ZBB Energy Corporation Reports Fourth Quarter and
Year-end June 30, 2012 Financial Results
MILWAUKEE, WI – (Marketwire – September 6, 2012) – ZBB Energy Corporation (NYSE MKT: ZBB), a leading developer of intelligent, renewable energy power platforms, today announced its financial results for the three months and year ended June 30, 2012.
Financial results for the three months ended June 30, 2012 as compared with the three months ended June 30, 2011 were:
| · | Product sales increased 29% to $855,459 |
| · | Total revenues decreased 21% to $1,081,499 |
| · | Net loss of $5,831,581 compared with $1,707,641 |
| · | Loss per share increased to ($0.13) from ($0.08) per share |
Financial results for the year ended June 30, 2012 as compared with the year ended June 30, 2011 were:
| · | Revenue increased 167% to $4,805,568 |
| · | Net loss of $13,710,226 compared with $8,449,006 |
| · | Loss per share decreased to ($0.37) from ($0.38) per share |
As of September 6, 2012, the Company’s backlog was $6.2 million compared with backlog of $5.2 million at the end of fiscal year 2011. ZBB ended the fiscal year with total assets of $22.1 million including $7.8 million in cash.
Highlights of the fourth quarter of fiscal year 2012
Total revenues declined during the fourth quarter to $1,081,499 from $1,361,958 in the prior year quarter. Fourth quarter product sales increased 29% to $855,459 due to successful commercialization and initial growth of the ZBB EnerSystem™ platform. This increase was offset by a decline in engineering and development revenues, due primarily to completion of the Honam engineering and development agreement.
Total expenses for the fourth quarter were $5,524,787 compared with $3,410,121 in the prior year’s quarter. The increase in expenses was primarily related to an increase in the cost of product sales and other expenses as follows:
| · | $703,683 increase in cost of product sales was due to an increase in commercial product sales; |
| · | $484,664 decrease in cost of engineering and development sales was due to the completion of engineering and development agreements; |
| · | $1,496,106 increase in advanced engineering and development expenses was due to an increase in the Company’s engineering and development activities for its next generation battery module and PECC systems that include preproduction research and development as well as pilot plant operations; |
| · | $347,101 increase in selling, general, and administrative expenses was due primarily to a planned increase in sales, marketing and administrative personnel, which resulted in an increase in salaries and related expense of $241,146 and an increase in stock based compensation of $386,595 partially offset by decreases in other expenses. |
| · | $271,653 increase in depreciation and amortization expenses was primarily due to changes in estimated useful lives for certain assets and the timing of property, plant and equipment additions. |
During the fourth quarter fiscal year 2012, the Company’s major accomplishments included:
| · | Shipped four ZBB EnerSystems to clients around the world and shipped components for ten ZBB EnerStore™ battery systems to the Company’s China joint venture partner for assembly. |
| · | Signed a contract to provide power management system to SPIDERS (Smart Power Infrastructure Demonstration for Energy Reliability) for the DOD (Department of Defense) in Hawaii and Colorado. |
| · | Completed an underwritten public offering of common stock for approximately $12 million in net proceeds. |
Subsequent to the end of the fourth quarter fiscal year 2012, the Company announced the following:
| · | Chuck Stankiewicz was promoted to Chief Operating Officer. |
| · | Installation and commissioning of a 500kWh energy management system, including ZBB EnerStore batteries and ZBB EnerSection™ inverters on the Illinois Institute of Technology campus as part of their “Perfect Power” micro grid application. |
| · | Since June 30, 2012 we shipped 25 ZBB EnerStore batteries with ZBB EnerSection 25kW and 125kW inverters to customers or subcontractors. |
| · | Receipt of follow-on orders from the Company’s China joint venture of over $600,000. |
| · | Completion of ETL Listing to UL1741 standards for the ZBB EnerSection 125kW inverter. |
| · | Tony Siebert was appointed Vice President of Sales and Product Marketing. |
| · | Exercise of the over-allotment on the June 2012 public offering bringing total gross proceeds to $13.8 million. |
Highlights of fiscal year 2012
Total revenues for fiscal year 2012 were $4,805,568, a 167% increase over the prior year’s revenues. The net loss for the year was $13,710,226, a 62% increase over the prior year. Basic and diluted EPS for the year was ($0.37) versus ($0.38) during the prior year.
Total costs and expenses for the years ended June 30, 2012 and June 30, 2011 were $17,260,864 and $10,623,113, respectively. This increase of $6,637,751 in the year ended June 30, 2012 was primarily due to the following factors:
| · | $1,499,783 increase in costs of product sales was due to an increase in commercial product sales; |
| · | $513,857 increase in costs of engineering and development sales was due to activities related to engineering and development agreements; |
| · | $2,717,643 increase in advanced engineering and development expenses due to an increase in the Company’s engineering and development activities for its next generation battery module and PECC systems which include preproduction research and development and pilot plant operations; |
| · | $1,109,952 increase in selling, general, and administrative expenses was due primarily to a planned increase in sales, marketing and administrative personnel, which resulted in an increase in salaries and related expense of $666,000, an increase of $152,600 due to the inclusion of Tier Electronics SG&A expenses for twelve months in fiscal year 2012 compared with five months in fiscal year 2011 and an increase in stock based compensation of $570,600 partially offset by decreases in other expenses. |
| · | $1,015,729 increase in depreciation and amortization expenses primarily due to $435,000 of additional amortization of intangible assets related to the Tier acquisition that occurred in January 2011, and $319,000 related to changes in estimated useful lives for certain assets and the timing of property, plant and equipment additions. |
Other major accomplishments during the nine months prior to the fourth quarter included:
| · | Initial shipments of ZBB EnerStore next generation proprietary flow battery system and ZBB EnerSection systems |
| · | Completion of the Honam Petrochemical phase I collaboration agreement and extension of the agreement to September 30, 2012 |
| · | Establishment of the joint venture in China and commencement of manufacturing operations in China |
| · | 25kWh ZBB EnerSection inverter ETL listed to the UL 1741 standard |
| · | Execution of a joint development and stock purchase agreement with a major US technology company |
| · | Receipt of a patent for ZBB EnerSection Power & Energy Control Center (PECC) |
“Fiscal year 2012 was a very important year for ZBB Energy, in which we successfully began commercialization of our technologies. We also completed strategic moves to bolster our ability to bring products to market worldwide and set the foundation for future growth. With these key pieces in place, we are well positioned to execute against our growth plans for the next several years,” said Eric C. Apfelbach, President and CEO. “Our backlog and sales funnel continue to be strong, our balance sheet is strong, and we’ve added key members to our team, all of which should translate into accelerated growth as we move into fiscal 2013.”
Conference call – September 7, 2012 – 11:00 a.m. Eastern Daylight Time (10:00 a.m. CDT)
The Company will hold a conference call on Friday, September 7, 2012 at 11:00 a.m. Eastern Daylight Time (10:00 a.m. Central Daylight Time) to discuss results for its fourth fiscal quarter ended June 30, 2012. To participate in the call, please dial 1-888-820-9409, for domestic callers, and 1-913-312-6677, for international callers. The participant passcode is 7645752.
The call will be available for replay at 1-888-203-1112, for domestic callers, and 1-719-457-0820, for international callers. The replay passcode is 7645752. The conference call will also be available for replay via the investor relations section of the Company’s website at www.zbbenergy.com until October 7, 2012.
About ZBB Energy Corporation
ZBB Energy Corporation (NYSE MKT: ZBB) designs, develops, and manufactures advanced energy storage, power electronic systems, and engineered custom and semi-custom products targeted at the growing global need for distributed renewable energy, energy efficiency, power quality, and grid modernization. ZBB and its power electronics subsidiary, Tier Electronics, LLC, have developed a portfolio of integrated power management platforms that combine advanced power and energy controls plus energy storage to optimize renewable energy sources and conventional power inputs whether connected to the grid or not. Tier Electronics participates in the energy efficiency markets through their hybrid vehicle control systems, and power quality markets with their line of regulation solutions. Together, these platforms solve a wide range of electrical system challenges in global markets for utility, governmental, commercial, industrial and residential end customers. Founded in 1986, ZBB's platforms ensure optimal efficiencies today, while offering the flexibility to adapt and scale to future requirements. ZBB's corporate offices and production facilities are located in Menomonee Falls, WI, USA with offices also located in Perth, Western Australia. For more information, visit: www.zbbenergy.com.
Safe Harbor Statement
Certain statements made in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended that are intended to be covered by the "safe harbor" created by those sections. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "could," "seek," "intend," "plan," "estimate," "anticipate" or other comparable terms. Forward-looking statements in this press release may address the following subjects among others: statements regarding the sufficiency of our capital resources, expected operating losses, expected revenues, expected expenses and our expectations concerning our business strategy. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our most recently filed Annual Report on Form 10-K and our subsequently filed Quarterly Reports on Form 10-Q. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Contact:
Lewis W. Kreps
Three Part Advisors, LLC
www.threepa.com
214-599-7955
or
David Mossberg
Three Part Advisors, LLC
817-310-0051
