Exhibit 99
ZBB Energy Corporation Reports Second Quarter Fiscal Year 2015
Results
MILWAUKEE, WI – (Marketwired – February 17, 2014) – ZBB Energy Corporation (NYSE MKT: ZBB), a leading developer of intelligent, renewable energy power platforms and hybrid vehicle control systems, today announced its financial results for its second fiscal quarter ended December 31, 2014.
Second Quarter Highlights
The Company’s major accomplishments during and subsequent to the end of the second quarter of fiscal year 2015 included:
| · | The Company announced its GridStrong™ family of distribution grid control and power quality improvement products, and exhibited at the GreenBuild 2014 International Conference. |
| · | The Company announced a power purchase agreement (PPA) utilizing solar photovoltaics in conjunction with ZBB Energy technologies to provide electricity to a 350+ unit condominium complex in Honolulu. The multi-million dollar project is the first for the Company under the PPA structure, which provides significant benefits to the customer, ZBB and potential investors. ZBB is working on several additional PPA type agreements designed to allow a bundling of these investments that would be attractive to high-yield income investors. |
| · | The Company announced that it has completed field qualification of its enhanced EnerStore "V3.3" 50kWh flow battery. The product upgrade package, which includes modifications that enhance system reliability, life cycle, energy output and efficiency performance of the product, has been field qualified and is now shipping. |
| · | The Company announced that it will provide the world's first customer side of the meter integrated hybrid battery system utilizing ZBB's EnerStore® V3.3 zinc bromide flow batteries and a lithium ion energy storage module to provide elevator and common area back-up power for a multi-tenant residential building in Hawaii. The hybrid system allows commercial and industrial markets to benefit from both short-term power and intermittent "power" types of applications and provides building owners and operators numerous benefits, including the ability to monetize behind-the-meter assets, realize back-up power in the event of a grid outage, and the peace of mind that comes with knowing that the building is essentially "future proof," in that ZBB's systems are modular and scalable to easily accommodate future energy system and program considerations |
Financial results for the three months ended December 31, 2014 as compared to the three months ended December 31, 2013 included:
| · | Total revenue was $300,654 as compared to $961,456 during the same period last year. |
| · | Total costs and expenses increased 15% to $3,575,886 from $3,104,169. |
| · | Loss from operations was $3,275,232 as compared to $2,142,713 during the same period last year. |
| · | Net loss to common shareholders was $3,446,642 compared to $2,233,969. |
| · | Loss per share was ($0.09) versus ($0.13) during the same period last year. |
Financial Position
The Company’s backlog is currently $3.5 million versus $8.8 million at this time last year. Backlog does not include the anticipated revenue stream associated with the PPA discussed above. The Company ended the second quarter of fiscal 2015 with total assets of $27.7 million, including $17.7 million in cash and $263,157 in accounts receivable. The Company believes that cash and cash equivalents on hand at December 31, 2014, and other potential sources of cash, will be sufficient to fund current operations through the third quarter of fiscal year 2016.
“While near-term revenue is down relative to last year, we are very encouraged by the progress of our sales and product development initiatives that underpin our future revenue growth,” said Eric C. Apfelbach, Chief Executive Officer. “As an example, we announced our first project where we have taken on the role of energy supplier through a PPA structure. This important strategic change is a reflection of ZBB’s broad capability and we believe will help to accelerate growth. We are also encouraged by our previously announced wins in the commercial and industrial space and with the increased pipeline of activity that should translate into a meaningful ramp in revenue. Our GridStrong™ product continues to perform well and is being slotted into multiple new utility evaluations. Longer term, we believe our Megawatt-hour scale products will prove to be well suited to meet the needs for large scale projects in the utility market. Brad Hansen, our President and COO, and I will provide more detail during our conference call this afternoon. I hope you can join us.” concluded Mr. Apfelbach.
Conference call – February 17, 2015 – 4:30p.m. EST (3:30 p.m. CST)
The Company will hold a conference call later today, Tuesday, February 17, 2015 at 4:30 p.m. EST (3:30 p.m. CST) to discuss results for its second fiscal quarter ended December 31, 2014. To participate in the call, please dial 1-888-211-4439. The participant passcode is 6599111.
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 6599111. The conference call will also be available for replay via the investor relations section of the Company’s website at www.zbbenergy.com until March 17, 2015.
About ZBB Energy Corporation
ZBB Energy Corporation (NYSE MKT: ZBB) designs, develops, licenses and manufactures advanced energy storage and power electronics systems, as well as engineered custom and semi-custom products targeted at the growing global need for distributed renewable energy, energy efficiency, power quality, and grid modernization. ZBB's portfolio includes integrated power management platforms that combine advanced power and energy controls plus energy storage to optimize renewable energy sources and conventional power inputs for grid connected and off-grid applications. ZBB's innovative platforms solve a wide range of electrical system challenges in global markets for utility, governmental, commercial, industrial and residential customers. In addition, the platforms ensure optimal efficiencies today, while offering the flexibility to adapt and scale to future requirements. ZBB's corporate offices, engineering and development, and production facilities are located in Menomonee Falls, WI, USA with a research facility also located in Perth, Western Australia. ZBB has a joint venture with Meineng Energy, a provider of leading-edge energy storage systems and solutions to the greater China market. 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.
Investor Relations Contact:
David Mossberg
Three Part Advisors, LLC
817-310-0051
| ZBB ENERGY CORPORATION | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended December 31, | Six months ended December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues | ||||||||||||||||
| Product sales | $ | 114,177 | $ | 761,456 | $ | 663,518 | $ | 1,830,578 | ||||||||
| Engineering and development | 186,477 | 200,000 | 201,997 | 200,000 | ||||||||||||
| Total Revenues | 300,654 | 961,456 | 865,515 | 2,030,578 | ||||||||||||
| Costs and Expenses | ||||||||||||||||
| Cost of product sales | 171,683 | 554,458 | 507,646 | 1,151,858 | ||||||||||||
| Cost of engineering and development | 59,982 | 43,636 | 169,145 | 43,636 | ||||||||||||
| Advanced engineering and development | 1,480,813 | 1,094,892 | 2,778,396 | 2,304,729 | ||||||||||||
| Selling, general, and administrative | 1,704,234 | 1,068,004 | 3,763,787 | 2,553,495 | ||||||||||||
| Depreciation and amortization | 159,174 | 343,179 | 313,690 | 685,759 | ||||||||||||
| Total Costs and Expenses | 3,575,886 | 3,104,169 | 7,532,664 | 6,739,477 | ||||||||||||
| Loss from Operations | (3,275,232 | ) | (2,142,713 | ) | (6,667,149 | ) | (4,708,899 | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Equity in loss of investee company | (225,471 | ) | (130,590 | ) | (307,973 | ) | (248,482 | ) | ||||||||
| Gain on investment in investee company | - | - | 1,257,407 | - | ||||||||||||
| Interest income | 7,879 | 1,000 | 11,490 | 1,509 | ||||||||||||
| Interest expense | (26,270 | ) | (45,777 | ) | (53,850 | ) | (97,515 | ) | ||||||||
| Other income (expense) | - | - | - | 896 | ||||||||||||
| Total Other Income (Expense) | (243,862 | ) | (175,367 | ) | 907,074 | (343,592 | ) | |||||||||
| Loss before benefit for Income Taxes | (3,519,094 | ) | (2,318,080 | ) | (5,760,075 | ) | (5,052,491 | ) | ||||||||
| Benefit for Income Taxes | - | (28,521 | ) | - | (48,250 | ) | ||||||||||
| Net loss | (3,519,094 | ) | (2,289,559 | ) | (5,760,075 | ) | (5,004,242 | ) | ||||||||
| Net loss attributable to noncontrolling interest | 143,508 | 130,590 | 226,010 | 248,482 | ||||||||||||
| Gain attributable to noncontrolling interest | - | - | (481,870 | ) | - | |||||||||||
| Net Loss Attributable to ZBB Energy Corporation | (3,375,586 | ) | (2,158,969 | ) | (6,015,935 | ) | (4,755,760 | ) | ||||||||
| Preferred Stock Dividend | (71,056 | ) | (75,000 | ) | (118,865 | ) | (77,499 | ) | ||||||||
| Net Loss Attributable to Common Shareholders | $ | (3,446,642 | ) | $ | (2,233,969 | ) | $ | (6,134,800 | ) | $ | (4,833,259 | ) | ||||
| Net Loss per share | ||||||||||||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.13 | ) | $ | (0.18 | ) | $ | (0.27 | ) | ||||
| Weighted average shares-basic and diluted | 39,051,379 | 17,709,413 | 34,835,949 | 17,708,422 | ||||||||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||||||||||
| ZBB ENERGY CORPORATION | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Unaudited) | ||||||||
| December 31, 2014 | June 30, 2014 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 17,710,385 | $ | 10,360,721 | ||||
| Restricted cash on deposit | 68,752 | 69,901 | ||||||
| Accounts receivable, net | 263,157 | 1,051,024 | ||||||
| Inventories, net | 1,451,298 | 1,352,970 | ||||||
| Prepaid expenses and other current assets | 246,429 | 295,814 | ||||||
| Refundable income tax credit | 80,283 | 91,191 | ||||||
| Note receivable | 153,156 | - | ||||||
| Total current assets | 19,973,460 | 13,221,621 | ||||||
| Long-term assets: | ||||||||
| Property, plant and equipment, net | 4,371,793 | 4,382,203 | ||||||
| Investment in investee company | 2,595,674 | 1,646,240 | ||||||
| Goodwill | 803,079 | 803,079 | ||||||
| Total assets | $ | 27,744,006 | $ | 20,053,143 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Current maturities of bank loans and notes payable | $ | 356,065 | $ | 351,142 | ||||
| Accounts payable | 467,060 | 589,642 | ||||||
| Accrued expenses | 2,063,037 | 2,621,479 | ||||||
| Customer deposits | 455,095 | 741,145 | ||||||
| Accrued compensation and benefits | 228,791 | 195,181 | ||||||
| Total current liabilities | 3,570,048 | 4,498,589 | ||||||
| Long-term liabilities: | ||||||||
| Bank loans and notes payable, net of current maturities | 1,866,222 | 2,045,127 | ||||||
| Total liabilities | 5,436,270 | 6,543,716 | ||||||
| Commitments and contingencies (Note 12) | ||||||||
| Equity | ||||||||
| Series B redeemable convertible preferred stock ($0.01 par value, | ||||||||
| $1,000 face value) 3,000 shares authorized and issued, 2,575 shares outstanding, preference in liquidation of $5,488,375 and $5,347,994 as of December 31, 2014 and June 30, 2014, respectively | 26 | 26 | ||||||
| Common stock ($0.01 par value); 150,000,000 authorized, | ||||||||
| 39,073,084 and 25,651,389 shares issued and outstanding as of December 31, 2014 and June 30, 2014, respectively | 1,099,045 | 964,828 | ||||||
| Additional paid-in capital | 116,695,781 | 102,286,450 | ||||||
| Accumulated deficit | (95,804,176 | ) | (89,788,242 | ) | ||||
| Accumulated other comprehensive loss | (1,592,167 | ) | (1,599,875 | ) | ||||
| Total ZBB Energy Corporation Equity | 20,398,509 | 11,863,187 | ||||||
| Noncontrolling interest | 1,909,227 | 1,646,240 | ||||||
| Total equity | 22,307,736 | 13,509,427 | ||||||
| Total liabilities and equity | $ | 27,744,006 | $ | 20,053,143 | ||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Six months ended December 31, | ||||||||
| 2014 | 2013 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (5,760,075 | ) | $ | (5,004,242 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property, plant and equipment | 313,690 | 421,760 | ||||||
| Amortization of intangible assets | - | 369,045 | ||||||
| Amortization of discounts and debt issuance costs on notes payable | - | 14,566 | ||||||
| Stock-based compensation, net | 853,811 | 106,024 | ||||||
| Equity in loss of investee company | 307,973 | 248,482 | ||||||
| Gain on investment in investee company | (1,257,407 | ) | - | |||||
| Interest accreted on note receivable | (3,156 | ) | - | |||||
| Changes in assets and liabilities | ||||||||
| Accounts receivable | 787,867 | 163,874 | ||||||
| Inventories | (98,328 | ) | 446,780 | |||||
| Prepaids and other current assets | 49,385 | 55,229 | ||||||
| Refundable income taxes | 10,908 | 84,964 | ||||||
| Accounts payable | (122,582 | ) | 161,296 | |||||
| Accrued expenses | (556,073 | ) | (21,671 | ) | ||||
| Customer deposits | (286,050 | ) | 199,411 | |||||
| Accrued compensation and benefits | 33,610 | (478,503 | ) | |||||
| Net cash used in operating activities | (5,726,427 | ) | (3,232,985 | ) | ||||
| Cash flows from investing activities | ||||||||
| Change in restricted cash | 1,149 | (9,356 | ) | |||||
| Expenditures for property and equipment | (303,280 | ) | (39,956 | ) | ||||
| Investment in note receivable | (150,000 | ) | - | |||||
| Net cash used in investing activities | (452,131 | ) | (49,312 | ) | ||||
| Cash flows from financing activities | ||||||||
| Repayments of bank loans and notes payable | (173,982 | ) | (113,035 | ) | ||||
| Proceeds from issuance of preferred stock and warrants | - | 3,000,000 | ||||||
| Preferred stock issuance costs | - | (96,967 | ) | |||||
| Proceeds from issuance of common stock | 14,837,760 | - | ||||||
| Common stock issuance costs | (1,148,023 | ) | - | |||||
| Proceeds from noncontrolling interest | 7,127 | - | ||||||
| Net cash provided by financing activities | 13,522,882 | 2,789,998 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 5,340 | (3,820 | ) | |||||
| Net increase in cash and cash equivalents | 7,349,664 | (496,119 | ) | |||||
| Cash and cash equivalents - beginning of period | 10,360,721 | 1,096,621 | ||||||
| Cash and cash equivalents - end of period | $ | 17,710,385 | $ | 600,502 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | 49,577 | $ | 95,606 | ||||
| Cash received from foreign income tax credit | - | 133,996 | ||||||
| Assets held for lease transferred to inventory | - | 112,500 | ||||||
| See accompanying notes to condensed consolidated financial statements. | ||||||||