EnSync Reports Second Quarter 2016
Results
Management to Host Conference Call at 4:30p.m. EST (3:30 p.m. CST)
MILWAUKEE, WI – (February 16, 2016) – EnSync, Inc. (NYSE MKT: ESNC), dba EnSync Energy Systems, a leading developer of innovative energy management systems for the utility, commercial, industrial and multi-tenant building markets, today announced second quarter 2016 results, ended December 31, 2015.
Key Projects Status
The Company made significant progress on many of its key projects during, and subsequent to the end of the second quarter of fiscal year 2016, including:
| · | University of the Nations: Phase I is complete and supplying power to the University. Phase II will be complete by early March. |
| · | Century West: The project is on schedule to be commissioned by May. |
| · | OATI: The Agile Hybrid batteries have shipped and installation and commissioning will be complete by May. |
| · | Cayman Islands: Our equipment has shipped to the Cayman Islands and the installation and commissioning will be complete by May. |
Other Key Recent Developments and Accomplishments
| · | Production Release and Technology Transfer from EnSync to Meineng Energy: Fourteen Agile Flow Batteries were shipped from Meineng Energy to EnSync customers since the beginning of Q2. Thirteen Matrix Energy Management Systems have either been shipped from Meineng Energy to EnSync, or are in process of assembly and test in China. Meineng is now qualified to build and test our advanced Matrix systems and modules. |
| · | Matrix ETL Listing to UL 1741: Our Matrix Energy Management platform is now listed by ETL to UL1741 specification. |
| · | Hawaii "Smart Inverter" Compliance Achieved: Our inverters are among the first to achieve this designation. |
| · | Installed Base Performance: The V3-Series Installed Base Upgrade Program is complete. All candidate systems have been upgraded, with significant improvement to performance. The program has been finished under budget. |
| · | Hybrid Storage System Success: We achieved the milestone of 1.0MWh of Hybrid Flow-Li Ion batteries shipped for C&I / Microgrid applications less than a year from announcement. EnSync remains the premier supplier of hybridized commercial energy storage solutions. |
Management Discussion
Brad Hansen, president and chief executive officer of EnSync, commented, "I am pleased with the progress we are making and the accomplishments during, and subsequent to the end of the quarter. The capabilities of our differentiated technology and systems solutions allow our customers to prioritize their electricity use from the grid, renewables and storage, synchronizing each of these sources in real time and leveraging their respective values. These capabilities will be a driving factor in moving the economy from a focus on coal-generated power to one utilizing renewable energy sources. These solutions, coupled with our expertise and credibility for economic modeling, system design and project development are a competitive differentiator in the PV + Storage systems market."
Mr. Hansen continued, "The University of the Nations project is on schedule and Phase I is performing well. Five other contracted power purchase agreement (PPA) projects are in varying degrees of construction and commissioning. Our near term efforts have transitioned from closing PPA contracts to marketing our existing projects. In December, we hired Fred Vaske as Vice President of Structured Finance to drive the development of an investor base and in turn, sell these projects. Fred brings a great deal of knowledge from his 20 years of project financing experience including major players in renewable energy, such as SunPower, Recurrent Energy, HanWa Q-Cells and Scatec Solar."
Fred Vaske, Vice President of Structured Finance for EnSync, added, "There is a great deal of interest in the EnSync PPA projects from both banks and corporate investors that have previously been investors in solar projects. They have recognized that there are new and variable services attributable to solar + storage installations that are lacking with solar only projects. Investors also recognize, based on regulatory and policy changes such as what recently occurred in Nevada's retroactive application of net metering reductions, that storage offers a degree of insurance against unanticipated change. Investors will also be very pleased with EnSync's industry leading control, communications and monitoring of the value generated by the project over the contract life."
Mr. Hansen concluded, "Recent developments validate our strategy. The President signed the budget bill, which extends the solar/storage investment tax credit an unprecedented five years, providing a strong foundation for future growth. The Supreme Court endorsed FERC jurisdiction over demand side management. This ruling will become important as we introduce our capability to perform supply response on-demand applications for commercial buildings. Additionally, state commissions continue to make changes in Net Metering programs and rate structures that enhance the value of storage in self-generation systems. Finally, we've put together a great executive team, with the right products and a robust strategy to address these developing opportunities."
Financial Results
Total revenue for three months ended December 31, 2015 was $382,261 compared to $300,654 for the three months ended December 31, 2014. Total costs and expenses were $4,889,717 compared to $3,575,886. Loss from operations was $4,507,456 compared to $3,275,232. Net loss attributable to common shareholders was $4,515,762 compared to $3,446,642. Loss per share was ($0.10) compared to ($0.09).
Current backlog for components, systems and engineering services is approximately $2.5 million. Additionally, the Company has acquired PPA contracts valued at approximately $11.2 million.
Financial Position
The Company ended the second quarter of fiscal 2016 with total assets of $44.8 million, including $28.1 million in cash. As of December 31, 2015, we have cumulative project costs of $5.8 million related to PPA contracts. We plan to recover substantially all of these costs before the end of our fiscal year as we sell or finance these projects.
Conference call – Today, February 16, 2016 – 4:30p.m. EST (3:30 p.m. CST)
Date: Tuesday, February 16, 2016
Time: 4:30 p.m. EST (3:30 p.m. CST)
Domestic participant dial in #: 888-471-3843
Participant passcode #: 9519944
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. A replay of the call will be available later on the same day via the investor relations section of the company's web site at www.ensync.com until April 16, 2016.
Domestic replay #: 888-203-1112
Replay passcode #: 9519944
About EnSync Energy Systems
EnSync, Inc. (NYSE MKT: ESNC), dba EnSync Energy Systems, is enabling the future of electricity with advanced energy management systems critical to a global economy becoming increasingly reliant upon the expansion of renewable energy. Whether part of the grid power transmission and distribution network, or behind the meter in commercial, industrial and multi-tenant buildings, EnSync technology brings differentiated power control and energy storage solutions to electricity-challenged environments. Our technologies also serve as the system level intelligence in microgrid applications, by seamlessly integrating multiple generation and storage assets to deliver power in remote and community level environments not served by the grid, or areas electing to use the grid secondary to microgrid assets. In 2015, EnSync incorporated power purchase agreements (PPAs) into its portfolio of offerings, enabling electricity savings for customers and providing a stable financial yield for investors. EnSync is a global corporation, with a joint venture in AnHui, China at Meineng Energy, as well as a strategic partnership with Solar Power, Inc. (SPI). For more information, visit: www.ensync.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 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.
