================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
- --------------------------------------------------------------------------------
October 21, 2002 Date of Report
(Date of earliest event reported):
ELECTRIC FUEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-23336 95-4302784
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
632 Broadway, Suite 301, New York, New York 10012
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 529-9200
(Former name or former address, if changed since last report)
================================================================================
Item 5. Other Events and Regulation FD Disclosure.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the Registrant notes that certain statements set
forth in this Current Report on Form 8-K may constitute forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995.
These statements are subject to various risks and uncertainties that may cause
actual results to vary significantly. These risks and uncertainties include, but
are not limited to, risks relating to: product and technology development; the
uncertainty of the market for Electric Fuel's products; changing economic
conditions; delay, cancellation or non-renewal of purchase orders; significant
future capital requirements; our ability to quickly and smoothly execute the
change in leadership as a result of our current CEO's resignation; and other
risk factors detailed in Electric Fuel's most recent annual report on Form 10-K
for the fiscal year ended December 31, 2001, Electric Fuel's Form S-3
registration statements filed in September 2002, and other filings with the
Securities and Exchange Commission. Readers should consider all of these risk
factors as well as other information contained in this report.
On October 21, 2002, the Registrant publicly disseminated a press release
announcing that Yehuda Harats, its president and CEO and a member of the Board,
had decided to resign from his positions with the Registrant and its
subsidiaries in order to pursue other interests. The Registrant also announced
that it will discontinue retail sales of its INSTANT POWER(R) consumer battery
products because of the high costs associated with consumer marketing and low
volume manufacturing. The move is expected to significantly accelerate progress
toward achieving positive cash flow in 2003. The Registrant will continue to
fulfill all its existing contractual obligations, online sales, and sales to
OEMs and the military.
The Registrant also announced that its Board of Directors had selected
Robert S. Ehrlich, Chairman of the Board, to be the new President and CEO.
The Registrant noted in the press release that the discontinuation of the
consumer retail products will result in a one-time, pre-tax charge of
approximately $8.5 million, reflecting a write-down of inventory and fixed
assets as well as costs associated with the reduction in the Registrant's
workforce. Almost all these charges are non-cash impacting items.
A copy of the press release is included herein as Exhibit 99.1. The
information contained in the press release is incorporated by reference into
this Item 5 and the foregoing description of such document is qualified in its
entirety by reference to this exhibit.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit
Number Description
------ -----------
99.1 Press release dated October 21, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ELECTRIC FUEL CORPORATION
(Registrant)
By: /s/ Robert S. Ehrlich
---------------------------------------
Name: Robert S. Ehrlich
Title: Chairman of the Board, President
and CEO
Dated: October 22, 2002
EXHIBIT INDEX
The following exhibits are filed with the Current Report on Form 8-K.
Exhibit
Number Description
------ -----------
99.1 Press release dated October 21, 2002
Corporate News
632 Broadway, Suite 301
New York, New York 10012
Tel: (212) 529-9200 Fax (212) 529-5800
www.electric-fuel.com
FOR IMMEDIATE RELEASE
ELECTRIC FUEL CEO STEPS DOWN;
DISCONTINUES UNPROFITABLE CONSUMER BATTERY OPERATIONS TO FOCUS ON
DEFENSE AND SECURITY BUSINESS
--------------------------
Company Projects Positive Cash Flow in 2003
New York, NY - October 21, 2002 - Electric Fuel Corporation (NasdaqNM:
EFCX) announced today that Yehuda Harats, its president and CEO and a member of
the Board, has decided to resign from his positions with the Company and its
subsidiaries in order to pursue other interests.
The Company also announced that it will discontinue retail sales of its
INSTANT POWER(R) consumer battery products because of the high costs associated
with consumer marketing and low volume manufacturing. The move is expected to
significantly accelerate progress toward achieving positive cash flow in 2003.
The Company will continue to fulfill all its existing contractual obligations,
online sales, and sales to OEMs and the military.
The decision will enable the Company to focus on its defense and security
related businesses: the "use of force" simulator business operated by the
Company's IES Interactive Training subsidiary; the car armoring business
operated by the Company's MDT subsidiary; and the Company's military and OEM
battery business, which produces batteries for the U.S. Armed Forces, U.S. and
Israeli security agencies, as well as high tech battery solutions for unmanned
aircraft and vehicles.
The Board of Directors selected Robert S. Ehrlich, Chairman of the Board,
to be the new President and CEO. Mr. Ehrlich has an extensive background in
corporate restructuring at Mattel, Inc. and Fresenius Medical Systems, Inc. When
Mr. Ehrlich joined Fresenius as CEO and Chairman, its revenues were $16 million;
when he left the Board, its revenues had climbed to $3.5 billion.
"In pursuit of the best interests of our shareholders, we have made a
strategic decision to arrest the negative cash flows stemming from the retail
business," Mr. Ehrlich stated. "The division has used up capital well beyond our
resources over the past few years, and this has stymied the Company's growth."
The discontinuation of the consumer retail products will result in a
one-time, pre-tax charge of approximately $8.5 million, reflecting a write-down
of inventory and fixed assets as well as costs associated with the reduction in
the Company's workforce. Almost all these charges are non-cash impacting items.
"We remain committed to our zinc-air electric vehicle program, which we
believe is weeks away from gaining additional funding, and to our growing and
profitable defense and security-related businesses. With this decisive move and
new business plan, we plan to reduce our burn rate to zero and reach break-even
as early as the first half of 2003, and to build from there," Ehrlich said.
Mr. Harats served as President and CEO of Electric Fuel since its inception
in 1990. His engineering background and innovative thinking were instrumental in
the development of the Company's flagship zinc-air products for the
transportation, consumer electronics, and safety sectors.
Mr. Harats commented, "While I will no longer be involved with Electric
Fuel's management, I am still a strong believer in the Company's zinc-air
technology. As a significant shareholder, I am confident that Electric Fuel will
continue to make progress."
Conference Call
There will be a special conference call on Tuesday, October 22, 2002 at
10:00 AM EDT to discuss this press release. To take part in the conference call,
please dial 1 (800) 289-0528 (U.S.) or + 1 (913) 981-5522 (International) a few
minutes before the 10:00 AM EDT start time. For your convenience, an instant
replay will be available Tuesday, October 22, 2002 at 1:00 PM EDT until
Thursday, October 24, 2002 at 8:00 PM EDT. The replay telephone numbers are 1
(888) 203-1112 (U.S.); +1 (719) 457-0820 (International). The confirmation
number is 599715.
About Electric Fuel
Electric Fuel Corporation (www.electric-fuel.com) is a world leader in
primary and refuelable zinc-air fuel cell technology, pioneering advancements in
battery technology for defense and security products and other military
applications and electric vehicles. Electric Fuel also develops, manufactures
and markets advanced hi-tech multimedia and interactive digital solutions for
training of military, law enforcement and security personnel, as well as using
state of the art lightweight materials and advanced engineering processes to
armor vehicles.
Electric Fuel has corporate and sales offices in New York and London and
conducts its research, development and production activities through
subsidiaries in Israel and Colorado, and at its production facilities in Israel
and in Auburn, Alabama, where it develops and manufactures advanced batteries
for the defense market.
COMPANY CONTACT:
Conrad F. Mir
Director of Investor Relations
(212) 529-9200, ext 111
mir@electric-fuel.com
Except for the historical information herein, the matters discussed in this news
release include forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance
on these forward-looking statements, as they are subject to various risks and
uncertainties that may cause actual results to vary significantly. These risks
and uncertainties include, but are not limited to, risks relating to: product
and technology development; the uncertainty of the market for our products;
changing economic conditions; delay, cancellation or non-renewal of purchase
orders; significant future capital requirements; our ability to quickly and
smoothly execute the change in leadership as a result of our former CEO's
resignation; and other risk factors detailed in Electric Fuel's most recent
annual report on Form 10-K for the fiscal year ended December 31, 2001, Electric
Fuel's Form S-3 registration statements filed in September 2002, and other
filings with the Securities and Exchange Commission. Electric Fuel assumes no
obligation to update the information in this release. Reference to the Company's
website above does not constitute incorporation of any of the information
thereon into this press release.