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8-K - FORM 8-K - ENERGY FOCUS, INC/DEefoi20140327_8k.htm

Exhibit 99.1

 

ENERGY FOCUS, INC. REPORTS FOURTH QUARTER AND YEAR 2013 RESULTS

 

SOLON, Ohio, March 27, 2014—Energy Focus, Inc. (OTCQB:EFOI), a leader in LED lighting technologies, today announced financial results for the fourth quarter and year ended December 31, 2013.

 

Results for the “Fiberstars” brand pool products business that was sold in November 2013 have been reclassified as discontinued operations. Net sales and gross margins shown for all periods presented exclude the discontinued operations.

 

Net sales of $6.6 million for the fourth quarter of 2013 compared to $7.1 million for the fourth quarter of 2012.

Gross margins of 23.2% of net sales compared to 14.2% of net sales for the fourth quarter of 2012.

Net loss from continuing operations of $2.5 million compared to $2.4 million for the fourth quarter of 2012.

Gain on the sale of the pool products business of $3.9 million.

Net income of $1.4 million compared to net loss of $2.0 million in the fourth quarter of 2012.

 

Financial results for the year include:

 

Net sales of $21.5 million from continuing operations compared to $23.4 million for 2012.

Gross margins of 21.3% of net sales compared to 17.0% of net sales for 2012.

Net loss from continuing operations of $6.9 million compared to $6.6 million for 2012.

 

“2013 was a transformative year for Energy Focus,” said James Tu, Executive Chairman. “Over the second half of the year, we were able to complete our broad restructuring initiatives and create a solid foundation towards our vision of becoming a leader in LED lighting retrofit. We believe that this opportunity represents an addressable market well in excess of $30 billion in the U.S. alone, and according to the Department of Energy, has the greatest potential impact on energy savings. We are most excited and grateful to now have a core, growing team of absolutely capable and dedicated employees, advisors and directors that are focused on collaborating and working towards realizing our vision.”

 

“During the fourth quarter, we successfully divested our non-core, fiber optic lighting business, and continued to improve our gross margin increasing it by nine percentage points to 23.2% from the fourth quarter of 2012. Most notably, we more than doubled our sales of government products/R&D services from the prior year’s fourth quarter,” continued Mr. Tu.

 

“Our flywheel towards sustainable long-term growth is clearly turning, first with our military business, which substantially expanded its distribution networks over the quarter and is now well on its way towards what we expect will be significant year over year growth in 2014. We are aggressively building our channel access and contract pipeline in performance contracting and commercial markets, which we believe will start contributing positively to our overall growth and margins quarter over quarter as 2014 progresses,” continued Mr. Tu.

 

Energy Focus, Inc. will host a conference call and webcast on Thursday, March 27, 2014 at 4:30 p.m. EDT (1:30 p.m. PDT) to review the fourth quarter and full year 2013 financial results, followed by a Q & A session. To participate in the call, please dial 888-504-7963 (U.S. and Canada) or 719-325-2354 (International) using passcode 3656208.  Participants are asked to call the assigned number approximately 10 minutes before the conference call begins. The webcast can be accessed under the investor section of our website at www.energyfocusinc.com.

 

 
 

 

 

An instant replay of the conference call will be available through the investor relations section of the site http://www.energyfocusinc.com/investors/news-and-events/events-and-presentations/ starting March 27, 2014 and will remain available for 3 months.

 

Forward Looking Statements

 

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, these statements can be identified by the use of words such as “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” “should,” “could,” “would” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from Energy Focus’ forward-looking statements. These risks and uncertainties include, but are not limited to: growth in the markets into which Energy Focus sells; conditions of the lighting industry and the economy in general; statements as to our competitive position; future operating results; net sales growth; expected operating expenses; gross product margin improvement; sources of net sales; anticipated revenue from government contracts; product development and enhancements; liquidity, ability to generate cash and cash reserves; our reliance upon a limited number of customers; our accounting policies; the effect of recent accounting announcements; the development and marketing of new products; relationships with customers and distributors; relationships with, dependence upon, and the ability to obtain components from suppliers; our ability to compete in certain markets; the evolution and future size of those markets; seasonal fluctuations; plans for and expected benefits of outsourcing and offshore manufacturing; trends in the price and performance of light-emitting diode (“LED”) lighting products; the benefits and performance of our lighting products; the adequacy of our current physical facilities; our strategy with regard to protecting our proprietary technology; and our ability to retain qualified employees. For more information about potential factors that could affect the financial results of Energy Focus, please refer to the Company’s SEC reports, including its Annual Reports on Form 10-K and its quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date hereof. Energy Focus disclaims any intention or obligation to update or revise any forward-looking statements.

 

About Energy Focus, Inc.

 

Energy Focus, Inc. is a leading provider of energy efficient LED lighting products, turnkey energy efficient lighting solutions and a developer of energy efficient lighting technology. Our solutions provide energy savings, aesthetics, safety and maintenance cost benefits over conventional lighting. Our long-standing relationship with the U.S. Government continues to enable us to provide energy efficient LED lighting products to the U.S. Navy and the Military Sealift Command fleets.

 

Customers include national, state and local U.S. government agencies as well as Fortune 500 companies, the U.S. Navy, and many others. Company headquarters are located in Solon, OH, with additional offices in Nashville, TN, and the United Kingdom. For more information, see our web site at www.energyfocusinc.com.

 

Media and Investor Contact:
Energy Focus, Inc.
(440) 715-1300
pr@energyfocusinc.com

ir@energyfocusinc.com

 

 
 

 

 

ENERGY FOCUS, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands except share and per share amounts)

 

   

December 31,

 
   

2013

   

2012

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 2,860     $ 1,181  

Trade accounts receivable less allowances of $84 and $265, respectively

    3,348       5,319  

Retainage receivable

    577       634  

Inventories, net

    2,510       2,581  

Costs in excess of billings

    145       99  

Prepaid and other current assets

    1,207       1,012  

Assets held for sale

    130       -  

Total current assets

    10,777       10,826  
                 

Property and equipment, net

    536       1,800  

Goodwill

    -       -  

Intangible assets, net

    55       608  

Collateralized assets

    1,000       1,000  

Other assets

    440       119  

Total assets

  $ 12,808     $ 14,353  
                 

LIABILITIES

               

Current liabilities:

               

Accounts payable

  $ 3,707     $ 5,879  

Accrued liabilities

    1,218       2,265  

Deferred revenue

    71       751  

Billings in excess of costs

    764       464  

Credit line borrowings

    -       1,590  

Current maturities of long-term debt

    59       756  

Total current liabilities

    5,819       11,705  
                 

Other liabilities

    54       30  

Acquisition-related contingent liabilities

    -       -  

Long-term debt

    4,011       1,793  

Total liabilities

    9,884       13,528  
                 

SHAREHOLDERS' EQUITY

               

Preferred stock, par value $0.0001 per share:

               

Authorized: 2,000,000 shares in 2013 and 2012

               

Issued and outstanding: no shares in 2013 and 2012

    -       -  

Common stock, par value $0.0001 per share:

               

Authorized: 150,000,000 shares in 2013, and 100,000,000 shares in 2012

               

Issued and outstanding: 51,421,937 in 2013 and 44,698,650 in 2012

    5       4  

Additional paid-in capital

    85,442       80,985  

Accumulated other comprehensive income

    462       460  

Accumulated deficit

    (82,985 )     (80,624 )

Total shareholders' equity

    2,924       825  

Total liabilities and shareholders' equity

  $ 12,808     $ 14,353  

 
 

 

 

ENERGY FOCUS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except per share amounts)

 

   

Three months ended

December 31,

   

Year ended

December 31,

 
   

2013

   

2012

   

2013

   

2012

 
                                 

Net sales

  $ 6,595     $ 7,111     $ 21,533     $ 23,375  

Cost of sales

    5,067       6,103       16,954       19,403  

Gross profit

    1,528       1,008       4,579       3,972  
                                 

Operating expenses:

                               

Research and development

    331       281       597       368  

Sales and marketing

    1,361       1,223       4,899       4,402  

General and administrative

    1,328       1,103       4,815       4,542  

Loss on impairment

    608       672       933       672  

Change in estimate of contingent liabilities

    -       (102 )     12       (102 )

Restructuring

    1       -       80       -  

Total operating expenses

    3,629       3,177       11,336       9,882  

Loss from operations

    (2,101 )     (2,169 )     (6,757 )     (5,910 )
                                 

Other income (expense):

                               

Settlement of acquisition obligations

    -       -       892       -  

Interest income

    -       1       -       2  

Interest expense

    (383 )     (123 )     (842 )     (511 )

Other income (expense)

    25       (59 )     (240 )     (157 )
                                 

Loss from continuing operations before income taxes

    (2,459 )     (2,350 )     (6,947 )     (6,576 )

Benefit from income taxes

    -       -       -       -  

Net loss from continuing operations

    (2,459 )     (2,350 )     (6,947 )     (6,576 )
                                 

Discontinued operations:

                               

(Loss) income from discontinued operations

    (64 )     328       672       867  

Gain on sale of discontinued operations

    3,915       -       3,915       -  
                                 

Income from discontinued operations before income taxes

    3,851       328       4,587       867  

Benefit from (provision) for income taxes

    5       8       (1 )     -  

Net income from discontinued operations

    3,856       336       4,586       867  
                                 

Net income (loss)

  $ 1,397     $ (2,014 )   $ (2,361 )   $ (5,709 )
                                 

Income (loss) per share:

                               

Basic

    0.03       (0.05 )     (0.05 )     (0.14 )

Diluted

    0.02       (0.05 )     (0.05 )     (0.14 )
                                 

Weighted average common shares outstanding:

                               

Basic

    50,997       44,542       47,792       41,322  

Diluted

    80,526       44,542       47,792       41,322