Tenfold revenue increase from continuing
operations over Q2 2017
Electrovaya Inc. (“Electrovaya” or the “Company”) (TSX:EFL)
(OTCQX:EFLVF) today reported its financial results for the fiscal
second quarter ended March 31, 2018 (“Q2 2018”). All numbers are in
U.S. dollars unless otherwise noted.
The Company is pleased to report a tenfold
increase in revenue from continuing operations in Q2 2018 compared
to the fiscal second quarter ended March 31, 2017 (“Q2 2017”).
Revenue from continuing operations was US$3.3 million (Cdn $4.2
million), compared to US$0.3 million (Cdn $0.4 million) in Q2 2017.
The increase was primarily attributable to revenue collected on the
Cdn $4.3 million purchase order from Walmart Canada announced on
September 18, 2017, and also included other purchase orders for
materials handling electric vehicle (MHEV) batteries.
Electrovaya is encouraged by continued interest
in its lithium ion forklift battery systems from new and existing
customers. In addition to the six Fortune 500 companies which have
issued initial and/or follow-up purchase orders, validation testing
is ongoing by major global companies, and the Company is confident
that sales momentum for these products will increase during fiscal
2018. Multiple manufacturers of MHEVs have approved the use of
Electrovaya’s lithium ion batteries in certain of their vehicles
for the North American market.
Q2 2018 Financial HighlightsAll
Q2 2018 financial highlights are from continuing operations
- Revenue was $3.3 million (Cdn $4.2
million), up significantly from $0.3 million (Cdn $0.4 million) for
Q2 2017.
- Gross profit was $0.9 million (Cdn
$1.1 million) with a gross margin of 28% compared to $0.0 million
(Cdn $0.1 million) with gross margin of 14% for Q2 2017.
- For the six months ended March 31,
2018, revenue was $4.0 million (Cdn $5.1 million) and gross profit
was $1.2 million (Cdn $1.5 million), while revenue and gross profit
were $1.1 million (Cdn $1.4 million) and $0.7 million (Cdn $0.9
million), respectively, for the six months ended March 31,
2017.
- Net loss was $2.7 million (Cdn $3.4
million) compared to $0.5 million (Cdn $0.6 million) for Q2 2017.
The increased loss was primarily due to a $2.4 million increase in
general and administrative expenses from Q2 2017 to Q2 2018,
resulting from approximately $0.4 million in legal and professional
fees primarily relating to the structured insolvency proceedings
for the Company’s German subsidiary in Q2 2018, and a reimbursement
of expenses without the corresponding inclusion of the discontinued
operations expenses in Q2 2017.
- Cash and equivalents were $2.0
million as at March 31, 2018.
- On January 25, 2018, the Company’s
wholly owned German subsidiary commenced a voluntary structured
insolvency process. An administrator has been appointed who has
engaged a merger and acquisition specialist to conduct an orderly
sale process. The Company has determined that it is no longer
necessary to own unprofitable subsidiaries carrying out component
production of electrodes and separators when alternate customized
supply chain arrangements are available.
Q2 2018 Business Highlights
Electrovaya continued commissioning of MHEVs on
the Cdn $4.3 million purchase order from Walmart Canada. Walmart is
converting all the forklifts at one of its Ontario distribution
centers from lead acid batteries to Electrovaya’s lithium ion
batteries. The Company believes this is the single largest
installation of materials handling vehicles powered by lithium ion
batteries in North America.
During the quarter, Electrovaya announced
purchase orders for its lithium ion battery systems from three
major global companies, including two U.S. Fortune 500 companies.
In addition, multiple manufacturers of MHEVs have approved the use
of Electrovaya’s lithium ion batteries in certain of their vehicles
for the North American market.
On March 29, 2018, two new directors, Dr. James
K. Jacobs and Mr. Suresh Madan were elected to the Company’s Board
of Directors at its Annual and Special Meeting. Dr. Jacobs
co-founded Electrovaya in 1996. He welcomed the opportunity to
re-join Electrovaya’s Board as he is excited about recent
advancements in the Company’s battery technology and the potential
for significant sales growth. Mr. Madan is currently President and
CEO of MyHealth Centre, which operates a chain of more than 30
diagnostic health facilities across Ontario. Mr. Madan brings deep
financial knowledge and business skills to the Company.
Subsequent to Q2 2018, Electrovaya attended the
MODEX conference in Atlanta, Georgia from April 9-12. MODEX is the
leading manufacturing and supply chain expo in the United States.
In addition, Electrovaya’s batteries are on display at the CeMAT
logistics and supply chain conference in Hannover, Germany, which
runs from April 23-27. The batteries are integrated in multiple
trucks of a leading materials handling vehicle manufacturer.
It is estimated by the Worldwide Industrial
Truck Statistics1 that approximately 281,000 materials handling
vehicles were sold in North America, and about 1.1 million
globally, during 2016. In the United States, about 65.5% (~185,000)
were electric vehicles, mostly powered by lead acid batteries. By
comparison, approximately 200,000 electric cars (battery and
plug-in electric vehicles)2 were sold in the United States in 2017,
mostly powered by lithium ion batteries. Typically, a lithium ion
battery powering an intensive-use MHEV could work ten times longer
than batteries for electric cars and must have the ability to be
charged rapidly and cycled multiple times per day. Thus, MHEV
battery requirements are substantially more demanding than those
required for electric cars, and the MHEV batteries are expected to
deliver superior value to the logistics and materials handling
user.
1 WITS as reported in Modern Material Handling
(MMH) magazine, Dec 6, 20172
https://arstechnica.com/cars/2018/01/2017-was-the-best-year-ever-for-electric-vehicle-sales-in-the-us
The Company’s complete Q2 2018 Financial
Statements and Management Discussion and Analysis are available at
www.sedar.com or on the Company’s website at
www.electrovaya.com.
Conference Call Details:The
Company will hold a conference call on Wednesday, April 25, 2018 at
8:00 a.m. Eastern Time (ET) to discuss the Q2 2018 financial
results and to provide a business update.
Conference ID: 13679391US and Canada toll free: (807)
407-8291International: +1 (201) 689-8345
To help ensure that the conference begins in a
timely manner, please dial in 10 minutes prior to the start of the
call.
For those unable to participate in the
conference call, a replay will be available for two weeks beginning
on April 25, 2018 through May 9, 2018. To access the replay, the
U.S. dial-in number is (877) 660-6853 and the non-U.S. dial-in
number is +1 (201) 612-7415. The replay conference ID is
13679391.
About Electrovaya Inc.
Electrovaya Inc. (TSX:EFL) (OTCQX:EFLVF)
designs, develops and manufactures proprietary Lithium Ion Super
Polymer® batteries, battery systems, and battery-related products
for energy storage, clean electric transportation and other
specialized applications. Headquartered in Ontario, Canada,
Electrovaya is a technology focused company with extensive IP,
supplying leading global customers.
To learn more about how Electrovaya is powering
mobility and energy storage, please explore
www.electrovaya.com.
Forward-Looking Statements
This press release contains forward-looking
statements, including statements that relate to, among other
things, the Company’s need for commoditized contract manufacturing
facilities in its product development process, the effect of
Litarion’s insolvency filing on the Company’s financial position
and performance, the future direction of the Company’s business and
products, the effect of a structured sale of Litarion, including on
the Company’s overhead and operations, the Company’s ability to
source supply to satisfy demand for its products and satisfy
current order volume, revenue forecasts, anticipated orders and
deliveries in CY2018 and beyond, demand for the Company's products,
technology development progress, pre-launch plans, plans for
product development, plans to work with OEMs, plans to sell
directly to user, plans for shipment using the Company’s
technology, production plans, the Company’s markets, objectives,
goals, strategies, intentions, beliefs, expectations and estimates,
and can generally be identified by the use of words such as “may”,
“will”, “could”, “should”, “would”, “likely”, "possible", “expect”,
“intend”, “estimate”, “anticipate”, “believe”, “plan”, “objective”
and “continue” (or the negative thereof) and words and expressions
of similar import. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, such statements involve risks and uncertainties, and
undue reliance should not be placed on such statements. Certain
material factors or assumptions are applied in making
forward-looking statements, and actual results may differ
materially from those expressed or implied in such statements.
Material assumptions used to develop forward-looking information in
this news release include, among other things, that current
customers will continue to make and increase orders for the
Company’s products, that the Company’s alternate supply chain will
be adequate to replace material supply and manufacturing, that the
Company’s interpretation of the effect of any comfort given to
Litarion’s auditors of the Company’s financial support for
Litarion’s operations is correct, and that Litarion’s insolvency
process will proceed in an orderly fashion that will satisfy
Litarion’s debt without a significant negative effect on the
Company or its assets. Important factors that could cause actual
results to differ materially from expectations include but are not
limited to: actions taken by creditors and remedies granted by
German courts in the Litarion insolvency proceedings and their
effect on the Company’s business and assets, negative reactions of
the Company’s existing customers to Litarion’s insolvency process,
the ability to sell the Company’s premises or to do so at a price
reflecting appropriate value, general business and economic
conditions (including but not limited to currency rates and
creditworthiness of customers); Company liquidity and capital
resources, including the availability of additional capital
resources to fund its activities; level of competition; changes in
laws and regulations; legal and regulatory proceedings; the ability
to adapt products and services to the changing market; the ability
to attract and retain key executives; and the ability to execute
strategic plans. Additional information about material factors that
could cause actual results to differ materially from expectations
and about material factors or assumptions applied in making
forward-looking statements may be found in the Company’s Annual
Information Form (“AIF”) for the year ended September 30, 2017 and
in the Company’s most recent annual and interim Management’s
Discussion and Analysis under “Risk and Uncertainties” as well as
in other public disclosure documents filed with Canadian securities
regulatory authorities. The Company does not undertake any
obligation to update publicly or to revise any of the
forward-looking statements contained in this document, whether as a
result of new information, future events or otherwise, except as
required by law.
For more information, please contact:
Peter Koven
Bay Street Communications
Telephone: 1.647.496.7857
Email: peterkoven@baystreetcommunications.com
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