Conference Call to be Held Today at 11 a.m.
ET
Energy Focus, Inc. (NASDAQ:EFOI), a leader in sustainable,
energy-efficient lighting and controls systems and ultraviolet-c
light disinfection (“UVCD”) products for the commercial, military
maritime and consumer markets, today announced financial results
for its second quarter ended June 30, 2022.
Second Quarter 2022 Financial Highlights:
- Net sales of $1.5 million, decreased 28.6% compared to the
second quarter of 2021, reflecting a $0.5 million, or 49.3%
decrease in military sales, as well as a decrease of $0.1 million,
or 9.6% in commercial sales, year-over-year. As compared to the
first quarter of 2022, net sales decreased by 28.2%, primarily
reflecting a $0.4 million decrease in military sales and a $0.2
million decrease in commercial sales.
- Gross profit margin of 7.4% was down from 18.9% in the second
quarter of 2021, and up from negative gross profit margin of (1.3)%
in the first quarter of 2022. The year-over-year decrease was
driven by lower sales and less favorable product mix. Sequentially,
despite lower sales and negative impacts from the mix of products
sold, the increase in gross profit margin primarily relates to a
favorable change in inventory reserves offset slightly by the
unfavorable impact of a scrap write-off.
- Loss from operations of $2.2 million was flat as compared to
the second quarter of 2021. Loss from operations improved 7.7% as
compared to a loss from operations of $2.7 million in the first
quarter of 2022.
- Net loss of $2.5 million, or $(0.35) per basic and diluted
share of common stock, compared to a net loss of $2.5 million, or
$(0.59) per basic and diluted share of common stock, in the second
quarter of 2021. Sequentially, the net loss decreased by $0.3
million compared to net loss of $2.8 million, or $(0.44) per basic
and diluted share of common stock, in the first quarter of
2022.
- Cash of $0.9 million, included in total availability (as
defined under “Non-GAAP Measures” below) of $2.5 million, each as
of June 30, 2022, as compared to cash of $2.7 million and total
availability of $1.1 million as of December 31, 2021.
- An April 2022 unsecured bridge financing generated $1.8 million
in net liquidity after discounts and transaction expenses, and a
June 2022 private placement for the sale of common stock and
warrants resulted in net proceeds of $3.2 million.
Stephen Socolof, Chairman and Interim Chief Executive Officer,
commented, “Despite the second quarter results, we believe our
progress on cost reduction initiatives, reinvestment in our
military sales channel, and building commercial sales pipeline will
position us for revenue and margin improvements in the second half
of 2022. We expect our cost savings initiatives will begin to
contribute to the bottom line in the third quarter, while our
enhanced ‘white light’ offerings and our refreshed RedCap® solution
are expected in the last half of this year. Customer project timing
and supply chain constraints impacted timing of certain second
quarter orders, leading us into the third quarter with a healthy
backlog of near-term orders. Our patented EnFocus™ powerline
control system products are seeing larger order volumes, and we are
optimistic they will become a more meaningful contributor in the
second half of the year.”
Mr. Socolof added, “We continue to focus on value-engineering
and supply chain management initiatives we expect will reduce our
cost of goods and make us more competitive, and have taken another
hard look at other cost-cutting initiatives. Our SG&A expenses
declined year-over-year, and sequentially when compared to the
prior quarter, demonstrating our commitment to expense management.
While reduced sales in the second quarter resulted in continued
cash burn, we anticipate the cost reduction efforts combined with
sales initiatives will result in a reduction in our cash burn in
the second half of the year as sales improve and cost management
impacts have full-period impacts.”
Second Quarter 2022 Financial Results:
Net sales were $1.5 million for the second quarter of 2022,
compared to $2.1 million in the second quarter of 2021, a decrease
of $0.6 million, or 28.6%. Net sales from commercial products were
approximately $1.0 million, or 65.9% of total net sales, for the
second quarter of 2022, as compared to $1.1 million, or 52.0% of
total net sales, in the second quarter of 2021, reflecting (i)
volatility of sales to large institutional customers; (ii)
fluctuations in the timing and pace of commercial projects; and
(iii) lingering macroeconomic supply chain impacts as a result of
the COVID-19 pandemic. Net sales from military maritime products
were approximately $0.5 million, or 34.1% of total net sales, for
the second quarter of 2022, compared to $1.0 million, or 48.0% of
total net sales, in the second quarter of 2021, primarily due to
delayed timing of orders and project funding and reduced military
maritime market pipeline development over the past year.
Sequentially, net sales were down 28.2% compared to $2.1 million in
the first quarter of 2022, reflecting primarily a decrease in
military maritime orders.
Gross profit was $0.1 million, or 7.4% of net sales, for the
second quarter of 2022. This compares with gross profit of $0.4
million, or 18.9% of net sales, in the second quarter of 2021. The
year-over-year decrease in gross profit was driven by (i) lower
sales volume, an unfavorable impact of $0.2 million, or 16% of net
sales; and (ii) an unfavorable product mix impact of approximately
$0.3 million, or 20% of net sales. These decreases were offset by a
favorable net impact of $0.2 million, or 11% of net sales, from our
inventory reduction project, with the change in inventory reserves
offset by the inventory scrap write-off. Gross profit for the
second quarter of 2022 also included unfavorable freight-in
variances of $0.1 million, or 7% of net sales.
Sequentially, gross profit of $0.1 million for the second
quarter of 2022 compares with negative gross profit of $(26.0)
thousand, or (1.3)% of net sales, in the first quarter of 2022.
Despite lower sales volumes (an unfavorable impact of approximately
$0.1 million, or 10% of net sales), and an unfavorable product mix
impact of approximately $0.1 million, or 5% of net sales, the
increase quarter-over-quarter primarily relates to the favorable
net impact of approximately $0.3 million, or 21% of net sales,
related to the inventory reduction project, with the change in
inventory reserves offset by the inventory scrap write-off.
Adjusted gross margin, as defined under “Non-GAAP Measures”
below, was (5.1)% for the second quarter of 2022, compared to 17.6%
in the second quarter of 2021, primarily driven by lower sales in
the second quarter of 2022 in combination with a negative product
mix impact during the second quarter of 2022 as compared to the
second quarter of 2021. Sequentially, this compares to adjusted
gross margin of 5.0% in the first quarter of 2021. The decrease
from the first quarter of 2022 was primarily driven by lower sales
in the second quarter of 2022 as well as lower variable margins
during the second quarter of 2022.
Operating loss was $2.2 million for the second quarter of 2022,
flat as compared to an operating loss of $2.2 million in the second
quarter of 2021. Sequentially, this improved compared to an
operating loss of $2.7 million in the first quarter of 2022. Net
loss was $2.5 million, or $(0.35) per basic and diluted share of
common stock, for the second quarter of 2022, compared with a net
loss of $2.5 million, or $(0.59) per basic and diluted share of
common stock, in the second quarter of 2021. Sequentially, this
compares with a net loss of $2.8 million, or $(0.44) per basic and
diluted share of common stock, in the first quarter of 2022.
Adjusted EBITDA, as defined under “Non-GAAP Measures” below, was
a loss of $2.1 million for the second quarter of 2022, compared
with a loss of $2.0 million in the second quarter of 2021 and a
loss of $2.6 million in the first quarter of 2021. The larger
adjusted EBITDA loss in the second quarter of 2022, as compared to
the second quarter of 2021, was primarily due to the gross margin
reductions from lower sales and less favorable product mix.
Cash was $0.9 million as of June 30, 2022. This compares with
cash of $2.7 million as of December 31, 2021. During the second
quarter of 2022, the Company added to its liquidity position with
$1.8 million in net proceeds in connection with the April 2022
bridge financing and $3.2 million in net proceeds in connection
with the June 2022 private placement. As of June 30, 2022, the
Company had total availability, as defined under “Non-GAAP
Measures” below, of $2.5 million, which consisted of $0.9 million
of cash and $1.6 million of additional borrowing availability under
its credit facilities. This compares to total availability of $4.1
million as of June 30, 2021 and total availability of $1.1 million
as of March 31, 2022. Our net inventory balance of $7.2 million as
of June 30, 2022 decreased $0.7 million from our net inventory
balance as of December 31, 2021. As part of our expense reduction
initiative, we have decreased our warehouse space by approximately
40% beginning in the third quarter of 2022. As part of our expense
reduction initiatives, we have significantly decreased our
warehouse space beginning in the third quarter of 2022. In
connection with the space reduction, in the second quarter of 2022,
we began disposing of a substantial portion of our excess and
obsolete commercial finished goods inventory that was more than 90%
reserved. Additional inventory management efforts are expected to
continue in the third quarter of 2022 in order to free up
additional space in the warehouse.
Earnings Conference Call:
The Company will host a conference call and webcast today,
August 11, 2022, at 11 a.m. ET to discuss the second quarter 2022
results, followed by a Q & A session.
You can access the live conference call by dialing the following
phone numbers:
- Toll free 1-877-451-6152 or
- International 1-201-389-0879
- Conference ID# 13731731
The conference call will be simultaneously webcast. To listen to
the webcast, log onto it at:
https://viavid.webcasts.com/starthere.jsp?ei=1560780&tp_key=11d78b462d.
The webcast will be available at this link through August 26, 2022.
Financial information presented on the call, including this
earnings press release, will be available on the investors section
of Energy Focus’ website, investors.energyfocus.com.
About Energy Focus
Energy Focus is an industry-leading innovator of sustainable
light-emitting diode (“LED”) lighting and lighting control
technologies and solutions, as well as UV-C Disinfection
technologies and solutions. As the creator of the first
flicker-free LED lamps, Energy Focus develops high quality LED
lighting products and controls that provide extensive energy and
maintenance savings, as well as aesthetics, safety, health and
sustainability benefits over conventional lighting. Our EnFocus™
lighting control platform enables existing and new buildings to
provide quality, convenient and affordable, dimmable and
color-tunable, circadian and human-centric lighting capabilities.
In addition, our patent-pending UVCD technologies and products aim
to provide effective, reliable and affordable UVCD solutions for
buildings, facilities and homes. Energy Focus’ customers include
U.S. and U.S. ally navies, U.S. federal, state and local
governments, healthcare and educational institutions, as well as
Fortune 500 companies. Since 2007, Energy Focus has installed
approximately 900,000 lighting products across the U.S. Navy fleet,
including tubular LEDs, waterline security lights, explosion-proof
globes and berth lights, saving more than five million gallons of
fuel and 300,000 man-hours in lighting maintenance annually. Energy
Focus is headquartered in Solon, Ohio. For more information, visit
our website at www.energyfocus.com.
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. These statements can generally be identified by
the use of forward-looking terminology, including the terms
“believes,” “estimates,” “anticipates,” “expects,” “feels,”
“seeks,” “forecasts,” “projects,” “intends,” “plans,” “may,”
“will,” “should,” “could” or “would” or, in each case, their
negative or other variations or comparable terminology. These
forward-looking statements include all matters that are not
historical facts and include statements regarding our intentions,
beliefs or current expectations concerning, among other things, our
results of operations, financial condition, liquidity, prospects,
growth, strategies, capital expenditures, and the industry in which
we operate. By their nature, forward-looking statements involve
risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future. Although we
base these forward-looking statements on assumptions that we
believe are reasonable when made in light of the information
currently available to us, we caution you that forward-looking
statements are not guarantees of future performance and that our
actual results of operations, financial condition and liquidity,
and industry developments may differ materially from statements
made in or suggested by the forward-looking statements contained in
this release. We believe that important factors that could cause
our actual results to differ materially from forward-looking
statements include, but are not limited to: (i) instability in the
U.S. and global economies and business interruptions experienced by
us, our customers and our suppliers, particularly in light of
supply chain issues, and related long-term impacts on travel, trade
and business operations, as a result of the COVID-19 pandemic; (ii)
the competitiveness and market acceptance of our LED lighting,
control and UVCD technologies, services and products; (iii) our
ability to compete effectively against companies with lower prices
or cost structures, greater resources, or more rapid development
capabilities, and new competitors in our target markets; (iv) our
ability to extend our product portfolio into new end markets,
including consumer products; (v) our ability to realize the
expected novelty, effectiveness, affordability and availability of
our UVCD products and their appeal compared to other competing
products; (vi) our ability to increase demand in our targeted
markets and to manage sales cycles that are difficult to predict
and may span several quarters; (vii) the timing of large customer
orders, significant expenses and fluctuations between demand and
capacity as we manage inventory and invest in growth opportunities;
(viii) our ability to successfully scale our network of sales
representatives, agents, distributors and other channel partners to
compete with the sales reach of larger, established competitors;
(ix) our ability to implement plans to increase sales and control
expenses; (x) our reliance on a limited number of customers for a
significant portion of our revenue, and our ability to maintain or
grow such sales levels; (xi) our ability to add new customers to
reduce customer concentration; (xii) our need for and ability to
obtain additional financing in the near term, on acceptable terms
or at all, to continue our operations; (xiii) our ability to
refinance or extend maturing debt on acceptable terms or at all;
(xiv) our ability to continue as a going concern for a reasonable
period of time; (xv) our ability to attract and retain a new chief
executive officer and a new chief financial officer; (xvi) our
ability to attract, develop and retain qualified personnel, and to
do so in a timely manner; (xvii) our reliance on a limited number
of third-party suppliers and development partners, our ability to
manage third-party product development and obtain critical
components and finished products on acceptable terms and of
acceptable quality despite ongoing global supply chain challenges,
and the impact of our fluctuating demand on the stability of such
suppliers; (xviii) our ability to timely, efficiently and
cost-effectively transport products from our third-party suppliers
by ocean marine and other logistics channels despite global supply
chain and logistics disruptions; (xix) the impact of any type of
legal inquiry, claim or dispute; (xx) the macro-economic
conditions, including recessionary trends, in the United States and
in other markets in which we operate or secure products, which
could affect our ability to obtain raw materials, component parts,
freight, energy, labor, and sourced finished goods in a timely and
cost-effective manner; (xxi) our dependence on military maritime
customers and on the levels and timing of government funding
available to such customers, as well as the funding resources of
our other customers in the public sector and commercial markets;
(xxii) business interruptions resulting from geopolitical actions
such as war and terrorism, natural disasters, including
earthquakes, typhoons, floods and fires, or from health epidemics,
or pandemics or other contagious outbreaks; (xxiii) our ability to
respond to new lighting and air disinfection technologies and
market trends; (xxiv) our ability to fulfill our warranty
obligations with safe and reliable products; (xxv) any delays we
may encounter in making new products available or fulfilling
customer specifications; (xxvi) any flaws or defects in our
products or in the manner in which they are used or installed;
(xxvii) our ability to protect our intellectual property rights and
other confidential information, and manage infringement claims made
by others; (xxviii) our compliance with government contracting laws
and regulations, through both direct and indirect sale channels, as
well as other laws, such as those relating to the environment and
health and safety; (xxix) risks inherent in international markets,
such as economic and political uncertainty, changing regulatory and
tax requirements and currency fluctuations, including tariffs and
other potential barriers to international trade; (xxx) our ability
to maintain effective internal controls and otherwise comply with
our obligations as a public company; and (xxxi) our ability to
maintain compliance with the continued listing standards of The
Nasdaq Stock Market. For additional factors that could cause our
actual results to differ materially from the forward-looking
statements, please refer to our most recent annual report on Form
10-K and quarterly reports on Form 10-Q filed with the Securities
and Exchange Commission.
Condensed Consolidated Balance
Sheets
(in thousands)
June 30, 2022
December 31, 2021
(Unaudited)
ASSETS
Current assets:
Cash
$
938
$
2,682
Trade accounts receivable, less allowances
of $10 and $14, respectively
1,155
1,240
Inventories, net
7,168
7,866
Short-term deposits
501
712
Prepaid and other current assets
847
924
Total current assets
10,609
13,424
Property and equipment, net
585
675
Operating lease, right-of-use asset
1,316
292
Total assets
$
12,510
$
14,391
LIABILITIES
Current liabilities:
Accounts payable
$
1,309
$
2,235
Accrued liabilities
199
265
Accrued legal and professional fees
53
104
Accrued payroll and related benefits
486
718
Accrued sales commissions
55
57
Accrued warranty reserve
315
295
Deferred revenue
—
268
Operating lease liabilities
180
325
Finance lease liabilities
—
1
Streeterville - 2021 note, net of discount
and loan origination fees
809
1,719
Streeterville - 2022 note, net of discount
and loan origination fees
1,031
—
Credit line borrowings, net of loan
origination fees
1,981
2,169
Total current liabilities
6,418
8,156
Condensed Consolidated Balance
Sheets
(in thousands)
June 30, 2022
December 31, 2021
(Unaudited)
Operating lease liabilities, net of
current portion
1,133
26
Streeterville note, net of current
maturities
788
—
Total liabilities
8,339
8,182
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.0001 per
share:
Authorized: 5,000,000 shares (3,300,000
shares designated as Series A Convertible Preferred Stock) at June
30, 2022 and December 31, 2021
Issued and outstanding: 876,447 at June
30, 2022 and December 31, 2021
—
—
Common stock, par value $0.0001 per
share:
Authorized: 50,000,000 shares at June 30,
2022 and December 31, 2021
Issued and outstanding: 7,811,460 at June
30, 2022 and 6,368,549 at December 31, 2021
1
—
Additional paid-in capital
148,221
144,953
Accumulated other comprehensive loss
(3
)
(3
)
Accumulated deficit
(144,048
)
(138,741
)
Total stockholders' equity
4,171
6,209
Total liabilities and stockholders'
equity
$
12,510
$
14,391
Condensed Consolidated Statements of
Operations
(in thousands, except per share
data)
(unaudited)
Three months ended
Six months ended June
30,
June 30, 2022
March 31, 2022
June 30, 2021
2022
2021
Net sales
$
1,480
$
2,061
$
2,074
$
3,541
$
4,711
Cost of sales
1,371
2,087
1,681
3,458
3,765
Gross profit (loss)
109
(26
)
393
83
946
Operating expenses:
Product development
353
503
370
856
1,023
Selling, general, and administrative
1,964
2,127
2,268
4,091
4,486
Restructuring recovery
—
—
(3
)
—
(22
)
Total operating expenses
2,317
2,630
2,635
4,947
5,487
Loss from operations
(2,208
)
(2,656
)
(2,242
)
(4,864
)
(4,541
)
Other expenses (income):
Interest expense
260
184
216
444
343
Gain on forgiveness of Paycheck Protection
Program loan
—
—
—
—
(801
)
Other income
—
(30
)
—
(30
)
—
Other expenses
18
11
15
29
32
Net loss
$
(2,486
)
$
(2,821
)
$
(2,473
)
$
(5,307
)
$
(4,115
)
Net loss per common share attributable
to common stockholders - basic:
From operations
$
(0.35
)
$
(0.44
)
$
(0.59
)
$
(0.78
)
$
(1.05
)
Weighted average shares of common stock
outstanding:
Basic and diluted
7,166
6,437
4,211
6,803
3,913
Condensed Consolidated Statements of
Cash Flows
(in thousands)
(unaudited)
Three months ended
Six months ended June
30,
June 30, 2022
March 31, 2022
June 30, 2021
2022
2021
Cash flows from operating
activities:
Net loss
(2,486
)
$
(2,821
)
$
(2,473
)
$
(5,307
)
$
(4,115
)
Adjustments to reconcile net loss to
net cash used in operating activities:
Other income
—
(30
)
—
(30
)
—
Gain on forgiveness of Paycheck Protection
Program loan
—
—
—
—
(801
)
Depreciation
43
44
53
87
100
Stock-based compensation
54
44
208
98
348
Provision for doubtful accounts
receivable
5
(9
)
2
(4
)
8
Provision for slow-moving and obsolete
inventories
(185
)
129
(28
)
(56
)
61
Provision for warranties
51
(30
)
—
21
12
Amortization of loan discounts and
origination fees
91
69
59
160
97
Changes in operating assets and
liabilities (sources / (uses) of cash):
Accounts receivable
184
(83
)
358
101
890
Inventories
384
370
(586
)
754
(2,549
)
Short-term deposits
47
12
137
59
149
Prepaid and other assets
96
20
(32
)
116
(28
)
Accounts payable
(777
)
61
(869
)
(716
)
82
Accrued and other liabilities
(149
)
(211
)
(149
)
(360
)
(358
)
Deferred revenue
—
(268
)
(2
)
(268
)
(1
)
Total adjustments
(156
)
118
(849
)
(38
)
(1,990
)
Net cash used in operating
activities
(2,642
)
(2,703
)
(3,322
)
(5,345
)
(6,105
)
Cash flows from investing
activities:
Acquisitions of property and equipment
(2
)
(35
)
(102
)
(37
)
(211
)
Net cash used in investing
activities
(2
)
(35
)
(102
)
(37
)
(211
)
Condensed Consolidated Statements of
Cash Flows - continued
(in thousands)
(unaudited)
Three months ended
Six months ended June
30,
June 30, 2022
March 31, 2022
June 30, 2021
2022
2021
Cash flows from financing activities
(sources / (uses) of cash):
Proceeds from the issuance of common stock
and warrants
3,500
—
5,000
3,500
5,000
Proceeds from the exercise of warrants
—
—
—
—
527
Offering costs paid on the issuance of
common stock and warrants
(334
)
—
(469
)
(334
)
(469
)
Principal payments under finance lease
obligations
—
(1
)
(1
)
(1
)
(2
)
Proceeds from exercise of stock options
and employee stock purchase plan purchases
5
—
59
5
59
Common stock withheld in lieu of income
tax withholding on vesting of restricted stock units
—
—
—
—
(2
)
Proceeds from the 2021 Streeterville
note
—
—
1,515
—
1,515
Payments on the 2021 Streeterville
note
(410
)
(615
)
—
(1,025
)
—
Proceeds from the 2022 Streeterville
note
2,000
—
—
2,000
—
Deferred financing costs paid
(234
)
—
(30
)
(234
)
(30
)
Net (payments) proceeds from the credit
line borrowings - Credit Facilities
(1,170
)
897
(1,871
)
(273
)
(791
)
Net cash provided by financing
activities
3,357
281
4,203
3,638
5,807
Net increase (decrease) in cash and
restricted cash
713
(2,457
)
779
(1,744
)
(509
)
Cash and restricted cash, beginning of
period
225
2,682
890
2,682
2,178
Cash and restricted cash, end of
period
$
938
$
225
$
1,669
$
938
$
1,669
Classification of cash and restricted
cash:
Cash
$
938
$
225
$
1,327
$
938
$
1,327
Restricted cash held in other assets
—
—
342
—
342
Cash and restricted cash
$
938
$
225
$
1,669
$
938
$
1,669
Sales by Product
(in thousands)
(unaudited)
Three months ended
Six months ended June
30,
June 30, 2022
March 31, 2022
June 30, 2021
2022
2021
Net sales:
Commercial
$
975
$
1,134
$
1,078
$
2,109
$
1,991
Military maritime products
505
927
996
1,432
2,720
Total net sales
$
1,480
$
2,061
$
2,074
$
3,541
$
4,711
Non-GAAP Measures
In addition to the results in this release that are presented in
accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”), we provide certain non-GAAP measures,
which present operating results on an adjusted basis. These
non-GAAP measures are supplemental measures of performance that are
not required by or presented in accordance with U.S. GAAP and,
include:
- total availability, which we define as our ability on the
period end date to access additional cash if necessary under our
short-term credit facilities, plus the amount of cash on hand on
that same date;
- adjusted EBITDA, which we define as net income (loss) before
giving effect to restructuring expenses, financing charges, income
taxes, non-cash depreciation, stock non-cash compensation, accrued
incentive compensation, non-routine charges to other income or
expense, and change in fair value of warrant liability; and
- adjusted gross margins, which we define as our gross profit
margins during the period without the impact from excess and
obsolete, in-transit and net realizable value inventory reserve
movements that do not reflect current period inventory
decisions.
We believe that our use of these non-GAAP financial measures
permits investors to assess the operating performance of our
business relative to our performance based on U.S. GAAP results and
relative to other companies within the industry by isolating the
effects of items that may vary from period to period without
correlation to core operating performance or that vary widely among
similar companies, and to assess liquidity, cash flow performance
of the operations, and the product margins of our business relative
to our U.S. GAAP results and relative to other companies in the
industry by isolating the effects of certain items that do not have
a current period impact. However, our presentation of these
non-GAAP measures should not be construed as an indication that our
future results will be unaffected by unusual or infrequent items or
that the items for which we have made adjustments are unusual or
infrequent or will not recur. Further, there are limitations on the
use of these non-GAAP measures to compare our results to other
companies within the industry because they are not necessarily
standardized or comparable to similarly titled measures used by
other companies. We believe that the disclosure of these non-GAAP
measures is useful to investors as they form part of the basis for
how our management team and Board of Directors evaluate our
operating performance.
Total availability, adjusted EBITDA and adjusted gross margins
do not represent cash generated from operating activities in
accordance with U.S. GAAP, are not necessarily indicative of cash
available to fund cash needs and are not intended to and should not
be considered as alternatives to cash flow, net income and gross
profit margins, respectively, computed in accordance with U.S. GAAP
as measures of liquidity or operating performance. Reconciliations
of these non-GAAP measures to the most directly comparable
financial measures calculated and presented in accordance with U.S.
GAAP are provided below for total availability, adjusted EBITDA and
adjusted gross margins, respectively.
As of
(in thousands)
June 30, 2022
March 31, 2022
June 30, 2021
Total borrowing capacity under credit
facilities
$
3,568
$
4,026
$
4,490
Less: Credit line borrowings, gross(1)
(2,015
)
(3,175
)
(1,698
)
Excess availability under credit
facilities(2)
1,553
851
2,792
Cash
938
225
1,327
Total availability(3)
$
2,491
$
1,076
$
4,119
(1)Forms 10-Q Balance Sheets reflect the
Line of credit net of debt financing costs of $23, $66 and $169,
respectively.
(2)Excess availability under credit
facilities - represents difference between maximum borrowing
capacity of credit facilities and actual borrowings
(3)Total availability - represents
Company’s ‘access’ to cash if needed at point in time
Three months ended
Six months ended June
30,
(in thousands)
June 30, 2022
March 31, 2022
June 30, 2021
2022
2021
Net loss
$
(2,486
)
$
(2,821
)
$
(2,473
)
$
(5,307
)
$
(4,115
)
Restructuring expense (recovery)
—
—
(3
)
—
(22
)
Net loss, excluding
restructuring
(2,486
)
(2,821
)
(2,476
)
(5,307
)
(4,137
)
Interest
260
184
216
444
343
Gain on forgiveness of Paycheck Protection
Program loan
—
—
—
—
(801
)
Other income
—
(30
)
—
(30
)
—
Depreciation
43
44
53
87
100
Stock-based compensation
54
44
208
98
348
Other incentive compensation
33
(5
)
12
28
130
Adjusted EBITDA
$
(2,096
)
$
(2,584
)
$
(1,987
)
$
(4,680
)
$
(4,017
)
Three Months Ended
(in thousands)
June 30, 2022
March 31, 2022
June 30, 2021
($)
(%)
($)
(%)
($)
(%)
Net sales
$
1,480
$
2,061
$
2,074
Actual gross profit
$
109
7.4
%
$
(26
)
(1.3
)%
$
393
18.9
%
E&O, in-transit and net realizable
value inventory reserve changes, net of scrap write-off for
inventory reduction
(185
)
(12.5
)%
129
6.3
%
(28
)
(1.4
)%
Adjusted gross profit
$
(76
)
(5.1
)%
$
103
5.0
%
$
365
17.6
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005074/en/
Investor Contact: Stephen Socolof Interim Chief Executive
Officer (216) 715-1300
Energy Focus (NASDAQ:EFOI)
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