Electrovaya Inc. (“Electrovaya” or the “Company”) (TSX:EFL)
(OTCQX:EFLVF) today reported its financial results for the fiscal
first quarter ended December 31, 2017 (“Q1 2018”). All numbers are
in US dollars unless otherwise noted.
The financial statements for Q1 2018 include the
financial position and results of Litarion GmbH (“Litarion”) as
discontinued operations. On January 25, 2018, Electrovaya announced
that Litarion, formerly its German subsidiary, commenced voluntary
preliminary structured insolvency proceedings.
As mentioned in previous disclosure, the demand
for Litarion’s products in Germany and elsewhere took longer than
expected to emerge. As a result, Litarion was incurring large
losses despite its high-quality products and service. By accounting
for Litarion as a discontinued operation, the Company’s overhead
expenses and cash usage are significantly reduced. For perspective,
Litarion’s cash used was $17.5 million in fiscal 2017, and $1.8
million in Q1 2018. Moreover, the elimination of Litarion's cash
usage also means that the Company’s annualized break-even revenue
level has decreased significantly.
Over the last 2.5 years, Litarion played an
important role in Electrovaya’s development and validation of its
industry-leading lithium ion battery systems. Now, however,
Electrovaya believes that it no longer needs its own contract
manufacturing facilities for electrode and separator products, as
the vast majority of its customers are looking for fully integrated
battery systems, especially its materials handling battery
products.
Electrovaya is confident that it can continue to
gain new and fulfill existing customer orders with no material
disruption as a result of the Litarion’s Discontinued Operations.
Electrovaya has developed alternative component suppliers and will
continue producing products with similar high quality, long
cycle-life and safety. Furthermore, the changes will additionally
allow lower costs and shortened lead times, which will benefit our
customers.
Electrovaya is establishing itself as a leading
global producer in the emerging market of lithium ion battery
systems for materials handling vehicles. The Company now has an
asset-light model capable of meeting rising customer demand while
capitalizing on a proven supply chain network.
Q1 2018 Financial Highlights:
- Revenue from continuing operations
was $0.75 million (Cdn $1 million), compared to $0.73 million (Cdn
$0.98 million) for the fiscal first quarter ended December 31, 2016
(“Q1 2017”).
- The loss from continuing operations
was $2.7 million (Cdn $3.5 million) compared to $0.9 million (Cdn
$1.2 million) for Q1 2017.
- Net loss in total was $15.2 million
(Cdn $19.4 million), compared to $2.4 million (Cdn $3.2 million)
for Q1 2017. This included the net loss from discontinued
operations of $12.5 million (Cdn $16 million) for Q1 2018 and $1.6
million (Cdn $2.1 million) for Q1 2017.
- Inventory for continuing operations
as at December 31, 2017 was $3.5 million (Cdn $4.4 million),
compared to $4.1 million (Cdn $5.5 million) as at September 30,
2017.
Q1 2018 Business
Highlights:
Electrovaya started both initial and follow-up deliveries on
purchase orders from multiple US Fortune 500 customers for its
lithium ion forklift battery systems. Other potential customers in
the materials handling vehicles sector continue to test and
validate the Company’s products. About 85% of our revenue in Q1
2018 came from the Materials Handling Electric Vehicle (MHEV)
sector.
The Company initiated deliveries on the Cdn $4.3 million
purchase order from Walmart Canada, which was announced on
September 18, 2017. Electrovaya recorded a small amount of revenue
from this order in Q1 2018. The balance (~90%) will be delivered
during Q2 2018. The Company believes that this will be the largest
single lithium ion powered MHEV installation in North America and
will be a major milestone for the industry and the company.
The Company continued to work with two OEM partners in the USA,
who are developing electric vehicles in the MHEV and Autonomous
Guided Vehicle (AGV) sectors respectively
Electrovaya completed financings that strengthened its working
capital. On October 4, 2017, the Company completed the second
tranche of a private placement that raised an aggregate total of
Cdn$5.3 million in gross proceeds. On December 20, 2017, the
Company announced that it entered into a commitment for a Cdn $8
million drawdown equity facility and a Cdn $2 million private
placement. On December 27, 2017, the Company completed the private
placement. Negotiations with respect to the definitive agreements
for the drawdown facility are ongoing.
Subsequent to Q1 2018, on February 9, 2018, Electrovaya listed
its head office building in Mississauga, Ontario for sale at Cdn
$24.9 million. The Company expects to either lease back space in
the building or move to other leased premises. Electrovaya requires
less space as it expands its purchases from qualified supply chain
providers.
The Company’s complete Q1 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 Thursday, February 15, 2018
at 8:00 a.m. Eastern Time (ET) to discuss the Q1 2018 financial
results and to provide a business update.
Conference ID:13676683US and Canada toll free: (877)
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 February 15, 2018 through February 28, 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
13676683.
For more information, please
contact:
Peter KovenBay Street CommunicationsTelephone:
1.647.496.7857Email: peterkoven@baystreetcommunications.com
About Electrovaya Inc.
Electrovaya Inc. (TSX:EFL) (OTCQX:EFLVF)
designs, develops and manufactures proprietary Lithium Ion
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, expectations with respect to German court
actions with respect to any insolvency process of Litarion, 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, the Company’s expectations with respect to a
sale of its premises and continued premises for operations, 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, 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 filing, 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.
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