- ECOtality's eTec Launches Approximately $100 Million Department of Energy Contract
- The Company Successfully Raised $20.5 Million and Converted $9.08 of Debt to Equity
- $15 Million in Manufacturing and Distribution Joint Ventures in China Established
ECOtality, Inc. (OTCBB:ETLY), a leader in clean electric transportation and storage technologies, today announced financial results for the third quarter ended September 30, 2009 and is providing a shareholder update. During the third quarter of 2009, ECOtality was focused on the launch of the approximately $100 million U.S. Department of Energy (DOE) electric vehicle (EV) infrastructure project, the recapitalization of the Company and the execution of two joint ventures in China for the manufacturing and distribution of EV infrastructure.
"In the past quarter, ECOtality focused its resources on becoming the international leader in electric vehicle charging systems – a strategy that was validated by the U.S. Department of Energy award of almost $100 million for the largest ever EV infrastructure deployment," said Jonathan Read, President and CEO, ECOtality. "The DOE contract marks a significant milestone for the Company as it validates our leading charge technologies, creates an immediate and dominant market position and provides a platform for strong financial growth as a true market leader for EV infrastructure."
Mr. Read continued, "The $20.5 million raised will allow us to efficiently begin our DOE contract and provides us with the working capital to pursue further growth and market expansion. Additionally, the newly formed joint ventures in China to manufacture and distribute EV charging equipment is extremely significant for the Company as China is expected to be the largest market for EVs. Finally, as part of the raise and capital restructuring, we successfully converted all debt to equity, eliminating the future dilution of warrants and significantly strengthening our capital structure."
Key Operational Highlights
- The Company was awarded $99.8 million from the U.S. Department of Energy, which was supplemented by an additional commitment of $8 million from the California Energy Commission, for the largest deployment of EVs and charging infrastructure ever undertaken in The EV Project (www.theEVproject.com). The contract was finalized and the Project was officially initiated on October 1, 2009.
- ECOtality raised $20.5 million in equity financing from various institutional investors. In addition to the capital raise, the debenture holders of ECOtality will convert all $9.1 million of existing debentures and related warrants into equity. The restructuring diminishes control by any one shareholder and through the elimination of debt and warrants significantly strengthening ECOtality's capital structure for current and future shareholders. Management believes the transaction will make the Company more attractive for the future acquisition of capital. Concurrent with the transaction, ECOtality's Board authorized management to submit an application to be listed on The NASDAQ Stock Market after completing a 1:60 reverse stock split.
- ECOtality signed definitive agreements with Shenzhen Goch Investment, Ltd. (SGI), which established two joint venture companies in China. SGI has committed to providing up to $10 million to fund a joint venture with ECOtality to manufacture and assemble electric vehicle charging equipment and $5 million to fund a joint venture to market and sell these charging systems in China.
- The Company was awarded a patent for its Bridge Power Manager (BPM) by the United States Patent and Trademark Office. The BPM provides a cost-effective means to share power with existing electric circuits for eTec's Minit-Charger™ line of fast charge systems.
- ECOtality's President and CEO, Jonathan Read, along with 40 other delegates, joined Energy Secretary Steven Chu, Commerce Secretary Gary Locke and their Chinese counterparts in Beijing recently for a U.S. – China Clean Energy Roundtable. This session was an important part of the discussions taking place between the two countries during President Barack Obama's visit to China.
- Vice President Joe Biden held a press conference at Phoenix Sky Harbor International Airport to discuss recent alternative energy government grants. At the event Mr. Biden met with members of eTec's management to receive an update on The EV Project and its importance for advancing electric transportation.
Third Quarter Financial Results for the Period Ended September 30, 2009
In the quarter ended September 30, 2009, ECOtality recognized revenues of $1,900,002 compared to the quarter ended September 30, 2008 of $2,900,819. This reduction in revenue is largely related to the effect of the slowing economy and the focusing of resources on securing the DOE contract.
Total operating expenses during the three months ended September 30, 2009 were $11,394,410 compared to $1,876,300 for the three months ended September 30, 2008. General and administrative expenses were $11,291,586 or 99% of total operating expenses for the three months ended September 30, 2009 compared with $1,534,492 or 82% for the three months ended September 30, 2008. The increase in general and administrative expenses is attributable to one-time performance awards made to management for the successful award of the $99.8 million contract with the Department of Energy.
ECOtality recorded an operating loss of $15,680,502 for the quarter ended September 30, 2009 compared with a loss of $1,564,429 for the quarter ended September 30, 2008. For comparative purposes, the operating loss included the one-time compensation expenses described above and other increased expenses related to our efforts to restructure our debt and obtain new capital.
Mr. Read concluded, "During this quarter we have established numerous strategic relationships with both domestic and international governments that are dedicated to implementing clean energy infrastructure. The Company has bolstered its balance sheet and secured capital to operate in a manner fitting that of a market leader. While we are pleased with the recent operational successes that we have achieved, we are excited about our growth prospects in this rapidly growing sector over the upcoming months. Our management team is confident that we can capture additional market share in what is estimated to be a $2 billion emerging industry for EV charging systems. We remain focused on strengthening our strategic relationships, expanding our market presence and increasing earnings. We look forward to leveraging the strong operational base that we have established during this quarter and growing ECOtality to its full capacity going forward."
Financial Results for the Nine-month Period Ended September 30, 2009
In the nine months ended September 30, 2009, ECOtality had revenues of $6,117,286 compared to the nine months ended September 30, 2008 of $8,654,868.
Total operating expenses during the nine months ended September 30, 2009 were $14,543,241 compared to $6,186,517 for nine months ended September 30, 2008. General and administrative expenses were $14,177,947 for nine months ended September 30, 2009 compared with $5,431,071 for the nine months ended September 30, 2008. The increase in general and administrative costs is related to one-time compensation expenses described in the quarterly results.
The Company recorded an operating loss of $20,304,903 for the nine months ended September 30, 2009 compared with the loss of 4,466,242 for the nine months ended September 30, 2008. This operating loss is attributable to the increased interest expense accrual for the non cash impact of the consideration given in return for waivers granted by our debenture holders as well as the one-time compensation expenses previously described.
Shareholder Conference Call
Management will host a conference call with the investment community on Tuesday, November 24, 2009 at 4:30 p.m. Eastern Daylight Time. The call will discuss the recent $99.8 million government grant, refinancing of the company and provide a Shareholder Update to the investment community. Interested parties may participate in the conference call by dialing 1-888-846-5003 or 1-480-629-9856 for international callers. Please call 5 to 10 minutes prior to 4:30 p.m. When prompted, ask for the "ECOtality Shareholder Update and Third Quarter Financial Results Call." A telephonic replay may be accessed approximately two hours after the call through November 31, 2009, by dialing 1-800-406-7325 or 1-303-590-3030 for international callers and entering the replay access code 4186310. The teleconference will be webcast simultaneously on the ECOtality website at www.ecotality.com/investors.
About ECOtality, Inc.
ECOtality, Inc. (OTCBB:ETLY), headquartered in Scottsdale, Arizona, is a leader in clean electric transportation and storage technologies. Through innovation, acquisitions, and strategic partnerships, ECOtality accelerates the market applicability of advanced electric technologies to replace carbon-based fuels. For more information about ECOtality, Inc., please visit www.ecotality.com.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Contacts:
ECOtality
Colin Read, 480-219-5005
cread@ecotality.com
or
Alliance
Advisors for ECOtality
Thomas Walsh, 212-398-3486 (Investor
Relations)
