Eos Energy Enterprises, Inc. (NASDAQ: EOSE) ("Eos" or the
“Company”), a leading provider of safe, scalable, efficient, and
sustainable zinc-based long duration energy storage systems, today
announced financial results for the first quarter ended
March 31, 2024.
First Quarter Highlights
- Revenue totaled $6.6 million from
its Z3 semi-automated manufacturing line, 25% lower than prior year
period, driven by customer revenue recognition timing.
- Cost
of Goods Sold totaled $28.2 million, a 5%
increase compared to prior year period, on 28% higher manufacturing
volume.
- Operating expenses
totaled $19.5 million, a 3% decrease compared to prior year
period.
- Cash balance of $31.8
million (excluding restricted cash) as of March
31, 2024.
- Commercial
opportunity pipeline of $13.3 billion, a 56%
increase compared to prior year with a $602.7 million backlog
as of March 31, 2024, an increase of 13% compared to March 31,
2023.
- Expanded and extended existing
agreement with Pine Gate Renewables with a new Master Supply
Agreement (MSA) for 500 MWh of energy storage systems to be
delivered over the next five years.
Eos Chief Executive Officer Joe Mastrangelo
said, “We’ve now shipped over 110 Z3
Cubes to five separate customers since the
first shipment in late September. It’s an incredible testament
to the work of the entire Eos team, considering that last
year we were still manufacturing Gen 2.3 and were yet to launch the
Z3. I’m incredibly proud of the work this team has
accomplished and where we stand today.”
Mastrangelo concluded, “We’ve
made tremendous progress toward the goals outlined on the
December Strategic Outlook call and we are now just weeks away from
commissioning our first state-of-the-art manufacturing line in
Turtle Creek, PA. Our orders backlog and pipeline remain
strong, and the significant volume, cost, and
manufacturability benefits associated with our
first line will improve our ability to meet the
growing demand for longer duration energy storage needs with a
safe, quiet, American made solution.”
2024 Outlook
The Company reaffirmed the following outlook for
2024:
- The Company expects to recognize
$60 million to $90 million in revenue as state-of-the-art (SotA)
manufacturing line 1 is expected to complete Site Acceptance
Testing (SAT) in Q2 2024. The Company then plans to increase
manufacturing volume throughout 2024 that aligns production with
customer requirements as well as the planned realization of its
cost-out roadmap.
- The Company forecasts positive
contribution margin in Q4 2024 as multiple cost
reduction actions are implemented throughout the
year. Contribution margin is defined as sales price less direct
labor and direct materials and includes the benefit of the
production tax credits.
Recent Business Highlights
Project AMAZE In early May, the
Company successfully achieved Factory Acceptance Testing (FAT) for
its first SotA manufacturing line. The line, designed and developed
in partnership with ACRO Automation Systems, is in the process of
being disassembled, shipped, and installed in the Turtle Creek
facility for SAT. Completing FAT is a significant milestone for the
Company as all process stations are functioning as designed and an
initial 12 second cycle time has been achieved, with a clear path
to a 10 second target. The line remains on schedule with the
expectation to be commissioned in Q2 2024, an important milestone
as the Company continues to focus on meeting the conditions of the
United States Department of Energy Title XVII loan.
Eos Z3 Shipments; Company Surpasses ~3
GWh of Cumulative Total Energy Discharged Announced on
April 23, 2024, Eos has manufactured and shipped over 110 Z3 Cubes
and nearly 75,000 battery modules to five different customers since
late September 2023. As of today, 95% of those cubes shipped have
now been installed on foundations and are commencing final customer
commissioning followed by Z3 Cube field operation.
Eos’s technology has cumulatively discharged
approximately 3 GWh in energy, adding another 400 MWh in just the
last three weeks. The majority of discharged energy comes from Gen
2.3 systems operating in the field with over 1.4 GWh discharged
year to date.
Path to Profitability In
December, the Company outlined an 80% Z3 launch to scale cost
reduction target. The Company has accelerated and secured 55% of
the direct material cost-out target as the R&D, engineering and
supply chain teams work to utilize alternative materials, increase
energy density, and execute on long term supplier contracts. The
Company recently transitioned to its lower cost, higher energy
density module along with its new inline energy cube, two programs
that are critical to its cost roadmap and manufacturing processes.
Current Eos manufacturing footprint is sized for the 1.25 GWh SotA
line 1 capacity. As the Company ramps production, labor and
overhead absorption are forecasted to improve in line with the
December 2023 Strategic Outlook Call. In addition, the Company is
investing in a plan that will further increase SotA line 1 capacity
by nearly 1 GWh utilizing the same manufacturing footprint.
Market Outlook With a robust
pipeline valued at $13.3 billion, the Company is poised to
capitalize on the growing demand for domestically produced energy
storage solutions driven by recent developments in policy,
technology, and market dynamics. In a strategic move to fortify
national security and protect critical infrastructure, Congress,
through the National Defense Authorization Act, has enacted a ban
on the Department of Defense’s procurement and use of select
Chinese-manufactured batteries across its operations. Eos continues
to see this as a tremendous growth opportunity as the need for
safe, non-flammable, American-made energy storage technology plays
a pivotal role in enabling the widespread adoption of renewable
energy and advancing grid resilience. The Company is currently
working 1.2 GWh in late stage-approvals, awaiting grant awards,
shortlisted projects, and final contracting with Eos
technology.
Earnings Conference Call and Audio
Webcast
Eos will host a conference call to discuss its
first quarter 2024 financial results on May 15, 2024, at 8:30 a.m.
ET. A live webcast of the call will be available on the “Investor
Relations” page of the Company’s website at
https://investors.eose.com. To access the call by webcast, please
register in advance using this link (registration link). To avoid
delays, we encourage participants to dial into the conference call
fifteen minutes ahead of the scheduled start time.
The conference call replay will be available via
webcast through Eos’s investor relations website for a limited
time. The webcast replay will be available beginning at 11:30 a.m.
ET on May 15, 2024, and can be accessed by visiting
https://investors.eose.com/events-and-presentations.
About Eos
Eos Energy Enterprises, Inc. is accelerating the
shift to clean energy with positively ingenious solutions that
transform how the world stores power. Our breakthrough Znyth™
aqueous zinc battery was designed to overcome the limitations of
conventional lithium-ion technology. Safe, scalable, efficient,
sustainable—and manufactured in the U.S—it's the core of our
innovative systems that today provide utility, industrial, and
commercial customers with a proven, reliable energy storage
alternative for 3- to 12-hour applications. Eos was founded in 2008
and is headquartered in Edison, New Jersey. For more information
about Eos (NASDAQ: EOSE), visit eose.com.
Contacts |
Investors: |
ir@eose.com |
Media: |
media@eose.com |
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Forward Looking Statements
Except for the historical information contained herein, the matters
set forth in this press release are forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, statements regarding
our expected revenue, contribution margins, orders backlog and
opportunity pipeline for the fiscal year ended December 31, 2024,
our path to profitability and strategic outlook, the tax credits
available to our customers or to Eos pursuant to the Inflation
Reduction Act of 2022, statements regarding our ability to secure
final approval of a loan from the Department of Energy LPO, or our
anticipated use of proceeds from any loan facility provided by the
US Department of Energy, statements that refer to 2024 outlook,
projections, forecasts or other characterizations of future events
or circumstances, including any underlying assumptions. The words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intends," "may," "might," "plan," "possible," "potential,"
"predict," "project," "should," "would" and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements are based on our management’s beliefs,
as well as assumptions made by, and information currently available
to, them. Because such statements are based on expectations as to
future financial and operating results and are not statements of
fact, actual results may differ materially from those
projected.
Factors which may cause actual results to differ
materially from current expectations include, but are not limited
to: changes adversely affecting the business in which we are
engaged; our ability to forecast trends accurately; our ability to
generate cash, service indebtedness and incur additional
indebtedness; our ability to raise financing in the future; our
customers’ ability to secure project financing; the amount of final
tax credits available to our customers or to Eos pursuant to the
Inflation Reduction Act, uncertainties around our ability meet the
applicable conditions precedent and secure final approval of a
loan, in a timely manner or at all from the Department of Energy,
Loan Programs Office, or the timing of funding and the final size
of any loan that is approved; the possibility of a government
shutdown while we work to meet the applicable conditions precedent
and finalize loan documents with the U.S. Department of Energy Loan
Programs Office or while we await notice of a decision regarding
the issuance of a loan from the Department Energy Loan Programs
Office; our ability to continue to develop efficient manufacturing
processes to scale and to forecast related costs and efficiencies
accurately; fluctuations in our revenue and operating results;
competition from existing or new competitors; our ability to
convert firm order backlog and pipeline to revenue; risks
associated with security breaches in our information technology
systems; risks related to legal proceedings or claims; risks
associated with evolving energy policies in the United States and
other countries and the potential costs of regulatory compliance;
risks associated with changes to the U.S. trade environment; risks
resulting from the impact of global pandemics, including the novel
coronavirus, Covid-19; our ability to maintain the listing of our
shares of common stock on NASDAQ; our ability to grow our business
and manage growth profitably, maintain relationships with customers
and suppliers and retain our management and key employees; risks
related to the adverse changes in general economic conditions,
including inflationary pressures and increased interest rates; risk
from supply chain disruptions and other impacts of geopolitical
conflict; changes in applicable laws or regulations; the
possibility that Eos may be adversely affected by other economic,
business, and/or competitive factors; other factors beyond our
control; risks related to adverse changes in general economic
conditions; and other risks and uncertainties.
The forward-looking statements contained in this
press release are also subject to additional risks, uncertainties,
and factors, including those more fully described in the Company’s
most recent filings with the Securities and Exchange Commission,
including the Company’s most recent Annual Report on Form 10-K and
subsequent reports on Forms 10-Q and 8-K. Further information on
potential risks that could affect actual results will be included
in the subsequent periodic and current reports and other filings
that the Company makes with the Securities and Exchange Commission
from time to time. Moreover, the Company operates in a very
competitive and rapidly changing environment, and new risks and
uncertainties may emerge that could have an impact on the
forward-looking statements contained in this press release.
Forward-looking statements speak only as of the
date they are made. Readers are cautioned not to put undue reliance
on forward-looking statements, and, except as required by law, the
Company assumes no obligation and does not intend to update or
revise these forward-looking statements, whether as a result of new
information, future events, or otherwise.
Key Metrics
Backlog. Our backlog represents
the amount of revenue that we expect to realize from existing
agreements with our customers for the sale of our battery
energy storage systems and performance of services. The
backlog is calculated by adding new orders in the current
fiscal period to the backlog as of the end of the prior fiscal
period and then subtracting the shipments in the current
fiscal period. If the amount of an order is modified or cancelled,
we adjust orders in the current period and our backlog accordingly,
but do not retroactively adjust previously published backlogs.
There is no comparable US-GAAP financial measure for backlog. We
believe that the backlog is a useful indicator regarding the future
revenue of our Company.
Pipeline. Our pipeline
represents projects for which we have submitted technical proposals
or non-binding quotes plus letters of intent (“LOI”) or firm
commitments from customers. Pipeline does not include lead
generation projects.
Booked Orders. Booked orders
are orders where we have legally binding agreements with a Purchase
Order (“PO”) or Master Supply Agreement (“MSA”) executed by both
parties.
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EOS ENERGY ENTERPRISES, INC. EARNINGS
RELEASE TABLES UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS (In thousands, except share and per share data) |
|
|
|
|
|
|
|
For The Three Months Ended March
31, |
|
2024 |
|
2023 |
Revenue |
|
|
|
|
|
Total revenue |
$ |
6,601 |
|
|
$ |
8,835 |
|
Costs and expenses |
|
|
|
|
|
Cost of goods sold |
28,229 |
|
|
26,940 |
|
Research and development expenses |
5,200 |
|
|
5,445 |
|
Selling, general and administrative expenses |
14,242 |
|
|
13,955 |
|
Loss from write-down of property, plant and equipment |
65 |
|
|
760 |
|
Total costs and expenses |
47,736 |
|
|
47,100 |
|
Operating loss |
(41,135 |
) |
|
(38,265 |
) |
Other (expense) income |
|
|
|
|
|
Interest expense, net |
(4,267 |
) |
|
(4,829 |
) |
Interest expense - related party |
(4,851 |
) |
|
(13,755 |
) |
Change in fair value of warrants |
2,900 |
|
|
(156 |
) |
Change in fair value of derivatives - related parties |
534 |
|
|
(12,934 |
) |
Loss on debt extinguishment |
— |
|
|
(1,634 |
) |
Other income (expense) |
136 |
|
|
(17 |
) |
Loss before income taxes |
$ |
(46,683 |
) |
|
$ |
(71,590 |
) |
Income tax expense |
25 |
|
|
10 |
|
Net loss |
$ |
(46,708 |
) |
|
$ |
(71,600 |
) |
Other comprehensive income |
|
|
|
|
|
Foreign currency translation adjustment, net of tax |
(5 |
) |
|
1 |
|
Comprehensive loss |
$ |
(46,713 |
) |
|
$ |
(71,599 |
) |
|
|
|
|
|
|
Basic and diluted loss per share attributable to common
shareholders |
|
|
|
|
|
Basic |
$ |
(0.23 |
) |
|
$ |
(0.82 |
) |
Diluted |
$ |
(0.23 |
) |
|
$ |
(0.82 |
) |
Weighted average shares of common stock |
|
|
|
|
|
Basic |
201,306,905 |
|
|
86,797,669 |
|
Diluted |
201,306,905 |
|
|
86,797,669 |
|
|
|
|
|
|
|
EOS ENERGY
ENTERPRISES, INC.EARNINGS RELEASE TABLES
UNAUDITED CONSOLIDATED BALANCE SHEETS DATA (In
thousands) |
|
|
March 31, 2024 |
|
December 31, 2023 |
Balance sheet data |
|
|
|
Cash and cash equivalents |
$ |
31,773 |
|
|
$ |
69,473 |
|
Other
current assets |
55,245 |
|
|
52,858 |
|
Property and
equipment, net |
42,742 |
|
|
37,855 |
|
Other
assets |
25,922 |
|
|
26,306 |
|
Total
assets |
155,682 |
|
|
186,492 |
|
Total
liabilities |
303,355 |
|
|
297,292 |
|
Total
deficit |
(147,673 |
) |
|
(110,880 |
) |
|
|
|
|
|
|
UNAUDITED
STATEMENTS OF CASH FLOW DATA (In thousands) |
|
|
March 31, 2024 |
|
March 31, 2023 |
|
|
|
|
Cash used in operating activities |
$ |
(40,474 |
) |
|
$ |
(30,478 |
) |
Cash used in
investing activities |
|
(4,042 |
) |
|
|
(2,897 |
) |
Cash
provided by financing activities |
|
6,111 |
|
|
|
32,455 |
|
Effect of
foreign exchange on cash, cash equivalents and restricted cash |
|
(6 |
) |
|
|
(1 |
) |
Net decrease
in cash, cash equivalents and restricted cash |
|
(38,411 |
) |
|
|
(921 |
) |
Cash, cash
equivalents and restricted cash, beginning of period1 |
|
84,667 |
|
|
|
31,223 |
|
Cash, cash
equivalents and restricted cash, end of period1 |
$ |
46,256 |
|
|
$ |
30,302 |
|
(1) Includes current and long-term restricted
cash, as reflected on the balance sheet
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