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ZBB Energy Corporation Reports First Quarter 2013 Results

ZBB Energy Corporation Reports First Quarter 2013 Results 
ZBB Receives $860,000 Order From Major Vehicle/Engine Manufacturer
for Hybrid Vehicle Motor Controller 
MILWAUKEE, WI -- (Marketwire) -- 11/05/12 --  ZBB Energy Corporation
(NYSE MKT: ZBB), a leading developer of intelligent, renewable energy
power platforms, today announced its financial results for the first
quarter ended on September 30, 2012. 
Financial results for the first quarter ended September 30, 2012 as
compared to the first quarter ended September 30, 2011 included: 


 
--  Product sales increased $1,379,031, or 610 percent, to $1,605,138
--  Total revenues increased 11 percent to $1,823,321
--  Net loss of $2,882,790 compared to $1,675,448
--  Loss per share decreased to ($0.04) from ($0.05) per share

  
As of November 5, 2012, the Company's backlog was $5.3 million compared
to backlog of $6.2 million on September 6, 2012. ZBB ended the
quarter with total assets of $20.4 million including $4.6 million in
cash. Inventory for current backlog expected to ship in the second
and third quarters of this fiscal year has mostly been procured.
Anticipated collections in the second and third quarters of this
fiscal year associated with current backlog less any customer
deposits approximate $3.7 million. Operating expenses continue to run
just under $900,000 per month with the Company actively reducing
non-essential cash expenses. 
The Company is aggressively pursuing additional sales orders and
other sources of funding. Sufficient cash and working capital through
June 30, 2013 depends on closing additional sales orders and/or
obtaining additional funding. 
Highlights of the first quarter of fiscal year 2013 
Total revenues increased during the first quarter to $1,823,321 from
$1,637,857 in the prior year quarter. First quarter product sales
increased $1,379,031 to $1,605,138 during the first quarter, due to
successful commercialization and continued sales growth of the
Company's EnerSystem(TM) platform and related products. This increase
was offset by a decline in engineering and development revenues,
which declined to $218,183, as compared to $1,411,750 in the prior
year, due primarily to the completion of the Honam engineering and
development agreement. 
Total expenses for the first
 quarter were $4,719,380 compared with
$3,334,339 in the prior year quarter. The increase in expenses was
primarily related to an increase in the cost of product sales and
other expenses as follows: 


 
--  $1,335,721 increase in cost of product sales was due to an increase in
    commercial product sales;
--  $436,042 decrease in cost of engineering and development sales was due
    to diminished activities related to engineering and development
    agreements completed in the prior year;
--  $460,536 increase in advanced engineering and development expenses was
    due to a shift from engineering contracts to product development and
    pilot plant operation for the Company's ZBB EnerStore(TM) and ZBB
    EnerSection(TM) products;
--  $74,689 increase in total other expense primarily as a result of a
    $76,481 equity loss of investee company;
--  $70,000 decrease in income tax benefits as a result of a R&D tax
    credit from Australia in the prior year's quarter.

  
During the first quarter, the Company's major accomplishments included: 


 
--  Shipped five ZBB EnerSystems and shipped twenty-five ZBB EnerStores to
    customers with a wide-range of applications.
--  Completion of ETL Listing to UL 1741 standard for the ZBB EnerSection
    125kW inverter.
--  Senior level executive appointments of Chuck Stankiewicz as Chief
    Operating Officer and Tony Siebert as Vice President of Sales and
    Product Marketing.
--  Installation and commissioning of a 500kWh energy management system,
    including ZBB EnerStore storage and ZBB EnerSection inverters on the
    Illinois Institute of Technology campus as part of their "Perfect
    Power" micro grid application.
--  Follow-on orders from the Company's China joint venture of over
    $600,000.

  
Milestones achieved subsequent to the end of the first quarter: 


 
--  Signed a long-term OEM supply agreement with major vehicle/engine
    manufacturer for Hybrid electronics.
    --  Received from the major vehicle/engine manufacturer orders of
        $500,000 in the first quarter being delivered in the second
        quarter with an additional $860,000 of new orders booked in the
        second quarter.
--  Received a development order to be followed by a prototype order for
    electronics to be applied to an innovative generator technology being
    applied to hydro generation.
--  Shipment of an eight unit ZBB EnerStore and ZBB EnerSection power and
    energy control center system to the microgrid installation at the
    Joint Base Pearl Harbor Hickam (JBPHH) U.S. Military base in Honolulu,
    Hawaii.
--  We achieved a 30% EnerStore product cost reduction that we expect to
    begin to realize on orders shipped in the third quarter.

  
"The first quarter increase in product sales met our plan objectives of
quarter over quarter increases in revenues," said Eric C. Apfelbach,
President and CEO. "These shipments provide field-proven references
for repeat orders from existing customer and for new customer orders.
While our sales funnel continues to grow the key to our growth and
achieving our 2013 fiscal year targets is accelerating the near-term
bookings of orders in the funnel. In addition, our initial
penetration in these key segments is leading to strategic partnership
opportunities that we believe could offer significant leverage in our
market channels, product offering and access to capital." 
Conference call - November 6, 2012 - 11:00 a.m. Eastern Standard Time
(10:00 a.m. CST) 
The Company will hold a conference call on Tuesday, November 6, 2012
at 11:00 a.m. Eastern Standard Time (10:00 a.m. Central Standard
Time) to discuss results for its first fiscal quarter ended September
30, 2012. To participate in the call, please dial 1-888-510-1765, for
domestic callers, and 1-719-325-2402, for international callers. The
participant passcode is 7203641. 
The call will be available for replay at 1-888-203-1112, for domestic
callers, and 1-719-457-0820, for international callers. The replay
passcode is 7203641. The conference call will also be available for
replay via the investor relations section of the Company's website at
www.zbbenergy.com until December 6, 2012. 


 
                                                                            
                                                                            
                                                                            
                           ZBB ENERGY CORPORATION                           
        Condensed Consolidated Statements of Operations (Unaudited)         
                                                                            
                                           Three months ended September 30, 
                                           -------------------------------- 
                                                 2012             2011      
                                           ---------------  --------------- 
Revenues                                                                    
  Product sales                            $     1,605,138  $       226,107 
  Engineering and development                      218,183        1,411,750 
                                           --------
-------  --------------- 
    Total Revenues                               1,823,321        1,637,857 
                                           ---------------  --------------- 
                                                                            
Costs and Expenses                                                          
  Cost of product sales                          1,492,392          156,671 
  Cost of engineering and development               45,065          481,107 
  Advanced engineering and development           1,159,739          699,383 
  Selling, general, and administrative           1,681,552        1,677,997 
  Depreciation and amortization                    340,632          319,181 
                                           ---------------  --------------- 
    Total Costs and Expenses                     4,719,380        3,334,339 
                                                                            
                                           ---------------  --------------- 
Loss from Operations                            (2,896,059)      (1,696,482)
                                           ---------------  --------------- 
                                                                            
Other Income (Expense)                                                      
  Equity in loss of investee company               (76,481)               - 
  Interest income                                      389            6,689 
  Interest expense                                 (47,563)         (59,668)
  Other income                                           -            4,013 
                                           ---------------  --------------- 
    Total Other Income (Expense)                  (123,655)         (48,966)
                                                                            
                                           ---------------  --------------- 
Loss before provision (benefit) for Income                                  
 Taxes                                          (3,019,714)      (1,745,448)
                                                                            
Provision (benefit) for Income Taxes                     -          (70,000)
                                           ---------------  --------------- 
  Net loss                                      (3,019,714)      (1,675,448)
  Net loss attributable to noncontrolling                                   
   interest                                        136,924                - 
                                           ---------------  --------------- 
Net Loss Attributable to ZBB Energy                                         
 Corporation                               $    (2,882,790) $    (1,675,448)
                                           ===============  =============== 
                                                                            
Net Loss per share                                                          
  Basic and diluted                        $         (0.04) $         (0.05)
                                                                            
                                                                            
Weighted average shares-basic and diluted       77,319,009       30,496,936 
                                                                            
                                                                            
                           ZBB ENERGY CORPORATION                           
                   Condensed Consolidated Balance Sheets                    
                                                                            
                                                                            
                                               September 30,                
                                                    2012                    
                                                (Unaudited)   June 30, 2012 
                                               -------------  ------------- 
Assets                                                                      
Current assets:                                                             
  Cash and cash equivalents                    $   4,637,014  $   7,823,217 
  Accounts receivable, net                         1,189,722        480,563 
  Inventories                                      3,831,728      2,912,207 
  Prepaid and other current assets                   343,643        187,448 
  Refundable income tax credit                       192,643        185,545 
                                               -------------  ------------- 
    Total current assets                          10,194,750     11,588,980 
Long-term assets:                                                           
  Property, plant and equipment, net               5,416,108      5,484,545 
  Investment in investee company                   3,007,408      3,083,889 
  Intangible assets, net                             958,618      1,143,122 
  Goodwill                                           803,079        803,079 
                                               -------------  ------------- 
    Total assets                               $  20,379,963  $  22,103,615 
                                               =============  ============= 
                                                                            
Liabilities and Equity                                                      
Current liabilities:                                                        
  Bank loans and notes payable                 $     993,821  $   1,022,826 
  Accounts payable                                 1,917,790      1,899,029 
  Accrued expenses                                 1,332,418      1,289,138 
  Customer deposits                                  915,183      1,315,309 
  Accrued compensation and benefits                  271,099        335,369 
                                               -------------  ------------- 
    Total current liabilities                      5,430,311      5,861,671 
Long-term liabilities:                                                      
  Bank loans and notes payable                     2,802,986      2,915,134 
                                               -------------  ------------- 
    Total liabilities                              8,233,297      8,776,805 
                                               -------------  ------------- 
                                                                            
Equity                                                                      
  Series A preferred stock ($0.01 par value,                                
   $10,000 face value)                                                      
  Common stock ($0.01 par value); 150,000,000                               
   authorized, 77,568,535 and 72,977,248                                    
   shares issued and outstandingas of                                       
   September 30, 2012 and June 30, 2012,                                    
   respectively                                      775,686        729,773 
  Additional paid-in capital                      82,155,435     80,363,519 
  Accumulated deficit                            (71,936,699)   (69,053,909)
  Acc
umulated other comprehensive loss            (1,584,680)    (1,584,921)
                                               -------------  ------------- 
    Total ZBB Energy Corporation Equity            9,409,742     10,454,462 
Noncontrolling interest                            2,736,924      2,872,348 
                                               -------------  ------------- 
    Total equity                                  12,146,666     13,326,810 
                                               -------------  ------------- 
    Total liabilities and equity               $  20,379,963  $  22,103,615 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                           ZBB Energy Corporation                           
        Condensed Consolidated Statements of Cash Flows (Unaudited)         
                                                                            
                                           Three months ended September 30, 
                                           -------------------------------- 
                                                 2012             2011      
                                           ---------------  --------------- 
Cash flows from operating activities                                        
Net loss                                   $    (3,019,714) $    (1,675,448)
Adjustments to reconcile net loss to net                                    
 cash used in operating activities:                                         
  Depreciation of property, plant and                                       
   equipment                                       156,128          137,907 
  Amortization of intangible assets                184,504          176,757 
  Stock-based compensation                         236,150          300,228 
Changes in assets and liabilities                                           
    Accounts receivable                           (709,159)      (1,271,909)
    Inventories                                   (919,521)        (166,161)
    Prepaids and other current assets             (156,195)           5,029 
    Refundable income taxes                         (7,098)         (56,710)
    Accounts payable                                18,761          661,880 
    Accrued compensation and benefits              (64,270)         (81,088)
    Accrued expenses                                20,465          111,823 
    Customer deposits                             (400,126)         263,233 
                                           ---------------  --------------- 
  Net cash used in operating activities         (4,583,594)      (1,594,459)
                                           ---------------  --------------- 
Cash flows from investing activities                                        
  Expenditures for property and equipment          (87,691)        (601,804)
                                           ---------------  --------------- 
  Net cash used in investing activities            (87,691)        (601,804)
                                           ---------------  --------------- 
Cash flows from financing activities                                        
  Repayments of bank loans and notes                                        
   payable                                        (141,153)         (75,501)
  Proceeds from issuance of Series A                                        
   preferred stock                                       -        1,447,240 
  Proceeds from issuance of common stock         1,744,688                - 
  Common stock issuance costs                     (143,009)         (65,304)
  Proceeds from noncontrolling interest              1,500                - 
                                           ---------------  --------------- 
  Net cash provided by financing                                            
   activities                                    1,462,026        1,306,435 
                                           ---------------  --------------- 
Effect of exchange rate changes on cash                                     
 and cash equivalents                               23,056          (52,399)
                                           ---------------  --------------- 
Net decrease in cash and cash equivalents       (3,186,203)        (942,227)
Cash and cash equivalents - beginning of                                    
 period                                          7,823,217        2,910,595 
                                           ---------------  --------------- 
                                                                            
Cash and cash equivalents - end of period  $     4,637,014  $     1,968,368 
                                           ===============  =============== 
                                                                            
Cash paid for interest                     $        46,753  $        59,668 
                                                                            
Supplemental non-cash investing and                                         
 financing activities:                                                      
  Issuance of common stock for discounted                                   
   notes receivable                                      -  $     1,440,960 

 
About ZBB Energy Corporation 
ZBB Energy Corporation (NYSE MKT: ZBB) designs, develops, and
manufactures advanced energy storage, power electronic systems, and
engineered custom and semi-custom products targeted at the growing
global need for distributed renewable energy, energy efficiency,
power quality, and grid modernization. ZBB and its power electronics
subsidiary, Tier Electronics, LLC, have developed a portfolio of
integrated power management platforms that combine advanced power and
energy controls plus energy storage to optimize renewable energy
sources and conventional power inputs whether connected to the grid
or not. Tier Electronics participates in the energy efficiency
markets through their hybrid vehicle control systems, and power
quality markets with their line of regulation solutions. Together,
these platforms solve a wide range of electrical system challenges in
global markets for utility, governmental, commercial, industrial and
residential end customers. Founded in 1986, ZBB's platforms ensure
optimal efficiencies today, while offering the flexibility to adapt
and scale to future requirements. ZBB's corporate offices and
production facilities are located in Menomonee Falls, WI, USA with
offices also located in Perth, Western Australia. For more
information, visit: www.zbbenergy.com. 
Safe Harbor Statement 
Certain statements made in this press release contain forward-looking
statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities and Exchange Act
of 1934, as amended that are intended to be covered by the "safe
harbor" created by those sections. Forward-looking statements, which
are based on certain assumptions and describe our future plans,
strategies and expectations, can generally be identified by the use
of forward-looking terms such as "believe," "expect," "may," "will,"
"should," "could," "seek," "intend," "plan," "estimate," "anticipate"
or other comparable terms. Forward-looking statements in this press
release may address the following subjects among others: statements
regarding the sufficiency of our capital resources, expected
operating losses, expected revenues, expected expenses and our
exp
ectations concerning our business strategy. Forward-looking
statements involve inherent risks and uncertainties which could cause
actual results to differ materially from those in the forward-looking
statements, as a result of various factors including those risks and
uncertainties described in the Risk Factors and in Management's
Discussion and Analysis of Financial Condition and Results of
Operations sections of our most recently filed Annual Report on Form
10-K and our subsequently filed Quarterly Reports on Form 10-Q. We
urge you to consider those risks and uncertainties in evaluating our
forward-looking statements. We caution readers not to place undue
reliance upon any such forward-looking statements, which speak only
as of the date made. Except as otherwise required by the federal
securities laws, we disclaim any obligation or undertaking to
publicly release any updates or revisions to any forward-looking
statement contained herein (or elsewhere) to reflect any change in
our expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.  
Contact: 
Lewis W. Kreps
Three Part Advisors, LLC
www.threepa.com
214-599-7955
or
David Mossberg
Three Part Advisors, LLC
817-310-0051