Revolution Lighting Technologies Reports Q2 2013 Financial Results

  Revolution Lighting Technologies Reports Q2 2013 Financial Results

                    – Reported Revenues of $7.4 million –

                           – Gross Margin at 49% –

                 – Positive Adjusted EBITDA of $1.0 million –

               – Cash Balance of $5.3 million at Quarter End –

Business Wire

STAMFORD, Conn. -- August 7, 2013

Revolution Lighting Technologies, Inc. (NASDAQ: RVLT) (“Revolution Lighting”),
a leader in advanced LED lighting technology, today announced financial
results for the quarter ended June 30, 2013.

“We are pleased with our second quarter results and the significant progress
we’ve made this year demonstrated by strong sequential results, as we execute
on our growth strategy,” said Robert V. LaPenta, Chairman and Chief Executive
Officer of Revolution Lighting Technologies. “We continue to see a steady
increase in LED adoption and believe that customers in the commercial,
industrial and municipal markets recognize the significant energy and cost
reduction benefits of our LED lighting technologies. Our new business pipeline
is robust and we expect a continued acceleration in revenue and profitability
as the year progresses.”

Quarter ended June 30, 2013

For the quarter ended June 30, 2013, total revenue was approximately $7.4
million, as compared to $1.1 million in the same period of 2012, an increase
of approximately 598%. Gross profit for the quarter was approximately $3.6
million, as compared to negative $0.7 million during the same period in 2012.
Gross margin was 49% as compared to negative 62% for the same period in 2012,
which included a provision for the liquidation of surplus and discontinued
inventory related to the retail consumer markets.

Revenue and gross margin for the Company were positively impacted by the
acquisition of the Seesmart business, which generated revenues of $6.5 million
that are more than three times the revenue generated by the acquired companies
for the corresponding pre acquisition period in the prior year. That result
reflects the shift in focus away from the lower ticket and lower margin
consumer retail market to the rapidly growing commercial, industrial and
municipal (municipal, university, schools and healthcare) segments, which we
believe offer higher margin opportunities.

The Company reported an operating loss of $1.3 million in the second quarter
of 2013 as compared to $5.6 million in the same period of 2012. Operating
results for the second quarter were negatively impacted by non-operating
costs, one-time and non-cash charges of $2.3 million, including expenses
related to acquisitions, severance and facility transition costs attributed to
the closing of the former Nexxus Lighting corporate office in North Carolina
and the amortization of intangible assets resulting from the acquisitions and
stock-based compensation. Positive Adjusted EBITDA (as defined below) for the
quarter was approximately $1.0 million excluding the aforementioned charges.

The Company reported a net loss for the quarter of approximately $5.1 million
as compared to a net loss of $5.7 million for the same period in 2012. The net
loss includes the aforementioned charges and additional one-time non-cash
charge of $3.8 million related to the change in fair value of the embedded
liability related to the Company’s Series E convertible redeemable preferred
stock. The Company will not incur charges or income from this non-cash item
going forward.

Basic and diluted earnings per share were negative $0.07 and $0.35,
respectively, for the quarters ended June 30, 2013 and 2012. Weighted basic
and diluted shares outstanding were 77.3 million for the quarter ended June
30, 2013 and 16.5 million for the quarter ended June 30, 2012. The per share
amounts reflect accrual of dividends on preferred stock.

Six months ended June 30, 2013

For the six months ended June 30, 2013, total revenue was approximately $13.7
million, as compared to $2.2 million in the same period of 2012, an increase
of approximately 521%. Gross profit for the quarter was approximately $6.2
million, as compared to negative $0.7 million during the same period in 2012.
Gross margin was 46% as compared to negative 31% for the same period in 2012
which included charges from the liquidation of surplus and discontinued
inventory related to the retail consumer markets.

Revenue and gross margin for the Company were positively impacted by the
acquisition of the Seesmart business, which generated revenues of $11.9
million that are more than three times the revenue generated for the
corresponding pre acquisition period in the prior year. That result reflects
the shift in focus away from the lower ticket and lower margin consumer retail
market to the commercial, industrial and municipal (municipal, university,
schools and healthcare) segments.

The Company reported an operating loss of $4.2 million in the six months ended
June, 30 2013 as compared to $7.4 million in the same period of 2012.
Operating results for the six months were negatively impacted by non-operating
costs, one-time and non-cash charges of $5.4 million, including expenses
related to acquisitions, severance and facility transition costs attributed to
the closing of the former Nexxus lighting corporate office in North Carolina
and the amortization of intangible assets related to acquisitions and
stock-based compensation. Adjusted EBITDA (as defined below) for the six
months was approximately $1.3 million excluding the aforementioned charges.

The Company reported a net loss for the six months ended June 30, 2013 of
approximately $10.5 million as compared to a net loss of $7.5 million for the
same period in 2012. The net loss includes the aforementioned charges and
additional one-time non-cash charge of $7.0 million related to the change in
fair value of the embedded liability related to the Company’s Series E Senior
Convertible Redeemable Preferred Stock (the “Series E Preferred Stock”), as
well as a gain of $0.7 million on a bargain purchase. The Company does not
expect these items to reoccur going forward.

Basic and diluted loss per share were negative $0.18 and $0.46, respectively,
for the six months ended June 30, 2013 and 2012. Weighted basic and diluted
shares outstanding were 74.5 million for the six months ended June 30, 2013
and 16.5 million for the six months ended June 30, 2012. The per share amounts
reflect the accretion to the redemption value of the Series E Preferred Stock
of $2.2.million, as well as the accrual of dividends on preferred stock.

Business Highlights since March 31, 2013

  *July 3^rd: Announced retrofits gasolineras Don Justo, subdivision of the
    largest gas station chain in Mexico
  *July 11^th: Announced partnership agreement with GB Energie LED to drive
    LED adoption across multiple markets
  *July 15^th: Aston Capital, a limited partnership private equity firm,
    announced that it will create LightCap I Fund to finance LED lighting
    purchases and installations for Revolution Lighting Technologies customers

Liquidity position

The Company’s liquidity position remains adequate with a cash balance of $5.3
million as of June 30th.

“We have further strengthened our financial position with the growth of our
sales pipeline and our strong gross margin, as well as the elimination of
charges that have contributed to previous quarterly net losses,” said Charles
J. Schafer, President and Chief Financial Officer of Revolution Lighting. “We
have adequate resources and are continuing to invest in the growth of
Revolution Lighting.”

Schafer continued: “In addition, Aston Capital’s recently announced formation
of LightCap I Fund will provide Revolution Lighting customers with an
alternative source of capital to purchase and install LED products, a
challenge that has historically kept certain customers out of the LED market.
We expect this financing option for our customers to contribute positively to
Revolution Lighting’s financial performance.”

Further information on Revolution Lighting Technologies quarterly results can
be found in the Company’s form 10-Q for the quarter ended June 30, 2013 filed
with the U.S. Securities and Exchange Commission (SEC) and may be accessed on
the SEC’s website at www.sec.gov.

About Revolution Lighting Technologies Inc.

Revolution Lighting Technologies, Inc. is a leader in the design, manufacture,
marketing, and sale of light emitting diode (LED) lighting solutions focusing
on the industrial, commercial and government markets in the United States,
Canada, and internationally. Through advanced technology and aggressive new
product development, Revolution Lighting has created an innovative,
multi-brand, lighting company that offers a comprehensive advanced product
platform. The company goes to market through its Seesmart brand, which
designs, engineers and manufactures an extensive line of high-quality interior
and exterior LED lamps and fixtures; Lighting Integration Technologies Inc.,
which sells and installs Seesmart products; and Lumificient, which supplies
LED illumination for the signage industry. Revolution Lighting Technologies
markets and distributes its product through a network of independent sales
representatives and distributors, as well as through energy savings companies
and national accounts. Revolution Lighting Technologies trades on the NASDAQ
under the ticker RVLT. For additional information, please visit:
www.rvlti.com.

Cautionary Statement for Forward-Looking Statements

Certain of the above statements contained in this press release are
forward-looking statements that involve a number of risks and uncertainties,
including the anticipated benefits of the Seesmart acquisition and statements
relating to the anticipated future growth and profitability of our business.
Such forward-looking statements are within the meaning of that term in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Reference is made to Revolution Lighting's filings under the
Securities Exchange Act for additional factors that could cause actual results
to differ materially, including our history of losses, customer concentration
risks, the potential for future dilution to our existing common stockholders,
our status as a controlled company, the risk that demand for our LED products
fails to emerge as anticipated, the availability of financing for our
customers, competition from larger companies, and risks relating to third
party suppliers and manufacturers, as well as the other Risk Factors described
in Item 1A of our Form 10-K for the fiscal year ended December 31, 2012.
Revolution Lighting Technologies, Inc. undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. Readers are cautioned that any such
forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those indicated in the forward-looking statements as a result of various
factors. Readers are cautioned not to place undue reliance on these
forward-looking statements.

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP measure of financial performance.
Adjusted EBITDA is calculated by adding back to net income or loss interest
and financing related transactions, acquisition related transactions, income
taxes, depreciation and amortization, asset impairments, stock based
compensation charges, and severance and transition costs. Adjusted EBITDA is
provided to investors to supplement the results of operations reported in
accordance with GAAP. Management believes that Adjusted EBITDA is useful to
help investors analyze the operating trends in the business and to assess the
relative underlying performance of businesses with different capital and tax
structures. Management believes that Adjusted EBITDA provides an additional
tool for investors to use in comparing our financial results with other
companies that use Adjusted EBITDA in their communications with investors. By
excluding non cash charges such as amortization and depreciation, stock based
compensation, asset impairments as well as non operating charges for income
taxes, interest and financing charges, acquisition related and severance and
transition costs charges investors can evaluate our operations and compare our
results with the results of other companies on a more consistent basis.
Management also uses Adjusted EBITDA to evaluate potential acquisitions,
establish internal budget and goals and evaluate the performance of business
units and management.

We consider Adjusted EBITDA to be an important indicator of our operational
strength and performance and a useful measure of historical and prospective
trends. However there are significant limitations of the use of Adjusted
EBITDA since it excludes interest income and expenses, financing related and
acquisition related transactions and severance and transition costs, income
taxes, all of which impact profitability, as well as depreciation and
amortization related to the use of long lived assets that benefits future
periods. We believe that limitations are compensated by providing Adjusted
EBITDA only with GAAP performance measures and clearly identifying the
differences between the two measures. Consequently, Adjusted EBITDA should not
be considered in isolation or as a substitute for net income or loss or
operating income or loss presented in accordance with GAAP. Moreover, Adjusted
EBITDA as defined by the Company may not be comparable to similarly titled
measure provided by other entities.

A reconciliation of our GAAP net loss to non-GAAP Adjusted EBITDA for the
three and six months ended June 30, 2013, respectively follows:

                                    (in millions)
                                         For the 3           For the 6

                                         months ended     months ended

                                         June 30, 2013       June 30, 2013
                                                                             
Net Loss                                 $    (5.1  )        $ (10.5       )
Change in fair value of                       3.8            7.0
embedded derivative
Gain on bargain purchase of                                  (0.7          )
business
Severance and transition costs                0.2            1.1
Acquisition related costs                     0.5            1.6
Depreciation and amortization                 1.1            2.1
Stock compensation costs                     0.5        0.7           
Adjusted EBITDA                          $    1.0        $ 1.3         
                                                                             

Contact:

ICR
Anton Nicholas / Cory Ziskind
203-682-8200
Anton.Nicholas@icrinc.com / Cory.Ziskind@icrinc.com
 
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