Ener1 Reports Third Quarter 2008 Results
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NEW YORK, November 13, 2008: Ener1, Inc. (AMEX:HEV), maker of advanced lithium-ion battery solutions to power the next generation of hybrid, plug-in hybrid and pure electric vehicles, today reported its third quarter 2008 financial results. EnerDel, Ener1's lithium-ion battery subsidiary, is on target to begin volume production at the beginning of 2009, and the third quarter represented a crucial transition period in preparation for this milestone. The following highlights significant events that occurred since the second quarter conference call:
EnerDel received a purchase order to deliver two prototype plug-in hybrid lithium-ion battery packs to one of the largest European auto manufacturing companies. These prototype packs are to be used in testing in a current vehicle model. The prototype pack is about half of the size of the Think City Electric Vehicle pack that EnerDel currently produces. We expect to deliver the two packs in February, 2009.
EnerDel will supply one prototype electric vehicle pack for a demonstration vehicle to one of the largest international tier one OEM supply companies. Delivery is expected by the end of November, 2008.
Ener1 completed the acquisition of approximately 85% of the capital stock of Enertech International, a producer of lithium-ion battery cells. The purchase of Enertech allowed Ener1 to obtain a production- ready facility for an estimated 50 cents on the dollar when compared to building a similar facility from the ground up. Enertech has been supplying cells to EnerDel for the past nine months in connection with Ener1's production of battery packs under its contract with Think.
Ener1 has added considerable engineering and management talent to its EnerDel subsidiary, as it scales production capacity to begin commercial production of the Th!nk City vehicle in 2009. Our global employee base with the acquisition of Enertech is now 450.
EnerDel is in the process of installing production equipment at its plant in Indianapolis. A large format coater, 43 meters in length, was delivered in September and is more than halfway through its two- month installation schedule (a photograph of the work in progress is available on the Ener1 web site). EnerDel has already installed and tested a cell stacking machine, another critical piece of equipment. Ener1 continued to accelerate R&D spending during the quarter as the company progressed towards meeting delivery milestones under the Supply Agreement with Think. R&D spending was $6.1 million in the third quarter compared to $5.4 million in the second quarter; the increase was due to the production costs of the Think battery packs.
Shareholder's equity now stands at $52 million. The Enertech acquisition will add approximately an additional $45 million to permanent capital.
"The third quarter was characterized by a firm-wide acceleration to production readiness, as we approach the commercial launch of the EnerDel battery in the Th!nk City vehicle scheduled for the first quarter of 2009," said Ener1 Chairman and CEO Charles Gassenheimer. "This strategic partnership will enable our battery to be the first commercially available lithium-ion technology for automotive use. The acquisition of a world class lithium-ion production facility in Korea highlights Ener1's ability to meet production needs as they arise."
"Ener1 is fast becoming a true end to end battery systems provider with premier cell technology solutions," continued Mr. Gassenheimer. "We have the ability to work with multiple chemistries, possess leading expertise in the field of systems integration, and through the acquisition of Enertech, today possess a global manufacturing footprint ready to produce cells, modules and battery packs to supply automotive markets worldwide. Fully built-out, under our current pricing assumptions, Ener1's manufacturing facilities can scale to produce $700 million in revenues. We remain excited about the proposition that our business model is extremely scalable and that our anticipated return on capital expenditures remains robust."
Management will host a conference call this morning at 10:00 a.m. Eastern Standard Time to discuss the third quarter results and give guidance on the company's financial position and objectives. To participate in the conference call, please dial (888) 713-4218 from within the United States, or (617) 213- 4870 from outside the United States. The participant pass code is 86551873.