Enova Systems Reports Year End Results in SEC Filing
TORRANCE, Calif.--April 4, 2002--Enova Systems, Torrance, Calif. (OTCBB:ENVA), has submitted its Form 10K for the Year ended December 31, 2001 to the U.S. Securities and Exchange Commission. Reflecting continued growth, the Company achieved revenues of $3.78 million for the year -- exceeding 2000 revenues by more than 31%.With a view toward additional opportunities in the energy technology sector, Enova continues to invest heavily in internally-funded research and development. For 2001, such R&D investment rose by 40% from the previous year, to $877,000. Enova's long-term strategic plan emphasizes new technology development to enhance existing products, as well as for new products for stationary as well as mobile applications.
Cost of sales of $2,783,000 for the year ended December 31, 2001 constituted an increase of $770,000, or 38%, from $2,013,000 for the year ended December 31, 2000. Consistent with the previous year, the cost of sales as a percentage of sales remained at approximately 70% in 2001. As the Company's sales mix changes from reliance on development contract revenues to increasing production system sales, it is anticipated that the gross margin will remain level or improve on a year-to-year basis.
Enova believes that its accomplishments in 2001 at once reflect and validate the breadth of the opportunity ahead:
| -- | Enova entered into a strategic relationship with Ford Motor Company to develop and manufacture a high voltage energy converter "HVEC" for the Ford Focus fuel cell vehicle. The Ford Focus FCV is being showcased at the New York Auto Show this week. This strategic relationship is currently contemplated to last for up to five years and include other production programs between the two companies. |
| -- | Enova also worked successfully with Ballard Power to produce low-voltage electric drive system components for use in Ford's Global Th!nk City vehicle. Ford has announced that the all-electric Th!nk City vehicle will be introduced in late 2002 in North America and Europe. |
| -- | The longstanding Enova-Hyundai Motor Company of Korea alliance continues. Following its successful completion of hybrid drive systems and fuel cell EV programs, Enova is working with HMC on advanced hybrid and fuel cell applications in 2002. These include parallel hybrid and fuel cell hybrid systems. |
| -- | Enova delivered more than 25 Panther 120kW drive systems, in both pure electric and hybrid-electric configurations during 2001. Customers such as Eco Power Technology (EPT) in Italy and Wrights' Environment (a division of Wrights Bus, one of the largest low-floor bus manufacturers in the United Kingdom) have purchased and integrated the hybrid electric Panther(TM) 120kW drive system into their buses. |
| -- | Enova fulfilled its contract with the U.S. Department of Transportation to design and deliver a three-car electric tram utilizing the Panther 120kW drive system to the State of Hawaii High Technology Development Corporation's (HTDC) facility in Honolulu. This low-floor, fully air-conditioned tram, capable of carrying 100 passengers, will undergo further test and evaluation in Hawaii. Enova intends to market this tram system to international markets for application to airports, recreational parks and other high capacity transit applications. |
| -- | In a transaction which Enova believes could lead to significant additional opportunities for the Company with various fuel cell companies, Enova delivered its Fuel Cell Control Unit "FCU" to UTC Fuel Cell, a division of United Technologies, for use in UT's stationary fuel cell systems. To date, approximately 20 Enova FCUs have been delivered to UTC Fuel Cell and Hamilton Sundstrand. The Company now is in alliance with two major fuel cell manufacturers, Ballard and UTC. |
| -- | Enova continued its strategic plan to increase its intellectual property portfolio. The Company submitted applications for four new technology patents as well as enhancing its other proprietary properties during 2001. |
Enova is taking action on several fronts to build on these achievements and opportunities.
The Company continues to resolve financial issues arising from the past. In 2001, Enova encountered significant, non-recurring professional expenses of $400,000 and an ultimate legal settlement of $900,000 with respect to the Fontal International lawsuit. As a result of this settlement, the Company has no known outstanding litigation. Absent the resulting one-time operating expense of approximately $1,300,000, the net loss from operations in 2001 would have been $2,382,000, an increase of $372,000 or 18% from our $2,010,000 loss from operations for the same period in 2000. The increase in net loss is attributable to several factors as discussed in the Form 10K, including the legal settlement with respect to the Fontal matter, increased research and development expenses, development of new power systems for the stationary market, as well as corresponding marketing and administrative expenses. As anticipated from increasing sales revenues, the Company intends to hire additional engineering, production, and support personnel to meet our current and prospective customer needs.
Carl D. Perry, CEO and president stated, "Enova's team has had an exceptional year, and the Company is very proud to have developed our business alliances and established new production programs to enhance our revenues in 2001. I am confident that in 2002 the Company will achieve similar significant milestones that will enhance our ability to achieve substantial growth in the future. The Bush Administration's realization that alternative energy is the future of our country only strengthens my belief that Enova will be at the forefront of the next generation of mobile and stationary alternative power applications."
With respect to equity funding and other investor matters:
| -- | Jagen Pty, Ltd, our majority shareholder, exercised warrants to purchase common stock for a total of $2,500,000. Anthony Rawlinson, Enova's chairman, exercised warrants to purchase common stock for a total of $500,000. |
| -- | Enova retained Merrill Lynch as its investment advisor to pursue equity financing options and other strategic alternatives. Enova intends to vigorously pursue obtaining additional equity capital in order to fund new product development and enhance our ability to obtain a listing on the NASDAQ National Market. |
| -- | Ford Motor Company, as part of its strategic alliance with Enova for development and manufacture of alternative fuel vehicle systems, obtained the right to purchase up to 4.6% of Enova's equity during the term of the relationship. |
The Company continues to earn recognition for its accomplishments. Enova's Panther Drive System and integration services were key elements to the development of the Hyundai Fuel Cell Vehicle which was honored with four prestigious Michelin Bibendum awards in 2001. This vehicle was developed in conjunction with Hyundai Motor Company, UTC Fuel Cell, Quantum and Enova. In separate public events, President Bush and top leaders from the Democratic Party in Congress recognized Enova's technology as they expressed a future vision for U.S. energy policy.
Anthony Rawlinson, chairman of Enova Systems remarked, "Enova has made great strides to establish itself as a global developer and producer of leading edge digital power components for the mobile and stationary markets. It has been a year of transition that has seen the company move from product development to product sales and marketing supported by a high quality outsourced manufacturing infrastructure which will enable future rapid sales growth."
This news release contains forward-looking statements relating to Enova Systems and its products. These forward-looking statements are subject to and qualified by certain risks and uncertainties. Such statements do not imply the future success of the Company or its products. These risks and uncertainties are detailed from time to time in Enova Systems' filings with the Securities and Exchange Commission under the name Enova Systems, Inc.