Electro Energy Inc. Reports Financial Results for Second Quarter 2006
Electro Energy Inc. announced its financial results for the three months and six months ended June 30, 2006. Consolidated net revenue for the quarter rose 18.5% to $896,719 compared with $756,965 for the same quarter in 2005. For the six months ended June 30, 2006, revenue increased 10.3% to $1,993,279 from $1,807,279 for the same period in 2005.
Gross loss for the 2006 quarter declined substantially to $23,935 (-2.7% of net revenue), down from a loss of $353,157 (46.7% of net revenue) for the same period last year. Management attributed the gross loss decrease to increased revenue from products. Gross loss for the six-month period ended June 30, 2006 was $111,869 compared to a loss of $738,512 for the same period in 2005.
Net loss for the second quarter of 2006 was $1,518,219 or $0.07 per share compared to a loss of $900,655 or $0.07 per share for the same period in 2005. For the six months ended June 30, 2006, net loss was $2,278,427 or $0.12 per share compared to net loss of $1,904,953 or $0.15 per share for the same period in 2005. In the second half, $411,437 of loss was attributable to increased non-cash charges, primarily related to accounting treatment of stock options.
Contributing to the second quarter loss were increased expenses for research and development (R&D) for applying the company's proprietary bipolar nickel metal hydride batteries to hybrid electric vehicles (HEV) and plug-in hybrid electric vehicles (PHEV) in the automotive market, as well as for low maintenance nickel cadmium batteries for the aerospace market and bipolar lithium ion for advanced military applications.
Michael E. Reed, CEO of Electro Energy, commented, "This was a very exciting quarter for Electro Energy. As a leading participant in the nationwide push for Hybrid Electric Vehicles and Plug-in Hybrid Electric Vehicles this Spring, we worked with the California Cars Initiative to adapt a Toyota Prius as a prototype PHEV powered by our proprietary bi-polar NiMH battery. The prototype vehicle was demonstrated at several high-profile events and received a significant amount of positive press attention. We have demonstrated how various electric vehicles can benefit from our batteries, which are stronger, lighter, longer-lasting, lower-cost, more flexible and more environmentally friendly than those of our competitors. While advancing this PHEV effort led to a significant increase in our developmental expenses, we believe these investments have established a vital platform for growth in a major target market."
Mr. Reed continued, "Moreover, in April we completed the purchase of significant battery manufacturing assets near Gainesville, Florida, which we are now ramping up for high-volume production to address several markets, including the hybrid electric automotive market; military markets; the utility market for alternative energy and distributed storage applications; and battery-powered tools."
In addition to the Gainesville acquisition and the development of a prototype PHEV, highlights for the Second Quarter of fiscal year 2006 also included an $850,000 contract from the U.S. Army Communications and Electronics Command (CECOM) to develop BB2590-type lithium-ion batteries with 20-30% greater capacity than other currently available batteries of the same type. The contract, announced in June, will be carried out by engineers at Electro Energy's Colorado Springs facility.