Financial and operating highlights include the following:
Fourth quarter revenues were $4,140,000, a 23.9% decrease over sales in the fourth quarter of 2007 of $5,440,000. The net loss in the quarter was $7,776,000 ($0.52 per share) compared to the net loss of $3,666,000 ($0.31 per share) in the fourth quarter of 2007.
Included in the 2008 net loss is a non-cash expense of $4,305,000 for the impairment of goodwill. Also included in the 2008 net loss is total expense in the amount of $1,071,000 related to the modification of the definition of slow-moving and obsolete inventory. Management deemed this modification appropriate as technology changes within the lighting industry continues to accelerate. Pro forma net loss without these transactions would have decreased to $2,400,000 ($0.16 per share) for the quarter and $9,072,000 ($0.64 per share) for 2008.
Energy Focus finished the year with a balance sheet showing cash at $10,568,000 and total shareholders’ equity of $16,789,000, which includes $9,335,000 received March 14, 2008 from an equity financing, net of expenses. Cash utilization for the year was $7,486,000 compared to $7,556,000 for 2007.
Operating expenses, net of the $4,305,000 goodwill impairment in 2008, decreased by 11.1%, $1,984,000, for the year compared to 2007. Operating expenses declined by 25.5%, $1,093,000, for the quarter (excluding impairment charges).
Energy Efficient EFO sales increased to $10,888,000, for the year, compared to $7,011,000 for 2007, an increase of 55.3%.
Energy Focus expects to receive a going concern opinion from its independent auditor, Grant Thornton, LLP.
I continue to be encouraged by our 55% increase in energy efficient product sales in spite of an extremely difficult global economy, said Joe Kaveski, chief executive officer of Energy Focus. While I believe this difficult environment will continue into 2009, I also believe Energy Focus should clearly benefit as funds become available from the American Recovery and Reinvestment Act of 2009 which emphasizes energy efficient lighting and green buildings. Moreover, I believe that our drive to transform the company into a comprehensive lighting energy solutions provider could not have been timed better. Our new solutions sales team and new energy-efficient products are perfectly positioned to address the opportunities created by our country’s renewed emphasis on creating energy efficient green buildings. Providing turnkey energy efficient lighting solutions will be the foundation of the company’s viability in 2009 and provide for growth in 2010 and beyond. However, the company continues to aggressively reduce costs with year over year expense reductions at about $2 million dollars in 2008 with comparable reductions expected in 2009.
