Energy Focus, Inc. (EFOI) research, news, and more from GeoInvesting

Company description

Thu, 17 Jun 2021 17:23:42 GMT

Energy Focus, Inc., together with its subsidiaries, designs, develops, manufactures, markets, and sells energy-efficient lighting systems in the United States and internationally. It offers military maritime LED lighting products, such as Military Intellitube, globe lights, berth lights, and fixtures, as well as Invisitube ultra-low EMI tubular LED (TLED) and LED retrofit kits to serve the United States navy and allied foreign navies. The company also provides commercial products comprising direct-wire TLED replacements for linear fluorescent lamps; RedCap emergency battery backup TLEDs; EnFocus lighting platform, including dimming and color tuning; LED fixtures for fluorescent replacement or high-intensity discharge replacement in low-bay and high-bay applications; LED downlights; LED dock lights; LED vapor tight lighting fixtures; and LED retrofit kits. It sells its products to military maritime, industrial, and general commercial markets through direct sales employees, independent sales representatives, electrical and lighting contractors, and distributors. The company was formerly known as Fiberstars, Inc. and changed its name to Energy Focus, Inc. in May 2007. Energy Focus, Inc. was founded in 1985 and is headquartered in Solon, Ohio.

Research

Mon, 18 Apr 2022 11:50:15 GMT

Energy Focus, Inc. (NASDAQ:EFOI)

We talked about how recurring losses, liquidity issues and management inability to reach product launch deadlines continue to persist. The conviction was stated as a 2, but since the forum we have decided to remove it from our Model Portfolios.

Research

Wed, 12 Jan 2022 15:07:36 GMT

This morning we have two pieces of news coming out of Energy Focus, Inc. (NASDAQ:EFOI) ($2.80; $17.6M market cap). Both are somewhat of a surprise, one positive and one negative. On the positive side the company announced a promotional campaign with GRIDWISE to market nUVo™ TRAVELER portable UVC air disinfectors to Gridwise members nationwide. TRAVELER uses ultraviolet light to break the DNA and RNA strands of airborne pathogens, a concept that has grown in popularity and utility during the height of the pandemic.

GRIDWISE is the leading gig-driver assistant mobile app that helps rideshare and delivery drivers maximize and track earnings, expenses, mileage and profitability, and has over tens of thousands of users (as of late 2019, over 40,000)

"People traveling in cars with other passengers are particularly vulnerable to airborne pathogens such as the SARS-CoV-2 virus and its variants, given the confined and often enclosed space. nUVo™ TRAVELER delivers proven UVC light disinfection technology by destroying airborne pathogens in real time before they can infect other people," said Michael Decker, VP of Marketing at Energy Focus. "This partnership with Gridwise is an exciting and impactful start to reach out to these populations—drivers and passengers—to advocate and educate the power of nUVo™ in providing constant, chemical-free and filter-free air disinfection and an extra layer of protection for gig-economy drivers and their passengers. This is especially important as the battle with the COVID-19 pandemic becomes long term."

On the negative side, the board hasremoved James Tu as CEO and replaced that position with an interim CEO from the Board, Mr. Socolof, who:

“...has served as a member of the Company’s Board since May 2019, and as the Company’s Lead Independent Director since September 2019.”

We obviously have to dissect both of these pieces of information because we believe that James was an Integral part to getting the GRIDWISE partnership to the finish line and has also been our point of contact at a company.

Our next step will be to do a little background research on the new interim CEO who seems to have a private equity background. We also have to determine if the new management direction the company is taking has anything to do with changing the growth plans of the company.

Selected Disclosures on Above-mentioned Stock(s):

Long EFOI; But removing EFOI from Favorite and Swing Trading Model Portfolios

GeoTeam's Longs

Other Select Longs

PodClips

Tue, 21 Dec 2021 05:00:00 GMT

Comments on Energy Focus Inc. (EFOI) Offering

Research

Wed, 08 Dec 2021 05:00:00 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($1.95; $9.9M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced the launch of its nUVo™ TRAVELER for immediate delivery and taking pre-orders on nUVo™ TOWER for expected for delivery in early January 2022.

“As people and countries worldwide continue to battle SARS-CoV-2 and its unpredictable mutations and constantly evolving variants, we believe our patent-pending nUVo™ TRAVELER and nUVo™ TOWER provide uniquely powerful, filter-free and chemical-free air disinfection solutions to help create safer spaces—whether at home, in the office or as they travel,”

Research

Fri, 12 Nov 2021 17:56:45 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($2.86; $14.5M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced Q3 2021 results:

Sales of $2.7 million vs $5.9 million in the prior year
Loss of $0.22 vs loss of $0.35 in the prior year

“Although revenue for the third quarter came in higher than that of the first and the second quarter, we continued to experience a challenging business environment, including delayed military funding and commercial retrofit projects, as well as ongoing logistics and supply chain dislocations for both our military and commercial LED lighting markets,” commented James Tu, Chairman and CEO of Energy Focus, Inc. “Meanwhile, we continued our aggressive transformation to develop breakthrough human-centric lighting technologies and products to differentiate our commercial products and to expand into the consumer market…

...While our existing military and commercial lighting retrofit customers continue to be affected by military funding fluctuations and COVID related project delays and logistical challenges, we are not waiting for markets to rebound,” concluded Mr. Tu. “Our organization has adapted and innovated to develop unique technologies and intellectual property to address emerging consumer and commercial lighting market opportunities surrounding human wellness, be it UVC disinfection or circadian lighting, in the new post-COVID landscape. We expect these new, broadly impactful products to contribute to our growth in 2022 and beyond.”

The quarter's results echo the sentiment we conveyed in the November Monthly Forum event that the EFOI comeback story continues to be pushed back and is in “wait and see” mode. Two significant risks are present:

Will new COVID-19 product rollouts that keep getting delayed force the company to have to raise capital?
Will the delays cause the company to miss the boat in securing market share?

We are hoping that the earnings conference call at 11 AM will shed some more light on EFOI's near-term risks.

PodClips

Wed, 06 Oct 2021 12:53:00 GMT

Since the most recent forum covering the month of September 2021 cover some companies that were experiencing some supply chain issues across a broad spectrum of microcap companies, Maj, decided to follow the forum up with a PodClip disucssing how they might also be affecting EFOI.

Research

Thu, 12 Aug 2021 14:40:27 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($3.6; $14.4M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced Q2 2021 results:

Sales of $2.1 million vs $3.3 million in the prior year
Loss per share of $0.59 vs loss of $0.29 in the prior year

“Our second quarter results were impacted by the military market that experienced funding delays and from the continued weakness in our commercial lighting retrofit market, although we have already seen a few orders so far in the third quarter that we believe represent opportunities delayed from the first half of 2021...

...we have also been expanding our channel partnerships to distribute these impactful human-centric lighting products, notably by signing a marketing partnership with FirstEnergy Home and FirstEnergy Advisors, for both our lighting and UVCD products, and a distribution agreement with threeUV, a leading UV product distributor for the public and institutional sectors...

...We anticipate our military market will improve in the second half of the year as funding becomes available, and we believe that our strategy to focus on leading the sales activities with our unique offerings such as RedCap® and EnFocusTM, as well as our newly launched products for both consumer and commercial markets, will lead to recovering sales during the second half of 2021”

Research

Thu, 17 Jun 2021 12:01:59 GMT

PodClip

Maj talks about how the market might be perceiving EFOI's ability to accomplish its goals, especially in light of the recent offering Maj touched upon in his last PodClip on EFOI . However, management confidence tells a different story.

Research

Mon, 14 Jun 2021 18:21:58 GMT

PodClip

Research

Thu, 13 May 2021 16:27:25 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($3.61; $16.4M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced Q1 2021 results:

Sales of $2.6 million vs $3.71 million in the prior year
Loss per diluted EPS of $0.45 vs. a loss of $0.18 in the prior year

As we had expected, EFOI Q4 results were disappointing as it continued to suffer from the negative impact of the Pandemic in its commercial business. Although, we expect shares to remain under pressure in the near term, we believe that business will begin to gradually pick up and that Q1 2021 will end up being will end up being the bottom "throw it out with the kitchen sink" quarter.

“On top of fluctuations in the timing of military orders and funding, first quarter results reflect the full impact of the pandemic on our commercial business as enterprise facilities remained well under-occupied and lighting retrofit budgets remained highly constrained during the quarter,” stated James Tu, Chairman and CEO of Energy Focus, Inc. “That said, over the past few weeks, we have begun to see initial signs of increasing project activities in the commercial sector, as retrofit budgets begin to loosen due to economy reopening in some parts of the country. Barring significant and unexpected delays in logistics or component delivery lead times, we are cautiously optimistic that the worst from the pandemic is now behind us, and we expect sequential top and bottom-line improvements in the second quarter and beyond.”

Research

Fri, 16 Apr 2021 16:34:54 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($3.75; $13.8M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced it has partnered with Batteries Plus Bulbs for national distribution.

Batteries Plus has over 700 stores across the U.S.

"We are honored to be the first national retailer to offer Energy Focus’ high-quality, cutting-edge LED lighting products,” said Shawn Budiac, Vice President-Category Management for Batteries Plus Bulbs. “We are impressed with Energy Focus’ long history of innovations and market-leading LED products and we believe that our retail and commercial customers will benefit from having these superior choices for both lighting retrofit and new-build applications.”

Research

Thu, 25 Mar 2021 17:10:06 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($3.93; $16.4M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced Q4 2020 results:

Sales of $3.7 million vs $3.5 million in the prior year
Loss of $0.25 vs loss of $0.39 in the prior year

“We entered 2021 poised for exciting growth, driven particularly by our commercial lighting business and the forthcoming UVCD product lines,” continued Mr. Tu. “The overall customer reaction to our new family of patent-pending EnFocusTM lighting control platform has been quite positive and enthusiastic, and we significantly strengthened our sales and marketing organizations that resulted in an expanded distribution network with new agency and channel partners. These developments give us optimism and confidence for our growth prospects as the reopening of the economy accelerates throughout 2021…

...In addition, our recently developed robotic UV-C surface disinfection services, mUVeCrew, is now being piloted at potential customer sites. We believe that these innovative and unique products and solutions, currently being finalized and will start deliveries later in second quarter of 2021, will help people and organizations return to normal social activities through effective and powerful disinfection capabilities. They also open up a completely new, emerging and potentially large market that could propel our growth in the coming quarters and likely years...

...We believe that our rapidly expanding human-centric lighting product offerings...represent the most advanced and sustainable lighting product portfolio in the marketplace today that optimizes financial, environmental and human impacts, and we are aiming to achieve a breakout year in 2021 as the macro-economic environment improves and the adoptions of our existing and new products expand in meaningful ways.”

Research

Fri, 26 Feb 2021 19:31:28 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($5.00; $17.5M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced it has partnered with Dalkia, a $5 billion, global energy services company that provides advanced and comprehensive energy efficiency and sustainability solutions for buildings and facilities.

“As a leading, global energy services solutions provider, Dalkia has a stellar and time-tested reputation as a thought leader and innovator in delivering optimal energy savings and sustainability improvements for large, complex facilities’ infrastructures. We very much look forward to offering our industry-leading LED lighting technologies including human-centric lighting and UV-C disinfection products that further elevate the energy efficiency, sustainability, and wellness impacts that Dalkia brings to their customers.”

Research

Tue, 02 Feb 2021 00:02:16 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($4.60; $19.2M market cap) is expected to roll out its UV “Sanitizing Robot” soon. The product was highlighted on Northeast Ohio local news. EFOI designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally.

Research

Thu, 21 Jan 2021 17:34:53 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($5.05; $17.6M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced 3 new sales agencies to expand its territories.

We deem this to be a very important step in the company's goal to aggressively grow revenue. Over the last year, EFOI has been developing new product lines and we feel that aligning themselves with sales partners is the right way to go to commercialize these products, given the company's current weakened (although much improved) financial health.

Information about sales partners:

CW Lighting and Associates, LLC, founded in 1983 and based in Houston, Texas is now a sales agent of Energy Focus, Inc. for commercial and industrial customers
Flex Green Lighting, the energy and lighting division of a 35-year electrical distribution company based in Indianapolis, Indiana is now the sales agent for Energy Focus, Inc. for the majority of the state of Indiana.
LEC and Company, based in St. Louis, Missouri for over 50 years has become the sales agent for Energy Focus for the state of Missouri and parts of southern Illinois.

Comments from management:

“Energy Focus is very excited to engage and partner with these new agencies to enter additional markets,” said Wanda Adams, Vice President of Business Development for Commercial Lighting for Energy Focus. “These agencies’ dedicated regional coverages and stellar growth records coupled with their reputation and commitment to sustainability, energy efficiency and human health make them the perfect partners for us. We look forward to developing long and mutually beneficial relationships with the teams at CW Lighting, Flex Green, and LEC to bring our growing line of leading LED, HCL and UV-C products to these new territories.”

Research

Thu, 12 Nov 2020 18:07:03 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($6.55; $21.2M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced Q3 2020 results:

Sales of $6.0 million vs $2.9 million in the prior year
Loss per share of $0.35 vs loss per share of $0.38 in the prior year

“Overall demand remained strong and steady, and we secured significant contracts for our new generation Intellitube products. On the other hand, during the quarter, the COVID-19 pandemic continued to significantly impact facility occupancy and retrofit budgets and activities, as well as timing and reliability of supply chain logistics, resulting in our sales coming in towards the lower end of our expected range.

Despite the myriad of short-term challenges brought on by the pandemic, we are more optimistic than ever in our long-term growth prospects, led by both our EnFocusTM lighting control platform products, which continued to be well received with initial shipments beginning in the third quarter, as well as our UVCD product lines that we recently introduced in October. With the pandemic still raging across most parts of the world, and elevated and routine disinfection practices expected to become the new normal for buildings and facilities, we believe that our complementary air and surface UVCD products represent some of the most advanced, powerful and affordable disinfection solutions in the market today. We have started to receive positive and enthusiastic feedback from customers, as well as existing and new channel partners, and remain on schedule to start delivering the products in the first quarter of 2021.”

Fourth Quarter 2020 Outlook:

“While activities for our military and maritime business remain stronger than levels a year ago, and we expect fourth quarter 2020 sales to grow from fourth quarter 2019, we continue to confront significant short-term uncertainties surrounding our commercial business and logistics challenges on select components due to the ongoing pandemic. Therefore, we are suspending our quarterly sales guidance for the time being and will resume outlook forecast as these external factors become more stable and predictable.”

Research

Wed, 14 Oct 2020 16:51:57 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($8.39; $27.1M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally announced the launch of UV-C disinfection product portfolio offering airborne and surface disinfection solutions for commercial and residential indoor environments.

We expect that this news will attract COVID-19 focused investors.

The company will be hosting a webinar today at 1PM EST to discuss its product portfolio.

“Energy Focus, Inc. (Nasdaq: EFOI), a leader in sustainable LED lighting and human-centric lighting (“HCL”) technologies, today launches a portfolio of germicidal UV-C Disinfection (“UVCD”) products, with advanced, patent-pending technologies designed to destroy 99.9+ percent* of various pathogens, including influenza and coronaviruses such as SARS and SARS-CoV-2, in the air or on surfaces to improve indoor hygiene and sanitation. Three initial products – nUVo™, abUV™, and mUVe™ -- complement each other to meet the needs of air and surface disinfection for commercial, industrial and residential indoor environments. The products are available for pre-order on the Company’s e-commerce website, through its internal salesforce and distribution channel partners, and deliveries are expected to start during the first quarter of 2021.”

Research

Tue, 15 Sep 2020 16:53:00 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($8.22; $26.6M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced it was awarded a $4.8 million contract from the U.S Navy.

“This five-year IDIQ contract calls for Energy Focus to exclusively supply its Navy-qualified large LED Globe Lights designed for demanding exterior shipboard use.

In addition, Energy Focus has been awarded a General Services Administration (GSA) Schedule Contract which allows it to provide access to and serve all government agencies in a more timely and efficient manner. GSA Schedules, also known as Federal Supply Schedules, are long-term governmentwide contracts with commercial companies. The contract enables federal as well as state and local agencies to find, review and purchase Energy Focus’ Buy American Act (BAA) and Trade-Agreement Act (TAA) products through the GSA Advantage!® online shopping portal.”

James Tu, Chairman & CEO of Energy Focus stated:

“We are extremely proud to continue to be the preferred LED lighting partner with the U.S. Navy by successfully developing and providing advanced and proven products for the Navy’s mission-critical applications...And we are equally thrilled to be awarded the GSA Schedule Contract after passing GSA’s extensive and rigorous application and qualification process. We look forward to reaching out and serving many more government and military agencies and buildings with our growing portfolio of breakthrough LED, lighting control and human-centric lighting (HCL) products that optimize not only energy efficiency and environmental sustainability, but also the health and wellbeing of millions of government personnel serving our country.”

In late August 2020 we noticed EFOI was awarded a $500,000 commercial contract under the General Service Administration website. Even though the contract was only $500,000, we believed it was significant as it opened the door for EFOI to sell its products throughout all government agencies. Today's press release confirms our findings.

We are beginning to believe that the government is positioning itself to start retrofitting its lighting systems with lighting solutions like UV that are being discussed as potential disinfectant to germs and viruses such as Covid-19. Please note that we cannot yet confirm this.

Research

Wed, 26 Aug 2020 19:10:03 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($8.45; $27.3M market cap), designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally. Yesterday, we noticed that EFOI has been awarded a government contract for $500,000 for a commercial lighting project. So far, we only see the contract on the government site. We look forward to hearing from EFOI to learn more about the possibility of additional wins with this government client or others.

The key here is that it appears the award is not specifically with the U.S. NAVY which could mean that EFOI is now selling products throughout multiple divisions of the government, not just the NAVY. So, even though the award is small, this development is extremely significant.

Research

Fri, 14 Aug 2020 19:23:26 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($7.33; $23.7M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced its Q2 2020 results:

Sales of $3.3 million vs $3.1 million in the prior year
Non-GAAP loss of $0.29 vs Non-GAAP loss of $0.91
Q3 2020 revenue guidance of $6 to $7 million representing a 106%-140% year over year improvement

“Energy Focus continues to deliver solid growth, margin expansion and improved operating results, reflecting the steps we have taken to deliver innovative products, on top of our heightened focus on expense and inventory management,” stated James Tu, Executive Chairman and CEO of Energy Focus. “The second quarter was impacted, as anticipated, by the delay of a portion of a large military order, shifting approximately $1.7 million in revenue out of the second quarter and into the third quarter. We expect to recognize a significant portion of this revenue in the third quarter, resulting in third quarter revenue guidance of $6 to $7 million, representing 106% to 140% growth over the third quarter of 2019.

Longer-term, we are increasingly encouraged with the market response to our patent-pending EnFocus™ lighting platform, which enables both existing and new buildings to provide quality, accessible and affordable dimmable and color tunable circadian lighting like never before,” added Mr. Tu. “Our immediate focus is on expanding our U.S. distribution of this groundbreaking product line, and we have had interests and inquiries from multiple countries since our release in June as well, suggesting clear global demand potential for the EnFocus™ products. We have already received initial orders and expect to start shipping the EnFocus™ products during the third quarter, with the expectation that the products will start contributing more significant sales in the fourth quarter particularly if facility management budgets and retrofit project activities start to solidify and recover.”

The company will be hosting its conference call at 11:00a.m EST, we will be joining the call to see if any information arbitrage opportunities are presented.

Research

Thu, 16 Jul 2020 16:35:24 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($4.98; $15.9M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally, announced its Q2 2020 business update and Q3 2020 guidance.

A delay in shipment of a large Navy order that was expected to hit in Q2 will be pushed to Q3 2020.

As a result, the Company anticipates second quarter revenue to be approximately $3.3 million, or $1.2-$1.5 million less than the $4.5 - $4.8 million range the Company previously provided, and represents 8% growth from the second quarter of 2019. The Company expects to ship and recognize the revenues related to most of the remaining portion of this order during the third quarter of 2020, with the balance of it, as previously reported, by year-end.
For the third quarter of 2020, due to the sales shift, the Company projects total revenues between $6 million to $7 million, representing 106% to 140% growth over the third quarter of 2019.

“The shipment of this military order was delayed due to a combination of operational and supply chain challenges we encountered during the quarter, exacerbated by COVID-19,” commented James Tu, Chairman and CEO of Energy Focus, Inc. “We were able to resolve these timing related issues, which did not cause any loss of orders and simply shifted some expected second quarter sales to the third quarter. Except for the continuing, uncertain impact from COVID-19 on the economy and broader business activities on a short-term basis, there is no fundamental change in our business, and we remain excited and optimistic about the military as well as the rapidly emerging and expanding commercial opportunities ahead of us.”

Q3 guidance implies a nice beat over the current $4.7 million analyst estimate. Even without the carryover from Q2, guidance implies the low-end range would have been in line with estimates and the top end would have been a nice beat. The Q3 guidance also falls in line with what the company disclosed on its Q4 conference call as its break even range of $7 to $8 million, in response to a question from GeoInvesting President Maj Soueidan. Again, even with the shift in revenues from Q2 to Q3, Q2 will still show 8% year over year growth.

Research

Wed, 13 May 2020 17:29:32 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($0.39; $6.2M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally announced Q1 2020 results:

Sales of $3.8 million vs $3.2 million in the prior year
Net loss of $0.04 vs net loss of $0.24 in the prior year

“For the first quarter, despite the economic headwinds associated with COVID-19 starting in March, we again delivered strong, positive sequential and year-over-year revenue growth, as well as a notable improvement in our cash flows.... Sales from our military business came in as expected and we secured key contract wins totaling $5.3 million. And while we began experiencing delays in commercial orders in the latter half of the first quarter and going into the second quarter, barring further unforeseen major economic disruption, we believe that these delays are likely temporary, as the facilities of our primary target customers in government, healthcare, education and select commercial and industrial sectors will mostly remain operational and thus require ongoing lighting maintenance and upgrades...

...In addition, our newly introduced EnFocus™ lighting control platform and products have received positive and encouraging responses from both existing and targeted customers, confirming our confidence that this breakthrough solution will create significant new sales opportunities in both commercial and military markets...

...Despite the uncertain business environment posed by COVID-19, we remain excited and optimistic about our growth strategies and R&D initiatives, and we expect continued revenue growth and operating margin improvement during the second quarter of 2020 and into the foreseeable future,” concluded Mr. Tu.

Guidance:

The Company currently projects second quarter 2020 sales in the range of $4.5 million to $4.8 million, representing year-over-year growth of 46%-56% from the second quarter of 2019, and sequential growth of 19%-27% compared with the first quarter of 2020.

With each quarter, we are gaining confidence that EFOI CEO James Tu has put the company on the path to achieving sustainable and profitable growth. If you are new to Geoinvesting or haven't read our research on EFOI, you can view a timeline of our research notes on the company here and our Reasons For Tracking the company here.

Research

Thu, 16 Apr 2020 17:45:32 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($0.33; $3.5M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally had two insiders file Form 4’s showing open market purchases:

Philip Politziner, a director purchased 32,000 shares
Tod Nestor, President and CFO purchased 150,000 shares

Research

Mon, 23 Mar 2020 16:29:10 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($0.30; $4.8M market cap), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally announced today that it considered part of the Defense Industrial Base, which is among the Critical Manufacturing Industries that fall within the broader Critical Infrastructure Industries, specified in the memorandum announced by U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA) dated March 19, 2020.

James Tu, Chairman and CEO of Energy Focus, stated: “We are in receipt of letters dated March 20, 2020 from multiple shipbuilder customers as well as the Under Secretary of Defense that recognize government and military suppliers such as Energy Focus during the COVID-19 pandemic as critical infrastructure companies. While the State of Ohio had issued its “stay at home” order that only permits essential businesses to stay open after March 23, 2020, our plant will continue to manufacture and fulfill our contracts and orders, while following the Company’s COVID-19 Contingency Plan (CCP) as well as Centers for Disease Control and Prevention (CDC) Interim Guidance for COVID-19 to ensure the safety and health of our employees.”

Research

Sun, 22 Mar 2020 04:00:00 GMT

As mentioned in our morning email this past Wednesday, March 19, Energy Focus, Inc. (NASDAQ:EFOI) reported earnings:

Sales of $3.5 million vs $3.1 million in the prior year
Net loss of $0.11 vs net loss of $0.25 in the prior year

We are not expecting much from the company in terms of profitability until revenue ramps up. Our current barometer to measure the progress of the company is to monitor whether the company’s turnaround plan, put in place by the new CEO in March 2019, will continue to yield positive results. Recall that James Tu rejoined the company as CEO in April 2019 after leaving the company in 2017 due to disagreements he had with the board on how to grow the company. He also simultaneously personally invested capital into the company. To summarize, James new plan included:

Relying less on distributors
Building direct relationships with customers
Hiring more sales reps
Diversifying the customer base
Taking advantage of an environment where competitors exited the market
Rebranding the company to be viewed more of a technology products/solutions company, rather than an LED lighting company selling generic commodity products
Cutting expenses by eliminating operational redundancies, along with implementing other cost saving measures.

We participated on the related Q4 conference call to gain intel on:

The sales level needed in order for the company to become profitable
Need to raise capital
Coronavirus impact

We learned that:

Breakeven is currently expected to occur at a revenue level of $7 to $8 million, but it’s a moving target.
The CEO was pretty adamant about not needing to raise equity capital in 2020
Coronavirus can certainly disrupt their business, but silver linings may exist.

Maj Soueidan, GeoInvesting

Hello, guys, thanks for taking the question. I have two questions for you. James, I just wanted a clarification now and earlier, I didn’t hear it quite clearly. It seemed like you said that maybe you might have to raise some money in 2020. I wasn’t quite sure I heard that right. Maybe clarify, what are your needs for 2020 above what you kind of have now on your balance sheet? And if you were to raise to finance growth in 2020 how would you maybe look to do that now?

James Tu

Yeah, I’ll answer and then Tod can add on. So our plan, we don’t have a plan to raise equity capital. What we are working on now, as Tom mentioned, is to expand our credit facility which we have been working on over the past few months. Our current credit facility is pretty low against our receivables and inventory. So we believe that there’s much more capital accessible for us from the credit facility standpoint.

We, as I mentioned the $2.7 million that we raised in the equity capital, give us a lot of room to maneuver this challenging time. I also emphasize that as I said in the earnings script that we stay on top of what’s going on. And if we see dramatic changes around the sales patterns and forecasts, we will have to make some operating expense adjustments as well. So just staying on top of what’s going on. And we’ll make sure that we take action in a timely manner. Tod?

Maj Soueidan, GeoInvesting

Okay, great. And before my next question, I guess I know you can’t give guidance, but if you – could you give us an idea, like where your break even revenue point might be.

James Tu

So, I would say that if you look at our current overhead, you’re probably going to be looking at, say, anywhere between $7 million to $8 million on a quarterly basis for profitability. On the other hand, if we see that we are not getting there very quickly, we will have to adjust our offerings. Right? So it’s a dynamic situation. But if we can see that we have pretty aggressive growth plans and obviously, this COVID-19 is a –throws a monkey wrench. So we need to be dynamic. Our plan is not to raise equity capital in 2020.

James Tu (On Coronavirus)

And obviously. So I was just going to say that you can see from our military contract wins in the past few months. So obviously, we’re going to see military business start picking-up throughout the year. And the commercial business obviously depends on if there are impacts from COVID-19. Obviously, we were looking to have a very strong year. Now, because of the COVID-19, we have to see how that impacts our end customers.

We see both sides of that, we see that right away right now, some schools are putting projects on hold because they just want to make sure that with this whole new reality they are prepared for that. On the other hand, if you’re looking at the school closures lasting at this point, obviously everybody is expecting a few weeks, but it might go longer. If it goes longer obviously it opens up the facility for retrofits. So it might actually generate more near term opportunity.

On the hospital side, obviously hospitals are going to be very busy. And I do think that hospital remains an opportunity. Some — again, some hospitals might be putting the retrofit projects on hold because of the activities now in-hospital and increasingly so. But they are still using lamps. LEDs actually have a much longer life that can reduce the maintenance staff time to replace fluorescent. And hospitals today are still very thinly penetrated by LED. By our estimate, it’s just 10% to 15%. So, the LED actually can help them free up the time for maintenance staff. So I see that as an opportunity that should continue.

So, the bottom line is it is probably a little bit early to tell the exact impact. Right now we have run different scenarios – we’re preparing for worst case scenarios, but we are watching it literally day by day and see how things could settle down and start moving again.

Research

Thu, 19 Mar 2020 16:22:22 GMT

Sales of $3.5 million vs $3.1 million in the prior year
Net loss of $0.11 vs net loss of $0.25 in the prior year

“Fourth quarter revenue represents our first quarter of sequential and year-over-year growth since 2015... ...Since fourth quarter of 2019, we have been awarded over $7.6 million in new contracts from the U.S. and allied Navies, demonstrating our strengthening competitiveness and leadership as a leading LED lighting provider for the U.S. Navy ecosystem...Overall, the business transformation initiatives we began in the first half of 2019 are gaining momentum, generating new orders and customers, and creating a runway for continuing growth in 2020 and beyond...

...With a whole new family of patented controlled lighting products being launched this month and delivered starting in the second quarter of this year, we believe we are in a strong position to expand the benefits of LED lighting beyond delivering environmental sustainability with our new EnFocus™ lighting platform and into elevating human well-being and performance, thereby addressing and penetrating the broader lighting retrofit market in a significant and meaningful way.”

Impact from Coronavirus:

“At this point, we have not seen opportunities lost due to COVID-19 but have started to see some customer lighting retrofit projects being put on hold or postponed. Our near-term sales, mainly those from commercial sectors, could be adversely affected if the current, dramatic slowdown of economic activities continues over an extended period. In addition, potential government regulation mandates could temporarily cause logistics bottlenecks or cease our production operation, and increase the cost of or prevent us from making or shipping products to customers. We aim to update with investors if and when material developments on our business or significant organizational changes transpire due to COVID-19.”

Guidance for Q1 2020:

“...the Company projects first quarter 2020 sales in the range of $3.5 million to $3.6 million, representing sequential growth of 0%-6% compared with the fourth quarter of 2019, and a 13%-16% growth over the first quarter 2019.”

Research

Fri, 21 Feb 2020 05:00:00 GMT

Adding EFOI to Our Run to One Portfolio

After meeting with James Tu at the LD MicroCap Conference we once again became interested in the EFOI story. Below is a recap of our coverage, which compiled together led us to now add the stock to our Run to One Mock Portfolio.

December 16, 2019 - Our brief reasons for tracking
January 6, 2020 - Call to action establishing a position
January 10, 2020 - Surprise share offering
February 18, 2020 - Contract win

In recent notes on GeoInvesting (Dec.16, 2019 through Feb 18, 2020), we continue to put an emphasis on CEO James Tu, especially believing that his return as CEO of the company has put the company back on track to rekindle the profitable growth it had once experienced.

Research

Tue, 18 Feb 2020 16:36:29 GMT

Energy Focus, Inc. (NASDAQ:EFOI) ($0.64; $10.1M market cap) a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally announced it has been awarded a $3.4 million contract from the U.S Navy.

“Energy Focus considers it a true honor and privilege to serve the U.S. Navy,” said James Tu, Chairman & CEO of Energy Focus. “This contract reflects our continuing success and commitment to innovation to help improve the Navy’s sustainability profiles and the lives of the people serving in the fleet. It also demonstrates our strengthening leadership in providing advanced LED lighting systems for world-class organizations with mission-critical facilities such as the U.S. Navy...

...This contract award reflects the U.S. Navy’s continuing commitment to TLEDs as the superior format for lighting retrofit applications and its confidence in Energy Focus to provide the most reliable and compelling TLED solutions...

...The confidence the Navy has put in our technologies and our company is humbling, and we look forward to continuing our relationship as a trusted LED lighting partner to the U.S. Navy as we support their efficiency, sustainability and strategic goals across the fleet.”

We view this order to be significant, given that it represents a quarter’s worth of revenue and is slated to fill by year end.

On January 6, 2020 we initiated a position as shares were climbing ahead of our scheduled interview. See our December 16, 2019 research note on why EFOI re-captured our attention as well as our January 10, 2020 note regarding the surprise offering that pulled shares back down.

We continue to believe that the return of CEO James Tu has put the company back on track to rekindle profitable growth it had once experienced - growth that drove the stock price to over $20.00 in the past.

Research

Fri, 10 Jan 2020 05:00:00 GMT

EFOI Shares Slide After Offering; Adding on the Dip Not Out Of Question

2 Days after our call with management, the company surprised us with a $2.75 million registered direct offering.

“EFOI announced that it has entered into definitive securities purchase agreements with certain institutional investors for the issuance and sale of 3,441,803 shares of the Company’s common stock, at a purchase price of $0.799 per share, in a registered direct offering priced at-the-market. The Company also agreed to issue to the institutional investors unregistered warrants to purchase up to 3,441,803 shares of common stock, at an exercise price of $0.674 per share in a concurrent private placement.”

Prior to this offering, the fully diluted share count was 12.5 million; post offering, it will be 19.4 million.

With only $600,000 in cash, coupled with liquidity concern comments in the last 10-Q filing, we understood that a raise was possible at some point moving forward; so much so, that we had even brought this concern up during our interview with management. However, we did not believe it would be now. We hoped that the company would execute on its business plan for a few quarters before initiating an offering. That way, we figured that an expected offering would be at a higher price if the stock continued to perform.

We are obviously discouraged and upset that the company executed an offering immediately after the conversation with GeoInvesting. But, given the weak balance sheet, we understood that a raise would be possibly needed at some point. Regardless, we feel the drop in price in reaction to the offering will be short-term pain for long-term gain as the company seems to be in a good position for strong growth for at least the next several quarters.

We hope this raise will remove any further liquidity issues and going concern comments in future 10-Q/K filings. We contacted the company and expressed our concerns and urged them to communicate with investors about what this means for future liquidity needs. We also suggested that insiders should buy stock once the quiet period around the reporting of year end 2019 results ends (in March 2020).

Another thing to note is that CEO of the company, James Tu, recently invested in the company to help shore up the balance sheet at around $0.70 a share. So, we don't think he would do anything that would jeopardize his investment in the company. In fact, we think he is doing this offering to strengthen the company's balance sheet and ability to grow the company.

On January 6, 2020 we initiated a position as shares were climbing ahead of our scheduled interview. See our December 16, 2019 research note on why EFOI re-captured our attention.

Research

Mon, 06 Jan 2020 05:00:00 GMT

EFOI Interview and Call to Action

We're pleased to announce that we will be conducting an interview with James Tu, the Chairman and CEO of Energy Focus, Inc. (NASDAQ:EFOI), a company that designs, develops, manufactures, markets, and installs energy-efficient lighting systems and solutions in the United States and internationally. We are inviting you to attend the call and would love for you listen in. There will be a 5-10 min brief introduction about Energy Focus and then we’ll go into the live interview, with the presentation slides available for reference.

We touched upon a few reasons why we put the company back on our radar (here) and stated that we were in the process of setting up this interview with Mr. Tu. Given the stock’s momentum over the last few days, we've initiated a position in EFOI (Call to Action) today prior to tomorrow's interview.

Research

Mon, 16 Dec 2019 13:09:59 GMT

We are honoring $EFOI CEO James Tu’s request to present his company’s comeback story to Geoinvesting Members.

In last week’s weekly update we mentioned that:

“We are performing preliminary research on a few more candidates for inclusion in our Microcap Run to One (R21) Model Portfolio. Three out of the five current holding in our Favorite 5 Model Portfolio ($ATGN, $KRMD, $TSSI) started out as R21 Portfolio selections.”

While we are still working on this task, as luck would have it, I have become very interested in EFOI due to my interaction with Mr. Tu at the LD Micro conference. Energy Focus is an “industry-leading innovator of energy-efficient LED lighting technologies and solutions.”

Recall from an article we wrote on LED solutions provider $OESX that the LED industry is poised for large growth over the next several years.

Over the last few years, EFOI has been decimated from the $20 range to its current price of around $0.40. However, our past history with the stock is not as ominous.

On May 7, 2015, we disclosed that we bought the stock at around $5.80. This action was based on information arbitrage contained in its Q1 2015 conference call transcript, as well as a large Navy contract the company was fulfilling.

Shortly after our purchase, we ended up interviewing management, but were not convinced that the company could sustain the rapid growth it enjoyed through the Navy contracts. We also believed that margins would decrease and became uncertain about the company’s strategy to grow its commercial and retail business. Thus, seven weeks later, we locked in a gain of 70%, missing an additional run into the mid $20 range by the end of August.

Actually, if you look back in time, EFOI traded as high as $152 in 2005.

A hit piece by the Street Sweeper dredged up some of our concerns, as well as some other issues. Amid falling sales and increased losses, and with the stock trading in the $3.00 range by February 2017, the Board relieved James Tu’s of his CEO role that he had held since December 2012.

However, according to James, throughout 2016 he voiced his opinion to the Board that he disagreed with their vision for growth. James told me that EFOI was selling most of its commercial and retail products through distributors. He believed that since the pace of change of technology in the LED lighting industry was occurring at a much quicker pace than in the past, distributors would not be able to do a great job understanding the products EFOI was trying to sell. He argued that the company should spend capital to start building a more direct channel to its end customers, as well as speed up its product innovation efforts.

Here’s a look at EFOI sales and EPS performance since 2010:

Sales

EPS

Well, after two years since the Board asked James to vacate his position as CEO, they asked him to return to the exact same capacity in April 2019. Furthermore, Tu was part of a group of investors who provided capital to the company to basically avoid bankruptcy:

“On March 29, 2019, the Company closed a strategic financing from a group of investors (including certain investors that had filed a Schedule 13D with the Securities and Exchange Commission on November 30, 2018). The financing provided gross proceeds to the Company of approximately $1.7 million in exchange for subordinated convertible promissory notes that will convert into shares of the Company’s Series A Convertible Preferred Stock on either April 17, 2019 or the day following the Company’s annual meeting of stockholders, if stockholder approval is needed to allow full conversion of the notes under the Nasdaq market rules. In connection with the financing, the Board of Directors has appointed James Tu and Robert Farkas to join the Board, effective following the Company’s filing of its Annual Report on Form 10-K. Mr. Tu will also return to the position of Chairman, Chief Executive Officer and President and serve as its interim Chief Financial Officer effective April 2, 2019 and the Company is conducting a search for a permanent or alternative interim Chief Financial Officer candidate.

Mr. Tu was one of the parties that participated in the Schedule 13D filing and financing and served as the Company’s Executive Chairman of the Board, non-Executive Chairman of the Board, Chief Executive Officer and President from 2013 through 2017.”

More research is needed to understand the risks surrounding EFOI and determine if the company’s new plan for growth will be successful in the long-run. Management seems optimistic about achieving revenue growth, but is a little vague on when profitability may be attained. Still, it’s encouraging that James Tu has invested capital into the company and that the stock performed fantastically for a period of time under his previous tenure.

The company’s Q3 2019 press release comments about growth, EFOI’s salesforce and the company’s plan to solidify its footprint as a leader in the industry it serves:

“During the past quarter, in addition to continuing our effort to significantly lower our burn rate since our relaunch in April, we achieved several milestones with regard to both our business development and technology initiatives. These milestones are positioning us to embark on a future path of sustainable and strong growth, as well as bring financially, environmentally and humanly impactful products to the market in the most timely and scalable manner possible.

We reorganized and strengthened our sales force by adding two new business development leaders to build and expand our newly created Channel Partnership business, which is dedicated to working with select experts within specific industries that have a national footprint, as well as our SME business, which reaches out to small and medium size enterprise customers through our inside sales team. With our existing Commercial Strategic Accounts and Military and Maritime businesses, we now have four business development teams, each led by a high-caliber team leader, dedicated to focus on specific channels that together are expected to accelerate our business development process and encompass key market sectors across the country.

We are confident that the relaunch and transformational plan we have put in place since April 2019 are setting the Company on a solid path toward growing our top line during the fourth quarter of 2019 and beyond, while solidifying our leadership in the LED lighting industry when it comes to product quality, technology innovation and brand equity and trust,” concluded Mr. Tu.”

Stay tuned for details on a live interview we are in the process of setting up with EFOI’s management, currently slated for this coming Thursday. We’ll notify you of any changes.

Research

Wed, 04 Nov 2015 15:44:58 GMT

EFOI ($14.60, marked up) Reported Strong Q3 2015 Results

On May 7, 2015 we initiated a long position in EFOI as an information arbitrage play when shares were trading at $5.80. In early July we closed out our long position as shares were up over 70% from our initial alert. The stock continued to run, going parabolic at one point, reaching a high of $29.20 before retracing to its current levels. Today, EFOI reported strong Q3 2015 results:

Sales of 18.3 million vs $7.3 million in the prior year and ahead of analyst estimates of $16.2 million
EPS of $0.40 vs $0.03 in the prior year and crushed analyst estimates of $0.13

Quotes from management:

"Our most exciting sales development during the quarter was the entry into a multi-million-dollar LED retrofit contract by a leading, global healthcare institution with initial product deliveries expected in the fourth quarter this year. This milestone win has ignited considerable interest in our products and helped initiate and expand our pipeline of opportunities from numerous hospital chains across the country. As a result, we believe that we will be able to score more wins, accelerate LED adoption and establish a distinct leadership position in the healthcare industry over the coming quarters and years to markedly improve hospitals' environments for better sustainability and health wellbeing," Mr. Tu added.

Caveat:

In the company’s business outlook, management stated, “while quarterly results will vary and fluctuate due to order and delivery timing, the Company believes it will achieve net sales growth in excess of 100 percent in 2015 over 2014”. With nine month net sales up 240%, the guidance leaves the door open for a possible disappointing Q4. Investors should note, this is similar verbiage the company has giving for outlook in the first two quarters of the year.

Research

Wed, 05 Aug 2015 14:25:59 GMT

Will possibly look to re-enter EFOI

On May 7, 2015 we initiated a long position in EFOI ($9.38; marked up 12%) on May 7, 2015 as an information arbitrage play when shares were trading at $5.80. In early July we closed out our long position as shares were up over 70% from our initial alert. The stock continued to run, reaching a high of $11.63 before retracing to its current $9 level. Today, EFOI once again reported a strong quarter with its Q2 2015:

Q2 2015 sales of $16.6 million vs $6.7 million in the prior year
Q2 2015 EPS of $0.21 vs a loss of $0.08 in the prior year

Quotes from management:

“With continued Navy sales growth and superb execution on production expansion and operational efficiency enhancement, our total sales for the first half of 2015 have already surpassed those for the entire year in 2014 with markedly improved margins. Based on our current pipeline of opportunities for both military and commercial products, we expect strong sales momentum and margin performance to continue for the rest of 2015...

...While quarterly results will vary and fluctuate due to order and delivery timing, the Company believes it will achieve net sales growth in excess of 100 percent in 2015 over 2014. Additionally, gross margins are expected to remain above the Company's targeted 35 percent for 2015.”

We will be on today’s conference call at 11:00 am to see if another information arbitrage opportunity is presented.

Research

Thu, 02 Jul 2015 14:43:25 GMT

Locked in gains on EFOI ($9.97)

Yesterday, in the early afternoon via premium tweet we stated we were beginning to unwind our long position in EFOI as shares were up 60% since our May 7, 2015 information arbitrage alert. Shares continued to climb, reaching a high of $10.07 (up 73% from initial alert), so late in the day we sent another tweet stating we closed our entire position. EFOI offered that rare chance to take advantage of conference call subject matter (in EFOI’s case, Q1 2015) that offered insight into the company's growth outlook. However, due to a poor connection, we surmised that the market could not immediately act on the information since even the transcript available online appeared incomplete due to transcription omissions. We took the time to reach out to the company’s investor relations firm and obtained a clean copy of the company’s transcript for the call. The version of the transcript revealed, with particularity, several bullish statements regarding the company’s near term and future business prospects. Shares may continue to push higher, but uncertainty on the company’s ability to maintain Q1 2015 margins has led us to lock in profits. Our original note can be read here.

Research

Thu, 07 May 2015 04:00:00 GMT

Clarity in Energy Focus, Inc. (EFOI) Conference Call Could Be Information Arbitrage Opportunity

GeoInvesting has uncovered what we believe to be another information arbitrage opportunity. This time, it’s regarding $EFOI shedding some clarity on the company’s conference call today.

There was a lot of information on the call about growth and outlook that we weren’t able to discern due to a poor connection and corresponding automated transcripts that left out key words during points of the company’s guidance. We took the time to reach out to the company’s investor relations firm, and we’ve obtained a clean copy of the company’s transcript for the call. This version of the transcript reveals, with particularity, several bullish statements regarding the company’s near term and future business prospects.

The key takeaway from the clean transcript was that it appeared that the current level of sales and net income in Q1 was not an aberration. If you annualize the company’s first quarter, you arrive at sales of about $52 million and EPS of around $0.50 for the full year. Current analyst estimates were for $45 million in revenue on a loss of $0.10 for the full year. We believe we’re ahead of the analysts, who will have to revise their outlook accordingly.

Here are a few key points made by management, which lend themselves to a bullish view of the company:

During the first quarter, we continued to witness broadening adoption of our LED lighting products in the Navy channel and our commercial sales, although still quite small, are now starting to build pipeline and sales momentum. While US Navy product sales grew from $1.5 million in 1Q 2014 to $10.8 million, commercial, non-Navy product sales also grew 87% from $1.2 million to $2.3 million a year ago. We expect volumes from the Navy channel to remain robust and the growth from the commercial sales to continue to accelerate for the rest of the year as early pipeline opportunities start to materialize.
We believe that, barring very large sales opportunities that might warrant one-time discounts, gross margin over 35%, which remains our long-term goal, is here to stay for the remainder of 2015.
At this point, based on our current backlog and visible order pipeline, we believe that our record first quarter 2015 results will not be a blip of strength, but yet another level of quarterly sales run rate we aim to break through. Meantime, we continue to focus on blazing the trails and setting an ever-higher standard of excellence in the lighting industry, and growing the business over the long-term along the way. And needless to say, we remain confident of reaching our long-term annual growth target of 50% for the remainder of 2015.
As James said in the press release, this quarter is the first quarter where we were profitable from operations since our restructuring in the second half of 2013. We have added costs to our business as we build out an infrastructure that will support our growth, and we will continue to add costs as necessary.

In light of these revelations, our take is that we think the stock could move higher once these statements are fully disseminated and understood by the market. While we’re still working through our full analysis of the company, including our price target, a 15x P/E on our annualized estimates gives us a $7.50 starting point for a target price.

A small caveat that we’d also like to point out is the fact that it appears the company may have been a part of a small promotional campaign in 2013. It looks as if the company is going to be able to build upon the revenue growth and maintain margin, but it’s unclear to us whether or not it’s going to be able to control SG&A.

You can find a link to the full, clear version of the transcripthere.

Comments & Business Outlook

Wed, 15 May 2013 04:00:00 GMT

First Quarter 2013 Results

Net sales of $5.3 million for the first quarter of 2013 and 2012.
Gross margins of 22.5 percent of net sales compared to 14.8 percent of net sales for the first quarter of 2012.
A net loss of $1.4 million compared to a net loss $1.9 million in the first quarter of 2012.

James Tu, Executive Chairman, commented: "Our first quarter sales came in modestly lower than our previous guidance due to a delay in Navy orders as a result of the sequester and sales that took longer to recognize in our lighting retrofit division, Stones River Companies (SRC). However, as we have stated in a recent press release, we have been witnessing much stronger momentum in SRC's business this year, with 50% growth in contracts over the same period last year. We're also excited to announce that, despite the government sequester, our Navy business has obtained an additional $1.9 million in orders so far in the second quarter; a trend that we expect to continue, leading to substantial growth in our Navy business in 2013."

"We believe that the LED revolution has started to reach the lighting retrofit market," continued Mr. Tu. "We are particularly excited about the increasing appeal of our LED lighting solutions over fluorescent even in projects that have fewer hours of operation, such as schools. In addition, under the new leadership Energy Focus has put in place, we're embarking on a series of operational initiatives that aim to unlock our organizational potential and create shareholder value. Therefore, in spite of a slow first quarter, we do look forward to a year of strong growth."

During the first quarter of 2013, the Company embarked on a program to raise an additional $3.8 million in unsecured convertible debt, of which $1.75 million was received during the first quarter. During the second quarter, the Company expects to receive an additional $2 million. "We are grateful and pleased to have received strong investor support during the current round of financing which will enable us to meet our growing working capital needs and reach our goal to be EBITDA positive in the second half of this year," added Mr. Tu.

The Company expects sales for the second quarter of 2013 to range between $8 million and $9 million, and expects sales will continue to grow in the second half of the year.