Announces Partnership with Coldwell Solar

WILSONVILLE, Ore. / May 09, 2023 / Business Wire / ESS Tech, Inc. (“ESS,” “ESS, Inc.” or the “Company”) (NYSE: GWH), a leading manufacturer of long-duration energy storage systems for commercial and utility-scale applications, today announced financial results for its first quarter of 2023 ended March 31, 2023.

“ESS built nine Energy Warehouses in Q1, continuing our strong pace of production from Q4 and proving out the improved scale of our production capacity. While we continue to make progress operationally, ESS faced certain challenges in the first quarter that limited shipments and revenue recognition, including project delays at a customer site. Although unfortunate, project delays at energy infrastructure companies are common so we remain confident that this timing issue will be resolved,” said Eric Dresselhuys, CEO of ESS. “Significant market tailwinds are building momentum for the long-duration energy storage market and, as the Inflation Reduction Act makes its way through the IRS, we continue to see accelerating traction with customers as we look to forge great partnerships. Our operational initiatives for 2023 to optimize our manufacturing supply base and processes, drive down costs to improve leverage, and conserve our cash balance remain on track and we are poised to play a vital part in meeting the energy storage demands of a zero carbon energy grid.”

Recent Business Highlights

• ESS LDES units received certification to the Underwriters Laboratories’ (UL) 1973 standard, an industry standard for stationary energy storage systems. This certification underscores our tech's resilience, safety and quality in a variety of environments and conditions.
• Entered into a partnership with Coldwell Solar, a major developer and builder of renewable energy projects for California’s commercial, agricultural and utility sectors. ESS is installing three Energy Warehouses in a microgrid to power three wineries in Mendocino County, CA, to help manage demand charges and ensure resilient operations. This microgrid is expected to be operational in late 2023.
• ESS has been awarded over 20 additional patents for its iron flow battery technology since the beginning of 2022, further reinforcing its position as an industry leader in the long-duration energy storage market. This brings the total number of patents held by the company to 62 worldwide as of March 31, 2023, with a further 225 applications filed.

Conference Call Details

ESS will hold a webcast conference call on Tuesday, May 9, 2023 at 4:30 p.m. EDT to discuss financial results for its first quarter 2023 ended March 31, 2023, and provide an operational update.  A live webcast of the conference call will be available here and on ESS’ Investor Relations website at http://investors.essinc.com/. Interested parties may join the conference call beginning at 4:30 p.m. EDT on Tuesday, May 9, 2023 via telephone by calling (888) 272-2741 in the U.S., or for international callers, by calling +1 (848) 280-6390. 

A replay of the webcast will be available via the web at http://investors.essinc.com/.

About ESS, Inc.

At ESS (NYSE: GWH), our mission is to accelerate global decarbonization by providing safe, sustainable, long-duration energy storage that powers people, communities and businesses with clean, renewable energy anytime and anywhere it’s needed. As more renewable energy is added to the grid, long-duration energy storage is essential to providing the reliability and resiliency we need when the sun is not shining, and the wind is not blowing.

Our technology uses earth-abundant iron, salt and water to deliver environmentally safe solutions capable of providing up to 12 hours of flexible energy capacity for commercial and utility-scale energy storage applications. Established in 2011, ESS Tech, Inc. enables project developers, independent power producers, utilities and other large energy users to deploy reliable, sustainable long-duration energy storage solutions. For more information visit www.essinc.com.

Use of Non-GAAP Financial Measures

In this press release and the accompanying earnings call, the Company includes Non-GAAP Operating Expenses and Adjusted EBITDA, which are non-GAAP performance measures that the Company uses to supplement its results presented in accordance with U.S. GAAP. As required by the rules of the Securities and Exchange Commission (“SEC”), the Company has provided herein a reconciliation of the non-GAAP financial measures contained in this press release and the accompanying earnings call to the most directly comparable measures under GAAP. The Company’s management believes Non-GAAP Operating Expenses and Adjusted EBITDA are useful in evaluating its operating performance and are similar measures reported by publicly-listed U.S. companies, and regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing these non-GAAP measures, the Company’s management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability for the periods presented. Adjusted EBITDA is not intended to be a substitute for net income/loss or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry. Further, Non-GAAP Operating Expenses are not intended to be a substitute for GAAP Operating Expenses or any U.S. GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

The Company defines and calculates Non-GAAP Operating Expenses as GAAP Operating Expenses adjusted for stock-based compensation and other special items determined by management as they are not indicative of business operations. The Company defines and calculates Adjusted EBITDA as net loss before interest, other non-operating expense or income, (benefit) provision for income taxes, and depreciation, and further adjusted for stock-based compensation and other special items determined by management, including, but not limited to, fair value adjustments for certain financial liabilities associated with debt and equity transactions as they are not indicative of business operations.

Forward-Looking Statements

This communication contains certain forward-looking statements, including statements regarding ESS and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intends”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “will” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the Company’s manufacturing plans, the Company’s order and sales pipeline, the Company’s ability to execute on orders, the Company’s ability to effectively manage costs, the Company and its current customers resolving delays with respect to projects and the Company’s partnerships with third parties such as Coldwell Solar. These forward-looking statements are based on ESS’ current expectations and beliefs concerning future developments and their potential effects on ESS. Many factors could cause actual future events to differ materially from the forward-looking statements in this communication. There can be no assurance that the future developments affecting ESS will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond ESS’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, which include, but are not limited to, continuing supply chain issues; delays, disruptions, or quality control problems in the Company’s manufacturing operations; the Company’s ability to hire, train and retain an adequate number of manufacturing employees; issues related to the shipment and installation of the Company’s products; issues related to customer acceptance of the Company’s products; issues related to the Company’s partnerships with third parties; inflationary pressures; risk of loss of government funding for customer projects; and the Company’s need to achieve significant business growth to achieve sustained, long-term profitability. Except as required by law, ESS is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.