WILSONVILLE, Ore. / Nov 07, 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 third quarter ended September 30, 2023.
“In the third quarter, ESS again made significant progress executing on improving our internal operations, commissioning units at existing customer sites, strengthening our balance sheet, and broadening customer traction. This progress with our customers and operations is reflected in our year to date revenue of $4.7 million, which is an increase of nearly 700% from last year. I’m also pleased to share that we successfully completed commissioning of a number of Energy Warehouses, including the six we delivered to Sacramento Municipal Utility District last quarter,” said Eric Dresselhuys, CEO of ESS.
“Worldwide demand for reliable, safe, energy storage technology is growing rapidly and is reflected in the solid customer demand we’re seeing in the market. We continue to expect a material increase in revenue in the fourth quarter, which should lead to $9 million in revenue for the full year. Furthermore, our transformative partnership with Honeywell serves as a tremendous validation of the unique value proposition of our iron flow battery and our position in the market. The collaboration between ESS and Honeywell will not only strengthen our technology, operations and go-to-market, but the cash infusion from Honeywell also bolsters our balance sheet and extends our cash runway well into 2025. In addition, we’re well underway in building our first Energy Center with Portland General Electric and expect it to be operational this year, which should translate to shipping commercial units in the second half of 2024. Combined, these drivers in our business positions ESS for long-term growth and profitability expansion.”
Recent Business Highlights
Conference Call Details
ESS will hold a webcast conference call on Tuesday, November 7, 2023 at 5:00 p.m. EST to discuss financial results for its third quarter 2023 ended September 30, 2023. Interested parties may join the conference call beginning at 5:00 p.m. EST on Tuesday, November 7, 2023 via telephone by calling (833) 927-1758 in the U.S., or for international callers, by calling +1 (929) 526-1599 and entering conference ID 307911. A telephone replay will be available until November 14, 2023, by dialing (866) 813-9403 in the U.S., or for international callers, +44 (204) 525-0658 with conference ID 679393. A live webcast of the conference call will be available on ESS’ Investor Relations website at http://investors.essinc.com/.
A replay of the call 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 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.
Energy Warehouses and Energy Centers are trademarks of ESS Tech, Inc. Any third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between ESS and the third party unless expressly stated.
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 revenue expectations, 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, and the Company’s partnerships with third parties such as Honeywell, LEAG, ESI and Sacramento Municipal Utility District. 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; as well as those risks and uncertainties set forth in the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2023, to be filed with the SEC on November 14, 2023, and its other filings filed with the SEC. 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.
ESS Tech, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||||
Revenue: |
|
|
|
|
|
|
|
| ||||||||
Revenue |
| $ | 1,544 |
|
| $ | 191 |
|
| $ | 4,741 |
|
| $ | 595 |
|
Revenue - related parties |
|
| 1 |
|
|
| 1 |
|
|
| 3 |
|
| $ | 283 |
|
Total revenue |
|
| 1,545 |
|
|
| 192 |
|
|
| 4,744 |
|
| $ | 878 |
|
Cost of revenue |
|
| 10,183 |
|
|
| — |
|
|
| 10,183 |
|
|
| — |
|
Gross profit (loss) |
|
| (8,638 | ) |
|
| 192 |
|
|
| (5,439 | ) |
|
| 878 |
|
Operating expenses: |
|
|
|
|
|
|
|
| ||||||||
Research and development |
|
| 1,609 |
|
|
| 20,127 |
|
|
| 38,790 |
|
|
| 49,190 |
|
Sales and marketing |
|
| 2,056 |
|
|
| 1,815 |
|
|
| 5,648 |
|
|
| 5,217 |
|
General and administrative |
|
| 5,831 |
|
|
| 5,981 |
|
|
| 16,963 |
|
|
| 20,567 |
|
Total operating expenses |
|
| 9,496 |
|
|
| 27,923 |
|
|
| 61,401 |
|
|
| 74,974 |
|
Loss from operations |
|
| (18,134 | ) |
|
| (27,731 | ) |
|
| (66,840 | ) |
|
| (74,096 | ) |
Other income (expenses), net: |
|
|
|
|
|
|
|
| ||||||||
Interest income, net |
|
| 1,155 |
|
|
| 781 |
|
|
| 3,737 |
|
|
| 999 |
|
Gain (loss) on revaluation of common stock warrant liabilities |
|
| 344 |
|
|
| (4,585 | ) |
|
| 917 |
|
|
| 20,515 |
|
Other income (expense), net |
|
| 17 |
|
|
| (62 | ) |
|
| 738 |
|
|
| (312 | ) |
Total other income (expenses), net |
|
| 1,516 |
|
|
| (3,866 | ) |
|
| 5,392 |
|
|
| 21,202 |
|
Net loss and comprehensive loss to common stockholders |
| $ | (16,618 | ) |
| $ | (31,597 | ) |
| $ | (61,448 | ) |
| $ | (52,894 | ) |
|
|
|
|
|
|
|
|
| ||||||||
Net loss per share - basic and diluted |
| $ | (0.11 | ) |
| $ | (0.21 | ) |
| $ | (0.40 | ) |
| $ | (0.35 | ) |
|
|
|
|
|
|
|
|
| ||||||||
Weighted-average shares used in per share calculation - basic and diluted |
|
| 157,076,260 |
|
|
| 152,861,300 |
|
|
| 155,377,648 |
|
|
| 152,427,346 |
|
ESS Tech, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(unaudited) | |||||||
(in thousands, except share data) | |||||||
| September 30, |
| December 31, | ||||
Assets |
|
|
| ||||
Current assets: |
|
|
| ||||
Cash and cash equivalents | $ | 37,173 |
|
| $ | 34,767 |
|
Restricted cash, current |
| 1,373 |
|
|
| 1,213 |
|
Accounts receivable, net |
| 1,265 |
|
|
| 4,952 |
|
Short-term investments |
| 87,329 |
|
|
| 105,047 |
|
Inventory |
| 2,256 |
|
|
| — |
|
Prepaid expenses and other current assets |
| 2,035 |
|
|
| 5,657 |
|
Total current assets |
| 131,431 |
|
|
| 151,636 |
|
Property and equipment, net |
| 17,986 |
|
|
| 17,570 |
|
Intangible assets, net |
| 4,990 |
|
|
| — |
|
Operating lease right-of-use assets |
| 2,485 |
|
|
| 3,401 |
|
Restricted cash, non-current |
| 945 |
|
|
| 675 |
|
Other non-current assets |
| 824 |
|
|
| 271 |
|
Total assets | $ | 158,661 |
|
| $ | 173,553 |
|
Liabilities and stockholders' equity |
|
|
| ||||
Current liabilities: |
|
|
| ||||
Accounts payable | $ | 3,192 |
|
| $ | 3,036 |
|
Accrued and other current liabilities |
| 9,846 |
|
|
| 14,125 |
|
Accrued product warranties |
| 2,636 |
|
|
| 1,643 |
|
Operating lease liabilities, current |
| 1,541 |
|
|
| 1,421 |
|
Deferred revenue |
| 1,424 |
|
|
| 6,168 |
|
Notes payable, current |
| — |
|
|
| 1,600 |
|
Total current liabilities |
| 18,639 |
|
|
| 27,993 |
|
Notes payable, non-current |
| — |
|
|
| 315 |
|
Operating lease liabilities, non-current |
| 1,365 |
|
|
| 2,535 |
|
Deferred revenue, non-current |
| 19,905 |
|
|
| 2,442 |
|
Common stock warrant liabilities |
| 2,292 |
|
|
| 3,209 |
|
Other non-current liabilities |
| — |
|
|
| 85 |
|
Total liabilities |
| 42,201 |
|
|
| 36,579 |
|
Stockholders' equity: |
|
|
| ||||
Preferred stock ($0.0001 par value; 200,000,000 shares authorized, none issued and outstanding as of September 30, 2023 and December 31, 2022) |
| — |
|
|
| — |
|
Common stock ($0.0001 par value; 2,000,000,000 shares authorized, 173,007,592 and 153,821,339 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively) |
| 18 |
|
|
| 16 |
|
Additional paid-in capital |
| 796,469 |
|
|
| 755,537 |
|
Accumulated deficit |
| (680,027 | ) |
|
| (618,579 | ) |
Total stockholders' equity |
| 116,460 |
|
|
| 136,974 |
|
Total liabilities and stockholders' equity | $ | 158,661 |
|
| $ | 173,553 |
|
ESS Tech, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(unaudited) | |||||||
(in thousands) | |||||||
| Nine Months Ended September 30, | ||||||
| 2023 |
| 2022 | ||||
Cash flows from operating activities: |
|
|
| ||||
Net loss | $ | (61,448 | ) |
| $ | (52,894 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
| ||||
Depreciation and amortization |
| 3,187 |
|
|
| 828 |
|
Non-cash interest income |
| (2,438 | ) |
|
| (527 | ) |
Non-cash lease expense |
| 916 |
|
|
| 841 |
|
Stock-based compensation expense |
| 7,673 |
|
|
| 8,703 |
|
Inventory write-downs and losses on noncancellable purchase commitments |
| 11,422 |
|
|
| — |
|
Change in fair value of common stock warrant liabilities |
| (917 | ) |
|
| (20,515 | ) |
Other non-cash (income) expenses, net |
| (34 | ) |
|
| 306 |
|
Changes in operating assets and liabilities: |
|
|
| ||||
Accounts receivable, net |
| 3,874 |
|
|
| 437 |
|
Inventory |
| (13,132 | ) |
|
| — |
|
Prepaid expenses and other assets |
| 3,701 |
|
|
| 1,497 |
|
Accounts payable |
| 275 |
|
|
| (1,604 | ) |
Accrued and other current liabilities |
| (4,305 | ) |
|
| 5,525 |
|
Accrued product warranties |
| 993 |
|
|
| 1,148 |
|
Deferred revenue |
| 12,532 |
|
|
| (117 | ) |
Operating lease liabilities |
| (1,050 | ) |
|
| (248 | ) |
Net cash used in operating activities |
| (38,751 | ) |
|
| (56,620 | ) |
|
|
|
| ||||
Cash flows from investing activities: |
|
|
| ||||
Purchases of property and equipment |
| (4,209 | ) |
|
| (11,186 | ) |
Maturities and purchases of short-term investments, net |
| 20,208 |
|
|
| (123,467 | ) |
Net cash provided by (used in) investing activities |
| 15,999 |
|
|
| (134,653 | ) |
|
|
|
| ||||
Cash flows from financing activities: |
|
|
| ||||
Proceeds from issuance of common stock and common stock warrants, net of issuance costs |
| 27,132 |
|
|
| — |
|
Payments on notes payable |
| (1,733 | ) |
|
| (1,500 | ) |
Proceeds from stock options exercised |
| 236 |
|
|
| 102 |
|
Proceeds from contributions to Employee Stock Purchase Plan |
| 332 |
|
|
| — |
|
Repurchase of shares from employees for income tax withholding purposes |
| (165 | ) |
|
| (2,808 | ) |
Other, net |
| (214 | ) |
|
| (15 | ) |
Net cash provided by (used in) financing activities |
| 25,588 |
|
|
| (4,221 | ) |
|
|
|
| ||||
Net change in cash, cash equivalents and restricted cash |
| 2,836 |
|
|
| (195,494 | ) |
Cash, cash equivalents and restricted cash, beginning of period |
| 36,655 |
|
|
| 240,232 |
|
Cash, cash equivalents and restricted cash, end of period | $ | 39,491 |
|
| $ | 44,738 |
|
ESS Tech, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows (continued) | |||||||
(unaudited) | |||||||
(in thousands) | |||||||
| Nine Months Ended September 30, | ||||||
| 2023 |
| 2022 | ||||
Supplemental disclosures of cash flow information: |
|
|
| ||||
Cash paid for operating leases included in cash used in operating activities | $ | 1,246 |
| $ | 1,213 | ||
Non-cash investing and financing transactions: |
|
|
| ||||
Purchase of property and equipment included in accounts payable and accrued and other current liabilities |
| 747 |
|
|
| 1,718 |
|
Right-of-use operating lease assets obtained in exchange for lease obligations |
| — |
|
|
| 4,534 |
|
Right-of-use finance lease assets obtained in exchange for lease obligations |
| — |
|
|
| 123 |
|
Common stock warrants issued for the acquisition of intangible assets |
| 4,990 |
|
|
| — |
|
|
|
|
| ||||
Cash and cash equivalents | $ | 37,173 |
|
| $ | 42,896 |
|
Restricted cash, current |
| 1,373 |
|
|
| 1,167 |
|
Restricted cash, non-current |
| 945 |
|
|
| 675 |
|
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ | 39,491 |
|
| $ | 44,738 |
|
ESS Tech, Inc. | ||||||||||||||||
Reconciliation of GAAP to Non-GAAP Operating Expenses | ||||||||||||||||
(unaudited) | ||||||||||||||||
(in thousands) | ||||||||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, | ||||||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||||
Research and development |
| $ | 1,609 |
|
| $ | 20,127 |
|
| $ | 38,790 |
|
| $ | 49,190 |
|
Less: stock-based compensation |
|
| (278 | ) |
|
| (767 | ) |
|
| (2,401 | ) |
|
| (1,941 | ) |
Non-GAAP research and development |
| $ | 1,331 |
|
| $ | 19,360 |
|
| $ | 36,389 |
|
| $ | 47,249 |
|
|
|
|
|
|
|
|
|
| ||||||||
Sales and marketing |
| $ | 2,056 |
|
|
| 1,815 |
|
| $ | 5,648 |
|
| $ | 5,217 |
|
Less: stock-based compensation |
|
| (211 | ) |
|
| (127 | ) |
|
| (526 | ) |
|
| (306 | ) |
Non-GAAP sales and marketing |
| $ | 1,845 |
|
| $ | 1,688 |
|
| $ | 5,122 |
|
| $ | 4,911 |
|
|
|
|
|
|
|
|
|
| ||||||||
General and administrative |
| $ | 5,831 |
|
| $ | 5,981 |
|
| $ | 16,963 |
|
| $ | 20,567 |
|
Less: stock-based compensation |
|
| (1,522 | ) |
|
| (2,104 | ) |
|
| (3,868 | ) |
|
| (6,456 | ) |
Non-GAAP general and administrative |
| $ | 4,309 |
|
| $ | 3,877 |
|
| $ | 13,095 |
|
| $ | 14,111 |
|
|
|
|
|
|
|
|
|
| ||||||||
Total operating expenses |
| $ | 9,496 |
|
| $ | 27,923 |
|
| $ | 61,401 |
|
| $ | 74,974 |
|
Less: stock-based compensation |
|
| (2,011 | ) |
|
| (2,998 | ) |
|
| (6,795 | ) |
|
| (8,703 | ) |
Non-GAAP total operating expenses |
| $ | 7,485 |
|
| $ | 24,925 |
|
| $ | 54,606 |
|
| $ | 66,271 |
|
ESS Tech, Inc. | ||||||||
Reconciliation of GAAP Net Loss to Adjusted EBITDA | ||||||||
(unaudited) | ||||||||
(in thousands) | ||||||||
|
| Three Months |
| Nine Months | ||||
Net loss |
| $ | (16,618 | ) |
| $ | (61,448 | ) |
Interest income, net |
|
| (1,155 | ) |
|
| (3,737 | ) |
Stock-based compensation |
|
| 2,889 |
|
|
| 7,673 |
|
Depreciation |
|
| 1,082 |
|
|
| 3,180 |
|
Gain (loss) on revaluation of common stock warrant liabilities |
|
| (344 | ) |
|
| (917 | ) |
Other income (expense), net |
|
| (17 | ) |
|
| (738 | ) |
Adjusted EBITDA |
| $ | (14,163 | ) |
| $ | (55,987 | ) |
Last Trade: | US$5.80 |
Daily Volume: | 59,018 |
Market Cap: | US$68.850M |
August 14, 2024 June 19, 2024 May 31, 2024 May 07, 2024 |
Hillcrest Energy Technologies is a clean technology company developing high value, high performance power conversion technologies and digital control systems for next-generation powertrains and grid-connected renewable...
CLICK TO LEARN MOREUGE International develops, owns, and operates commercial and community solar projects in the United States and strategic markets abroad. Our distributed energy solutions deliver cheaper, cleaner energy to businesses and consumers...
CLICK TO LEARN MORECOPYRIGHT ©2022 GREEN STOCK NEWS