XZERES Reports Second Quarter Financial Results
POSTED 10/20/11 XZERES Corp., designer, developer and producer of distributed generation, wind power systems and power management and power efficiency devices for the renewable and clean energy markets, announced today its financial results for its fiscal second quarter ended August 31, 2011.Financial Results
Revenue for the second quarter ended August 31, 2011 totaled $1.367 Million, a 34% sequential increase over Q1 2011 and a 278% year-over-year increase. It represented the fifth consecutive quarter that sales have increased by more than 30%. The Company reported a net loss of $1.76 million, a sequential improvement over the first quarter net loss of $1.99 million.
“We are extremely pleased with our second quarter performance and even more excited about what the near-future holds,” stated Frank Greco, CEO. “Our success in building a capable infrastructure and expanding our footprint internationally have set the stage for XZERES to generate a much higher level of sales activity in the coming quarters, which we believe will allow us to reach profitability within the next three quarters,” further commented Greco.
Since beginning its sales efforts just over one year ago, more than 80% of XZERES’ sales have been to the US market. While the company expects growth in the United States to continue, it believes there are much larger immediate and mid-term growth opportunities for its products overseas, particularly in the United Kingdom (UK), Continental Europe and Vietnam. The company’s efforts to develop these international sales channels include; establishing a subsidiary, office, and sales team in the UK; achieving the critical MCS Certification award in the UK for our 10kW Turbine (1 of only 3 companies in our size range to successfully do so); and successfully completing a critical pilot study with a large customer in Vietnam.
Thus far these international efforts have resulted in announcements of agreements with the Republic of Vietnam and with the largest distributed wind energy dealer in the UK – VG Energy LTD. These two agreements alone are expected to add more than $7-8 million in additional sales over the next 12-15 months. As we further capitalize on our global focus, we expect more agreements to follow.
According to David N. Baker, XZERES Chairman and Co-Founder, “Working together with the largest dealers and distributors in Europe and the United States, our plan is to change the face of the renewable and clean energy marketplace by offering customers a diversified technology-centric product offering. Equally important to our expected top-line growth, we anticipate our fixed costs going forward to remain stable, as we now have the necessary infrastructure in place to support the expected growth. As a result, the Company anticipates meaningful bottom-line performance improvements going forward as sales continue to expand.”
Outlook
Despite potential quarterly fluctuations, due to product development activities or establishment of production processes associated with bringing new products to market, on an annual basis, we still expect gross margins to rise substantially from current levels over the next two fiscal years as we develop, acquire and deploy new products, services and business models. Furthermore, we maintain our goal [not a guarantee] for FY 2012 ending February 28, 2012, to significantly more than quadruple our revenues, as compared to the recently completed fiscal year 2011.
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