Eos Energy Enterprises, Inc. (NASDAQ: EOSE) (“Eos” or the
“Company”), a leading provider of safe, scalable, efficient, and
sustainable zinc-based energy storage systems, today provided an
update on the goals outlined in the December 2023 Strategic Outlook
and its preliminary first quarter results. Eos continues to reach
milestones necessary to achieve the goals outlined in the Strategic
Outlook in December 2023, particularly related to cost reduction
initiatives, Project AMAZE implementation and Eos
Z3™ production.
“The team continues to progress towards the
milestones and goals presented during our December Strategic
Outlook call, and is focused on delivering customer shipments,
reducing costs for both Eos and our customers, and remaining on
schedule to commission our first state-of-the-art manufacturing
line in Turtle Creek during Q2,” said Joe Mastrangelo, CEO of Eos.
“We continued to ship additional Z3 Cubes to customer locations
this quarter and our cost reduction efforts are beginning to yield
better gross margins compared to prior quarter results. We are
excited by these recent achievements and remain motivated by the
opportunity in front of us.”
Industry Recognition, Cost-Out &
Performance Improvement On April 18, Sabic Specialties
Business won the coveted Gold Edison Award for the high
electrically conductive compounds co-developed with Eos
specifically for the Z3 battery module. Inspired by Thomas Edison,
the Edison Awards™ are a globally respected leader in honoring
the highest levels of new product and service development,
marketing, human-centered design, and innovation. Over the past
four years, Eos and SABIC worked collaboratively to develop a
solution using one of SABIC’s new resin materials to replace the
titanium used in prior Eos battery iterations and this patented
material and innovation is one of many product cost out examples on
Eos’s path to profitability.
The Company outlined an 80% cost reduction
target from Z3 launch to scale, and direct materials accounted for
29 percentage points of that reduction. The Company has secured 55%
of the direct material cost-out target as the R&D, engineering
and supply chain teams work to utilize alternative materials,
increase energy density and execute on long term supplier
contracts. Innovating materials and establishing a secure,
U.S.-based supply chain remains a priority for lowering component
costs and delivering higher performing battery modules. Eos is
currently manufacturing the higher energy density, lower cost
battery module that was discussed in December and the Q4 2023
earnings conference call.
Z3 Production and State-of-the-Art
Automated Manufacturing LineCentral to Project AMAZE and
discussed during the Company’s December 2023 Strategic Outlook,
scaled production is the largest cost reduction opportunity.
Improved overhead, fixed cost and variable labor utilization are
forecasted to reduce Z3 product cost by 51% when operating the
state-of-the-art manufacturing line at scale.
Working with ACRO Automation, the Company
successfully tested the mechanical and electrical line design and
is now optimizing performance and cycle time to deliver quality Z3
battery modules. The line is producing batteries in ACRO’s
Wisconsin facility to be used in product testing. The companies are
fine tuning software and operational sequencing to improve material
flow and achieve the required cycle time for successful Factory
Acceptance Testing.
While preparing for the expected Q2 2024
state-of-the-art manufacturing line installation and commissioning,
Eos continues to manufacture Z3 battery modules on its
semi-automated line. Once integrated into the Turtle Creek
facility, the annual manufacturing capacity for delivering energy
storage systems is expected to be 1.25 GWh. Achieving this
milestone is critical to reducing overhead and indirect labor costs
in alignment with the Company’s cost-out plan.
Shipped Over 110 Z3 Cubes; Discharged ~1
GWh of Cumulative Total Energy in 2024 Utilizing its
semi-automated manufacturing line, Eos has manufactured and shipped
over 110 Z3 Cubes and nearly 75,000 battery modules to five
different customers since late September 2023. More than 65% of the
cubes shipped have been installed on foundations and are awaiting
final customer commissioning to bring Z3 into full field operation,
an important milestone in converting Eos’s $13.3 billion
opportunity pipeline as of the end of the first quarter into booked
orders. Commissioning represents an important stage in the project
lifecycle and includes ensuring proper mechanical and electrical
installation before energization, testing site controls
integration, optimizing and tuning site operations to maximize
customer use case performance, and customer training on Eos BESS
system operation.
Eos’s technology has cumulatively discharged
approximately 2.6 GWh in energy, which is enough energy to light an
entire NFL season’s worth of games. Most of this energy is from Gen
2.3 systems operating in the field with 1 GWh in discharged energy
year to date. The Company expects this number to continue growing
as customers cycle the existing Gen 2.3 energy storage systems and
Z3 projects become fully operational throughout 2024.
Announces Production Tax Credit
Monetization On April 22, Eos closed an agreement with
Banyan Software, Inc. to accelerate its 2023 production tax credit
monetization. Eos received $2.3 million in cash, representing a 10%
discount on the value of its credits. The Company anticipates
additional future transactions to accelerate the cash benefits of
the IRA production tax credits to fund operations and strengthen
its balance sheet. Simultaneously, the Company continues to work
towards closing and funding the conditional loan commitment with
the U.S. Department of Energy Loans Program Office.
Preliminary First Quarter Results &
Conference Call TimingEos expects to record revenue of
approximately $6.6 million for the first quarter, as the Company
completed shipments of its first Texas project owned by a large
North American infrastructure fund. As the Company continues to
scale Z3 production, it is currently expecting a 5-10% gross margin
improvement quarter over quarter. The Company had an ending cash
balance (excluding restricted cash) of approximately $31.8 million
and an orders backlog of $602.7 million as of March 31, 2024.
Eos will release its first quarter 2024
financial results after the U.S. market closes on May 14, 2024. A
conference call to discuss its results will be held on May 15 at
8:30 a.m. Eastern Time.
Registration Information
A live webcast of the earnings call will be
available on the “Investor Relations” page of the Company’s website
at https://investors.eose.com. To access the call by phone,
please register in advance using this link (registration link), and
you will be provided with dial in details via email upon
registration. To avoid delays, we encourage participants to dial
into the conference call fifteen minutes ahead of the scheduled
start time.
The conference call replay will be available via
webcast through Eos’s investor relations website for 12 months
following the live presentation. The webcast replay will be
available from 11:30 a.m. ET on May 15, 2024, and can be accessed
by
visiting https://investors.eose.com/events-and-presentations.
About Eos
Eos Energy Enterprises, Inc. is accelerating the
shift to clean energy with positively ingenious solutions that
transform how the world stores power. Our breakthrough Znyth™
aqueous zinc battery was designed to overcome the limitations of
conventional lithium-ion technology. Safe, scalable, efficient,
sustainable—and manufactured in the U.S—it's the core of our
innovative systems that today provide utility, industrial, and
commercial customers with a proven, reliable energy storage
alternative for 3- to 12-hour applications. Eos was founded in 2008
and is headquartered in Edison, New Jersey. For more information
about Eos (NASDAQ: EOSE), visit eose.com.
Contacts Investors: ir@eose.comMedia: media@eose.com
Forward-Looking Statements / Disclaimer
This press release includes certain statements
that may constitute "forward-looking statements" within the meaning
of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements that refer to our expected
revenue for the first quarter 2024, expected margins for first
quarter 2024, and cash balance and orders backlog as of March 31,
2024. The words "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intends," "may," "might," "plan,"
"possible," "potential," "predict," "project," "should," "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. Factors which may cause actual results to
differ materially from current expectations include, but are not
limited to: the preliminary financial information remains subject
to changes and finalization based upon management’s ongoing review
of results for the first quarter 2024 and the completion of all
quarter closing procedures; changes adversely affecting the
business in which we are engaged; our ability to forecast trends
accurately; our ability to secure final approval of a loan from the
Department of Energy or the final amount of any loan; our ability
to generate cash, service indebtedness and incur additional
indebtedness; our ability to secure financing to continue
expansion; our customer’s ability to secure project financing; our
ability to develop efficient manufacturing processes to scale on
expected timelines and to forecast related costs and efficiencies
accurately, and to secure labor; fluctuations in our revenue and
operating results; competition from existing or new competitors;
the failure to convert firm order backlog and pipeline to revenue;
the failure to sufficiently reduce manufacturing costs, potential
delays in the launch of our Eos Z3 battery; inefficient
implementation of the Inflation Reduction Act of 2022; the amount
of final tax credits available to our customers or to Eos pursuant
to the Inflation Reduction Act; risks associated with security
breaches in our information technology systems; risks related to
legal proceedings or claims; risks associated with evolving energy
policies in the United States and other countries and the potential
costs of regulatory compliance; risks associated with changes in
federal, state, or local laws; risks associated with potential
costs of regulatory compliance; risks associated with changes to
U.S. trade policies; risks resulting from the impact of global
pandemics, including the novel coronavirus, Covid-19; our ability
to maintain the listing of our shares of common stock on NASDAQ;
our ability to grow our business and manage growth profitably,
maintain relationships with customers and suppliers and retain our
management and key employees; risks related to the adverse changes
in general economic conditions, including inflationary pressures
and increased interest rates; risk from supply chain disruptions
and other impacts of geopolitical conflict; changes in applicable
laws or regulation; the possibility that Eos may be adversely
affected by other economic, business, and/or competitive factors;
other factors beyond our control; and other risks and
uncertainties. The forward-looking statements contained in this
press release are also subject to additional risks, uncertainties,
and factors, including those more fully described in Eos’s most
recent filings with the Securities and Exchange Commission,
including Eos’s most recent Annual Report on Form 10-K and
subsequent reports on Forms 10-Q and 8-K. Further information on
potential risks that could affect actual results will be included
in the subsequent periodic and current reports and other filings
that Eos makes with the Securities and Exchange Commission from
time to time. Moreover, Eos operates in a very competitive and
rapidly changing environment, and new risks and uncertainties may
emerge that could have an impact on the forward-looking statements
contained in this press release. Forward-looking statements speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and, except as
required by law, Eos assumes no obligation and does not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise.
Eos Energy Enterprises (NASDAQ:EOSE)
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