x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
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o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Delaware
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94-3021850
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|
(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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Item
1
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Financial
Statements:
|
|||
a.
|
Condensed
Consolidated Balance Sheets at March 31, 2008 (unaudited) and
December 31,
2007
|
3
|
||
b.
|
Condensed
Consolidated Statements of Operations for the Three Months
Ended March 31,
2008 and 2007 (unaudited)
|
4
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||
c.
|
Condensed
Consolidated Statements of Comprehensive Income (Loss) for
the Three
Months Ended March 31, 2008 and 2007 (unaudited)
|
5
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||
d.
|
Condensed
Consolidated Statements of Cash Flows for the Three Months
Ended March 31,
2008 and 2007 (unaudited)
|
6
|
||
e.
|
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
7
|
||
Item
2
|
Management’s
Discussion and Analysis of Results of Operations and Financial
Condition
|
14
|
||
Item
3
|
Quantitative
and Qualitative Disclosures About Market Risk
|
17
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||
Item
4
|
Controls
and Procedures
|
18
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||
Part
II - OTHER INFORMATION
|
||||
Item
1
|
Legal
Proceedings
|
19
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||
Item
1A
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Risk
Factors
|
19
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||
Item
6
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Exhibits
|
19
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||
Signatures
|
20
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|||
Exhibit
Index
|
21
|
March 31,
|
December 31,
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||||||
2008
|
2007
|
||||||
(unaudited)
|
|||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
14,838
|
$
|
8,412
|
|||
Accounts
receivable trade, net
|
3,917
|
3,454
|
|||||
Inventories,
net
|
7,209
|
6,888
|
|||||
Prepaid
and other current assets
|
420
|
381
|
|||||
Total
current assets
|
26,384
|
19,135
|
|||||
Fixed
assets, net
|
5,175
|
5,316
|
|||||
Goodwill,
net
|
4,455
|
4,359
|
|||||
Other
assets
|
93
|
59
|
|||||
Total
assets
|
$
|
36,107
|
$
|
28,869
|
|||
LIABILITIES
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
2,823
|
$
|
2,265
|
|||
Accrued
liabilities
|
1,502
|
1,473
|
|||||
Deferred
revenue
|
105
|
—
|
|||||
Credit
line borrowings
|
1,197
|
1,159
|
|||||
Short-term
bank borrowings
|
1,552
|
1,726
|
|||||
Total
current liabilities
|
7,179
|
6,623
|
|||||
Other
deferred liabilities
|
201
|
62
|
|||||
Deferred
tax liabilities
|
292
|
252
|
|||||
Long-term
bank borrowings
|
325
|
314
|
|||||
Total
liabilities
|
7,997
|
7,251
|
|||||
SHAREHOLDERS’
EQUITY
|
|||||||
Common
stock
|
1
|
1
|
|||||
Additional
paid-in capital
|
65,464
|
55,682
|
|||||
Accumulated
other comprehensive income
|
974
|
815
|
|||||
Accumulated
deficit
|
(38,329
|
)
|
(34,880
|
)
|
|||
Total
shareholders’ equity
|
28,110
|
21,618
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
36,107
|
$
|
28,869
|
Three months
ended
|
|||||||
March 31,
|
|||||||
2008
|
2007
|
||||||
Net
sales
|
$
|
4,837
|
$
|
5,009
|
|||
Cost
of sales
|
3,593
|
3,539
|
|||||
Gross
profit
|
1,244
|
1,470
|
|||||
Operating
expenses:
|
|||||||
Research
and Development
|
917
|
483
|
|||||
Sales
and marketing
|
2,362
|
2,620
|
|||||
General
and administrative
|
1,370
|
1,078
|
|||||
Total
operating expenses
|
4,649
|
4,181
|
|||||
Loss
from operations
|
(3,405
|
)
|
(2,711
|
)
|
|||
Other
income (expense):
|
|||||||
Other
income/(expense)
|
2
|
7
|
|||||
Interest
income/ (expense)
|
(6
|
)
|
99
|
||||
Loss
before income taxes
|
(3,409
|
)
|
(2,605
|
)
|
|||
Provision
for income taxes
|
(40
|
)
|
(1
|
)
|
|||
Net
loss
|
$
|
(3,449
|
)
|
$
|
(2,606
|
)
|
|
Net
loss per share – basic and diluted
|
$
|
(0.28
|
)
|
$
|
(0.23
|
)
|
|
Shares
used in computing net loss per share – basic and
diluted
|
12,227
|
11,484
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
Net
loss
|
$
|
(3,449
|
)
|
$
|
(2,606
|
)
|
|
Other
comprehensive income (loss)
|
|||||||
Foreign
currency translation adjustments
|
159
|
56
|
|||||
Net
unrealized loss on securities
|
—
|
(21
|
)
|
||||
Comprehensive
loss
|
$
|
(3,290
|
)
|
$
|
(2,571
|
)
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
loss
|
$
|
(3,449
|
)
|
$
|
(2,606
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
|||||||
Depreciation
|
311
|
323
|
|||||
Stock-based
compensation
|
219
|
252
|
|||||
Unrealized
loss from marketable securities
|
—
|
(21
|
)
|
||||
Provision
for doubtful accounts receivable
|
(167
|
)
|
7
|
||||
Deferred
taxes
|
40
|
40
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|||||
Deferred
revenue
|
105
|
—
|
|||||
Gain
on disposal of fixed assets
|
1
|
— | |||||
Changes
in assets and liabilities:
|
|||||||
Accounts
receivable
|
(260
|
)
|
374
|
||||
Inventories
|
(228
|
)
|
(853
|
)
|
|||
Prepaid
and other current assets
|
(34
|
)
|
(143
|
)
|
|||
Other
assets
|
(32
|
)
|
75
|
||||
Accounts
payable
|
546
|
(1,052
|
)
|
||||
Accrued
liabilities
|
159
|
(305
|
)
|
||||
Total
adjustments
|
660
|
(1,303
|
)
|
||||
Net
cash used in operating activities
|
(2,789
|
)
|
(3,909
|
)
|
|||
Cash
flows from investing activities:
|
|||||||
Purchase
of short-term investments
|
—
|
(21,132
|
)
|
||||
Sale
of short-term investments
|
—
|
25,302
|
|||||
Acquisition
of fixed assets
|
(121
|
)
|
(159
|
)
|
|||
Net
cash provided by (used in) investing activities
|
(121
|
)
|
4,011
|
||||
Cash
flows from financing activities:
|
|||||||
Cash
proceeds from issuances of common stock, net
|
9,436
|
—
|
|||||
Cash
proceeds from exercise of stock options
|
126
|
302
|
|||||
Proceeds
from credit line borrowings
|
923
|
63
|
|||||
Payments
of credit line borrowings
|
(901
|
)
|
—
|
||||
Payments
of short and long-term bank borrowings
|
(179
|
)
|
(180
|
)
|
|||
Net
cash provided by financing activities
|
9,405
|
185
|
|||||
Effect
of exchange rate changes on cash
|
(69
|
)
|
(69
|
)
|
|||
Net
increase in cash and cash equivalents
|
6,426
|
218
|
|||||
Cash
and cash equivalents, beginning of period
|
8,412
|
3,705
|
|||||
Cash
and cash equivalents, end of period
|
$
|
14,838
|
$
|
3,923
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
Numerator –
Basic and Diluted loss per share
|
|||||||
Net
loss
|
$
|
(3,449
|
)
|
$
|
(2,606
|
)
|
|
Denominator
- Basic and Diluted loss per share
|
|||||||
Weighted
average shares outstanding
|
12,227
|
11,484
|
|||||
Basic
and Diluted net loss per share
|
$
|
(0.28
|
)
|
$
|
(0.23
|
)
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
Expected
life of option
|
4.0
years
|
4.0
years
|
|||||
Risk-free
interest rate
|
4.05
|
%
|
4.91
|
%
|
|||
Expected
Volatility
|
67
|
%
|
59
|
%
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
|
|||||||
Balance
at the beginning of the period
|
$
|
212
|
$
|
230
|
|||
Accruals
for warranties issued during the period
|
52
|
32
|
|||||
Settlements
made during the period (in cash or in kind)
|
(74
|
)
|
(62
|
)
|
|||
Balance
at the end of the period
|
$
|
190
|
$
|
200
|
March 31,
2008
|
December 31,
2007
|
||||||
Raw
materials
|
$
|
5,509
|
$
|
5,965
|
|||
Inventory
Reserve
|
(993
|
)
|
(713
|
)
|
|||
Finished
goods
|
2,693
|
1,636
|
|||||
$
|
7,209
|
$
|
6,888
|
March 31,
2008
|
December 31,
2007
|
||||||
Equipment
(useful life 5 years)
|
$
|
8,796
|
$
|
8,654
|
|||
Tooling
(useful life 2 – 5 years)
|
2,752
|
2,751
|
|||||
Furniture
and fixtures (useful life 5 years)
|
226
|
225
|
|||||
Computer
software (useful life 3 years)
|
424
|
417
|
|||||
Leasehold
improvements (the shorter of useful or lease life)
|
1,639
|
1,576
|
|||||
13,837
|
13,623
|
||||||
Less
accumulated depreciation and amortization
|
(8,662
|
)
|
(8,307
|
)
|
|||
$
|
5,175
|
$
|
5,316
|
Year Ending March 31,
|
U.S.A.
|
Germany
|
Total
|
|||||||
2009
|
$
|
2,466
|
$
|
283
|
$
|
2,749
|
||||
2010
|
—
|
63
|
63
|
|||||||
2011
|
—
|
66
|
66
|
|||||||
2012
|
—
|
70
|
70
|
|||||||
2013
|
—
|
74
|
74
|
|||||||
2014
and Thereafter
|
—
|
52
|
52
|
|||||||
Total
Commitment
|
$
|
2,466
|
$
|
608
|
$
|
3,074
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
|
|
||||||
United
States Domestic
|
$
|
2,580
|
$
|
3,288
|
|||
Other
countries
|
2,257
|
1,721
|
|||||
|
$
|
4,837
|
$
|
5,009
|
Three months ended
March 31,
|
|||||||
2008
|
2007
|
||||||
|
|
||||||
Pool
Lighting
|
$
|
1,607
|
$
|
2,481
|
|||
Commercial
Lighting
|
3,230
|
2,528
|
|||||
|
$
|
4,837
|
$
|
5,009
|
March 31,
|
December 31,
|
||||||
2008
|
2007
|
||||||
|
|
||||||
United
States Domestic
|
$
|
7,413
|
$
|
7,791
|
|||
Germany
|
1,922
|
1,773
|
|||||
Other
Countries
|
295
|
111
|
|||||
|
$
|
9,630
|
$
|
9,675
|
Three
months ended
March
31,
|
|||||||
2008
|
2007
|
||||||
Gross
expenses for research and development
|
$
|
1,020
|
$
|
670
|
|||
Deduct:
credits from DARPA & DOE contracts
|
(103
|
)
|
(187
|
)
|
|||
Net
research and development expense
|
$
|
917
|
$
|
483
|
Exhibit
Number
|
Description
of Documents
|
||
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer. | ||
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer. | ||
32.1
|
Statement of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2003 (18 U.S.C. §1350). | ||
32.2
|
Statement of Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2003 (18 U.S.C. §1350). |
ENERGY
FOCUS, INC.
|
||
Date:
May 8, 2008
|
By:
|
/s/
Joseph G. Kaveski
|
Joseph
G. Kaveski
|
||
Chief
Executive Officer
|
||
By:
|
/s/
Nicholas G. Berchtold
|
|
Nicholas
G. Berchtold
|
||
Chief
Financial Officer
|
||
(Principal
Financial and Accounting
Officer)
|
Exhibit
Number
|
Description
of Documents
|
|
31.1
|
Rule
13a-14(a) Certification of Chief Executive Officer.
|
|
31.2
|
Rule
13a-14(a) Certification of Chief Financial Officer.
|
|
32.1
|
Statement
of Chief Executive Officer under Section 906 of the Sarbanes-Oxley
Act of 2003 (18 U.S.C. §1350).
|
|
32.2
|
Statement
of Chief Financial Officer under Section 906 of the Sarbanes-Oxley
Act of 2003 (18 U.S.C. §1350).
|