Eguana Announces First Quarter 2023 Financial Results

CALGARY, Alberta, May 30, 2023 (GLOBE NEWSWIRE) -- Eguana Technologies Inc. ("Eguana" or the "Company") (TSX-V: EGT, OTCQB: EGTYF) today announced results for its first quarter ended March 31, 2023.

“The Eguana team advanced several objectives across hardware and software during the quarter, which will have significant and positive long-term impact on growth and global positioning objectives. These include, to name a few, moving the 10kW whole home product to full scale manufacturing, expanding the Energy Management System software license for direct control from the utility to the ESS, advancing Eguana Cloud development to allow for the recurring revenue, and a doubling of the number of unique enrollments and completions within the Eguana university platform, which already has over 400 unique logins,” commented Eguana CEO Justin Holland. “Additionally, the completion of the Solarlab acquisition, LFP product certification to new Australian standards, and entry into the Simply Energy cyber security program has set up Australia very well for the second half of 2023.”

Fiscal Q1 2023 Financial Highlights

• The Company previously announced its change in fiscal year-end from September 30 to December 31, to align the Company’s financial reporting with the calendar year end and the majority of publicly traded companies. December 31, 2022 was the first financial year end with the new date and time period that was comprised of five quarters. As a result, the comparative period for the first quarter of 2023 is technically the second quarter of 2022, both at March 31st, in the respective years.
• Q1 2023 revenue of $5.9 million, a significant increase from the comparative quarter in March 2022 with product revenue of approximately $285,000. This revenue growth is due to expanded products, expanded markets, enhanced business development efforts and overall company growth. The first quarter 2023 was slower than the prior quarter ended December 31, 2022, which follows typical seasonality patterns, however, management is cautious in near-term market growth, as a result of changing consumer buying patterns related to increased interest rates and inflation, and increased inventory levels through distribution. Second half growth is expected to be stronger driven by the early success of our partner training programs.
• Q1 2023 gross margin was approximately $152,000, or 2.6%, a decline from 25.1%, in the comparative quarter of March 2022, which was uncommonly high due to the impact of inventory adjustments. Margin has remained steady over the last two quarters with further 6%-8% improvement anticipated in the coming quarters as a result of freight cost reduction, battery price reduction, and removal of import tariffs by a prior shift of certain components and sub assemblies out of China. The increases in margin are expected to take effect when current inventories procured in 2022 are consumed through manufacturing. Longer term cost reduction activities are also planned with battery module and advanced power electronics, which are expected to drive an additional 12%-15% over the next 18 months.
• Q1 2023 operating loss of $3.2 million, a slight increase from a $2.5 million operating loss for the comparative March quarter in 2022. This decline is largely due to higher expenses in product research and development in the first quarter of 2023, supporting sales and growth objectives.
• Working capital at March 31, 2023 was $32.1 million, a slight decrease from $33.7 million at December 31, 2022. The working capital position is much improved from the prior year, at March 31, 2022, reported as a deficit of $12.2 million.
• ITOCHU Corporation (“ITOCHU”), a strategic investor in the Company, purchased 16,666,666 common shares of Eguana, for total proceeds of $3.3 million, through the exercise of their share purchase warrants, previously issued in an offering which closed on March 16, 2020. Additionally, ITOCHU and Eguana agreed to convert approximately $1.1 million of interest owing under the Company’s 7% unsecured convertible debenture into 4,242,617 common shares of Eguana in full satisfaction of the March 1, 2023 interest payment.

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