Energy Focus, Inc. · NASDAQ:EFOI
Energy Focus — Investor Presentation (September 2022)
28 slides from Energy Focus's investor presentation, September 2022
Slide 1: Investor Presentation
Investor Presentation Energy Focus, Inc. September 2022 © Energy Focus, Inc. 1
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “esti
Slide 3: Cutting Edge Technology for the Lighting Market
Cutting Edge Technology for the Lighting Market Innovator of LED lighting technologies and solutions: Military - Proven track record for superior quality and innovation in LED since 2004 Standard Specialty - Marquee enterprise customers, including U.S. and foreign military, U.S. Maritime government,
Slide 4: Senior Leadership
Senior Leadership Lesley Matt, Chief Executive Officer Randy Gianas, VP of Engineering • Former SVP of TCP Lighting • Over a decade of experience in lighting engineering, • Accomplished the merger of TCP with re- operations, supply chain and sales privatization of the organization and setting a new
Slide 5: Board of Directors Includes Strong Recent Adds
Board of Directors Includes Strong Recent Adds Steve Socolof, Lead Director Jeff Parker, Independent Director • Experienced venture capitalist • 30 years managing LED companies in the display, • Managing Partner of Tech Council Ventures lighting, and medical markets • 25 years investing in enterpris
Slide 6: At the Forefront of Lighting Evolution
At the Forefront of Lighting Evolution Lighting industry is transitioning to new platform of full-spectrum controllability and multi-purpose functionality 2017: Energy Focus remains at the forefront of development Energy Focus launches RedCap Emergency battery 2007: backup line 1st Energy Focus 2003
Slide 7: Critical Installations for a Variety of Use-Cases
Critical Installations for a Variety of Use-Cases Military (MMM) Commercial Healthcare Education Energy and maintenance savings, LEDs replace linear fluorescents Environmental sustainability, Quality of lighting and low flicker and improved quality of lighting which quickly burn out and change quali
Slide 8: Smart Lighting & Wellness Lighting to Emerge & Grow Rapidly
Smart Lighting & Wellness Lighting to Emerge & Grow Rapidly Estimated Market Sizes 2021-2027* Current Market Opportunity $ Billions • Covid slowed adoption over the past two years • Expect penetration to accelerate $27 • Significant greenfield opportunity (75% of the total market) $11 $6 $1 2021 202
Slide 9: Post-Pandemic Construction Upturn
Post-Pandemic Construction Upturn Commercial Construction Starts in Energy Focus Target Sectors Are In Upswing. Significant Increases Forecast in Years 2023- 2026 9 © Energy Focus, Inc.
Slide 10: Go-forward Strategy Commercial Lighting Market
Go-forward Strategy Commercial Lighting Market • Enhanced and expanded commercial lighting portfolio encompassing both LED tubes and fixtures • Improved sourcing and quality assurance across all product lines • New products for military and industrial applications • Broadened application for EnFocus
Slide 11: EnFocus Groundbreaking HCL Control Platform
EnFocus™ Groundbreaking HCL Control Platform • No additional control wires • No wireless connections • Simple, secure, cost effective, turnkey lighting control system • Market opportunity to interface with all 0-10v commercial lighting fixtures • EnFocus help usher in and foster adoption of control
Slide 12: EnFocus Controls – First Deployments
EnFocus™ Controls – First Deployments Customer Beta Design Phase Sales Pipeline Sites Sites where EnFocusTM system has been installed for evaluation. All sites are reporting excellent operation and functionality: - Texas Facilities Commission - BDI - Bushland High School - Gexpro - HHSC Winters Buil
Slide 13: OEM Opportunity with the EnFocus Module
OEM Opportunity with the EnFocusTM Module • The EnFocusTM “translation” module allows EnFocusTM controllers to control any standard dimmable or color-tunable commercial fixture. Currently in prove-out phase, product launch is scheduled for end of Q4 • Rollout to OEM market channel has begun © 2022 E
Slide 14: EnFocus Enables Circadian Lighting
EnFocusTM Enables Circadian Lighting Features Benefits Sleep: “Students exposed to Human Centric Lighting, Stan 2/3 of adults fail to obtain lighting with higher light Walerczyk, CLEP, LC, the recommended intensity and light https://humancentriclighting.or temperature levels had, by g/wpcontent/uplo
Slide 15: Bringing Circadian Powerline Control to Existing Buildings & Homes
Bringing Circadian Powerline Control to Existing Buildings & Homes for the First Time • The most sustainable • Much lower cost and affordable lighting to install than control solution versus • Simple retrofit other wired or other LED alternatives. • Network safe and installation, with wireless dimmi
Slide 16: Improving Market Channel Coverage
Improving Market Channel Coverage Commercial Channel Expanded existing agency coverage to handle Northwest, Southwest and Central Hiring new agencies for deeper coverage into Northeast and Northern CA
Slide 17: Improving Coverage Already Demonstrating Results
Improving Coverage Already Demonstrating Results Redcap Quote Requests (Units) RedCap Sales Improvement Redcap quote requests averaged 1000/month in January, increased to 5000/month in June, and still growing Distributors increasing stock inventory as well
Slide 18: Improving Market Channel Coverage: Military Channel
Improving Market Channel Coverage Military Channel Addition of Senior Director for Government Sales resulted in increased number of bid requests and higher quote conversion rate. Over $1MM of new projects on schedule for 2023 – all new business
Slide 19: Continuing to Focus on Cost-Out Initiatives
Finally, Continuing to Focus on Cost-Out Initiatives • Aggressively pursuing cost reduction opportunities above and below the line to improve margins and reduce SG&A • Headquarters/plant footprint trimmed effective 7/1, reducing annual rent costs by ~$415k annually • Logistics optimization expected
Slide 20: Financials
Financials 20
Slide 21: Revenue Trend Demanded Action
Revenue Trend Demanded Action • Revenue trend driven by COVID, lack of new product introduction, and execution • Actions taken to turn the business around in 2nd half $ in millions Net Sales $6.0 $3.8 $3.7 $3.3 $2.6 $2.7 $2.4 $2.1 $2.1 $1.5 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4
Slide 22: Building Backlog Beginning to Show Improving Sales Traction
Building Backlog Beginning to Show Improving Sales Traction $ in thousands Backlog at End of Quarter $1,267.4 $891.6 $544.0 $483.3 Q4 2021 Q1 2022 Q2 2022 As at Sept 8 2022 Commercial Military © Energy Focus, Inc. 22
Slide 23: Expenses and Adjusted EBITDA
Expenses and Adjusted EBITDA • Some cost improvements showing up in Q2, but most will be realized in 2nd half $ in millions Adjusted EBITDA Operating Expenses (Net loss excluding restructuring, interest, other income (loss), depreciation and amortization, stock-based compensation, change in fair val
Slide 24: Net Inventory (After Reserves)
Net Inventory (After Reserves) • Significant Assets to Convert to Cash With Improved Sales Execution $8,129 $7,755 $7,866 $7,515 $7,367 $7,168 $5,641 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 © Energy Focus, Inc. 24
Slide 25: Summary Balance Sheets
Summary Balance Sheets As of As of ($ in thousands) 6/30/2022 12/31/2021 Cash $938 $2,682 Capital Structure Total current assets $1,155 $13,424 (as of June 30, 2022) Total assets $12,510 $14,391 Total current liabilities $6,418 $8,156 Total liabilities $8,339 $8,182 Stockholders’ equity1 $3,432 $6,2
Slide 26: Thank You!
THANK YOU! Energy Focus, Inc. © Energy Focus, Inc. 26
Slide 27: APPENDIX - Adjusted EBITDA Reconciliation
APPENDIX - Adjusted EBITDA Reconciliation As of As of As of As of As of As of As of As of As of As of ($ in thousands) 3/31/20 6/30/20 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 Net Loss $ (541) $ (4,340) $ (1,165) $ 65 $ (1,642) $ (2,473) $ (1,140) $ (2,631) $ (2,821) $ (2,48
Slide 28: APPENDIX – Total Availability Reconciliation
APPENDIX – Total Availability Reconciliation As of As of As of As of As of As of As of As of As of As of ($ in thousands) 3/31/20 6/30/20 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 Total borrowing capacity under credit facilities $ 2,025 $ 2,566 $ 4,577 $ 4,121 $ 4,250 $ 4,490
Energy Focus — Investor Presentation (September 2022) on 6ix