 Conference Call to be Held Tomorrow August 14, 2020, at 11AM ETSOLON, Ohio, Aug. 13, 2020 GLOBE NEWSWIRE -- Energy Focus, Inc. Energy Focus or the Company NASDAQ:EFOI, a leader in sustainable LED lighting technologies, today announced financial results for its second quarter ended June 30, 2020. Second Quarter 2020 and Subsequent Business Highlights: Net sales of 3.3 million, up 8.2 compared to the second quarter of 2019 and down 11.8 sequentially from the first quarter of 2020 reflecting the shift in the timing of the shipment of a portion of a certain military contract order from the second quarter to the third quarter of 2020. Loss from operations improved by 1.2 million year-over-year, and by 0.3 million compared sequentially to the first quarter of 2020. Net loss of 4.3 million, or 1.36 per share, inclusive of a 3.3 million non-cash adjustment in the fair value of outstanding warrants, compared to a net loss of 2.3 million, or 0.91 per share in the second quarter of 2019. Management expects third quarter revenues of 6 million to 7 million, inclusive of the sales shift from the second quarter, representing year-over-year growth of 106-140 from the third quarter of 2019, and sequential growth of 80-110 compared with the second quarter of 2020. Cash of 2.7 million as of June 30, 2020 compared to 0.4 million as of December 31, 2019. Launched EnFocusTM, the Companys breakthrough lighting control platform, which received strong and positive feedback from customers and prospects, and won Top Product of the Year award from Energy Environment Leaders. Secured two new working capital financing facilities that significantly expand the credit capacity at a lower blended borrowing cost than the previous facility.Energy Focus continues to deliver solid growth, margin expansion and improved operating results, reflecting the steps we have taken to deliver innovative products, on top of our heightened focus on expense and inventory management, stated James Tu, Executive Chairman and CEO of Energy Focus. The second quarter was impacted, as anticipated, by the delay of a portion of a large military order, shifting approximately 1.7 million in revenue out of the second quarter and into the third quarter. We expect to recognize a significant portion of this revenue in the third quarter, resulting in third quarter revenue guidance of 6 to 7 million, representing 106 to 140 growth over the third quarter of 2019. Year-to-date as of June 30, 2020, our revenues are up over the prior year more than 13, even with the 1.7 million in delayed revenue, reflecting our expanded leadership and increased penetration in the military market that offset the temporary slowdown of our commercial business due to the impact from COVID-19 pandemic since late March. Longer-term, we are increasingly encouraged with the market response to our patent-pending EnFocusTM lighting platform, which enables both existing and new buildings to provide quality, accessible and affordable dimmable and color tunable circadian lighting like never before, added Mr. Tu. Our immediate focus is on expanding our U.S. distribution of this groundbreaking product line, and we have had interests and inquiries from multiple countries since our release in June as well, suggesting clear global demand potential for the EnFocusTM products. We have already received initial orders and expect to start shipping the EnFocusTM products during the third quarter, with the expectation that the products will start contributing more significant sales in the fourth quarter particularly if facility management budgets and retrofit project activities start to solidify and recover.Subsequent to quarter end, we closed two new credit facilities with new lenders, important financing events that increase our current borrowing capacity and access to additional working capital as we continue to grow our business, stated Tod Nestor, President and CFO of Energy Focus. With substantially improved terms, our blended all-in borrowing costs will be much lower and previous borrowing limitations have been eased as our lenders recognize the high quality of the assets that back these facilities. Total credit availability under the new facilities has therefore been expanded from 1.9 million to 4.8 million with additional room to expand as we build new, higher-turnover inventory such as EnFocusTM, RedCap and our forthcoming UV disinfection products. These facilities address our expected need for additional funding for the foreseeable future. We are also excited to report that our engineering team continued to make technical breakthroughs and achieved development milestones for our coming UV germicidal irradiation UVGI products, first with EnFocusTM controlled UVGI troffers that provide both flicker-free, dimmable and color tunable lighting as well as UV-C disinfection capability. With simple replacement of existing wall switches and fluorescent or LED fixtures, buildings of all kindsparticularly those with pressing demand for safety in the age of COVID-19 such as healthcare, senior living, educational, correctional, retail and public assembly facilities could affordably and rapidly adopt high quality, sustainable LED lighting while providing effective air disinfection while occupants are in the spaces. Barring unexpected supply or logistics delays that COVID-19 might cause, we plan to launch this impactful and timely product line in the fourth quarter and expect sales from the UVGI product series to commence in the first quarter of 2021, concluded Mr. Tu.Second Quarter 2020 Financial Results: Net sales were 3.3 million for the second quarter of 2020, compared to 3.1 million in the second quarter of 2019, an increase of 8.2. Net sales from commercial products were 1.1 million, or 31.7 of total net sales, for the second quarter of 2020, down from 2.1 million or 69.1 of total net sales, in the second quarter of 2019 reflecting the impact of the COVID-19 pandemic and related customer interruptions. Net sales from military and maritime products MMM were 2.3 million, or 68.3 of total net sales, for the second quarter of 2020, up from 1.0 million, or 30.9 of total net sales, in the second quarter of 2019. Sequentially, net sales were down 11.8 compared to 3.8 million in the first quarter of 2020, reflecting a shift in the timing of the shipment of a portion of a 3.4 million U.S. Navy order for the Companys new generation of military Intellitubes. The shipment, which was originally expected to contribute approximately 1.7 million to the Companys revenues during the second quarter, was shifted into the third quarter as disclosed in a press release issued on July 16, 2020.Gross profit was 1.3 million, or 40.3 of net sales, for the second quarter of 2020. This compares with gross loss of 109 thousand, inclusive of 500,000 of unfavorable inventory reserves, in the second quarter of 2019. Sequentially, this compares with gross profit of 1.0 million, or 27.3 of net sales, in the first quarter of 2020. The sequential increase in gross profit and gross profit margin was primarily driven by an increase in MMM. Adjusting gross profit margins for excess and obsolete inventory, and related reserves, and warranty reserves, gross profit margin was 33.0 for the second quarter of 2020 compared to 23.4 in the second quarter of 2019 and 25.2 in the first quarter of 2020. The higher reported gross margin was due to a sales mix more weighted to higher margin military sales in the period.Operating loss was 0.9 million for the second quarter of 2020 compared to an operating loss of 2.1 million in the second quarter of 2019. Sequentially, this compares to an operating loss of 1.3 million in the first quarter of 2020. Net loss was 4.3 million, inclusive of 3.3 million pre-tax adjustment which was the result of the revaluation of the warrant liability using the market price of the Companys stock at June 30, 2020 versus the market price of the Companys stock at March 31, 2020. On a per share basis, the net loss was 1.36 per basic and diluted share for the second quarter of 2020, compared with a net loss of 2.3 million, or 0.91 in the second quarter of 2019. Sequentially, this compares with a net loss of 0.5 million, or 0.19 per basic and diluted share, in the first quarter of 2020.Adjusted EBITDA, as defined under Non-GAAP Measures below, was a loss of 0.7 million for the second quarter of 2020, compared with a loss of 2.0 million in the second quarter of 2019 and a loss of 1.1 million in the first quarter of 2020.Cash was 2.7 million as of June 30, 2020. This compares with 0.4 million as of December 31, 2019. As of June 30, 2020, the Company had total availability of 3.9 million, which consisted of 2.7 million of cash and 1.2 million of additional borrowing availability under its credit facility. This compares to total availability of 1.9 million as of December 31, 2019 and total availability of 4.1 million as of March 31, 2020.Financings: On August 11, 2020, Energy Focus entered into two debt financing arrangements, which substantially increase the Companys borrowing capacity and reduce its blended interest expense: A two-year inventory financing facility Inventory Facility with Crossroads Financial Group, LLC, which includes maximum borrowings of the lower of 3 million and a borrowing base determined from time to time based on the value of the Companys eligible inventory, valued at 75 of inventory cost or 85 of the inventory net orderly liquidation value, less availability reserves. As of August 11, 2020, the borrowing base was less than the 3 million maximum amount at approximately 2.4 million. 