Enova Systems reported a third-quarter loss of US$1.641 million—a doubling of its US$0.782 million loss in Q3 2005. The company, which develops and manufactures electric, hybrid and fuel-cell drive systems and management systems, attributed the increased costs to expanding product and marketing initiatives.
Net revenues dropped to US$312,000 for the third quarter, down from US$857,000 for the same period in 2005. Revenues in the first quarter and nine months of 2006 derived mainly from production type contracts with Hyundai Motor Corporation and the State of Hawaii. Enova attributed the decrease in revenues in the first nine months of 2006 to contracts that were completed or near completion in 2005.
Enova has been awarded contracts with, but have not yet recognized revenues from, IC Corp. for nineteen hybrid-electric school buses, Phoenix Motor Car for ten sport utility trucks and Ford Motor Company for four High Voltage Energy Converters (HVEC).
At the same time, internal research, development and engineering expenses increased in the three and nine months ended September 30, 2006 to $297,000 and $929,000 as compared with $197,000 and $592,000 respectively, for the same period in 2005.
Enova continues to develop several new products such as its post transmission parallel hybrid drive system and enhancements to our diesel generator set which account for a majority of the increase during the first quarter and nine months of 2006 when compared to the same period in 2005.
The company also has large expectations for its work in China.
We also anticipate continuing our work with Tsinghua University of China, and their fuel cell bus development program. We believe that China intends to use hybrid-electric buses to shuttle athletes and guests at the 2008 Beijing Summer Olympics and the 2010 World’s Expo in Shanghai and that it is seeking up to one thousand full-size hybrid-electric buses to support these global events.—Anthony Rawlinson, Chairman