November 15, 2006
Power Efficiency Corporation Reports Third Quarter Results, Summarizes Corporate Milestones Achieved
LAS VEGAS--(BUSINESSWIRE)---November 15, 2006—Power Efficiency Corporation (OTCBB: PEFF), a developer and marketer of advanced energy savings technologies for electric motors, announced its third quarter results of operations and recent developments.
“Highlights from the third quarter include a significant increase in both revenue and gross margin,” said Steven Strasser, Power Efficiency’s Chairman and CEO. “While many energy technology companies struggle to have positive gross margins, even with tens of millions of dollars in sales, Power Efficiency was able to achieve roughly 40% gross margins in the third quarter on $80,000 in sales, and has 25% gross margins for the year. Over the next several quarters, we expect our margins to fluctuate as we commercialize our new digital product and slowly phase out our current analog product line. Longer term, we expect the next generation product to have markedly lower costs, higher overall gross margins, and significantly increased revenue potential compared to the analog product.”
Revenue was derived from direct sales and through original equipment manufacturers to a variety of end users, including casinos, hotels, transit systems, and a shopping mall. Most inspiring was the initial purchases by several large companies after successful tests. These companies are now considering rolling out the technologies throughout their facilities in 2007.
Strasser continued, “We expect to release the new digital product during the first quarter of 2007 and are already seeing an increased interest in it from both industrial and commercial end users. We have also entered preliminary price and volume discussions with several original equipment manufacturers that are leaders in their respective industries about adopting the new product as a standard component on their equipment. The energy savings advantages of the new digital product are very attractive to manufacturers when compared to a standard electric motor soft start.”
The Company also advanced development of its digital product for appliances and light commercial equipment during the third quarter, and anticipates completing key technology developments in the first quarter of 2007. With increasing pressure to make appliances more efficient, Power Efficiency sees a large opportunity to apply its technology toward appliance motor efficiency.
About Power Efficiency Corporation
Power Efficiency Corporation designs and manufactures the Power Efficiency Motor Efficiency Controller™, a product that reduces the amount of energy used by electric motors in many constant speed/variable load applications. These motors are found in escalators, elevators, grinders, granulators, mixers, saw mills and many other applications. The Power Efficiency Motor Efficiency Controller™ allocates power in direct proportion to the motor's required workload, eliminating wasted electricity. The company's core technology is based on patented improvements to NASA technology. Energy savings from these controllers are typically 20-40%. The controllers also reduce the operating heat of the motor, producing significant motor life extension and downtime reduction benefits. PEC products are CE Marked and CSA certified.
For more information visit www.powerefficiencycorp.com
As a cautionary note to investors, certain matters discussed in this press release may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's product in the market; the Company's success in technology and product development; the Company's ability to execute its business model and strategic plans; and all the risks and related information described from time to time in the Company's SEC filings, including the financial statements and related information contained in the Company’s 2005 Annual Report. Power Efficiency assumes no obligation to update the information in this release.
Contact:
B.J. Lackland, CFO
Christine Toledo, Media Contact
702-697-0377
