Electric Fuel 1st Qtr. Sales Rise 11%, Loss Widens

Staff On May 21 2001 - 6:00am

NEW YORK — Zinc-Air fuel battery maker Electric Fuel reported sales climbed about 11 percent in the first quarter, reaching $726,000, compared with $653,000 in the year-ago three months. The company, however, extended its net loss for the period to $3.4 million, compared with $2.5 million in the same three months last year.

"We are very pleased at our continued successes in building the distribution base for our batteries and chargers," said Yehuda Harats, president/CEO. "Our loss for this quarter was lower than for the fourth quarter of 2000, and this despite difficult economic times, especially in the consumer electronics products industry. Most of our retailers used the first quarter to sell down the large number of batteries they had stocked in the fourth quarter of 2000."

Electric Fuel said a group of institutional investors has brought in an aggregate of $11.1 million to the company by purchasing more than 4 million previously registered shares of Electric Fuel common stock. Electric Fuel intends to use the proceeds of the offering to increase its sales and marketing activities, as well as to accelerate new product development and increase production capacity, and for working capital and general corporate purposes.

One group, called Special Situation funds, which focuses on investing in small public companies, acted as the lead investor. Additionally, investors will receive five-year warrants to purchase up to an additional 2.7 million shares that, if exercised, could bring up to another $8.7 million into the company.