Ecoark Announces Operating Results for Fiscal 2021 and Provides Financial Guidance for Fiscal 2022

Rhea-AI Summary

Ecoark Holdings, Inc. (ZEST) reported significant growth with revenues of $15.6 million in fiscal 2021, up from $0.6 million the previous year, largely due to the acquisition of Banner Midstream. However, it recorded a net loss of $20.9 million, compared to $12.1 million in the prior year. For fiscal 2022, Ecoark anticipates revenues of approximately $28 million, driven by higher oil prices, and aims for positive cash flow from operations. The company is also working to uplist to a national securities exchange.

Positive

• Revenue increased by 2,500% in fiscal 2021 compared to the previous year.
• Projected revenue for fiscal 2022 is approximately $28 million.
• Expecting positive operating cash flow for the first quarter of fiscal 2022 from Banner Midstream.
• Stockholders' equity rose to $17 million from $5.7 million year-over-year.

Negative

• Net loss increased to $20.9 million in fiscal 2021 from $12.1 million the previous year.
• Zest Labs reported negative cash flows from operations of ($2,979).

Generated $15.6 million in revenues for fiscal 2021 as compared to $0.6 million in the prior fiscal year

Expects to generate revenue of approximately $28 million and positive operating cash flow in fiscal 2022, based on current oil prices of approximately $70 per barrel

Provide update on ongoing effort to uplist to a national securities exchange

SAN ANTONIO, June 30, 2021 (GLOBE NEWSWIRE) -- Ecoark Holdings, Inc. ("Ecoark") (OTC: ZEST), today announced the following operating results for the fiscal year ended March 31, 2021, as compared to the prior fiscal year.

• Achieved revenue of $15.6 million of revenue versus $0.6 million in the prior year due primarily to the acquisition of Banner Midstream on March 27, 2020
• Reported net loss of $20.9 million or $1.02 loss per basic and diluted share versus a net loss of $12.1 million or $0.95 loss per basic and diluted share in the prior year period
• Cash on hand of $1.3 million as of March 31, 2021 versus $0.4 million as of March 31, 2020
• Stockholders’ equity of $17.0 million as of March 31, 2021 versus a stockholders’ equity of $5.7 million as of March 31, 2020

Subsequent to the Company’s fiscal year-end, on April 9, 2021, a Little Rock, Arkansas jury awarded Ecoark and its wholly owned subsidiary, Zest Labs Inc. (“Zest”) a total of $115 million in damages in a lawsuit against Bentonville-based Walmart Inc. (“Walmart”).   Walmart has filed post-trial motions related to the verdict and the Company expects Walmart to file an appeal. Additionally, Banner Midstream, Ecoark’s energy subsidiary, expects to achieve positive operating cash flow in the first quarter of fiscal 2022.

“We continue to grow and expand our operations, as evidenced by a 23% increase in our revenue for the fourth quarter of fiscal 2021 as compared to the first quarter of fiscal 2021, We expect our momentum to continue into fiscal 2022, including an expected 43% sequential increase in revenue for the first quarter of fiscal 2022, while maintaining a strong balance sheet position including stockholders' equity of approximately $17 million,” stated Randy May, Chief Executive Officer of Ecoark.

“We made opportunistic purchases of oil and gas mineral leases during the height of the COVID-19 pandemic in 2020,” continued Mr. May. “These actions have positioned us well to aggressively produce these properties in conjunction with the rebound in economic activity and crude oil prices.”

Outlook for Fiscal 2022

Based on current West Texas Intermediate (“WTI”) crude oil prices of approximately $70 per barrel, Ecoark expects its energy business operated by Banner Midstream Corp. (“Banner Midstream”) to generate revenue and cash flow from operations of approximately $26.3 million and $6.3 million, respectively for fiscal 2022. The Company has projected oil prices to continue to increase over the summer and has included a table with various levels of guidance versus WTI pricing. The Company is not hedging at current oil prices, but may seek to implement hedges should WTI oil prices increase to $90 or above.

The Company currently expects its Trend Discovery Holdings Inc. subsidiary to generate revenue and cash flow from operations of approximately $2.6 million and $1.1 million, respectively for fiscal 2022. While Zest Labs, Inc. (“Zest Labs”) currently has several potential licensing agreements in progress with large customers, anticipated revenue associated with this potential activity has not been included in the Company’s outlook for fiscal 2022.

Fiscal 2022 Outlook – Scenario Analysis

Figures in $000s	$60 WTI Crude			$80 WTI Crude			$100 WTI Crude
Revenues
Banner Midstream	$25,019			$27,483			$29,946
Trend Discovery	$2,644			$2,644			$2,644
Total Revenue*	$27,663			$30,127			$32,590
Cash Flows from Operations
Zest Labs	($2,979)			($2,979)			($2,979)
Banner Midstream	$5,294			$7,266			$9,237
Trend Discovery	$1,100			$1,100			$1,100
Total Cash Flows from Operations	$3,415			$5,387			$7,358

* Not including Zest Labs.

Ecoark is unable to accurately forecast EPS due to the volatility of non-cash gains and losses from changes in derivative liability, so EPS guidance has not been disclosed.

Update on Initiative to Uplist to a Leading National Securities Exchange

Following the filing of Ecoark’s annual report on Form 10-K, the recent increase in Ecoark’s share price as reported on OTCQB above $4.00 per share, and the clearing of other regulatory hurdles, in addition to the actions taken in calendar 2020, the Company believes it now meets all requirements to uplist to a national securities exchange.  

About Ecoark Holdings, Inc.

Founded in 2011, Ecoark is a diversified holding company. The company has three wholly owned subsidiaries: Zest Labs, Inc. (“Zest Labs”), Banner Midstream Corp (“Banner Midstream”) and Trend Discovery Holdings (“Trend Discovery”). Zest Labs, offers the Zest Fresh^TM solution, a breakthrough approach to quality management of fresh food, is specifically designed to help substantially reduce the $161 billion amount of food loss the U.S. experiences each year. Banner Midstream is engaged in oil and gas exploration, production, and drilling operations on over 30,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi. Banner Midstream also provides transportation and logistics services and procures and finances equipment to oilfield transportation services contractors. Trend Discovery invests in a select number of early-stage startups each year as part of the fund’s Venture Capital strategy; we are open-minded investors with a founder-first mentality.   Trend Discovery LP has an audited track record of uncorrelated outperformance of the S&P 500 since inception.

Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation financial guidance for fiscal 2022, expected revenue increase in the first quarter of fiscal 2022, Banner Midstream’s expected positive operating cash flow in the first quarter of fiscal 2022, the expected growth and expansion of our operations, our expectations with respect to oil prices and our plans with respect to production activities and hedging, Zest Lab’s potential licensing agreements and our expectations with respect to listing on a national securities exchange. All statements, other than statements of historical facts, included in this release that address activities, events or developments that are expected or anticipated to occur in the future are forward-looking statements and are identified with, but not limited to, words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions (or the negative versions of such words or expressions). These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside management's control that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks include, without limitation, the risks arising from the future adverse impact of the COVID-19 pandemic on our Company and the national and global economy, political and societal pressures which adversely affect the oil and gas industry, oil prices, the cost of drilling and the availability and cost of additional capital, changes in applicable laws and regulations, fluctuations in oil and gas prices, general risks associated with the drilling and production activities, the possibility of adverse economic, business, competitive factors and our continued ability to meet the initial listing requirements of a national securities exchange. Additional risks and uncertainties are identified and discussed in Ecoark’s filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended March 31, 2021. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Additional factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

ZEST FRESH™ and Zest Labs™ are trademarks of Zest Labs, Inc.

Contact:

Investor Relations:
Marc Silverberg
ICR
marc.silverberg@icrinc.com

 

FAQ

What were Ecoark's revenues for fiscal 2021?

Ecoark reported revenues of $15.6 million for fiscal 2021.

What is Ecoark's revenue projection for fiscal 2022?

Ecoark expects to generate approximately $28 million in revenue for fiscal 2022.

What is the current status of Ecoark's uplisting initiative?

Ecoark believes it now meets the requirements to uplist to a national securities exchange following recent increases in its share price.

How much was Ecoark's net loss for fiscal 2021?

Ecoark reported a net loss of $20.9 million for fiscal 2021.

What is Zest Labs' financial status?

Zest Labs reported negative cash flows from operations of ($2,979).