With Shipments Delayed Until Fiscal Third Quarter Capstone Expects Fiscal Second Quarter Financial Results to be Below Expect...
October 01 2015 - 08:30AM
Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST), the world's leading clean technology manufacturer of
microturbine energy systems, announced today that its preliminary
second quarter earnings were notably below management's
expectations and analysts' consensus estimates as continued
headwinds in the oil and gas market and a strong U.S. dollar
delayed orders and shipments in the quarter.
"We have approximately 75 microturbines totaling over 13MW for
customers in finished goods as of September 30th that were slotted
to ship in the quarter that will now ship next quarter," said Jim
Crouse, Executive Vice President of Sales and Marketing at Capstone
Turbine. "The Capstone sales team will be working diligently to get
these units delivered as quickly as possible and drive for a strong
rebound in the third quarter, which is historically our strongest
quarter in the fiscal year," added Crouse.
After posting the second best first quarter in company history,
which was an increase of 16% year-over-year, and a 200 basis point
improvement in margin, Capstone experienced a significant slowdown
in both product shipments and new order flow in the most recent
quarter ended September 30, 2015. In addition, the Company received
no significant payments from its Russian distributor, who until
recently was one of their largest customers.
As a result of the lower than expected revenue and increased
inventory levels, cash burn for the quarter was higher than
anticipated prompting management to look at additional areas within
the business where operating expenses can be immediately reduced.
Management has therefore decided to indefinitely postpone an
upcoming employee merit increase, cut hourly overtime, eliminate
temporary employees and convert all variable cash compensation to
stock grants. These actions are in addition to the recent
flattening of the Capstone executive organizational structure which
eliminated three executive positions back in April 2015. These most
recent actions combined with the April restructuring will save
approximately $3.3 million in cash annually.
"Companies across the energy space are seeing significant market
headwinds with the precipitous drop in oil prices, commodity prices
and the strong U.S. dollar," said Darren Jamison, Capstone's
President and Chief Executive Officer. "In response to the ongoing
market slowdown we are taking a three pronged strategy. First, we
are looking for every way possible to lower our operating expenses
without impacting our brand or total customer satisfaction. Second,
we will continue to make improvements to our products in order to
have them be more competitive and cost effective in the growing
combined heat and power (CHP) space. These product changes will be
unveiled at the upcoming PowerGen International Show on December
8th in Las Vegas, Nevada. Lastly, the Company is looking to grow
its business in Latin America, Australia, Africa and the Middle
East. These markets have tremendous potential and will give us an
ability to offset the slowdown we are experiencing in the energy
space and more specifically in Russia," added Jamison.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST) is the world's leading producer of low-emission
microturbine systems and was the first to market commercially
viable microturbine energy products. Capstone Turbine has shipped
over 8,500 Capstone Microturbine systems to customers worldwide.
These award-winning systems have logged millions of documented
runtime operating hours. Capstone Turbine is a member of the U.S.
Environmental Protection Agency's Combined Heat and Power
Partnership, which is committed to improving the efficiency of the
nation's energy infrastructure and reducing emissions of pollutants
and greenhouse gases. A UL-Certified ISO 9001:2008 and ISO
14001:2004 certified company, Capstone is headquartered in the Los
Angeles area with sales and/or service centers in the New York
Metro Area, United Kingdom, Mexico City, Shanghai and
Singapore.
The Capstone Turbine Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6212
This press release contains "forward-looking statements," as
that term is used in the federal securities laws, about the
shipment of finished goods. Forward-looking statements may be
identified by words such as "expects," "objective," "intend,"
"targeted," "plan" and similar phrases. These forward-looking
statements are subject to numerous assumptions, risks and
uncertainties described in Capstone's filings with the Securities
and Exchange Commission that may cause Capstone's actual results to
be materially different from any future results expressed or
implied in such statements. Capstone cautions readers not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this release. Capstone undertakes no
obligation, and specifically disclaims any obligation, to release
any revisions to any forward-looking statements to reflect events
or circumstances after the date of this release or to reflect the
occurrence of unanticipated events.
"Capstone" and "Capstone MicroTurbine" are registered trademarks
of Capstone Turbine Corporation. All other trademarks mentioned are
the property of their respective owners.
CONTACT: Capstone Turbine Corporation
Investor and investment media inquiries:
818-407-3628
ir@capstoneturbine.com
INVESTORS:
Dian Griesel Int'l
Cheryl Schneider/Tom Caden
212-825-3210
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