Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST), the world's leading clean technology manufacturer of
microturbine energy systems, reported financial results for its
second quarter of fiscal 2016 ended September 30, 2015.
Financial results are in line with the Company's revised
expectations announced on October 1, 2015. Total revenue for the
second quarter of 2016 was $17.9 million, and net loss was $7.9
million or $0.02 per share.
Darren Jamison, President and Chief Executive Officer of
Capstone Turbine, said, "As disappointed as we are in reporting
financial results that were below our original internal and Street
expectations, we are taking actions to expedite the shipment of
orders that were left in finished goods from the second quarter and
have accelerated our initiative to lower our cash burn by
continuing to reduce our overall operating expenses."
The Company expects that its recent accelerated strategic
initiatives, combined with its earlier actions this year to flatten
the organization and its other ongoing cost-cutting measures, will
result in lowering the overall quarterly EBITDA breakeven level
from approximately $40 million in revenue per quarter to $30
million per quarter by April 2016, the beginning of its first
quarter of fiscal 2017. Average revenue for the Company over the
last 18 quarters was approximately $30 million, with revenue
exceeding that level nine times and reaching at least $27 million,
13 out of the last 18 quarters. Based upon the new cost structure,
which will reduce expenses by 25%, the Company would have been
breakeven or very close 13 of the last 18 quarters.
"As we wind down the final development efforts of the C200/C1000
program, and as our distribution channel matures, we approach the
point where we can reduce our R&D and SG&A spend
substantially going into the next fiscal year. We believe that this
lower cost structure will allow us to size the business to
essentially breakeven at revenue levels that we have hit many times
before and will allow us to quickly reduce our cash usage next
year," added Jamison.
The Company's three-pronged profit strategy is to first look for
every way possible to lower operating expenses and "lean out" the
organization without impacting brand or total customer
satisfaction. Second, the Company plans to finalize the C200 and
C1000 product improvements in order to make them 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 8, 2015 in Las Vegas,
Nevada. Third, the Company turned its focus on growing market
adoption in Latin America, Australia, Africa and the Middle East,
as these markets have tremendous potential and can offset the
slowdown the Company is experiencing in the energy space and, more
specifically, in Russia.
"We are making progress with geographical and industry
diversification by working closely with our distributors. We
continue to seek out new opportunities as we invest our time and
resources in educating potential customers about Capstone's value
proposition, specifically within the emerging markets of Australia,
Latin America, Africa and the Middle East. During the second
quarter, we dramatically increased our presence in Australia as
that market contributed to approximately 30% of sales. The energy
efficiency market was strong this quarter and comprised 68% of our
sales, and natural resources applications accounted for 26% of
sales," Mr. Jamison continued.
"We still have challenges ahead from the continued economic
headwinds, the strong U.S. dollar and the drop in oil and commodity
prices. However, with a new lower cost structure, improved CHP
product offerings and increased sales efforts in emerging markets,
we believe we will be able to overcome these challenges and improve
our financial results throughout the upcoming year. Further, as a
result of our initiatives, we expect to be better positioned for
sustainable growth when oil prices rebound and the dollar weakens,
" Mr. Jamison concluded.
Business Highlights Include:
- CHP/energy efficiency comprised 68% of shipments in the second
quarter, with 26% of shipments being used in natural resource
applications. Orders received this quarter included:
- Two C1000 microturbine follow-on orders for Eagle Ford Shale in
Texas.
- C1000 to Kineticor Resource Corporation for Canadian flare gas
utilization.
- Two C600s to provide clean power for oil field project in
Alaska.
- C600 microturbine to power oil processing equipment and
electrical submersible pumps on an oil platform off the western
coast of Africa.
- C600 microturbine follow-on order to upgrade a new commercial
building in Melbourne, Australia, as part of Walker Corporation's
flagship Collins Square project in the city's Central Business
District (CBD).
- C1000 microturbine to upgrade a processing plant for an Italian
silica plant.
Financial Highlights of Second Quarter of Fiscal 2016
Include:
- Total revenue of $17.9 million compared with $32.2 million in
the year-ago second quarter. This quarter's results did not include
any orders from Russia, which contributed $6.7 million in revenue
during last year's second quarter.
- Total backlog as of September 30, 2015 was $104.8 million
compared with $172.3 million as of September 30, 2014 and $160.5
million as of June 30, 2015. The Company removed $52.4 million from
backlog from BPC Engineering, its Russian distributor, this
quarter.
- Selling, General & Administrative expenses for the second
quarter of fiscal 2016 were $6.7 million compared with $9.5 million
in the year-ago second quarter.
- Net loss for the second quarter was $7.9 million or $0.02 per
share, compared with a net loss of $6.5 million or $0.02 per share
in the year-ago second quarter.
- Cash and cash equivalents as of September 30, 2015 was $10.6
million ($15.6 million when combined with restricted cash of $5.0
million related to the credit facility).
Conference Call and Webcast
The Company will host a live webcast today, November 5, at 1:45
p.m. Pacific Time (4:45 p.m. Eastern Time) to discuss its financial
results and provide a business update for the second quarter of
fiscal year 2016 ended September 30, 2015. At the end of the
conference call, Capstone will host a question-and-answer session
to provide an opportunity for financial analysts to ask questions.
Investors and interested individuals are invited to listen to the
webcast by logging on to the Company's investor relations webpage
at: www.capstoneturbine.com.
A replay of the webcast will be available on the website for 30
days.
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, among
other things, the shipment of finished goods, the success of our
strategic initiatives and cost-cutting measures, improving our
products, strengthen our distribution channels, the growth and
diversification of our end markets and attaining profitability.
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.
Financial Tables Follow
CAPSTONE TURBINE
CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In thousands, except
share amounts) |
(Unaudited) |
|
|
|
|
September 30, |
March 31, |
|
2015 |
2015 |
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash
equivalents |
$ 10,599 |
$ 32,221 |
Restricted cash |
5,000 |
— |
Accounts receivable, net of
allowances of $10,496 at September 30, 2015 and $11,041 at
March 31, 2015 |
16,164 |
13,120 |
Inventories |
28,688 |
23,097 |
Prepaid expenses and other
current assets |
3,179 |
3,063 |
Total current
assets |
63,630 |
71,501 |
Property, plant and equipment, net |
4,132 |
3,523 |
Non-current portion of inventories |
2,298 |
2,258 |
Intangible assets, net |
1,200 |
1,337 |
Other assets |
283 |
308 |
Total |
$ 71,543 |
$ 78,927 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Current Liabilities: |
|
|
Accounts payable and accrued
expenses |
$ 25,101 |
$ 22,266 |
Accrued salaries and
wages |
2,067 |
2,113 |
Accrued warranty
reserve |
2,474 |
3,183 |
Deferred revenue |
3,427 |
3,051 |
Revolving credit
facility |
15,164 |
12,953 |
Current portion of notes
payable and capital lease obligations |
142 |
407 |
Total current
liabilities |
48,375 |
43,973 |
Long-term portion of notes payable and
capital lease obligations |
101 |
89 |
Other long-term liabilities |
184 |
161 |
Commitments and contingencies |
|
|
Stockholders' Equity: |
|
|
Preferred stock, $.001 par
value; 10,000,000 shares authorized; none issued |
|
|
Common stock, $.001 par
value; 515,000,000 shares authorized; 336,533,685 shares
issued and 335,159,966 shares outstanding at
September 30, 2015; 331,635,840 shares issued and 330,379,962
shares outstanding at March 31, 2015 |
337 |
332 |
Additional paid-in capital |
839,743 |
837,650 |
Accumulated deficit |
(815,621) |
(801,764) |
Treasury stock, at cost; 1,373,719 shares at
September 30, 2015 and 1,255,878 shares at March 31,
2015 |
(1,576) |
(1,514) |
Total stockholders'
equity |
22,883 |
34,704 |
Total |
$ 71,543 |
$ 78,927 |
|
|
|
|
|
|
CAPSTONE TURBINE
CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
(Unaudited) |
|
|
|
|
|
|
Three
Months Ended |
Six
Months Ended |
|
September 30, |
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Revenue: |
|
|
|
|
Product, accessories and
parts |
$14,689 |
$29,808 |
$38,835 |
$50,763 |
Service |
3,216 |
2,440 |
6,050 |
4,745 |
Total revenue |
17,905 |
32,248 |
44,885 |
55,508 |
Cost of goods sold: |
|
|
|
|
Product, accessories and
parts |
13,147 |
24,941 |
33,061 |
42,700 |
Service |
2,830 |
2,064 |
5,211 |
4,149 |
Total cost of goods sold |
15,977 |
27,005 |
38,272 |
46,849 |
Gross margin |
1,928 |
5,243 |
6,613 |
8,659 |
Operating expenses: |
|
|
|
|
Research and
development |
2,872 |
2,055 |
5,288 |
4,382 |
Selling, general and
administrative |
6,705 |
9,543 |
14,794 |
17,307 |
Total operating
expenses |
9,577 |
11,598 |
20,082 |
21,689 |
Loss from operations |
(7,649) |
(6,355) |
(13,469) |
(13,030) |
Other (expense) income |
(36) |
(16) |
(38) |
81 |
Interest expense |
(197) |
(144) |
(347) |
(287) |
Loss before income taxes |
(7,882) |
(6,515) |
(13,854) |
(13,236) |
Provision for income taxes |
— |
14 |
3 |
64 |
Net loss |
$ (7,882) |
$ (6,529) |
$ (13,857) |
$ (13,300) |
|
|
|
|
|
Net loss per common share—basic and
diluted |
$ (0.02) |
$ (0.02) |
$ (0.04) |
$ (0.04) |
|
|
|
|
|
Weighted average shares used to
calculate net loss per common share |
331,544 |
329,865 |
331,048 |
325,942 |
|
|
|
|
|
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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