Capstone Turbine Reports Fourth Quarter and Full-Year Fiscal 2016 Financial Results
June 09 2016 - 4:15PM
Results Indicate Reduced Operating Expenses and
Lower Net Loss
Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST), the world’s leading clean technology manufacturer of
microturbine energy systems, reported financial results for its
fourth quarter and the full fiscal year of 2016 ended March 31,
2016.
Darren Jamison, President and Chief Executive Officer of
Capstone Turbine, said, “Having faced numerous challenges this
year, we took action to reposition the business for profitability.
As a result of those actions, we are successfully diversifying our
market verticals, expanding into new geographical areas and
substantially reducing our operating expenses with the goal of
reaching profitability at lower operating levels. We also launched
Capstone Energy Finance™, our joint venture that provides financing
options to purchase our microturbines and capture customers that
would like to deploy our products but may not currently have the
capital dollars to purchase them.”
Total revenue for the fourth quarter of fiscal 2016 was $18.9
million compared with $29.9 million in the year-ago fourth quarter,
and net loss was $5.3 million, or $0.25 per share compared with a
net loss of $14.3 million or $0.87 per share in the year-ago fourth
quarter. Capstone had bad debt recovery of $1.4 million during the
fourth quarter of fiscal 2016 from EMI, one of its distributors in
the Middle East and Africa. In comparison, Capstone recorded a bad
debt expense of approximately $7.1 million during the fourth
quarter of fiscal 2015 against its receivables owed by BPC, one of
its Russian distributors.
Total revenue for fiscal 2016 was $85.2 million, compared with
$115.5 million in the year-ago period. Net loss for fiscal 2016
improved to $25.2 million, or $1.39 per share, compared with $31.5
million or $1.92 per share in fiscal 2015. Capstone had bad debt
recovery of $1.5 million during fiscal 2016 primarily from EMI. In
comparison, Capstone recorded bad debt expense of approximately
$10.1 million during fiscal 2015 against its receivables owed
primarily by BPC and EMI. Per-share figures for both the fourth
quarter and full year include the 1-for-20 reverse stock split that
was effected in November 2015.
Mr. Jamison continued, “During the year, we focused on
increasing our business in the energy efficiency and renewable
energy vertical markets. Our efforts were successful as fiscal 2016
product revenue was comprised of 53% from energy efficiency
applications, 37% from oil and gas and other natural resources
applications and 10% from renewable energy applications. This
compared to fiscal 2015 product revenue of 44% from energy
efficiency, 49% from oil and gas and other natural resources, and
7% from renewable energy applications. These results indicate that
we have made significant strides in shifting our business toward
the energy efficiency vertical market, because it was only 25% of
our total product revenue in fiscal 2014.”
Financial Highlights of Fiscal 2016
Fourth Quarter:
- Gross margin for the quarter was 11% compared to 12% in the
year-ago fiscal fourth quarter at 37% lower revenue levels
- Operating expenses for the quarter were reduced $10.3 million,
or 59%, to $7.3 million from $17.6 million in the year-ago fourth
quarter
- Net loss for the quarter improved $9 million, or 63%, to $5.3
million, or $0.25 per share, for the quarter from a net loss of
$14.3 million, or $0.87 per share, in the year-ago fourth
quarter
- Inventories decreased $4.4 million from the third quarter on
lower finished goods and raw materials
- Accounts payable and accrued expenses decreased $8.2 million,
or 38%, from the third quarter
- Bookings for the fourth quarter were $18.3 million compared to
$13.7 million in the year-ago fourth quarter
- Book-to-bill for the quarter improved to 1.6 from 0.6 in the
year-ago fourth quarter
Financial Highlights of Full Year Fiscal
2016:
- Gross margin for fiscal 2016 was 15% compared to 16% in fiscal
2015 at 26% lower revenue levels
- Operating expenses for fiscal 2016 were reduced $11.9 million,
or 24%, to $37.3 million from $49.2 million in fiscal 2015
- Net loss for the year improved $6.3 million, or 20%, to $25.2
million, or $1.39 per share, for fiscal 2016 from a net loss of
$31.5 million, or $1.92 per share, in fiscal 2015
- Inventories decreased $7.1 million, or 28%, in fiscal 2016 on
lower finished goods and raw materials
- Accounts payable and accrued expenses decreased $9.1 million,
or 41%, in fiscal 2016
- Working capital was negative $2.4 million for fiscal 2016
compared to negative $11.9 million in fiscal 2015
- Borrowings decreased $3.5 million on the Wells Fargo credit
facility in fiscal 2016 compared to a $0.3 million reduction in
fiscal 2015
“As we look into the year ahead, we remain focused on reaching
profitability as quickly as possible,” continued Mr. Jamison. “With
the improvements we have made, we believe we are firmly on the path
of reducing our cost structure by 35%, increasing our gross margin
to 25% and reaching our breakeven goal at approximately $25 million
in quarterly revenue.”
Mr. Jamison added, “We also expect to benefit from improved
market vertical diversification with more focus on energy
efficiency and renewable energy and improved geographic
diversification with a strong focus on increasing our business in
growth areas such as Mexico, South America, Africa, Eastern Europe,
the Middle East and Australia. With a slow return of business from
our Russian distributor BPC, we look forward to rebuilding our
business in that country by continuing to support BPC and also by
adding new distributors in Russia and the Commonwealth of
Independent States. In addition to market vertical and geographical
diversification, we expect growth to come from our newly launched
C1000 Signature Series, our service business with a growing Factory
Protection Plan program and our new extended warranty product.”
Conference Call and Webcast
The Company will host a live webcast today, June 9, 2016 at 1:45
PM Pacific Time (4:45 PM Eastern Time) to provide the results of
the fourth quarter and fiscal year 2016 ended March 31, 2016. The
company will discuss its financial results and will provide an
update on its business activities. 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 has shipped
approximately 8,800 Capstone Microturbine systems to customers
worldwide. These award-winning systems have logged millions of
documented runtime operating hours. Capstone 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 United States, Latin America, Europe,
Middle East, China and Singapore.
This press release contains "forward-looking statements," as
that term is used in the federal securities laws, about reducing
costs and achieving profitability, the success of our Capstone
Energy Finance joint venture, improved market diversification,
renewed sales to BPC and the success of our new products.
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 |
|
CONSOLIDATED BALANCE SHEETS |
|
(In thousands, except share
amounts) |
|
|
|
|
|
March 31, |
|
March 31, |
|
|
|
2016 |
|
2015 |
|
Assets |
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
|
11,704 |
|
|
$ |
|
32,221 |
|
|
Restricted cash |
|
|
|
5,002 |
|
|
|
|
— |
|
|
Accounts
receivable, net of allowances of $8,909 at March 31, 2016 and
$11,041 at March 31, 2015 |
|
|
|
13,575 |
|
|
|
|
13,120 |
|
|
Inventories |
|
|
|
16,126 |
|
|
|
|
23,097 |
|
|
Prepaid
expenses and other current assets |
|
|
|
2,636 |
|
|
|
|
3,063 |
|
|
Total
current assets |
|
|
|
49,043 |
|
|
|
|
71,501 |
|
|
Property, plant and
equipment, net |
|
|
|
3,537 |
|
|
|
|
3,523 |
|
|
Non-current portion of
inventories |
|
|
|
2,143 |
|
|
|
|
2,258 |
|
|
Intangible assets,
net |
|
|
|
941 |
|
|
|
|
1,337 |
|
|
Other assets |
|
|
|
228 |
|
|
|
|
308 |
|
|
Total |
|
$ |
|
55,892 |
|
|
$ |
|
78,927 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
|
13,187 |
|
|
$ |
|
22,266 |
|
|
Accrued
salaries and wages |
|
|
|
1,880 |
|
|
|
|
2,113 |
|
|
Accrued
warranty reserve |
|
|
|
1,639 |
|
|
|
|
3,183 |
|
|
Deferred
revenue |
|
|
|
4,368 |
|
|
|
|
3,051 |
|
|
Revolving
credit facility |
|
|
|
9,459 |
|
|
|
|
12,953 |
|
|
Current
portion of notes payable and capital lease obligations |
|
|
|
361 |
|
|
|
|
407 |
|
|
Total
current liabilities |
|
|
|
30,894 |
|
|
|
|
43,973 |
|
|
Long-term portion of
notes payable and capital lease obligations |
|
|
|
74 |
|
|
|
|
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, 23,857,516
shares issued and 23,753,873 shares outstanding at March 31,
2016; 16,590,058 shares issued and 16,527,264 shares outstanding at
March 31, 2015 |
|
|
|
24 |
|
|
|
|
17 |
|
|
Additional paid-in capital |
|
|
|
853,288 |
|
|
|
|
837,965 |
|
|
Accumulated deficit |
|
|
|
(826,955 |
) |
|
|
|
(801,764 |
) |
|
Treasury
stock, at cost; 103,643 shares at March 31, 2016 and 62,794 shares
at March 31, 2015 |
|
|
|
(1,617 |
) |
|
|
|
(1,514 |
) |
|
Total
stockholders’ equity |
|
|
|
24,740 |
|
|
|
|
34,704 |
|
|
Total |
|
$ |
|
55,892 |
|
|
$ |
|
78,927 |
|
|
CAPSTONE TURBINE CORPORATION AND
SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(In thousands, except per share
amounts) |
|
|
|
|
|
Years Ended March 31, |
|
|
|
2016 |
|
2015 |
|
2014 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
Product,
accessories and parts |
|
$ |
|
73,116 |
|
|
$ |
|
104,710 |
|
|
$ |
|
123,553 |
|
|
Service |
|
|
|
12,095 |
|
|
|
|
10,751 |
|
|
|
|
9,552 |
|
|
Total revenue |
|
|
|
85,211 |
|
|
|
|
115,461 |
|
|
|
|
133,105 |
|
|
Cost of goods
sold: |
|
|
|
|
|
|
|
|
|
|
Product,
accessories and parts |
|
|
|
61,866 |
|
|
|
|
88,531 |
|
|
|
|
103,434 |
|
|
Service |
|
|
|
10,578 |
|
|
|
|
8,643 |
|
|
|
|
7,975 |
|
|
Total cost of goods
sold |
|
|
|
72,444 |
|
|
|
|
97,174 |
|
|
|
|
111,409 |
|
|
Gross margin |
|
|
|
12,767 |
|
|
|
|
18,287 |
|
|
|
|
21,696 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
|
10,152 |
|
|
|
|
9,679 |
|
|
|
|
9,029 |
|
|
Selling,
general and administrative |
|
|
|
27,106 |
|
|
|
|
39,517 |
|
|
|
|
27,981 |
|
|
Total
operating expenses |
|
|
|
37,258 |
|
|
|
|
49,196 |
|
|
|
|
37,010 |
|
|
Loss from
operations |
|
|
|
(24,491 |
) |
|
|
|
(30,909 |
) |
|
|
|
(15,314 |
) |
|
Other (expense)
income |
|
|
|
(40 |
) |
|
|
|
41 |
|
|
|
|
(20 |
) |
|
Interest expense |
|
|
|
(640 |
) |
|
|
|
(548 |
) |
|
|
|
(712 |
) |
|
Change in fair value of
warrant liability |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
10 |
|
|
Loss before income
taxes |
|
|
|
(25,171 |
) |
|
|
|
(31,416 |
) |
|
|
|
(16,036 |
) |
|
Provision for income
taxes |
|
|
|
20 |
|
|
|
|
117 |
|
|
|
|
220 |
|
|
Net loss |
|
$ |
|
(25,191 |
) |
|
$ |
|
(31,533 |
) |
|
$ |
|
(16,256 |
) |
|
Net loss per common
share—basic and diluted |
|
$ |
|
(1.39 |
) |
|
$ |
|
(1.92 |
) |
|
$ |
|
(1.06 |
) |
|
Weighted average shares
used to calculate basic and diluted net loss per
common share |
|
|
|
18,162 |
|
|
|
|
16,401 |
|
|
|
|
15,353 |
|
|
CONTACT:
Capstone Turbine Corporation
Investor and investment media inquiries:
818-407-3628
ir@capstoneturbine.com
INVESTORS:
Dian Griesel Int’l.
Cheryl Schneider
212-825-3210
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