Cash Usage Approaches Zero on Higher Revenue,
Line of Credit Borrowings and Tight Expense Controls
In an effort to increase investor transparency, Capstone Turbine
Corporation (www.capstoneturbine.com) (Nasdaq:CPST), the world's
leading clean technology manufacturer of microturbine energy
systems announced selected preliminary fourth quarter financial
results indicating a quarter-over-quarter improvement in cash usage
of 86%, excluding the net proceeds from equity transactions and
including increased borrowings from the Wells Fargo credit facility
and approximately $22 million in quarterly revenue, an 11% increase
from the prior quarter’s revenue and a 16% increase from the same
period a year ago.
Darren Jamison, President and Chief Executive
Officer of Capstone Turbine said, “I am extremely pleased with our
preliminary fourth quarter results as the business continues to
improve in all of our focus areas, while we continue to execute
against our three-pronged profitability strategy. When you exclude
the cash from equity raises, this is the third best cash usage
quarter in the last five years. Cash and revenue growth are my
primary focus as we continue our drive to profitability by
leveraging our new significantly lower operating cost structure,”
added Mr. Jamison.
The continued sequential improvement in cash was
achieved by a combination of higher revenues, increased borrowings
from the Wells Fargo credit facility, improved working capital
management and continued tight expense controls. Total cash, cash
equivalents and restricted cash decreased $0.2 million to $19.2
million as of March 31, 2017, compared to cash, cash equivalents
and restricted cash balance of $19.4 million at the end of the
third quarter and $16.7 million as of March 31, 2016. Each of these
balances includes approximately $5.0 million of restricted cash
related to the Wells Fargo credit facility, and the March 31, 2017
cash balance includes approximately $0.3 million of net proceeds
from new equity transactions that occurred during the fourth
quarter of fiscal 2017.
Cash used in the fourth quarter, excluding net
proceeds from equity transactions and including changes in the
Wells Fargo credit facility, was $0.5 million compared to $3.5
million for the third quarter of fiscal 2017 and $7.1 million for
the fourth quarter of fiscal 2016. As a result, cash used during
the fourth quarter of fiscal 2017 decreased $3.0 million, or 86%,
over the third quarter fiscal 2017, and decreased $6.6 million, or
93%, over the fourth quarter of fiscal 2016.
“As I said last quarter, we are at war with
operating costs and will continue our focus on lowering our cash
burn by looking at every area where we can reduce expenses,
increase inventory turns, increase efficiency and improve our cash
cycle. We have made tremendous strides in this area, as reported
business expenses for the third quarter were down over 35% from the
same period a year ago,” added Mr. Jamison.
The company booked new product orders of
approximately $20 million during the fourth quarter, for a 1.3:1
book-to-bill ratio, compared with $8.5 million of new product
orders received and booked during the prior quarter, which was a
0.7:1 book-to-bill ratio.
“We remain focused on diversifying our customer
base and geographic presence while increasing our revenue from the
combined heat and power (CHP)/energy efficiency markets as our oil
and gas business continues to rebound as it did during this
quarter,” added Mr. Jamison.
The company reported that the Factory Protection
Plan (FPP) long-term service contract backlog remained strong and
at the record level achieved last quarter of approximately $77
million.
“While the size of the installed microturbine fleet
expands worldwide, we continue our focus on growing our FPP service
contract business as the continued growth of this business is one
of the keys to achieving our profitability and reduced cash usage
goals as it yields high margin recurring revenue. Capstone’s FPP
long-term service contract backlog has grown approximately 18% over
the last 18 months,” stated Mr. Jamison.
During the fourth quarter of fiscal 2017 the
company received large U.S. shale play orders from Capstone
distributors, Horizon Power Systems and E-Finity Distributed
Generation. E-Finity also secured a significant 5MW CHP project, as
well as GEM securing a 1MW CHP project. RSP Systems received an
order during the quarter for a C1000S microturbine and two C600S
microturbines to enhance two of the largest office towers currently
under construction in New York City.
The company continued to ship and commission the
new Signature Series CHP focused product which is getting very
positive customer feedback. In addition, the company shipped 10 of
its new roof mounted integrated CHP heat recovery modules designed
for our C1000 Signature Series systems, which added approximately
$0.5 million of new accessory revenue in the fourth quarter.
“As a result of our new fuel development program,
we sold our first butane-fueled unit. The butane-fueled unit
is a C600S system that is scheduled to ship to a small village in
West Africa in June,” added Mr. Jamison.
“As a team, we remain firmly focused on shortening
our path to profitability by lowering our business expenses,
growing both our product and service revenues, diversifying our
business, launching new innovative products, improving add-on
accessory sales, creating new key partnerships and tightly managing
our balance sheet,” Mr. Jamison concluded.
The financial results presented in this press
release are preliminary and may change. This preliminary financial
information includes calculations or figures that have been
prepared internally by management and have not been reviewed or
audited by our independent registered public accounting firm.
There can be no assurance that the Company’s actual results for the
period presented herein will not differ from the preliminary
financial data presented herein and such changes could be
material. This preliminary financial data should not be viewed
as a substitute for full financial statements prepared in
accordance with GAAP and is not necessarily indicative of the
results to be achieved for any future periods. The company expects
to issue its full financial results for the fiscal year and fourth
quarter ended March 31, 2017, no later than June 13, 2017.
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 9,000 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 9001:2015 and ISO 14001:2015 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 and Asia.
This press release contains "forward-looking
statements," as that term is used in the federal securities laws,
about Capstone’s business improvement; decrease in cash burn; the
success of it’s three pronged plan to profitability; decrease in
operating costs; increased inventory turns; increase in revenue;
diversification of customers base, market verticals and
geographical presence; success of Capstone’s FPP program;
advantages of our Signature Series product and accessories
offerings; and the development of new innovative products such as
our new fuel development programs. 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
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