SAN DIEGO, Aug. 7, 2017 /PRNewswire/ -- Maxwell
Technologies, Inc. (NASDAQ: MXWL) today reported financial results
for the three months ended June 30,
2017. Total revenues for the second quarter of 2017 were
$37.1 million, compared with
$26.7 million for the first quarter
of 2017 and $34.1 million for the
prior year quarter. Net loss for the second quarter of 2017 was
$10.1 million, compared with a net
loss of $10.4 million for the first
quarter of 2017 and net income of $2.2
million for the prior year quarter. The Company reported
$(1.8) million of adjusted earnings
before interest, taxes, depreciation and amortization (Adjusted
EBITDA) for the second quarter of 2017, compared with $(3.9) million for the first quarter of 2017 and
$(0.7) million for the prior year
quarter. Non-GAAP net loss for the second quarter of 2017 was
$5.5 million, compared with a
non-GAAP net loss of $7.4 million for
the first quarter of 2017 and $4.0
million for the prior year quarter. Non-GAAP financial
measures are described and defined later in this release.
"We delivered solid sequential revenue growth, building on the
momentum we have created over the last 12 months. Our strategy is
gaining traction and our business transformation is making
progress," said Dr. Franz Fink, Maxwell's President and Chief
Executive Officer. "We closed the quarter slightly above the top
end of our revenue guidance range, coming in at $37.1 million, a 39% sequential increase over the
first quarter, and we narrowed the adjusted EBITDA gap towards
breakeven. Furthermore, the integration of Nesscap is progressing
nicely, with a high level of collaboration as our teams merge
together as one and collectively realize our targeted
synergies."
Financial Results
and Operating Metrics (1)
|
|
(Unaudited; in
thousands, except for per share amounts)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
March 31,
2017
|
|
June 30,
2016
|
|
June 30,
2017
|
|
June 30,
2016
|
Total
revenue
|
|
$
|
37,103
|
|
|
$
|
26,686
|
|
|
$
|
34,135
|
|
|
$
|
63,789
|
|
|
$
|
69,338
|
|
Ultracapacitor
revenue
|
|
$
|
25,079
|
|
|
$
|
14,234
|
|
|
$
|
21,224
|
|
|
$
|
39,313
|
|
|
$
|
44,744
|
|
High-Voltage
revenue
|
|
$
|
12,024
|
|
|
$
|
12,452
|
|
|
$
|
11,841
|
|
|
$
|
24,476
|
|
|
$
|
20,018
|
|
Microelectronics
revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,070
|
|
|
$
|
—
|
|
|
$
|
4,576
|
|
Gross
margin
|
|
21.1
|
%
|
|
23.2
|
%
|
|
29.2
|
%
|
|
22.0
|
%
|
|
28.3
|
%
|
Non-GAAP gross
margin
|
|
22.7
|
%
|
|
23.9
|
%
|
|
30.0
|
%
|
|
23.2
|
%
|
|
29.2
|
%
|
Loss from
operations
|
|
$
|
(8,673)
|
|
|
$
|
(9,032)
|
|
|
$
|
(3,812)
|
|
|
$
|
(17,705)
|
|
|
$
|
(10,052)
|
|
Non-GAAP loss from
operations
|
|
$
|
(4,037)
|
|
|
$
|
(6,042)
|
|
|
$
|
(3,120)
|
|
|
$
|
(10,079)
|
|
|
$
|
(6,841)
|
|
Net income
(loss)
|
|
$
|
(10,118)
|
|
|
$
|
(10,399)
|
|
|
$
|
2,167
|
|
|
$
|
(20,517)
|
|
|
$
|
(4,681)
|
|
Net income (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.28)
|
|
|
$
|
(0.32)
|
|
|
$
|
0.07
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.15)
|
|
Adjusted
EBITDA
|
|
$
|
(1,778)
|
|
|
$
|
(3,894)
|
|
|
$
|
(741)
|
|
|
$
|
(5,672)
|
|
|
$
|
(2,000)
|
|
Non-GAAP net
loss
|
|
$
|
(5,482)
|
|
|
$
|
(7,409)
|
|
|
$
|
(4,038)
|
|
|
$
|
(12,891)
|
|
|
$
|
(8,367)
|
|
Non-GAAP net loss per
share
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.15)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.38)
|
|
|
$
|
(0.26)
|
|
Net cash used in
operating activities
|
|
$
|
(2,677)
|
|
|
$
|
(3,825)
|
|
|
$
|
(5,394)
|
|
|
$
|
(6,502)
|
|
|
$
|
(6,988)
|
|
Cash purchases of
property and equipment
|
|
$
|
1,115
|
|
|
$
|
945
|
|
|
$
|
1,391
|
|
|
$
|
2,060
|
|
|
$
|
3,629
|
|
Cash, cash
equivalents and restricted cash
|
|
$
|
19,181
|
|
|
$
|
20,894
|
|
|
$
|
35,775
|
|
|
$
|
19,181
|
|
|
$
|
35,775
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
For a reconciliation of non-GAAP financial measures, please
refer to the section entitled "Reconciliation of GAAP to Non-GAAP
Financial Measures" included at the end of this
release.
|
Discussion of Financial Results for the Quarter
Please note that Nesscap is included in all results and outlook
beginning May 1, 2017.
Revenue and Gross Margin
- Total revenue for the second quarter of 2017 was $37.1 million, compared with $26.7 million for the first quarter of 2017,
driven by strong ultracapacitor revenue in the wind market.
Ultracapacitor revenue for the second quarter of 2017 was
$25.1 million, compared with
$14.2 million for the first quarter
of 2017. High-voltage revenue was $12.0
million for the second quarter of 2017, compared with
$12.5 million for the first quarter
of 2017.
- Gross margin for the second quarter of 2017 was 21.1% compared
with 23.2% in the first quarter of 2017, driven by strong
ultracapacitor sales, which generally have lower gross margins than
the corporate average. Q2 gross margin was also impacted by
approximately $351,000 of acquisition
related intangible amortization and inventory step-up expense.
- Non-GAAP gross margin for the second quarter of 2017 was 22.7%
compared with 23.9% in the first quarter of 2017 and excludes the
acquisition related expense mentioned in the prior bullet and
stock-based compensation expense.
Operating Expense, Net Loss & Adjusted
EBITDA
- Operating expense for the second quarter of 2017 was
$16.5 million, compared with
$15.2 million for the first quarter
of 2017. The quarter-over-quarter increase was driven primarily by
the inclusion of the business of Nesscap, beginning in May, and
related acquisition expenses.
- Non-GAAP operating expense for the second quarter of 2017 was
$12.5 million compared with
$12.4 million for the first quarter
of 2017 and excludes stock-based compensation, amortization of
intangibles, acquisition related expenses and other non-recurring
legal costs.
- Net loss for the second quarter of 2017 was $10.1 million, or $(0.28) per share, compared with a net loss of
$10.4 million, or $(0.32) per share, for the first quarter of
2017.
- Non-GAAP net loss for the second quarter of 2017 was
$5.5 million compared with a non-GAAP
net loss of $7.4 million for the
first quarter of 2017.
- Adjusted EBITDA for the second quarter of 2017 was $(1.8) million, compared with $(3.9) million for the first quarter of
2017.
Capital Expenditures
- Capital expenditures during the second quarter of 2017 were
$1.1 million, compared with
$0.9 million for the first quarter of
2017. Capital expenditures in the second quarter were primarily
related to research and development activities and the Swiss
factory expansion.
Strategic Business & Operational
Highlights
- In February 2017, we announced
that we entered into an agreement to acquire substantially all of
the assets and business of Nesscap Energy, Inc., a developer and
manufacturer of ultracapacitor products for use in transportation,
renewable energy, industrial and consumer markets. On April 28, 2017, we completed this acquisition
through the issuance of approximately 4.1 million shares of Maxwell
common stock and the assumption of certain liabilities. The
acquisition of Nesscap adds complementary businesses to our
operations and expands our portfolio of products and we believe the
acquisition will add value for our customers.
- In April 2017, we signed a
strategic equity investment agreement with China's SDIC Fund Management Co., Ltd.
("SDIC Fund"), subject to approval
by the Committee on Foreign Investment in the United States ("CFIUS"). On August 4, just prior to the August 7 expiration of the final phase of the
CFIUS review process, we withdrew the filing to allow more time for
review and discussion with CFIUS. To that end, we are continuing to
work with CFIUS, SDIC Fund, and our advisors to address the
remaining open information requests before a refiling. In the
meantime, we are pleased about the momentum we are seeing across
our portfolio and the progress we have made executing on our
strategy to diversify and grow our business. The improving strength
of our core business, coupled with the advancements in our
differentiated dry battery electrode technology platform, positions
us well to secure the strategic investment or other financing which
may be required to further advance our business and to unlock the
true value of our technology platform for our partners, customers
and shareholders.
Business Outlook
- Total revenue for the third quarter of 2017 is expected to be
in the range of $35 million to $38
million.
- Gross margin for the third quarter of 2017 is expected to be
20.5%, plus or minus 150 basis points.
- Non-GAAP gross margin for the third quarter of 2017 is expected
to be 22.5%, plus or minus 150 basis points.
- GAAP operating expense for the third quarter of 2017 is
expected to be in the range of $15.7 million
to $16.1 million.
- Non-GAAP operating expense for the third quarter of 2017 is
expected to be in the range of $12.7 million
to $13.1 million.
The Company has reconciled expected GAAP and non-GAAP gross
margin, operating expenses, adjusted EBITDA, net loss and net loss
per share at the midpoint of expectations. However, the Company is
not able to estimate additional potentially excluded and
reconciling amounts due to the substantial uncertainties involved.
The effect of these excluded items may be significant. The
reconciliation of GAAP and non-GAAP third quarter outlook is as
follows (in millions, except for percentages and per share
data):
|
Projected at
Midpoint
of Guidance
|
|
Projected at
Midpoint
of Guidance
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
|
|
September 30,
2017
|
|
Gross Margin
Reconciliation:
|
|
|
|
Total Operating
Expenses Reconciliation:
|
|
|
|
GAAP gross
margin
|
|
20.5
|
%
|
|
GAAP total operating
expenses
|
|
$
|
15.9
|
|
|
Stock-based
compensation expense
|
|
0.7
|
%
|
|
Stock-based
compensation expense
|
|
(2.0)
|
|
|
Acquisition related
expense (1)
|
|
1.3
|
%
|
|
Acquisition related
expense (1)
|
|
(0.7)
|
|
|
Non-GAAP gross
margin
|
|
22.5
|
%
|
|
Legal costs for SEC
and FCPA matters
|
|
(0.3)
|
|
|
|
|
|
|
Non-GAAP total
operating expenses
|
|
$
|
12.9
|
|
|
Net Loss
Reconciliation:
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(9.0)
|
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
Stock-based
compensation expense
|
|
2.3
|
|
|
GAAP net
loss
|
|
$
|
(9.0)
|
|
|
Acquisition related
expense (1)
|
|
1.2
|
|
|
Interest, taxes,
depreciation, amortization
|
|
3.3
|
|
|
Legal costs for SEC
and FCPA matters
|
|
0.3
|
|
|
EBITDA
|
|
(5.7)
|
|
|
Non-GAAP net
loss
|
|
$
|
(5.2)
|
|
|
Stock-based
compensation expense
|
|
2.3
|
|
|
|
|
|
|
Acquisition related
expense (1)
|
|
0.9
|
|
|
Net Loss per
Share Reconciliation:
|
|
|
|
Legal costs for SEC
and FCPA matters
|
|
0.3
|
|
|
GAAP net loss per
diluted share
|
|
$
|
(0.24)
|
|
|
Adjusted
EBITDA
|
|
$
|
(2.2)
|
|
|
Expenses excluded
from GAAP
|
|
0.10
|
|
|
|
|
|
|
Non-GAAP net loss per
diluted share
|
|
$
|
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Acquisition related
expense is partially recorded in operating expenses and partially
recorded in cost of revenue.
|
Webcast Information
As previously announced, Maxwell management will host a live
webcast at approximately 5:00 p.m.
EDT / 2:00 p.m. PDT today to
discuss these results. Other forward-looking and material
information may also be discussed during this call.
The call may be accessed by dialing toll-free, (877) 201-0168
from the U.S. or (647) 788-4901 for international callers, and
entering the conference ID, MAXWELL.
More information about this event including a live webcast and
other supporting materials may be accessed by visiting
http://investors.maxwell.com.
A replay of the conference call will be available for a limited
time by visiting http://investors.maxwell.com.
About Maxwell
Maxwell is a global leader in the development and manufacture of
innovative, cost-effective energy storage and power delivery
solutions. Our ultracapacitor products provide safe and reliable
power solutions for applications in consumer and industrial
electronics, transportation, renewable energy and information
technology. Our CONDIS® high-voltage grading and coupling
capacitors help to ensure the safety and reliability of electric
utility infrastructure and other applications involving transport,
distribution and measurement of high-voltage electrical energy. For
more information, visit www.maxwell.com.
Notes Regarding Non-GAAP Financial Measures
The Company uses non-GAAP financial measures for internal
evaluation and to report the results of its business. Information
presented in this press release and in the attached financial
tables includes financial information prepared in accordance with
generally accepted accounting principles in the U.S., or GAAP, as
well as non-GAAP financial measures. Generally, a non-GAAP
financial measure, within the meaning of Item 10 of Regulation S-K
promulgated by the Securities and Exchange Commission (SEC), is a
numerical measure of a company's financial performance or cash
flows that (a) excludes amounts, or is subject to adjustments that
have the effect of excluding amounts, which are included in the
most directly comparable measure calculated and presented in
accordance with GAAP in the condensed consolidated balance sheets,
condensed consolidated statements of operations, condensed
consolidated statements of comprehensive income (loss) or condensed
consolidated statements of cash flows; or (b) includes amounts, or
is subject to adjustments that have the effect of including
amounts, which are excluded from the most directly comparable
measure so calculated and presented.
The Company uses the following non-GAAP financial measures in
this release, in its earnings conference call and in its on-going
evaluation of the business: (a) non-GAAP gross profit; (b) non-GAAP
operating expense; (c) non-GAAP income (loss) from operations; (d)
EBITDA; (e) adjusted EBITDA; (f) non-GAAP net income (loss); (g)
non-GAAP net income (loss) per diluted share and (h) non-GAAP gross
margin.
The definitions of non-GAAP financial measures used in this news
release are presented below:
- Non-GAAP gross margin and Non-GAAP gross profit exclude the
effect of stock-based compensation, amortization of intangibles,
accelerated depreciation and acquisition related
expense.
- Non-GAAP operating expense excludes the effect of stock-based
compensation, restructuring and related costs, acquisition related
expense, shareholder proxy advisement fees, release of tax liability and legal costs for
SEC and FCPA matters.
- Non-GAAP loss from operations excludes the effect of
accelerated depreciation, stock-based compensation, restructuring
and related costs, acquisition related expense, shareholder proxy
advisement fees, release of tax liability and legal costs for SEC
and FCPA matters.
- Adjusted EBITDA excludes the effect of foreign currency
exchange loss, other income, stock-based compensation,
restructuring and related costs, acquisition related expense,
shareholder proxy advisement fees, release
of tax liability, gain on sale of product line and legal
costs for SEC and FCPA matters.
- Non-GAAP net loss and non-GAAP net loss per share exclude the
effect of accelerated depreciation, stock-based compensation,
restructuring and related costs, acquisition related expense,
shareholder proxy advisement fees, release of tax liability, gain
on sale of product line and legal costs for SEC and FCPA
matters.
The Company believes that these measures provide useful
information to its management, board of directors and investors
about its operating activities and business trends related to its
financial condition and results of operations.
In addition, the Company's management and board of directors use
these non-GAAP financial measures in developing operating budgets
and in reviewing the Company's results of operations, as non-cash
items, non-recurring items and items unrelated to ongoing operating
results have limited impact on current and future operating
decisions. Additionally, the Company believes that inclusion of
non-GAAP financial measures provides consistency and comparability
with its past reports of financial results. Non-GAAP financial
measures should be considered in addition to, but not as a
substitute for, the information prepared in accordance with GAAP.
These measures are intended to supplement GAAP financial
information, and may be computed differently from non-GAAP
financial measures used by other companies. However, investors
should be aware that non-GAAP measures have inherent limitations
and should be read in conjunction with the Company's consolidated
financial statements prepared in accordance with GAAP.
The Company's non-GAAP financial measures included in this news
release exclude the following non-cash items, non-recurring items
or items unrelated to its ongoing operating results, as
applicable:
- Stock-based compensation expense consisting of non-cash charges
for stock options, restricted stock awards, restricted stock units,
employee stock purchase plan awards and bonuses expected to be
settled with the Company's fully vested common stock.
- Amortization of intangibles consisting of non-cash amortization
of purchased intangibles acquired in connection with the Company's
acquisition of the operating subsidiaries of Nesscap Energy,
Inc.
- Restructuring and related costs including restructuring and
exit costs incurred in connection with the Company's restructuring
plans, disposition transaction costs consisting of legal fees and
other expenses incurred in connection with the sale of the
microelectronics product line and executive transition costs
representing recruiting and other expenses incurred in relation to
the resignation and hiring of certain executive officers.
- Accelerated depreciation charges representing the adjustment of
the remaining useful life for certain manufacturing equipment in
connection with the Company's restructuring plan.
- Acquisition related expense consisting of costs incurred in
connection with the Company's acquisition of the operating
subsidiaries of Nesscap Energy, Inc. which include both transaction
related expenses and the fair value adjustment for acquired
inventory recorded in cost of revenue.
- Shareholder proxy advisement fees represent external advisor
expenses incurred in connection with preparing for the Company's
2016 and 2017 shareholder proxy and annual meeting.
- Legal costs for the FCPA and SEC matters represent external
legal expenses related to the U.S. Securities and Exchange
Commission's investigation of the facts and circumstances
surrounding the restatement of the Company's financial statements
for the fiscal years 2011 and 2012, as well as for ongoing legal
matters related to previous Foreign Corrupt Practices Act (FCPA)
violations.
Reconciliations of non-GAAP financial measures used in this
release to the most directly comparable GAAP financial measures can
be found in the section entitled "Reconciliation of GAAP to
Non-GAAP Financial Measures" included toward the end of this
release.
Forward-Looking Statements
Statements in this news release that are "forward-looking
statements" are based on current expectations and assumptions that
are subject to risks and uncertainties and are subject to the Safe
Harbor provisions created by the Private Securities Litigation
Reform Act of 1995. Such risks, uncertainties and contingencies
include, but are not limited to, the following:
- Dependence upon the sale of products to a small number of
customers and vertical markets, some of which are heavily dependent
on government funding or government subsidy programs which could be
reduced, modified or discontinued in the future;
- Uncertainties related to the global geopolitical landscape and
the recent elections in the United
States;
- Risks related to acquisitions and potential for unsuccessful
integration of acquired businesses;
- Risk that our restructuring efforts may not be successful and
that we may not be able to realize the anticipated cost savings and
other benefits;
- Our ability to obtain sufficient capital to meet our operating
or other needs;
- Regulatory and other approvals related to the completion of
financing transactions;
- Downward pressures on product pricing from increased
competition and shifts in sales mix with respect to low margin and
high margin business;
- Our ability to manage and minimize the impact of unfavorable
legal proceedings;
- Risk that activist stockholders attempt to effect changes to
our company which could adversely affect our corporate
governance;
- Risks related to our international operations including, but
not limited to, our ability to adequately comply with the changing
rules and regulations in countries where our business is conducted,
our ability to oversee and control our foreign subsidiaries and
their operations, our ability to effectively manage foreign
currency exchange rate fluctuations arising from our international
operations, and our ability to continue to comply with the U.S.
Foreign Corrupt Practices Act as well as the anti-bribery laws of
foreign jurisdictions;
- Dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside
our control may adversely affect our sales;
- Our ability to remain competitive and stimulate customer demand
through successful introduction of new products, and to educate our
prospective customers on the products we offer;
- Successful acquisition, development and retention of key
personnel;
- Our ability to effectively manage our reliance upon certain
suppliers of key component parts, specialty equipment and
logistical services;
- Our ability to manage product quality problems;
- Our ability to protect our intellectual property rights and to
defend claims against us;
- Our ability to effectively identify, enter into, manage and
benefit from strategic alliances;
- Occurrence of a catastrophic event at any of our
facilities;
- Occurrence of a technology systems failure, network disruption,
or breach in data security; and
- Our ability to match production volume to actual customer
demand.
For further information regarding risks and uncertainties
associated with Maxwell's business, please refer to the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Risk Factors" sections of our SEC
filings, including, but not limited to, our annual report on Form
10-K and quarterly reports on Form 10-Q. Copies of these documents
may be obtained by contacting Maxwell's investor relations
department at (858) 503-3368, or at our investor relations website:
investors.maxwell.com. All information in this release is as of
August 7, 2017. The Company undertakes no duty to update any
forward-looking statement to reflect actual results or changes in
the Company's expectations.
Investor Contact: Soohwan
Kim, CFA, The Blueshirt Group, +1 (858) 503-3368,
ir@maxwell.com
Media Contact: Sylvie
Tse, Metis Communications, +1 (617) 236-0500,
maxwell@metiscomm.com
MAXWELL
TECHNOLOGIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except
per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
2017
|
|
March
31,
2017
|
|
June
30,
2016
|
|
June
30,
2017
|
|
June
30,
2016
|
Revenue
|
|
$
|
37,103
|
|
|
$
|
26,686
|
|
|
$
|
34,135
|
|
|
$
|
63,789
|
|
|
$
|
69,338
|
|
Cost of
revenue
|
|
29,276
|
|
|
20,495
|
|
|
24,154
|
|
|
49,771
|
|
|
49,704
|
|
Gross
profit
|
|
7,827
|
|
|
6,191
|
|
|
9,981
|
|
|
14,018
|
|
|
19,634
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
12,070
|
|
|
9,540
|
|
|
8,223
|
|
|
21,610
|
|
|
18,321
|
|
Research and
development
|
|
4,430
|
|
|
4,686
|
|
|
5,461
|
|
|
9,116
|
|
|
11,068
|
|
Restructuring and
exit costs
|
|
—
|
|
|
997
|
|
|
109
|
|
|
997
|
|
|
297
|
|
Total operating
expenses
|
|
16,500
|
|
|
15,223
|
|
|
13,793
|
|
|
31,723
|
|
|
29,686
|
|
Loss from
operations
|
|
(8,673)
|
|
|
(9,032)
|
|
|
(3,812)
|
|
|
(17,705)
|
|
|
(10,052)
|
|
Gain on sale of
product line
|
|
—
|
|
|
—
|
|
|
(6,657)
|
|
|
—
|
|
|
(6,657)
|
|
Interest expense,
net
|
|
97
|
|
|
63
|
|
|
61
|
|
|
160
|
|
|
131
|
|
Other
income
|
|
(52)
|
|
|
(1)
|
|
|
(47)
|
|
|
(53)
|
|
|
(131)
|
|
Foreign currency
exchange loss, net
|
|
18
|
|
|
97
|
|
|
64
|
|
|
115
|
|
|
203
|
|
Income (loss) before
income taxes
|
|
(8,736)
|
|
|
(9,191)
|
|
|
2,767
|
|
|
(17,927)
|
|
|
(3,598)
|
|
Income tax
provision
|
|
1,382
|
|
|
1,208
|
|
|
600
|
|
|
2,590
|
|
|
1,083
|
|
Net income
(loss)
|
|
$
|
(10,118)
|
|
|
$
|
(10,399)
|
|
|
$
|
2,167
|
|
|
$
|
(20,517)
|
|
|
$
|
(4,681)
|
|
Net income (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.28)
|
|
|
$
|
(0.32)
|
|
|
$
|
0.07
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.15)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,526
|
|
|
32,197
|
|
|
31,842
|
|
|
33,871
|
|
|
31,746
|
|
Diluted
|
|
35,526
|
|
|
32,197
|
|
|
32,027
|
|
|
33,871
|
|
|
31,746
|
|
MAXWELL
TECHNOLOGIES, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except
per share data)
|
(Unaudited)
|
|
|
|
June
30,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,181
|
|
|
$
|
25,359
|
|
Trade and other
accounts receivable, net
|
|
30,331
|
|
|
20,441
|
|
Inventories,
net
|
|
30,174
|
|
|
32,248
|
|
Prepaid expenses and
other current assets
|
|
4,101
|
|
|
4,407
|
|
Total current
assets
|
|
83,787
|
|
|
82,455
|
|
Property and
equipment, net
|
|
27,217
|
|
|
26,120
|
|
Intangible assets,
net
|
|
11,469
|
|
|
—
|
|
Goodwill
|
|
35,592
|
|
|
22,799
|
|
Pension
asset
|
|
9,670
|
|
|
8,887
|
|
Other non-current
assets
|
|
868
|
|
|
613
|
|
Total
assets
|
|
$
|
168,603
|
|
|
$
|
140,874
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
26,467
|
|
|
$
|
19,181
|
|
Accrued employee
compensation
|
|
7,564
|
|
|
6,152
|
|
Deferred revenue and
customer deposits
|
|
5,802
|
|
|
3,967
|
|
Short-term borrowings
and current portion of long-term debt
|
|
20
|
|
|
40
|
|
Total current
liabilities
|
|
39,853
|
|
|
29,340
|
|
Deferred tax
liability, long-term
|
|
8,805
|
|
|
8,580
|
|
Long-term debt,
excluding current portion
|
|
57
|
|
|
43
|
|
Employee severance
benefit obligation
|
|
3,354
|
|
|
—
|
|
Other long-term
liabilities
|
|
2,846
|
|
|
2,089
|
|
Total
liabilities
|
|
54,915
|
|
|
40,052
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.10
par value per share, 80,000 shares authorized at June 30, 2017 and
December 31, 2016; 36,934 and 32,135 shares issued and
outstanding at June 30, 2017 and December 31, 2016,
respectively
|
|
3,691
|
|
|
3,210
|
|
Additional paid-in
capital
|
|
325,032
|
|
|
296,316
|
|
Accumulated
deficit
|
|
(224,621)
|
|
|
(204,104)
|
|
Accumulated other
comprehensive income
|
|
9,586
|
|
|
5,400
|
|
Total stockholders'
equity
|
|
113,688
|
|
|
100,822
|
|
Total liabilities and
stockholders' equity
|
|
$
|
168,603
|
|
|
$
|
140,874
|
|
MAXWELL
TECHNOLOGIES, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands, except
per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
2017
|
|
March
31,
2017
|
|
June
30,
2016
|
|
June
30,
2017
|
|
June
30,
2016
|
OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(10,118)
|
|
|
$
|
(10,399)
|
|
|
$
|
2,167
|
|
|
$
|
(20,517)
|
|
|
$
|
(4,681)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
2,259
|
|
|
2,148
|
|
|
2,379
|
|
|
4,407
|
|
|
4,966
|
|
Amortization of
intangible assets
|
|
202
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
—
|
|
Loss on lease due to
restructuring
|
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
Pension and employee severance benefit
obligation cost
|
|
191
|
|
|
86
|
|
|
161
|
|
|
277
|
|
|
318
|
|
Stock-based
compensation expense
|
|
2,254
|
|
|
1,538
|
|
|
1,459
|
|
|
3,792
|
|
|
2,662
|
|
Gain on sale of
property and equipment
|
|
—
|
|
|
—
|
|
|
(47)
|
|
|
—
|
|
|
(131)
|
|
Gain on sale of
product line
|
|
—
|
|
|
—
|
|
|
(6,657)
|
|
|
—
|
|
|
(6,657)
|
|
Unrealized (gain) loss on foreign
currency exchange rates
|
|
(48)
|
|
|
26
|
|
|
(18)
|
|
|
(22)
|
|
|
39
|
|
Release of tax
liability
|
|
—
|
|
|
—
|
|
|
(1,518)
|
|
|
—
|
|
|
(1,518)
|
|
Provision for
losses on
accounts receivable
|
|
2
|
|
|
—
|
|
|
16
|
|
|
2
|
|
|
67
|
|
Provision for losses
on inventory
|
|
811
|
|
|
17
|
|
|
149
|
|
|
828
|
|
|
139
|
|
Provision for
warranties
|
|
20
|
|
|
189
|
|
|
168
|
|
|
209
|
|
|
307
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Trade and other
accounts receivable
|
|
(3,319)
|
|
|
(3,432)
|
|
|
1,755
|
|
|
(6,751)
|
|
|
14,831
|
|
Inventories
|
|
4,135
|
|
|
1,922
|
|
|
(3,810)
|
|
|
6,057
|
|
|
(5,186)
|
|
Prepaid expenses and
other assets
|
|
(146)
|
|
|
(453)
|
|
|
(760)
|
|
|
(599)
|
|
|
(628)
|
|
Pension
asset
|
|
(150)
|
|
|
(155)
|
|
|
(158)
|
|
|
(305)
|
|
|
(297)
|
|
Accounts payable and
accrued liabilities
|
|
3,143
|
|
|
1,571
|
|
|
(156)
|
|
|
4,714
|
|
|
(10,719)
|
|
Deferred revenue and
customer deposits
|
|
(1,275)
|
|
|
2,626
|
|
|
(55)
|
|
|
1,351
|
|
|
249
|
|
Accrued employee
compensation
|
|
(545)
|
|
|
785
|
|
|
(303)
|
|
|
240
|
|
|
(495)
|
|
Deferred tax
liability
|
|
19
|
|
|
(209)
|
|
|
(91)
|
|
|
(190)
|
|
|
(10)
|
|
Other long-term
liabilities
|
|
(112)
|
|
|
(85)
|
|
|
(162)
|
|
|
(197)
|
|
|
(331)
|
|
Net
cash used in operating activities
|
|
(2,677)
|
|
|
(3,825)
|
|
|
(5,394)
|
|
|
(6,502)
|
|
|
(6,988)
|
|
INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(1,115)
|
|
|
(945)
|
|
|
(1,391)
|
|
|
(2,060)
|
|
|
(3,629)
|
|
Proceeds from sale of
property and equipment
|
|
—
|
|
|
—
|
|
|
49
|
|
|
—
|
|
|
133
|
|
Cash used in
acquisition, net of cash acquired
|
|
(97)
|
|
|
—
|
|
|
—
|
|
|
(97)
|
|
|
—
|
|
Proceeds from sale of
product line
|
|
1,500
|
|
|
—
|
|
|
20,486
|
|
|
1,500
|
|
|
20,486
|
|
Net cash
provided by (used in) investing activities
|
|
288
|
|
|
(945)
|
|
|
19,144
|
|
|
(657)
|
|
|
16,990
|
|
FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Principal payments on
long-term debt and short-term borrowings
|
|
(7)
|
|
|
(10)
|
|
|
(10)
|
|
|
(17)
|
|
|
(21)
|
|
Proceeds from
issuance of common stock under equity compensation plans
|
|
194
|
|
|
—
|
|
|
267
|
|
|
194
|
|
|
613
|
|
Net
cash provided by (used in) financing activities
|
|
187
|
|
|
(10)
|
|
|
257
|
|
|
177
|
|
|
592
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
489
|
|
|
315
|
|
|
(221)
|
|
|
804
|
|
|
399
|
|
Increase
(decrease) in cash, cash equivalents and restricted
cash
|
|
(1,713)
|
|
|
(4,465)
|
|
|
13,786
|
|
|
(6,178)
|
|
|
10,993
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
20,894
|
|
|
25,359
|
|
|
21,989
|
|
|
25,359
|
|
|
24,782
|
|
Cash, cash
equivalents and restricted cash, end of period
|
|
$
|
19,181
|
|
|
$
|
20,894
|
|
|
$
|
35,775
|
|
|
$
|
19,181
|
|
|
$
|
35,775
|
|
MAXWELL
TECHNOLOGIES, INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(in thousands, except
per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
March 31,
2017
|
|
June 30,
2016
|
|
June 30,
2017
|
|
June 30,
2016
|
Gross Margin
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
margin
|
|
21.1
|
%
|
|
23.2
|
%
|
|
29.2
|
%
|
|
22.0
|
%
|
|
28.3
|
%
|
Stock-based
compensation expense
|
|
0.7
|
%
|
|
0.7
|
%
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.7
|
%
|
Amortization of
intangible assets
|
|
0.1
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
Accelerated
depreciation
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.2
|
%
|
Acquisition related
expense
|
|
0.8
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.4
|
%
|
|
—
|
%
|
Non-GAAP gross
margin
|
|
22.7
|
%
|
|
23.9
|
%
|
|
30.0
|
%
|
|
23.2
|
%
|
|
29.2
|
%
|
Gross Profit
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
|
7,827
|
|
|
$
|
6,191
|
|
|
$
|
9,981
|
|
|
$
|
14,018
|
|
|
$
|
19,634
|
|
Stock-based
compensation expense
|
|
257
|
|
|
193
|
|
|
262
|
|
|
450
|
|
|
497
|
|
Amortization of
intangible assets
|
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
—
|
|
Accelerated
depreciation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
Acquisition related
expense
|
|
291
|
|
|
—
|
|
|
—
|
|
|
291
|
|
|
—
|
|
Non-GAAP gross
profit
|
|
$
|
8,435
|
|
|
$
|
6,384
|
|
|
$
|
10,243
|
|
|
$
|
14,819
|
|
|
$
|
20,256
|
|
Total Operating
Expenses Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP total operating
expenses
|
|
$
|
16,500
|
|
|
$
|
15,223
|
|
|
$
|
13,793
|
|
|
$
|
31,723
|
|
|
$
|
29,686
|
|
Stock-based
compensation expense
|
|
(1,997)
|
|
|
(1,345)
|
|
|
(1,197)
|
|
|
(3,342)
|
|
|
(2,165)
|
|
Amortization of
intangible assets
|
|
(142)
|
|
|
—
|
|
|
—
|
|
|
(142)
|
|
|
—
|
|
Restructuring and
related costs
|
|
—
|
|
|
(997)
|
|
|
(279)
|
|
|
(997)
|
|
|
(853)
|
|
Release of tax
liability(1)
|
|
—
|
|
|
—
|
|
|
1,278
|
|
|
—
|
|
|
1,278
|
|
Acquisition related
expense
|
|
(1,512)
|
|
|
(275)
|
|
|
—
|
|
|
(1,787)
|
|
|
—
|
|
Shareholder proxy
advisement fees
|
|
(315)
|
|
|
(59)
|
|
|
—
|
|
|
(374)
|
|
|
(314)
|
|
Legal costs for SEC
and FCPA matters
|
|
(62)
|
|
|
(121)
|
|
|
(232)
|
|
|
(183)
|
|
|
(535)
|
|
Non-GAAP operating
expenses
|
|
$
|
12,472
|
|
|
$
|
12,426
|
|
|
$
|
13,363
|
|
|
$
|
24,898
|
|
|
$
|
27,097
|
|
Loss from
Operations Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from
operations
|
|
$
|
(8,673)
|
|
|
$
|
(9,032)
|
|
|
$
|
(3,812)
|
|
|
$
|
(17,705)
|
|
|
$
|
(10,052)
|
|
Stock-based
compensation expense
|
|
2,254
|
|
|
1,538
|
|
|
1,459
|
|
|
3,792
|
|
|
2,662
|
|
Amortization of
intangible assets
|
|
202
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
—
|
|
Restructuring and
related costs
|
|
—
|
|
|
997
|
|
|
279
|
|
|
997
|
|
|
853
|
|
Accelerated
depreciation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
Release of tax
liability(1)
|
|
—
|
|
|
—
|
|
|
(1,278)
|
|
|
—
|
|
|
(1,278)
|
|
Acquisition related
expense
|
|
1,803
|
|
|
275
|
|
|
—
|
|
|
2,078
|
|
|
—
|
|
Shareholder proxy
advisement fees
|
|
315
|
|
|
59
|
|
|
—
|
|
|
374
|
|
|
314
|
|
Legal costs for SEC
and FCPA matters
|
|
62
|
|
|
121
|
|
|
232
|
|
|
183
|
|
|
535
|
|
Non-GAAP loss from
operations
|
|
$
|
(4,037)
|
|
|
$
|
(6,042)
|
|
|
$
|
(3,120)
|
|
|
$
|
(10,079)
|
|
|
$
|
(6,841)
|
|
Adjusted EBITDA
Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
|
(10,118)
|
|
|
$
|
(10,399)
|
|
|
$
|
2,167
|
|
|
$
|
(20,517)
|
|
|
$
|
(4,681)
|
|
Interest expense,
net
|
|
97
|
|
|
63
|
|
|
61
|
|
|
160
|
|
|
131
|
|
Income tax
provision
|
|
1,382
|
|
|
1,208
|
|
|
600
|
|
|
2,590
|
|
|
1,083
|
|
Depreciation
|
|
2,259
|
|
|
2,148
|
|
|
2,379
|
|
|
4,407
|
|
|
4,966
|
|
Amortization of
intangible assets
|
|
202
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
—
|
|
EBITDA
|
|
(6,178)
|
|
|
(6,980)
|
|
|
5,207
|
|
|
(13,158)
|
|
|
1,499
|
|
Foreign currency
exchange loss, net
|
|
18
|
|
|
97
|
|
|
64
|
|
|
115
|
|
|
203
|
|
Other
income
|
|
(52)
|
|
|
(1)
|
|
|
(47)
|
|
|
(53)
|
|
|
(131)
|
|
Stock-based
compensation expense
|
|
2,254
|
|
|
1,538
|
|
|
1,459
|
|
|
3,792
|
|
|
2,662
|
|
Gain on sale of
product line
|
|
—
|
|
|
—
|
|
|
(6,657)
|
|
|
—
|
|
|
(6,657)
|
|
Restructuring and
related costs
|
|
—
|
|
|
997
|
|
|
279
|
|
|
997
|
|
|
853
|
|
Acquisition related
expense
|
|
1,803
|
|
|
275
|
|
|
—
|
|
|
2,078
|
|
|
—
|
|
Release of tax
liability(1)
|
|
—
|
|
|
—
|
|
|
(1,278)
|
|
|
—
|
|
|
(1,278)
|
|
Shareholder proxy
advisement fees
|
|
315
|
|
|
59
|
|
|
—
|
|
|
374
|
|
|
314
|
|
Legal costs for SEC
and FCPA matters
|
|
62
|
|
|
121
|
|
|
232
|
|
|
183
|
|
|
535
|
|
Adjusted
EBITDA
|
|
$
|
(1,778)
|
|
|
$
|
(3,894)
|
|
|
$
|
(741)
|
|
|
$
|
(5,672)
|
|
|
$
|
(2,000)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30,
2017
|
|
March 31,
2017
|
|
June 30,
2016
|
|
June 30,
2017
|
|
June 30,
2016
|
Net Income
(Loss) Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
$
|
(10,118)
|
|
|
$
|
(10,399)
|
|
|
$
|
2,167
|
|
|
$
|
(20,517)
|
|
|
$
|
(4,681)
|
|
Stock-based
compensation expense
|
|
2,254
|
|
|
1,538
|
|
|
1,459
|
|
|
3,792
|
|
|
2,662
|
|
Amortization of
intangible assets
|
|
202
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
—
|
|
Gain on sale of
product line
|
|
—
|
|
|
—
|
|
|
(6,657)
|
|
|
—
|
|
|
(6,657)
|
|
Restructuring and
related costs
|
|
—
|
|
|
997
|
|
|
279
|
|
|
997
|
|
|
853
|
|
Accelerated
depreciation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125
|
|
Release of tax
liability(1)
|
|
—
|
|
|
—
|
|
|
(1,518)
|
|
|
—
|
|
|
(1,518)
|
|
Acquisition related
expense
|
|
1,803
|
|
|
275
|
|
|
—
|
|
|
2,078
|
|
|
—
|
|
Shareholder proxy
advisement fees
|
|
315
|
|
|
59
|
|
|
—
|
|
|
374
|
|
|
314
|
|
Legal costs for SEC
and FCPA matters
|
|
62
|
|
|
121
|
|
|
232
|
|
|
183
|
|
|
535
|
|
Non-GAAP net
loss
|
|
$
|
(5,482)
|
|
|
$
|
(7,409)
|
|
|
$
|
(4,038)
|
|
|
$
|
(12,891)
|
|
|
$
|
(8,367)
|
|
Net Income
(Loss) per Diluted Share Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss) per diluted share
|
|
$
|
(0.28)
|
|
|
$
|
(0.32)
|
|
|
$
|
0.07
|
|
|
$
|
(0.61)
|
|
|
$
|
(0.15)
|
|
Stock-based
compensation expense
|
|
0.06
|
|
|
0.05
|
|
|
0.04
|
|
|
0.11
|
|
|
0.09
|
|
Amortization of
intangible assets
|
|
0.01
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Gain on sale of
product line
|
|
—
|
|
|
—
|
|
|
(0.21)
|
|
|
—
|
|
|
(0.21)
|
|
Restructuring and
related costs
|
|
—
|
|
|
0.03
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
|
Accelerated
depreciation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
*
|
|
Release of tax
liability(1)
|
|
—
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
|
(0.05)
|
|
Acquisition related
expense
|
|
0.05
|
|
|
0.01
|
|
|
—
|
|
|
0.06
|
|
|
—
|
|
Shareholder proxy
advisement fees
|
|
0.01
|
|
|
*
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
Legal costs for SEC
and FCPA matters
|
|
—
|
|
|
*
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
Non-GAAP net loss per
diluted share
|
|
$
|
(0.15)
|
|
|
$
|
(0.23)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.38)
|
|
|
$
|
(0.26)
|
|
Weighted
Average Diluted Common Shares Outstanding used
for:
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
|
35,526
|
|
32,197
|
|
32,027
|
|
33,871
|
|
31,746
|
Non-GAAP net
loss
|
|
35,526
|
|
32,197
|
|
31,842
|
|
33,871
|
|
31,746
|
|
|
*
|
Net income (loss)
effect of this reconciling item was less than $0.01 per
share.
|
(1)
|
Release of tax
liability is partially related to operating expense and partially
related to income tax expense.
|
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SOURCE Maxwell Technologies, Inc.