Capstone Successfully Winding Down $5.2 Million Field Retrofit Program - Anticipates Record Accessories, Parts and Service Re...
October 12 2017 - 8:30AM
Capstone Turbine Corporation (www.capstoneturbine.com)
(Nasdaq:CPST), the world's leading clean technology manufacturer of
microturbine energy systems, announced today that it is completing
the previously announced $5.2 million field retrofit program to
upgrade non-Signature Series C1000 and C200 microturbines to
provide improved performance and reliability similar to the
Signature Series C1000, C200 and the C65 and C30 microturbines.
With the completion of the field retrofit program and the market
adoption of the new C1000 Series and C200 integrated heat recovery
module, Capstone’s accessories, parts and service revenue, the
corresponding gross margin and cash are expected to have a positive
impact on the second half of the current fiscal year.
In February 2017, Capstone announced a program to proactively
retrofit non-Signature Series C1000 and C200 microturbines in order
to improve performance, reliability and customer satisfaction. This
month, the program is expected to be completed on schedule and
within budget. This program has provided a significant improvement
in demonstrated performance and reliability of the non-Signature
Series C1000 and C200 microturbines, which now approaches the
world-class performance and reliability of the Signature Series
C1000, C200 and the C65 and C30 microturbines.
The improved reliability of the non-Signature Series
microturbines, when coupled with the high performing Signature
Series microturbines, is expected to begin to drive Capstone’s
accessories, parts and service gross margin up considerably,
currently estimated to approach approximately 40% by the end of
this current fiscal year.
“We need to drive Capstone to profitability as quickly as
possible in order to fuel Capstone’s launch to the next level of
product development and market penetration. Our aftermarket service
business growth is a critical element of our multi-point strategic
plan to quickly achieve Adjusted EBITDA breakeven, which includes
our operating expense reduction plan,” said Darren Jamison,
Capstone’s President and Chief Executive Officer.
“Additionally, the growth of our accessories revenue is being
driven by our shift to a more CHP-focused market and is
specifically fueled by our new C1000 and C200 integrated heat
recovery modules, or HRMs, introduced last year as a part of the
Signature Series new product launch. Year-over-year, we expect to
see upwards of approximately 40% growth in our accessories revenue,
which we currently anticipate should result in approximately $9
million in combined accessories, parts and service quarterly
revenue by the end of the fiscal year,” added Mr. Jamison.
“Capstone’s plan to achieve $10 million in quarterly
accessories, parts and service revenue with a corresponding 50%
gross margin is the foundation of our plan to drive near-term
profitability,” said Jayme Brooks, Capstone’s Chief Financial
Officer and Chief Accounting Officer. “The combined effect of
completing our $5.2 million field retrofit program and the market
shift to our new HRM products is positioning Capstone to achieve
Adjusted EBITDA breakeven,” added Ms. Brooks.
Adjusted EBITDA is defined as net income before interest,
provision for income taxes, depreciation and amortization expense,
stock-based compensation expense and change in fair value of
warrants. Adjusted EBITDA is not a measure of our liquidity or
financial performance under GAAP and should not be considered as an
alternative to net income or any other performance measure derived
in accordance with GAAP, or as an alternative to cash flows from
operating activities as a measure of our liquidity.
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 over
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, including
statements about the market acceptance of Capstone products,
accessories, parts and service revenue, gross margins and cost
reduction activities. 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 CorporationInvestor
and investment media
inquiries:818-407-3628ir@capstoneturbine.com
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