Capstone Effects $3M Settlement Payment to Carrier to Conclude the Company’s Royalty Obligation Saving Millions in Future R...
September 20 2018 - 8:30AM
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:
CPST), the world's leading clean technology manufacturer of
microturbine energy systems, announced today it made the previously
negotiated $3 million settlement payment to Carrier to conclude
Capstone’s future royalty obligations, saving millions in future
royalty costs which will have a positive impact on future product
gross margin.
On July 25, 2018, Capstone and Carrier entered into a Second
Amendment to the Development Agreement (“Second Amendment”) whereby
Capstone agreed to pay Carrier approximately $3 million to conclude
the company’s current royalty obligation under the Development and
License Agreement (“Development Agreement”) and release the company
from any future royalty payment obligations.
“By strategically negotiating this settlement we will improve
our quarterly product margins by approximately 2% at today’s
revenue levels, and improve our cash flows and shorten our path to
profitability as a result of eliminating future royalty payments,”
said Darren Jamison, Capstone’s President and Chief Executive
Officer.
The Second Amendment also removed non-compete provisions from
the Development Agreement, which allows Capstone to design, market
or sell its C200 System in conjunction with any energy system and
compete with Carrier products in the combined cooling, heating and
power market (“CCHP”).
“By removing the non-compete language, we are now able to enter
into strategic relationships with other global chiller
manufacturers to improve our competitiveness in the growing CHP and
CCHP markets,” concluded Mr. Jamison.
ICF Inc. estimates that between 2008 to 2013, microturbines had
approximately a 17% market share and that more recently, from 2013
to 2017, the microturbine market share increased to a record 25% of
installations larger than 100 kW and smaller than 5 MW in the
United States.
In addition, ICF forecasts that U.S. combined heat and power
(“CHP”) annual capacity installations will grow from approximately
600 MW in 2017 to as high as 1,400 MW in 2026 and that the growth
in overall CHP markets will be driven by smaller commercial
applications that typically are well suited for microturbine
technology.
“There are a variety of drivers for the forecasted growth in the
CHP market, including the need for resilient on-site power,
advances in packaged CHP technologies, growth in utility CHP
programs, and the ability of CHP to balance intermittent renewable
generation in microgrids,” said Anne Hampson, a Principal at
ICF.
Capstone end-use customers saved an estimated $194 million in
annual energy costs and 314,000 tons of carbon in fiscal 2018.
These carbon savings would compare to the annual equivalent carbon
reduction from approximately 369,800 acres of forest or removing
over 67,000 passenger vehicles from the road for a year.
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 DQS-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.
For more information about the company, please visit
www.capstoneturbine.com. Follow Capstone Turbine on Twitter,
LinkedIn and YouTube.
About ICF Inc.
ICF (NASDAQ: ICFI) is a global consulting services company with
over 5,500 specialized experts, but they are not your typical
consultants. At ICF, business analysts and policy specialists work
together with digital strategists, data scientists, and creatives.
ICF combines unmatched industry expertise with cutting-edge
engagement capabilities to help organizations solve their most
complex challenges. Since 1969, public and private sector clients
have worked with ICF to navigate change and shape the future. Learn
more at icf.com.
Forward-Looking Statements
This press release contains “forward-looking statements,” as
that term is used in the federal securities laws. 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
Integra Investor RelationsShawn M.
Severson415-226-7747cpst@integra-ir.com
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