Positive Adjusted EBITDA as EaaS Business
Continues to Grow
Revenues of $18.7M, up 18% Sequentially from
$15.8M
Capstone Green Energy Corporation (NASDAQ: CGRN) announced its
financial results for the first quarter ended June 30, 2022,
posting positive Adjusted EBITDA as the Company continues to
deliver on its Energy-as-a-Service (EaaS) business plan.
First Quarter Fiscal 2023 Highlights:
- Revenues for the first quarter ending June 30, 2022 were $18.7
million, up 18% from $15.8 million in revenue during the fourth
quarter ended March 31, 2022, and up 16% from revenues of $16.1
million in the year-ago June quarter.
- Gross margins for first quarter ending June 30, 2022 were 25%
compared to 6% in the fourth quarter ended March 31, 2022,
primarily due to the growth of the EaaS long-term rental services
and May 1, 2022 product and service price increases.
- Net loss of $2.1 million for the first quarter ending June 30,
2022, improved from a net loss of $6.9 million in the previous
quarter ended March 31, 2022 and from a net loss of $2.2 million in
the year-ago June quarter.
- Positive Adjusted EBITDA of $0.4 million for the first quarter
ending June 30, 2022, compared to an Adjusted EBITDA of negative
$4.7 million in the fourth quarter ended March 31, 2022, and an
Adjusted EBITDA of negative $2.3 million in the year-ago June
quarter.
- Total EaaS long-term rental units under contract on June 30,
2022 were 34.4MW versus 10.1MW on June 30, 2021, representing 241%
growth over the year-ago quarter.
- Gross product bookings for the first quarter ending June 30,
2022, were $12.4 million, down slightly from $12.7 million in the
previous quarter ended March 31, 2022.
- The product Book-to-Bill Ratio dropped to 1.4:1 in first
quarter ending June 30, 2022, from 1.7:1 as a result of lower
product shipments in the previous quarter ended March 31, 2022.
Ending product backlog on June 30, 2022 was $24.8 million compared
to $25.3 million on March 31, 2022.
- Total cash and cash equivalents were $16.9 million at June 30,
2022, down from $22.6 million on March 31, 2022. Cash balances were
impacted during the quarter from continued capital expenditures
supporting the growth of the EaaS rental business, changes in
working capital, and interest expense on the Goldman Sachs 3-year
term note.
"The top-line revenue growth in our first quarter is certainly
encouraging, as are the positive Adjusted EBITDA results, but it is
our EaaS business growth that is most exciting as it drives higher
margins, generates more constant and predictable revenue and
enables us to leverage a more streamlined staffing model relative
to a traditional industrial manufacturing company. Furthermore, the
solution is attractive to our customers across a variety of
industries as it helps them to directly manage capital costs and
meet environmental impact targets," said Darren Jamison, President
and Chief Executive Officer of Capstone Green Energy.
"Capstone’s key goals this new fiscal year are growing revenues
and achieving positive Adjusted EBITDA for the full year by
accelerating the growth of our EaaS business and boosting balance
sheet liquidity beyond the benefits received from last year’s cost
reduction efforts. We expect the combination of our new Capstone
direct sales organization and expanding our distribution network
globally will be key tools in driving additional growth. Our EaaS
strategy and technology are being proven in the field every day and
we will be pushing hard to replicate our success with more
customers and across more geographies," concluded Mr. Jamison.
About Capstone Green Energy
Capstone Green Energy (NASDAQ: CGRN) is a leading provider of
customized microgrid solutions and on-site energy technology
systems focused on helping customers around the globe meet their
environmental, energy savings, and resiliency goals. Capstone Green
Energy focuses on four key business lines. Through its Energy as a
Service (EaaS) business, it offers rental solutions utilizing its
microturbine energy systems and battery storage systems,
comprehensive Factory Protection Plan (FPP) service contracts that
guarantee life-cycle costs, as well as aftermarket parts. Energy
Generation Technologies (EGT) are driven by the Company's
industry-leading, highly efficient, low-emission, resilient
microturbine energy systems offering scalable solutions in addition
to a broad range of customer-tailored solutions, including hybrid
energy systems and larger frame industrial turbines. The Energy
Storage Solutions (ESS) business line designs and installs
microgrid storage systems creating customized solutions using a
combination of battery technologies and monitoring software.
Through Hydrogen & Sustainable Products (H2S), Capstone Green
Energy offers customers a variety of hydrogen products, including
the Company's microturbine energy systems.
To date, Capstone has shipped over 10,000 units to 83 countries
and estimates that in FY22 it saved customers over $213 million in
annual energy costs and approximately 388,000 tons of carbon. Total
savings over the last four years are estimated to be approximately
$911 million in energy savings and approximately 1,503,100 tons of
carbon savings.
For customers with limited capital or short-term needs, Capstone
offers rental systems; for more information, contact:
rentals@CGRNenergy.com.
For more information about the Company, please visit
www.CapstoneGreenEnergy.com. Follow Capstone Green Energy on
Twitter, LinkedIn, Instagram, Facebook, and YouTube.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements as defined in
the Private Securities Litigation Reform Act of 1995, including
statements regarding growth and liquidity expectations and other
statements regarding the Company's expectations, beliefs, plans,
intentions, and strategies. The Company has tried to identify these
forward-looking statements by using words such as "expect,"
"anticipate," "believe," "could," "should," "estimate," "intend,"
"may," "will," "plan," "goal" and similar terms and phrases, but
such words, terms and phrases are not the exclusive means of
identifying such statements. Actual results, performance and
achievements could differ materially from those expressed in, or
implied by, these forward-looking statements due to a variety of
risks, uncertainties and other factors, including, but not limited
to, the following: the ongoing effects of the COVID-19 pandemic;
the availability of credit and compliance with the agreements
governing the Company's indebtedness; the Company's ability to
develop new products and enhance existing products; product quality
issues, including the adequacy of reserves therefor and warranty
cost exposure; intense competition; financial performance of the
oil and natural gas industry and other general business, industry
and economic conditions; the Company's ability to adequately
protect its intellectual property rights; and departures and other
changes in management and other key employees. For a detailed
discussion of factors that could affect the Company's future
operating results, please see the Company's filings with the
Securities and Exchange Commission, including the disclosures under
"Risk Factors" in those filings. Except as expressly required by
the federal securities laws, the Company undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, changed circumstances or future events,
or for any other reason.
CAPSTONE GREEN ENERGY
CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
amounts)
(Unaudited)
June 30,
March 31,
2022
2022
Assets
Current Assets:
Cash and cash equivalents
$
16,914
$
22,559
Accounts receivable, net of allowances of
$850 at June 30, 2022 and $845 at March 31, 2022
24,168
24,665
Inventories, net
18,608
18,465
Prepaid expenses and other current
assets
6,468
5,519
Total current assets
66,158
71,208
Property, plant, equipment and rental
assets, net
21,694
18,038
Non-current portion of accounts
receivable
1,056
1,212
Non-current portion of inventories
2,013
1,680
Other assets
8,933
8,635
Total assets
$
99,854
$
100,773
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable and accrued expenses
$
22,238
$
25,130
Accrued salaries and wages
1,360
1,147
Accrued warranty reserve
1,527
1,483
Deferred revenue
9,694
9,185
Current portion of notes payable and lease
obligations
1,930
675
Total current liabilities
36,749
37,620
Deferred revenue - non-current
934
981
Term note payable, net
50,957
50,949
Long-term portion of notes payable and
lease obligations
7,627
5,809
Total liabilities
96,267
95,359
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $.001 par value;
1,000,000 shares authorized; none issued
—
—
Common stock, $.001 par value; 51,500,000
shares authorized, 15,431,602 shares issued and 15,320,673 shares
outstanding at June 30, 2022; 15,398,368 shares issued and
15,296,735 shares outstanding at March 31, 2022
15
15
Additional paid-in capital
947,237
946,969
Accumulated deficit
(941,541
)
(939,482
)
Treasury stock, at cost; 110,929 shares at
June 30, 2022 and 101,633 shares at March 31, 2022
(2,124
)
(2,088
)
Total stockholders’ equity
3,587
5,414
Total liabilities and stockholders'
equity
$
99,854
$
100,773
CAPSTONE GREEN ENERGY
CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
June 30,
2022
2021
Revenue:
Product and accessories
$
9,167
$
8,389
Parts, service and rentals
9,485
7,693
Total revenue
18,652
16,082
Cost of goods sold:
Product and accessories
8,891
8,992
Parts, service and rentals
5,055
4,442
Total cost of goods sold
13,946
13,434
Gross margin
4,706
2,648
Operating expenses:
Research and development
490
883
Selling, general and administrative
4,919
5,324
Total operating expenses
5,409
6,207
Loss from operations
(703
)
(3,559
)
Other income
2
665
Interest income
6
5
Interest expense
(1,362
)
(1,235
)
Gain (loss) on debt extinguishment
—
1,950
Loss before provision for income taxes
(2,057
)
(2,174
)
Provision for income taxes
2
8
Net loss
(2,059
)
(2,182
)
Net loss per common share attributable to
common stockholders—basic and diluted
$
(0.13
)
$
(0.16
)
Weighted average shares used to calculate
basic and diluted net loss per common share attributable to common
stockholders
15,318
13,226
CAPSTONE GREEN ENERGY
CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURE
(In thousands, except per
share data)
(Unaudited)
Three months ended
Reconciliation of Reported Net Loss to
EBITDA and Adjusted EBITDA
June 30,
2022
2021
Net loss, as reported
$
(2,059
)
$
(2,182
)
Interest expense
1,362
1,235
Provision for income taxes
2
8
Depreciation and amortization
695
386
EBITDA
$
—
$
(553
)
Gain on debt extinguishment
—
(1,950
)
Additional PPP loan forgiveness
—
(660
)
Stock-based compensation and other
expense
432
870
Adjusted EBITDA
$
432
$
(2,293
)
To supplement the company’s unaudited financial data presented
on a generally accepted accounting principles (GAAP) basis,
management has presented Adjusted EBITDA, a non-GAAP financial
measure. This non-GAAP financial measure is among the indicators
management uses as a basis for evaluating the company’s financial
performance as well as for forecasting future periods. Management
establishes performance targets, annual budgets and makes operating
decisions based in part upon this metric. Accordingly, disclosure
of this non-GAAP financial measure provides investors with the same
information that management uses to understand the company’s
economic performance year-over-year.
EBITDA is defined as net income before interest, provision for
income taxes, and depreciation and amortization expense. Adjusted
EBITDA is defined as EBITDA before gain on debt extinguishment,
additional PPP loan forgiveness and stock-based compensation and
other expense. Gain on debt extinguishment and additional PPP loan
forgiveness relates to the Paycheck Protection Program loan
forgiveness. Stock-based compensation and other expense includes
expense related to stock issued to employees, directors, vendors,
and for extraordinary, non-recurring expenses.
Adjusted EBITDA is not a measure of the company’s 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 its liquidity.
While management believes that the non-GAAP financial measure
provides useful supplemental information to investors, there are
limitations associated with the use of this measure. The measures
are not prepared in accordance with GAAP and may not be directly
comparable to similarly titled measures of other companies due to
potential differences in the exact method of calculation.
Management compensates for these limitations by relying primarily
on the company’s GAAP results and by using Adjusted EBITDA only
supplementally and by reviewing the reconciliations of the non-GAAP
financial measure to its most comparable GAAP financial
measure.
Non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in the
United States. The company’s non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP financial measures and should be read only in
conjunction with the company’s consolidated financial statements
prepared in accordance with GAAP.
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version on businesswire.com: https://www.businesswire.com/news/home/20220811005697/en/
Capstone Green Energy Investor and investment media inquiries:
818-407-3628 ir@CGRNenergy.com
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