Capstone Green Energy Reducing Operating Costs as the Business Model Shifts Towards Energy as a Service
March 03 2022 - 8:00AM
Business Wire
Lower Operating Costs Combined with Rental
Fleet Deployments to Improve Financial Performance
Capstone Green Energy Corporation (NASDAQ: CGRN), a global
leader in carbon reduction and on-site resilient green
Energy-as-a-Service (EaaS) solutions, has launched an effort to
reduce operating costs and modify the operating model to better
match the Company’s expanding EaaS business. The expense reduction
plan implemented this week is intended to support Capstone's stated
goal of reaching consistent quarterly positive adjusted EBITDA.
The Company has undertaken a holistic review of the
organization, taking the growing EaaS business into account. EaaS
adds diversity to the Company’s revenues and allows for a more
streamlined staffing model that constitutes most of the operating
cost reductions. Other measures taken to reduce expenses, until
this spring when the Company expects to realize increased revenue
from rental units yet to be commissioned, include temporary salary
reductions for the Capstone Green Energy leadership team and
company management, furloughing some employees, and moving others
to part-time status.
“We are committed to making the changes needed to increase our
profitability through better alignment of our current cost
structure to support our higher margin Energy-as-a-Service
revenues,” said Darren Jamison, President and Chief Executive
Officer of Capstone Green Energy. “While Capstone has achieved
adjusted positive EBITDA in the past, the EaaS business model
generates high margin recurring revenue that should drive more
consistent quarter to quarter positive adjusted EBITDA.”
The EaaS rental unit timeline includes a delay between the time
of manufacture and the time revenue from that unit is realized. The
microturbine rental unit is built, allocated by a signed rental
contract, and then commissioned at the customer site, at which
point it begins to generate revenue.
“These actions are designed to enhance our ability to execute on
our business plans and serve our customers who are looking to
outsource their energy management, while also lowering energy
costs, increasing resiliency and reducing emissions,” Mr. Jamison
continued. “We will continue to look for ways to enhance Capstone’s
financial performance and overall cost structure to optimize
adjusted EBITDA.”
About Capstone Green Energy
Capstone Green Energy (www.CapstoneGreenEnergy.com) (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 Conversion Products 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 Products business line designs and
installs microgrid storage systems creating customized solutions
using a combination of battery technologies and monitoring
software. Through Hydrogen Energy Solutions, Capstone Green Energy
offers customers a variety of hydrogen products, including the
Company's microturbine energy systems.
For customers with limited capital or short-term needs, Capstone
offers rental systems; for more information, contact:
rentals@CGRNenergy.com. To date, Capstone has shipped over 10,000
units to 83 countries and estimates that, in FY21, it saved
customers over $217 million in annual energy costs and
approximately 397,000 tons of carbon. Total savings over the last
three years are estimated at 1,115,100 tons of carbon and $698
million in annual energy savings.
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 the Company’s positive adjusted EBITDA goal
and expectations for the Company’s expense reduction plan. 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 timing of rental
units generating revenue; further cost reduction efforts; 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 the impact of pending or
threatened litigation. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220303005338/en/
Capstone Green Energy Investor and investment media inquiries:
818-407-3628 ir@CGRNenergy.com
Capstone Green Energy (NASDAQ:CGRN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Capstone Green Energy (NASDAQ:CGRN)
Historical Stock Chart
From Sep 2023 to Sep 2024