Satcon Technology Corporation® (NASDAQ CM:SATC), a leading
provider of utility scale power conversion solutions for the
renewable energy market, today announced its results for the second
quarter ended June 30, 2012.
Revenue for the second quarter of 2012 was $23.7 million,
compared with revenue of $24.3 million in the first quarter of
2012. During the quarter, the company shipped 91 MWs of its
industry-leading PowerGate® Plus, Prism® Platform, and Equinox®
solutions. North America continued to be the company’s strongest
performing region in Q2, representing 85% of total revenue during
the quarter.
Gross margin for the quarter was 20%, compared with 1% in the
first quarter of 2012. The company’s gross margin increased
substantially due to continued material cost reductions, the
closure of its Canadian manufacturing facility and favorable
product mix, including some sales of previously reserved
inventory.
During Q2 of 2012, the company elected to defer $2.6 million of
product shipments to a customer due to past payment history.
Without this revenue deferral, total revenue would have been $26.3
million and gross margin would have been 22%. The company received
payment for this shipment in early August, and will recognize this
revenue during its third quarter ending September 30, 2012.
Bookings for the second quarter were approximately $25.1
million. In addition, the company received award letters for an
incremental $15.0 million, which are not reflected in this bookings
number.
“We made significant progress on our operating model during the
second quarter,” said Steve Rhoades, Satcon’s President and Chief
Executive Officer. “We significantly improved our gross margins by
reducing the cost of our central inverter and MV platform product
lines, successfully transitioning to a variable, contract
manufacturing model with the completion of our Canada facility
closure and reducing our operating expenses by over 17% from the
first quarter of 2012.”
“We further reduced our working capital, while paying down a
significant portion of our short- and long-term debt,” continued
Rhoades. “We continued to be the number one inverter supplier in
North America’s commercial and utility segments in 2011 according
to IMS Research, and will capitalize on this leadership position
throughout the remainder of the year. For the third quarter of
2012, we expect revenue to be between $25 million and $30 million,
and gross margin to be in the mid- to high-teens.”
In addition to the progress on its operating model described
above, Satcon has retained Lazard Frères & Co. LLC as its
financial advisor to assist in the consideration of strategic
alternatives.
Conference Call Reminder
The company will hold a conference call to review its financial
results and business highlights today, August 8, 2012 at 5:00 p.m.
ET. During the conference call, the company may answer questions
concerning business and financial developments and trends, and
other business and financial matters. The company’s responses to
these questions, as well as other matters discussed during the
conference call, may contain or constitute information that has not
been previously disclosed.
The conference call will be webcast live over the Internet and
can be accessed on the Investor Relations section of the company’s
website at http://investor.satcon.com. The conference call also can
be accessed by dialing (877) 407-8289 (U.S. and Canada) or (201)
689-8341 (International). Interested parties that are unable to
listen to the live call may access an archived version of the
webcast on Satcon’s website.
About Satcon
Satcon Technology Corporation is a leading provider of
utility-grade power conversion solutions for the renewable energy
market, enabling the industry's most advanced, reliable and proven
clean energy alternatives. For more than ten years, Satcon has
designed and delivered advanced power conversion products that
enable large-scale producers of renewable energy to convert the
clean energy they produce into grid-connected efficient and
reliable power. To learn more about Satcon, please visit
http://www.Satcon.com.
Safe Harbor
Statements made in this document that are not historical facts
or which apply prospectively are forward-looking statements that
involve risks and uncertainties. These forward-looking statements
are identified by the use of terms and phrases such as "will,"
"intends," "believes," "expects," "plans," "anticipates" and
similar expressions. Forward looking statements contained in this
press release include, without limitation, the statements regarding
the company’s expected revenue and gross margin in the third
quarter of 2012, its position as a leading supplier in its target
market, and future growth in the North American and Asian markets.
Investors should not rely on forward looking statements because
they are subject to a variety of risks and uncertainties and other
factors that could cause actual results to differ materially from
the company's expectation. These risks and uncertainties include
the company’s history of operating losses, its ability to maintain
compliance with Nasdaq Marketplace Rules for continued listing, its
ability to meet demand for its products, its ability to meet
required covenants under its existing loan agreements, the
availability of third-party financing arrangements for its
customers, its ability to maintain its technological expertise, the
availability of sufficient funds for our corporate needs, as well
as other risk factors contained in the company's SEC filings,
including its Annual Report on Form 10-K for the year ended
December 31, 2011 and other periodic reports subsequently filed
with the SEC. Forward-looking statements contained in this press
release speak only as of the date of this release. Subsequent
events or circumstances occurring after such date may render these
statements incomplete or out of date. The company expressly
disclaims any obligation to update the information contained in
this release.
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30,2012 December 31,2011
ASSETS Current assets: Cash and cash equivalents $2,993,370
$21,586,497 Accounts receivable, net of allowances of $2,826,912
and $2,231,616 at June 30, 2012 and December 31, 2011, respectively
30,386,806 46,082,592 Inventory 43,113,828 49,937,028 Note
receivable 100,000 4,114,388 Prepaid expenses and other current
assets 4,670,681 2,468,202 Total current assets 81,264,685
124,188,707 Property and equipment, net 10,500,544 11,091,910 Other
long-term assets 576,990 676,850 Total assets $92,342,219
$135,957,467
LIABILITIES AND STOCKHOLDERS’ DEFICIT Current
liabilities: Line of credit $15,417,766 $34,675,000 Accounts
payable 45,120,432 51,955,218 Accrued payroll and payroll related
expenses 2,468,136 3,011,981 Other accrued expenses 7,155,181
6,959,197 Accrued restructuring costs 892,186 1,543,830 Note
payable, current portion, net of discount of $225,426 and $320,592
at June 30, 2012 and December 31, 2011, respectively 4,281,110
3,912,600 Current portion of subordinated convertible note
7,270,000 12,369,336 Current portion of deferred revenue 5,879,003
6,015,235 Total current liabilities 88,483,814 120,442,397 Warrant
liabilities 22,000 131,530 Note payable, net of current portion and
discount of $33,985 and $120,931 at June 30, 2012 and December 31,
2011, respectively 2,867,362 5,104,157 Subordinated convertible
note, net of current portion — 5,870,664 Deferred revenue, net of
current portion 29,834,901 25,525,032 Other long-term liabilities
725,680 709,986 Total liabilities 121,933,757 157,783,766
Commitments and contingencies
Stockholders’ deficit: Preferred stock; $0.01 par value
1,000,000 shares authorized, 0 shares issued and outstanding at
June 30, 2012 and December 31, 2011 — — Common stock; $0.01 par
value, 37,500,000 shares authorized; 18,026,016 and 15,225,457
shares issued and outstanding at June 30, 2012 and December 31,
2011, respectively 1,442,082 1,218,037 Additional paid-in capital
317,554,565 305,310,085 Accumulated deficit (347,158,617)
(326,924,853) Accumulated other comprehensive loss (1,429,568)
(1,429,568) Total stockholders’ deficit (29,591,538) (21,826,299)
Total liabilities and stockholders’ deficit $92,342,219
$135,957,467
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF
OPERATIONS
(Unaudited)
Three Months Ended Six Months
Ended
June 30,
2012
June 30,
2011
June 30,
2012
June 30,
2011
Product revenue $23,667,108 $45,497,036 $47,955,622
$107,501,973 Cost of product revenue 18,951,154
41,866,139 43,078,972 88,998,664 Gross margin
4,715,954
3,630,897
4,876,650 18,503,309 Operating expenses:
Research and development 2,575,921 9,718,388 5,812,147 15,854,721
Selling, general and administrative 8,017,551 12,898,591 17,992,725
23,121,904 Restructuring charges 581,600 1,134,254
873,821 1,134,254 Total operating expenses 11,175,072
23,751,233 24,678,693 40,110,879
Operating loss (6,459,118) (20,120,336) (19,802,043)
(21,607,570) Change in fair value of
convertible note and warrants
1,733,320
1,023,622
2,183,361
1,147,183 Loss on extinguishment of convertible note (1,070,000) —
(1,070,000) — Other income (expense), net (170,324) (277,757)
(53,757) (477,613) Interest income 11,011 183,125 11,466 183,276
Interest expense (605,594) (2,036,396) (1,499,376)
(2,611,645) Net loss before provision for income
taxes (6,560,705) (21,227,742) (20,230,349)
(23,366,369) Provision for income taxes (3,415) —
(3,415) —
Net loss $(6,564,120) $(21,227,742) $(20,233,764)
$(23,366,369) Net loss per weighted average
share, basic and diluted
$(0.37)
$(1.43)
$(1.20)
$(1.57)
Weighted average number of common shares, basic and diluted
17,830,345
14,892,126
16,921,195
14,866,458
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