Strong sequential revenue improvement
Northern Power Systems Corp. (TSX: NPS), a next
generation renewable energy technology company, today announced
financial results for its second quarter ended June 30,
2015.
Revenues for the three months ended June 30, 2015 were $12.5
million, compared to $13.8 million in the second quarter of 2014.
GAAP net loss for the second quarter of 2015 was $3.3 million,
compared to a net loss of $2.1 million in the prior year
second quarter. Order backlog at June 30, 2015 was approximately
$41 million as compared to $40 million at June 30, 2014. June 30,
2015 backlog in constant currency to the prior year period would
increase by approximately 10 percent.
“Revenues in our second quarter of 2015 were up fifty percent
sequentially led by distributed turbine sales in our key markets,”
stated Troy Patton, president and chief executive officer of
Northern Power Systems. “Over the past several quarters, we have
been working against substantial headwinds. We are particularly
pleased to see sequential performance improvements demonstrating
our operational successes in overcoming these challenges. On a year
over year basis, our order activity continues to be strong,
delivering over fifty percent expansion in our first half of 2015
compared to the same period in 2014 driven by our core markets. In
addition, we are seeing new markets starting to demonstrate
pipeline traction. With continued strength in backlog and pipeline,
we remain on track to report full year top-line results on par with
2014 and likely demonstrating growth. Our third quarter performance
is already giving us confidence in this outlook for a strong back
half of 2015.”
“Our balance sheet continues to provide the underpinning for
growth in our business. We are confident that we have the liquidity
necessary to support growth of the business through 2016,” stated
Ciel Caldwell, chief financial officer of Northern Power Systems.
“Inventory levels have been declining through our second into our
third quarter as predicted with thirty percent of our $15.2 million
quarter ending inventory balance as inventory in-transit to
customers. With blade supply in full production our sales of units
are continuing to accelerate, and although the majority of the
transition costs are now behind us, they notably impacted our
second quarter margin profile.”
Consolidated Second Quarter Financial Metrics:
- Revenue for the second quarter of
fiscal year 2015 was at $12.5 million, compared to $13.8 million
reported in the prior year period and $8.3 million reported in the
first quarter of 2015.
- Gross margin in the second quarter was
9.3 percent, down from gross margin of 15.9 percent in the prior
year period.
- GAAP net loss for the second quarter of
fiscal year 2015 was $3.3 million, representing a 57 percent
increase compared to a $2.1 million loss in the prior year
second quarter.
- Non-GAAP adjusted EBITDA loss for the
second quarter was $2.7 million, representing a $1.5 million
increase compared to a non-GAAP adjusted EBITDA loss of $1.2
million in the prior year second quarter.
Earnings Conference Call
The Company will host a conference call and webcast today,
August 12, 2015 at 5:00 p.m. (EDT) to discuss the second quarter
2015 financial results and other matters.
To participate, callers in the United States should dial
+1-877-317-6789, Canada +1-866-605-3852 and in other countries
+1-412-317-6789. Participants should ask to be joined to the
Northern Power Systems call.
The conference call will also be available via webcast on the
Investor Relations section of Northern Power's website
(http://www.ir.northernpower.com). A webcast slide
presentation for the quarterly results will also be available
at the Company's website.
About non-GAAP financial measures
To supplement Northern Power Systems’ consolidated financial
statements presented in accordance with U.S. generally accepted
accounting principles (GAAP), Northern Power Systems has
used a non-GAAP financial measure, specifically non-GAAP adjusted
EBITDA income (loss). Non-GAAP adjusted EBITDA income (loss) is
defined as net income (loss), excluding share-based compensation
expense, amortization of acquisition-related intangibles,
depreciation of property, plant and equipment, interest expense,
tax provision or benefit, and certain other non-cash impacts as
applicable.
The presentation of non-GAAP financial information is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. For more information on non-GAAP adjusted EBITDA, please see
the table captioned “Reconciliation of GAAP net loss to non-GAAP
adjusted EBITDA net income (loss)” included at the end of this
release. The table has more details on the GAAP financial measure
that is most directly comparable to non-GAAP adjusted EBITDA and
the related reconciliation between these financial measures.
Northern Power Systems’ management believes that this non-GAAP
financial measure provides meaningful supplemental information in
assessing our performance and liquidity by excluding certain items
that may not be indicative of our recurring core business operating
results, which could be non-cash charges or discrete cash charges
that are infrequent in nature. This non-GAAP financial measure also
has facilitated management’s internal comparisons to Northern Power
Systems’ historical performance and our competitors’ operating
results, as well as reflects measurements which are used by
creditors and other third parties in assessing our performance.
About Northern Power Systems
Northern Power Systems designs, manufactures, and sells wind
turbines and power technology products, and provides engineering
development services and technology licenses for energy
applications, into the global marketplace from its US headquarters
and European offices.
- Northern Power Systems has almost 40
years’ experience in technologies and products generating renewable
energy.
- Northern Power Systems currently
manufactures the NPS™ 60 and NPS™ 100 turbines. With over 8 million
run time hours across its global fleet, Northern Power wind
turbines provide customers with clean, cost effective, reliable
renewable energy.
- Patented next generation permanent
magnet direct drive (PMDD) technology uses fewer moving parts,
delivers higher energy capture, and provides increased reliability
due to reduced maintenance and downtime.
- Northern Power Systems’ FlexPhase™
power converter platform uses patented converter architecture and
advanced controls technology for advanced grid support and
generation applications.
- Northern Power Systems offers
comprehensive in‐house development services, including systems
level engineering, advanced drivetrains, power electronics, PM
machine design, and remote monitoring systems to the energy
industry.
- Some of the world’s largest
manufacturers license the company’s next generation technology and
IP for their utility and distributed wind products and
markets.
To learn more about Northern Power Systems, please visit
www.northernpower.com.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding
Northern Power Systems and its business, which may include, but is
not limited to, product and financial performance, regulatory
developments, supplier performance, anticipated opportunity and
trends for growth in our customer base and our overall business,
our market opportunity, expansion into new markets, and execution
of the company’s growth strategy. Often, but not always,
forward-looking statements can be identified by the use of words
such as “plans”, “is expected”, “expects”, “scheduled”, “intends”,
“contemplates”, “anticipates”, “believes”, “proposes” or variations
(including negative variations) of such words and phrases, or state
that certain actions, events or results “may”, “could”, “would”,
“might” or “will” be taken, occur or be achieved. Such statements
are based on the current expectations of the management of Northern
Power Systems. The forward-looking events and circumstances
discussed in this release may not occur by certain specified dates
or at all and could differ materially as a result of known and
unknown risk factors and uncertainties affecting the company,
including risks regarding the wind power industry; production,
performance and acceptance of the company’s products; our sales
cycle; our ability to convert backlog into revenue; performance by
the company’s suppliers; our ability to maintain successful
relationships with our partners and to enter into new partner
relationships; our performance internationally; currency
fluctuations; economic factors; competition; the equity markets
generally; and the other risks detailed in Northern Power Systems’
risk factors discussed in filings with the U.S. Securities and
Exchange Commission (the “SEC”), including but not limited to
Northern Power Systems’ Annual Report on Form 10-K filed on March
31, 2015, as well as other documents that may be filed by Northern
Power Systems from time to time with the SEC. Although Northern
Power Systems has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from
those anticipated, estimated or intended. No forward-looking
statement can be guaranteed. Except as required by applicable
securities laws, forward-looking statements speak only as of the
date on which they are made and Northern Power Systems undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
NORTHERN POWER SYSTEMS CORP.FORMERLY KNOWN AS WIND
POWER HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited)FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2015 AND 2014(In thousands, except share and per
share amounts) For the
three months endedJune 30, For the six months
endedJune 30,
2015
2014
2015
2014
REVENUES: Net revenue $ 12,469 $ 13,770 $ 20,768 $ 27,526 Cost of
revenues 11,306 11,574 17,764
24,140 Gross profit 1,163 2,196
3,004 3,386 Gross margin percentage 9.3 % 15.9 % 14.5 % 12.3 %
OPERATING EXPENSES: Sales and marketing 1,150 898 2,462
1,678 Research and development 810 1,077 1,949 2,216 General and
administrative 2,022 2,305 5,047
4,481 Total operating expenses 3,982
4,280 9,458 8,375
Loss from operations (2,819 ) (2,084 ) (6,454 ) (4,989 )
Interest income (expense) - net (71 ) (32 ) (97 ) (272 )
Other income (expense) - net (25 ) 67
(112 ) 102 Loss before provision for income taxes
(2,915 ) (2,049 ) (6,663 ) (5,159 ) Provision for income taxes
383 15 768 29
NET LOSS $ (3,298 ) $ (2,064 ) $ (7,431 ) $ (5,188 )
Foreign currency translation 18 - (14 ) -
COMPREHENSIVE LOSS $ (3,280 ) $ (2,064 ) $ (7,445 ) $
(5,188 ) Net loss applicable to common shareholders $ (3,298 ) $
(2,064 ) $ (7,431 ) $ (5,188 ) Net loss per common share -
basic and diluted (0.14 ) (0.10 ) (0.33 ) (0.31 )
Weighted average number of common
sharesoutstanding - basic and diluted
22,765,949 21,088,589 22,765,526 16,964,388 Non-GAAP
adjusted EBITDA net loss $ (2,704 ) $ (1,172 ) $ (6,185 ) $ (3,716
)
NORTHERN POWER SYSTEMS CORP.FORMERLY
KNOWN AS WIND POWER HOLDINGS, INC.CONDENSED CONSOLIDATED
BALANCE SHEETS (unaudited)AS OF JUNE 30, 2015 AND DECEMBER
31, 2014(In thousands, except share and per share
amounts) ASSETS June 30, 2015
December 31, 2014 CURRENT ASSETS: Cash and cash equivalents
$ 6,124 $ 13,142 Accounts receivable - net 4,228 3,491 Unbilled
revenue 2,664 2,212 Inventories - net 15,190 16,456 Other current
assets
3,152 3,799
Total current assets 31,358 39,100 Property, plant
and equipment - net 2,089 1,854 Intangible assets - net 801 474
Goodwill 722 722 Other assets
604
704 Total Assets
$
35,574 $ 42,854
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Working capital revolving line of credit $ 3,000 $
4,000 Accounts payable 4,038 4,153 Accrued expenses 7,604 7,579
Deferred revenue 3,746 4,275 Customer deposits 6,820 5,642 Other
current liabilities 942 726 Total
current liabilities 26,150 26,375
Deferred revenue, less current portion 2,055 2,041 Other
long-term liability 313 308 Total
Liabilities 28,518 28,724
SHAREHOLDERS’EQUITY: Common stock 165,389 165,386 Additional
paid-in capital 8,340 7,972 Accumulated other comprehensive income
(14 ) - Accumulated deficit (166,659 ) (159,228 )
Total Shareholders' Equity 7,056 14,130
Total Liabilities and Shareholders' Equity
$ 35,574 $
42,854
The accompanying notes are an integral part of these condensed
consolidated financial statements.
NORTHERN POWER SYSTEMS CORP.FORMERLY KNOWN AS WIND
POWER HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (unaudited)FOR THE SIX MONTHS ENDED JUNE 30, 2015
AND 2014(In thousands) For the
six months endedJune 30,
2015
2014
OPERATING ACTIVITIES: Net loss $ (7,431 ) $ (5,188 ) Adjustments to
reconcile net loss to net cash used in operating activities:
Provision for inventory obsolescence 132 93 Recovery of doubtful
accounts (90 ) (88 ) Stock-based compensation expense 368 602
Depreciation and amortization 383 569 Noncash implied license
revenue (420 ) - Loss on disposal of asset 50 Deferred income taxes
7 3 Changes in operating assets and liabilities: Accounts
receivable and unbilled revenue (1,099 ) (4,209 ) Inventories and
deferred costs 855 (2,042 ) Other current and noncurrent assets
1,141 247 Accounts payable (115 ) 1,167 Accrued expenses 25 1,498
Customer deposits 1,178 (4,477 ) Other liabilities
(416 ) 2,821
Net cash used in operating activities
(5,432
) (9,004 )
INVESTING ACTIVITIES: Proceeds from sale of property - 1,218
Purchases of property and equipment
(575
) (600 ) Net cash
(used in) provided by investing activities
(575
) 618 FINANCING
ACTIVITIES: Proceeds from private placement equity financing, net -
19,662 Proceeds from revolving line of credit 3,000 - Repayments on
revolving line of credit (4,000 ) - Proceeds from exercise of stock
options 3 25 Debt principal payments
-
(441 ) Net cash (used in) provided
by financing activities
(997 )
19,246 Effect of exchange rate
change on cash
(14 )
- Change in cash and cash equivalents
(7,018 ) 10,860 Cash and cash equivalents - Beginning of the Period
13,142 4,534
Cash and cash equivalents - End of the Period
$
6,124 $ 15,394
NORTHERN POWER SYSTEMS CORP.FORMERLY KNOWN
AS WIND POWER HOLDINGS, INC.RECONCILIATION OF NET LOSS TO
NON-GAAP ADJUSTED EBITDA LOSS (unaudited)FOR THE THREE AND
SIX MONTHS ENDED JUNE 30, 2015 AND 2014(In thousands)
For the three months
endedJune 30, For the six months endedJune
30,
2015
2014
2015
2014
NET LOSS $ (3,298 ) $ (2,064 ) $ (7,431 ) $ (5,188 )
Interest expense 71 32 97 272 Provision for income taxes 383 15 768
29 Depreciation and amortization 193 391 383 569 Stock compensation
expense 190 454 368 602 Non cash implied license revenue (243 ) -
(420 ) - Loss on disposal of asset - -
50 - Non-GAAP adjusted EBITDA loss $
(2,704 ) $ (1,172 ) $ (6,185 ) $ (3,716 )
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version on businesswire.com: http://www.businesswire.com/news/home/20150812006203/en/
Northern Power SystemsCiel R. Caldwell, +1
857-209-3606Chief Financial Officerir@northernpower.com
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