25% Reduction in Net Loss Fueled by 33% Reduction in Operating Expenses from Prior Year
Conference Call and Webcast to Be Held Today at 1:45 PM PT, 4:45 PM ET
CHATSWORTH, Calif., Nov. 09, 2016 (GLOBE NEWSWIRE) -- Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST), the world’s leading clean technology manufacturer of
microturbine energy systems, reported financial results for its second quarter of fiscal 2017 ended September 30, 2016.
The company reported total revenue of $15.0 million for the second quarter of fiscal 2017 and a net loss of $5.9
million, or $0.19 per share. This compares with total revenue of $17.9 million and a net loss of $7.9 million, or $0.48 per share,
reported for the second quarter of fiscal 2016. Operating expenses for the quarter decreased 33% to $6.4 million from $9.6 million
in the year-ago quarter. Weighted average shares outstanding for the quarter ended September 30, 2016 were 30.5 million compared
with 16.6 million in the year-ago quarter.
Darren Jamison, President and Chief Executive Officer of Capstone, said, “Our focus remains fixed on
diversifying our customer base and geographic presence while increasing our business in the CHP/energy efficiency markets. To
support our sales initiatives, we developed new strategic relationships to provide financing options for our distributors and end
use customers.”
“We continue to focus on areas where we can reduce expenses and lean out our business. Also, we recently
completed a new capital raise that was intended to keep customers, vendors and employees “tucked in” during these times when our
revenue has been less predictable due to the nature and timing of our emerging CHP business. As a team, we remain firmly focused on
our path to profitability, lowering our expenses, building our revenue, diversifying our business, launching new products and
partnerships, and strengthening our balance sheet,” added Jamison.
Energy efficiency markets for the second quarter were 81% of revenue compared with 68% in last year’s second
quarter, renewable energy was 11% compared with 6% of revenue in last year’s second quarter and natural resources was 8% of revenue
compared with 26% of revenue in last year’s second quarter. Europe and Russia accounted for nearly 70% of revenue this quarter
compared with 16% in last year’s second quarter, while the U.S. and Canada accounted for 12% of revenue this quarter compared with
24% of revenue in last year’s second quarter. Asia and Australia also accounted for 12% of revenue for the quarter, compared with
43% of revenue in last year’s second quarter.
Business developments and milestones recently achieved
- Partnered with Sky Solar (Sky Group) for $50 million in additional project capital (and an option for up to an additional
$100 million) for the second phase of the Capstone Energy Finance joint venture (CEF). As our current pipeline for CEF nears the
$40 million capacity, this added funding is expected to help expand our business by providing financing options to global
customers.
- Partnered with Acresis and Bridge Capital to put together a product-financing program for Capstone distribution partners to
provide much needed working capital and growth capital for well-qualified partners.
- Continued to move ahead with our product development roadmap with a newly-patented multi-staged lean pre-vaporizing,
pre-mixing fuel injector providing ultra-low emissions that meet United States Environmental Protection Agency (EPA) Tier 4
requirements for power generation. Under this new program, exhaust emissions will be required to be reduced by more than 90
percent.
- Developed new partnerships with the U.S. Department of Energy (DOE) to provide funding in the amount of $335,000 for one year
to Argonne National Laboratory to conduct hydrogen and synthetic fuel (“syngas”) testing on Capstone’s C65 and C200 microturbines
at no cost to Capstone. In addition, Capstone continued progress on our flexible fuels program, with recent successful testing on
butane.
- Recent launch of the C200 Signature Series product. The all new Signature Series products which include C200, C600, C800 and
C1000 have the option for integrated heat recovery modules and two stage air filtration, improved enclosure design, lower noise
levels, 12 year marine grade paint and a new system control platform. In addition, the first C1000 Signature Series products were
recently commissioned in the U.S. and Europe.
- Resumed sales growth in Russia through BPC Engineering as well as additional new distributors in Russia and the CIS states,
including the first order from one of our new Russian distributors.
Mr. Jamison concluded, “With approximately 9,000 units shipped, Capstone maintains a strong leadership position
in the marketplace. We believe new product innovations and financing options, geographical expansion, diversifying our verticals
and reducing operating costs will all contribute to achieving our goals in the quarters and years ahead.”
Financial Highlights of Fiscal 2017 Second Quarter:
- Net loss for the second quarter was $5.9 million, compared with a net loss of $7.9 million in last year’s second
quarter.
- Loss per share of $0.19 compared to last year’s second quarter loss of $0.48 (split adjusted). Weighted average shares
outstanding at the end of the second quarter of fiscal 2017 were 30.5 million compared with 16.6 million in the year-ago second
quarter.
- Total revenue for the second quarter of fiscal 2017 was $15.0 million compared with $17.9 million in the year-ago second
quarter.
- Gross margin of $0.7 million was 5% compared to $1.9 million, or 11%, in the year-ago fiscal second quarter.
- Operating expenses decreased 33% for the quarter to $6.4 million compared with $9.6 million in the year-ago second quarter.
- Bad debt recovery was $0.5 million during the second quarter of fiscal 2017 primarily from BPC Engineering, the company’s
distributor in Russia. There were no significant bad debt charges or recoveries recorded during the second quarter of fiscal
2016.
- Cash and cash equivalents were $16.1 million as of September 30, 2016, compared to cash and cash equivalents of $15.6 million
as of September 30, 2015. Each of these balances includes $5 million of restricted cash related to our Wells Fargo credit
facility.
- Inventories as of September 30, 2016 were $19.2 million compared with $31.0 million at the end of the year-ago second
quarter, a decrease of $11.8 million.
- Accounts payable and accrued expenses were $12.1 million compared with $25.1 million at the end of the second quarter fiscal
2016.
- As of September 30, 2016, borrowings on the Wells Fargo credit facility were $6.2 million, a $9.0 million decrease from
borrowings as of September 30, 2015.
- Subsequent to the end of the quarter, the company entered into a securities purchase agreement for gross proceeds of
approximately $7.5 million in an offering of a combination of common stock and warrants.
- The company booked product net orders of approximately $8.9 million during the second quarter, for a 1.1:1 book-to-bill
ratio, compared with $8.4 million of product net orders received and booked during the year-ago second quarter, which was a 0.7:1
book-to-bill ratio.
Conference Call and Webcast
The company will host a live webcast today, November 9, 2016 at 1:45 PM Pacific Time (4:45 PM Eastern Time) to provide the results
of the second quarter fiscal 2017 ended September 30, 2016. The company will discuss its financial results and will provide an
update on its business activities. At the end of the conference call, Capstone will host a question-and-answer session to provide
an opportunity for financial analysts to ask questions. Investors and interested individuals are invited to listen to the webcast
by logging on to the company's investor relations webpage at http://www.capstoneturbine.com. A replay of the webcast will be available on the website for 30
days.
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
approximately 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 UL-Certified ISO 9001:2008 and ISO 14001:2004 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
China.
This press release contains "forward-looking statements," as that term is used in the federal securities laws,
about market growth in the energy efficiency market, achieving profitability, diversifying our business, success of geographic
expansion, reduced costs and new product innovations and financing options. 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.
Financial Tables Follow
|
CAPSTONE TURBINE CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(In thousands, except share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
September 30, |
|
March 31, |
|
2016 |
|
2016 |
Assets |
Current Assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
|
11,106 |
|
|
$ |
|
11,704 |
|
Restricted cash |
|
|
5,006 |
|
|
|
|
5,002 |
|
Accounts receivable, net of allowances of $7,032 at September 30,
2016 and $8,909 at March 31, 2016 |
|
|
12,750 |
|
|
|
|
13,575 |
|
Inventories |
|
|
16,955 |
|
|
|
|
16,126 |
|
Prepaid expenses and other current assets |
|
|
2,208 |
|
|
|
|
2,636 |
|
Total current assets |
|
|
48,025 |
|
|
|
|
49,043 |
|
Property, plant and equipment, net |
|
|
2,796 |
|
|
|
|
3,537 |
|
Non-current portion of inventories |
|
|
2,272 |
|
|
|
|
2,143 |
|
Intangible assets, net |
|
|
805 |
|
|
|
|
941 |
|
Other assets |
|
|
240 |
|
|
|
|
228 |
|
Total |
$ |
|
54,138 |
|
|
$ |
|
55,892 |
|
Liabilities and Stockholders’
Equity |
Current Liabilities: |
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
|
12,087 |
|
|
$ |
|
13,187 |
|
Accrued salaries and wages |
|
|
1,829 |
|
|
|
|
1,880 |
|
Accrued warranty reserve |
|
|
1,327 |
|
|
|
|
1,639 |
|
Deferred revenue |
|
|
4,520 |
|
|
|
|
4,368 |
|
Revolving credit facility |
|
|
6,178 |
|
|
|
|
9,459 |
|
Current portion of notes payable and capital lease obligations |
|
|
50 |
|
|
|
|
361 |
|
Total current liabilities |
|
|
25,991 |
|
|
|
|
30,894 |
|
Long-term portion of notes payable and capital lease obligations |
|
|
33 |
|
|
|
|
74 |
|
Other long-term liabilities |
|
|
179 |
|
|
|
|
184 |
|
Commitments and contingencies |
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
Preferred stock, $.001 par value; 10,000,000 shares authorized; none
issued |
|
|
|
|
|
Common stock, $.001 par value; 515,000,000 shares authorized,
30,794,703 shares issued 30,678,284 shares outstanding at September 30, 2016; 23,857,516 shares issued and 23,753,873 shares
outstanding at March 31, 2016 |
|
|
31 |
|
|
|
|
24 |
|
Additional paid-in capital |
|
|
866,878 |
|
|
|
|
853,288 |
|
Accumulated deficit |
|
|
(837,336 |
) |
|
|
|
(826,955 |
) |
Treasury stock, at cost; 116,419 shares at September 30, 2016 and
103,643 shares at March 31, 2016 |
|
|
(1,638 |
) |
|
|
|
(1,617 |
) |
Total stockholders’ equity |
|
|
27,935 |
|
|
|
|
24,740 |
|
Total |
$ |
|
54,138 |
|
|
$ |
|
55,892 |
|
CAPSTONE TURBINE CORPORATION AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except per share
data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
September
30, |
|
September
30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Product, accessories and parts |
|
$ |
|
11,518 |
|
|
$ |
|
14,689 |
|
|
$ |
|
27,301 |
|
|
$ |
|
38,835 |
|
Service |
|
|
|
3,480 |
|
|
|
|
3,216 |
|
|
|
|
6,762 |
|
|
|
|
6,050 |
|
Total revenue |
|
|
|
14,998 |
|
|
|
|
17,905 |
|
|
|
|
34,063 |
|
|
|
|
44,885 |
|
Cost of goods sold: |
|
|
|
|
|
|
|
|
|
|
|
|
Product, accessories and parts |
|
|
|
11,341 |
|
|
|
|
13,147 |
|
|
|
|
24,978 |
|
|
|
|
33,061 |
|
Service |
|
|
|
2,987 |
|
|
|
|
2,830 |
|
|
|
|
5,416 |
|
|
|
|
5,211 |
|
Total cost of goods sold |
|
|
|
14,328 |
|
|
|
|
15,977 |
|
|
|
|
30,394 |
|
|
|
|
38,272 |
|
Gross margin |
|
|
|
670 |
|
|
|
|
1,928 |
|
|
|
|
3,669 |
|
|
|
|
6,613 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
|
1,350 |
|
|
|
|
2,872 |
|
|
|
|
2,972 |
|
|
|
|
5,288 |
|
Selling, general and administrative |
|
|
|
5,036 |
|
|
|
|
6,705 |
|
|
|
|
10,782 |
|
|
|
|
14,794 |
|
Total operating expenses |
|
|
|
6,386 |
|
|
|
|
9,577 |
|
|
|
|
13,754 |
|
|
|
|
20,082 |
|
Loss from operations |
|
|
|
(5,716 |
) |
|
|
|
(7,649 |
) |
|
|
|
(10,085 |
) |
|
|
|
(13,469 |
) |
Other (expense) income |
|
|
|
(27 |
) |
|
|
|
(36 |
) |
|
|
|
(43 |
) |
|
|
|
(38 |
) |
Interest income |
|
|
|
7 |
|
|
|
— |
|
|
|
12 |
|
|
|
— |
Interest expense |
|
|
|
(129 |
) |
|
|
|
(197 |
) |
|
|
|
(263 |
) |
|
|
|
(347 |
) |
Loss before income taxes |
|
|
|
(5,865 |
) |
|
|
|
(7,882 |
) |
|
|
|
(10,379 |
) |
|
|
|
(13,854 |
) |
Provision for income taxes |
|
|
— |
|
|
— |
|
|
|
3 |
|
|
|
|
3 |
|
Net loss |
|
$ |
|
(5,865 |
) |
|
$ |
|
(7,882 |
) |
|
$ |
|
(10,382 |
) |
|
$ |
|
(13,857 |
) |
Net loss per common share—basic and diluted |
|
$ |
|
(0.19 |
) |
|
$ |
|
(0.48 |
) |
|
$ |
|
(0.36 |
) |
|
$ |
|
(0.84 |
) |
Weighted average shares used to calculate basic and diluted net loss per
common share |
|
|
|
30,498 |
|
|
|
|
16,578 |
|
|
|
|
28,843 |
|
|
|
|
16,552 |
|
CONTACT: Capstone Turbine Corporation Investor and investment inquiries: 818-407-3628 ir@capstoneturbine.com INVESTORS: Dian Griesel Int’l Cheryl Schneider 212-825-3210
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