Active Power Reports Fourth Quarter and Full Year 2015 Results
Highlights
- Total revenue in 2015 increased
$8.3 million or 17% to$57.4 million compared to total revenue in 2014 - Double digit annual growth in uninterruptible power supply (UPS) and MIS
- Backlog at
December 31, 2015 , was$30.8 million compared to$26.7 million atDecember 31, 2014 , an improvement of$4.1 million or 15% - Gross margin was 29% in 2015 compared to 26% in 2014
- Operating expenses decreased
$1.8 million or 7% in 2015 compared to 2014; expenses down seven of the last nine quarters - Adjusted EBITDA improved to a loss of
$3.7 million in 2015 compared to a loss of$10.1 million in 2014
Fourth Quarter and Full Year 2015 Financial Results
Revenue in the fourth quarter of 2015 was
Gross margin in the fourth quarter of 2015 was 25% compared to 26% in the year-ago period and 26% in the previous quarter. The modest decrease in gross margin from both periods is primarily related to under absorption of fixed overhead costs in manufacturing and lower volume of service revenue which contains a higher margin. For the full year, gross margin was 29% compared to 26% in 2014. The increase in gross margin is related to higher margin MIS along with improvements in manufacturing absorption on increased production in 2015.
Operating expenses in the fourth quarter of 2015 were
Net loss in the fourth quarter of 2015 was
Adjusted EBITDA in the fourth quarter of 2015 was a loss of
Cash and cash equivalents totaled
Bookings and Backlog
Bookings in the fourth quarter of 2015 were
Bookings amounts represent anticipated revenue from product orders received during the period that are believed to be firm and from signed contracts for service work. Backlog represents the amount of anticipated revenue from prior bookings at the end of the period. Please refer to the Supplemental Information following the Condensed Consolidated Balance Sheets for more detail regarding bookings.
Management Commentary
"We are pleased to have delivered the strongest overall annual performance for
"The overall lengthening of sales cycles coupled with soft market conditions resulted in lower bookings in the fourth quarter of 2015. We have seen delays for orders being awarded and schedule changes to defer delivery. We remain vigilant in our expense management initiatives in light of these market conditions."
"While revenue and earnings in the fourth quarter of 2015 were lower than in prior periods, we demonstrated the depth of our fundamental, long-term planning. We entered 2016 with a higher backlog, a lower cost base and a growing opportunities pipeline bolstered by a higher number of large project opportunities as compared to the past three years. Near-term challenges notwithstanding, we look forward to 2016 being another year of improved performance."
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About
Non-GAAP Financial Measure
This press release includes information about adjusted EBITDA, which is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). At the end of the following tables,
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by references to future periods, and include statements we make regarding:
- our expectations that we can increase bookings and backlog;
- our belief that we can improve operational efficiencies;
- our ability to control our future expenses;
- our ability to expand our sales distribution network;
- our ability to diversify our revenue stream through sales to healthcare and industrial applications;
- our future anticipated working capital needs;
- our ability to raise additional cash if needed to fund our operations;
- anticipated levels of bookings and revenue;
- our ability to improve inventory turns and factory utilization;
- expected fluctuations in currency exchange rates; and
- our expectation that seasonal trends will continue in fiscal 2016.
Actual results and the outcomes of future events could differ materially from those expressed or implied by these forward-looking statements because of a number of risks and uncertainties, including: the deferral or cancellation of sales commitments as a result of general economic conditions or uncertainty; the possibility backlog may not result in revenue; financial results that may vary significantly from quarter to quarter due to seasonality and volatility in customer demand; our continued ability to obtain sufficient working capital to fund our operations; risks related to our international operations; our dependence on our relationships with
For more information on the risk factors that could cause actual results to differ from these forward looking statements, please refer to
Active Power, Inc. | ||||||||||||||||||
Condensed Consolidated Statement of Operations | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
(unaudited) | ||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||
Revenues: | ||||||||||||||||||
Product revenue | $ | 9,626 | $ | 11,541 | $ | 43,247 | $ | 36,211 | ||||||||||
Service and other revenue | 2,899 | 3,811 | 14,174 | 12,925 | ||||||||||||||
Total revenue | 12,525 | 15,352 | 57,421 | 49,136 | ||||||||||||||
Cost of goods sold: | ||||||||||||||||||
Cost of product revenue | 7,461 | 9,435 | 32,017 | 29,182 | ||||||||||||||
Cost of service and other revenue | 1,976 | 1,868 | 8,587 | 7,302 | ||||||||||||||
Total cost of goods sold | 9,437 | 11,303 | 40,604 | 36,484 | ||||||||||||||
Gross profit | 3,088 | 4,049 | 16,817 | 12,652 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Research and development | 1,329 | 1,493 | 5,723 | 6,689 | ||||||||||||||
Selling and marketing | 2,532 | 3,009 | 10,589 | 11,940 | ||||||||||||||
General and administrative | 2,015 | 1,513 | 6,565 | 6,043 | ||||||||||||||
Total operating expenses | 5,876 | 6,015 | 22,877 | 24,672 | ||||||||||||||
Loss from Operations | (2,788 | ) | (1,966 | ) | (6,060 | ) | (12,020 | ) | ||||||||||
Interest expense, net | (123 | ) | (94 | ) | (375 | ) | (395 | ) | ||||||||||
Other income (expense), net | 5 | 10 | (24 | ) | (160 | ) | ||||||||||||
Loss before income taxes | (2,906 | ) | (2,050 | ) | (6,459 | ) | (12,575 | ) | ||||||||||
Income tax expense | - | 6 | - | (252 | ) | |||||||||||||
$ | (2,906 | ) | $ | (2,044 | ) | $ | (6,459 | ) | $ | (12,827 | ) | |||||||
Net Loss per share, basic and diluted | $ | (0.13 | ) | $ | (0.09 | ) | $ | (0.28 | ) | $ | (0.57 | ) | ||||||
Shares used in computing net loss per share, basic and diluted | 23,137 | 23,128 | 23,134 | 22,494 | ||||||||||||||
Active Power, Inc. | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands, except par value) | ||||||||||
December 31, 2015 | December 31, 2014 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 12,260 | $ | 14,824 | ||||||
Restricted cash | 36 | 40 | ||||||||
Accounts receivable, net of allowance for doubtful accounts of $70 and $212 at December 31, 2015 and December 31, 2014, respectively | 8,849 |
11,222 |
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Inventories, net | 6,466 | 6,845 | ||||||||
Prepaid expenses and other | 792 | 800 | ||||||||
Total current assets | 28,403 | 33,731 | ||||||||
Property and equipment, net | 1,914 | 2,076 | ||||||||
Deposits and other | 278 | 291 | ||||||||
Total assets | $ | 30,595 | $ | 36,098 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 2,852 | $ | 4,044 | ||||||
Accrued expenses | 4,494 | 4,134 | ||||||||
Deferred revenue | 3,576 | 2,771 | ||||||||
Revolving line of credit | 5,535 | 5,535 | ||||||||
Total current liabilities | 16,457 | 16,484 | ||||||||
Long-term liabilities | 583 | 821 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity | ||||||||||
Preferred stock - $0.001 par value; 2,000 shares authorized | - | - | ||||||||
Common stock - $0.001 par value; 40,000 shares authorized; 23,171 and 23,162 issued and 23,109 and 23,094 outstanding at December 31, 2015 and December 31, 2014, respectively | 23 |
23 |
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Treasury stock | (240 | ) | (231 | ) | ||||||
Additional paid-in capital | 304,094 | 302,667 | ||||||||
Accumulated deficit | (290,454 | ) | (283,995 | ) | ||||||
Other accumulated comprehensive income | 132 | 329 | ||||||||
Total stockholders' equity | 13,555 | 18,793 | ||||||||
Total liabilities and stockholders' equity | $ | 30,595 | $ | 36,098 | ||||||
Active Power, Inc. |
Supplemental Information (in thousands) |
Revenue by Product | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||
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December 31, 2015 | |
% of total | |
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December 31, 2014 | |
% of total | |
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September 30, 2015 | |
% of total | |
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December 31, 2015 | |
% of total | |
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December 31, 2014 | |
% of total | |
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UPS | $ | 9,503 | 76 | % | $ | 6,885 | 45 | % | $ | 5,528 | 37 | % | $ | 31,046 | 54 | % | $ | 28,064 | 57 | % | |||||||||||
MIS | 123 | 1 | % | 4,656 | 30 | % | 5,640 | 38 | % | 12,201 | 22 | % | 8,147 | 17 | % | ||||||||||||||||
Total Product Revenue | 9,626 | 77 | % | 11,541 | 75 | % | 11,168 | 75 | % | 43,247 | 75 | % | 36,211 | 74 | % | ||||||||||||||||
Service | 2,899 | 23 | % | 3,811 | 25 | % | 3,744 | 25 | % | 14,174 | 25 | % | 12,925 | 26 | % | ||||||||||||||||
Total Revenue | $ | 12,525 | 100 | % | $ | 15,352 | 100 | % | $ | 14,912 | 100 | % | $ | 57,421 | 100 | % | $ | 49,136 | 100 | % | |||||||||||
Revenue by Geography | |||||||||||||||||||||||||||||||
Americas | $ | 9,566 | 76 | % | $ | 8,389 | 55 | % | $ | 12,057 | 81 | % | $ | 43,068 | 76 | % | $ | 31,495 | 64 | % | |||||||||||
EMEA | 2,541 | 20 | % | 5,416 | 35 | % | 1,878 | 13 | % | 12,434 | 22 | % | 13,998 | 29 | % | ||||||||||||||||
Asia | 418 | 3 | % | 1,547 | 10 | % | 977 | 6 | % | 1,919 | 3 | % | 3,643 | 7 | % | ||||||||||||||||
Total Revenue | $ | 12,525 | 100 | % | $ | 15,352 | 100 | % | $ | 14,912 | 100 | % | $ | 57,421 | 100 | % | $ | 49,136 | 100 | % | |||||||||||
Active Power, Inc. | ||||||||||||||||||
Supplemental Information (in thousands) | ||||||||||||||||||
Total Bookings | Twelve Months Ended | |||||||||||||||||
December 31, 2014 |
March 31, 2015 |
June 30, 2015 |
September 30, 2015 |
December 31, 2015 |
December 31, 2015 |
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Bookings | $ | 18,500 | $ | 19,171 | $ | 17,322 | $ | 16,992 | $ | 8,043 | $ | 61,528 | ||||||
Book to Bill Ratio | 1.21 | 1.46 | 1.03 | 1.14 | 0.64 | 1.07 | ||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, 2015 |
December 31, 2014 |
September 30, 2015 |
December 31, 2015 |
December 31, 2014 |
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Net Loss | $ | (2,906 | ) | $ | (2,044 | ) | $ | (1,736 | ) | $ | (6,459 | ) | $ | (12,827 | ) | ||||||
Interest Expense | 123 | 94 | 95 | 375 | 395 | ||||||||||||||||
Depreciation Expense | 234 | 266 | 239 | 997 | 1,191 | ||||||||||||||||
Stock Based Compensation | 385 | 341 | 369 | 1,428 | 1,139 | ||||||||||||||||
Impairment of Long-Lived Assets | - | - | - | - | 42 | ||||||||||||||||
Adjusted EBITDA | $ | (2,164 | ) | $ | (1,343 | ) | $ | (1,033 | ) | $ | (3,659 | ) | $ | (10,060 | ) | ||||||
About Presentation of Adjusted EBITDA
Adjusted EBITDA is not a financial measure calculated and presented in accordance with GAAP, and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The company defines adjusted EBITDA as net loss before impairment of long-lived assets, depreciation, interest, and non-cash stock based compensation. Other companies (including competitors) may define adjusted EBITDA differently. The company presents adjusted EBITDA because management believes it to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of
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