Q3 2013 Highlights
- UPS sales increased
$3.7 million to $6.5 million compared to the previous quarter, but decreased$8.3 million compared to the third quarter of 2012. - Service revenue increased
$321,000 to $5.1 million compared to the previous quarter and increased$2.2 million or 73% compared to the third quarter of 2012. - Gross margin decreased to 30.0% compared to 34.3% in the previous quarter, but improved compared to 28.6% in the third quarter of 2012.
- Deployed second set of two PowerHouse™ systems to support expansion of two modular data centers for global manufacturer of oil and gas drilling products, now totaling nearly three megawatts of power infrastructure installed onsite.
- Shipped multiple CleanSource® UPS systems totaling more than three megawatts of total rated UPS capacity to one of the largest pharmaceutical companies in the world to support their new drug manufacturing facility in the eastern U.S.
- Appointed
Mark A. Ascolese as company's new president and CEO, bringing to the company extensive experience serving a variety of mission critical markets including the energy storage and data center markets.
Restatement
On
Financial Results
Revenue in the third quarter of 2013 was
Gross margin in the third quarter of 2013 was 30.0% compared to 34.3% in the previous quarter and 28.6% in the third quarter of 2012. The sequential decrease in gross margin was due to higher margin shipments of MIS products in the second quarter of 2013. The increase in gross margin from the year-ago quarter was primarily due to higher service sales in the third quarter of 2013 compared to the third quarter of 2012. For the nine months ended
Net loss in the third quarter of 2013 was
Adjusted EBITDA for the third quarter of 2013 was a negative
Cash and cash equivalents were
Management Commentary
"The third quarter was challenging with overall product revenues down compared to the third quarter of 2012," said
"As we exit the year and enter 2014, we will focus on driving more consistent performance and predictability throughout the business through the addition of our CSHD product line and sales performance management. We will also leverage and enhance the unique flywheel technology we have in place to grow product revenue and expand into new and relevant markets where our products can immediately solve customers' problems."
Change to Guidance Practice
Conference Call and Webcast
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About
Founded in 1992,
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that involve risks and uncertainties, including statements relating to focus on driving more consistent performance and predictability throughout the business; and plans to leverage and enhance the unique flywheel technology we have in place to grow product revenue and expand into new and relevant markets.
Such forward-looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Factors that could cause the actual results to differ materially from the results predicted include, among others, 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 and Comprehensive Loss | ||||||||||||||||||
| (in thousands, except per share amounts; unaudited) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Product revenue | $ | 8,023 | $ | 16,647 | $ | 34,858 | $ | 50,534 | ||||||||||
| Service and other revenue | 5,131 | $ | 2,964 | 12,915 | 10,534 | |||||||||||||
| Total revenue | 13,154 | 19,611 | 47,773 | 61,068 | ||||||||||||||
| Cost of goods sold: | ||||||||||||||||||
| Cost of product revenue | 6,784 | 12,254 | 25,373 | 35,608 | ||||||||||||||
| Cost of service and other revenue | 2,426 | 1,742 | 7,180 | 6,766 | ||||||||||||||
| Total cost of goods sold | 9,210 | 13,996 | 32,553 | 42,374 | ||||||||||||||
| Gross profit | 3,944 | 5,615 | 15,220 | 18,694 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Research and development | 2,149 | 1,325 | 5,580 | 4,045 | ||||||||||||||
| Selling and marketing | 2,714 | 3,447 | 8,684 | 10,891 | ||||||||||||||
| General and administrative | 2,046 | 1,691 | 4,759 | 5,175 | ||||||||||||||
| Total operating expenses | 6,909 | 6,463 | 19,023 | 20,111 | ||||||||||||||
| Income (Loss) from Operations | (2,965 | ) | (848 | ) | (3,803 | ) | (1,417 | ) | ||||||||||
| Interest expense, net | (118 | ) | (80 | ) | (282 | ) | (246 | ) | ||||||||||
| Other income (expense), net | (52 | ) | 81 | (139 | ) | 159 | ||||||||||||
| Net Income (Loss) | $ | (3,135 | ) | $ | (847 | ) | $ | (4,224 | ) | $ | (1,504 | ) | ||||||
| Net Income (Loss) per share, basic | $ | (0.16 | ) | $ | (0.04 | ) | $ | (0.22 | ) | $ | (0.08 | ) | ||||||
| Shares used in computing net loss per share, basic | 19,337 | 19,115 | 19,188 | 18,399 | ||||||||||||||
| Comprehensive loss: | ||||||||||||||||||
| Net Loss | $ | (3,135 | ) | $ | (847 | ) | $ | (4,224 | ) | $ | (1,504 | ) | ||||||
| Translation gain (loss) on subisidiaries denominated in foreign currencies | 238 | 211 | 39 | (99 | ) | |||||||||||||
| Comprehensive loss: | $ | (2,897 | ) | $ | (636 | ) | $ | (4,185 | ) | $ | (1,603 | ) | ||||||
| Active Power, Inc. | ||||||||||
| Condensed Consolidated Balance Sheets | ||||||||||
| (in thousands) | ||||||||||
| September 30, 2013 | December 31, 2012 | |||||||||
| (unaudited) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 14,252 | $ | 13,524 | ||||||
| Restricted cash | 511 | - | ||||||||
| Accounts receivable, net of allowance for doubtful accounts of $838 and $488 at September 30, 2013 and December 31, 2012, respectively | 8,713 | 17,862 | ||||||||
| Inventories, net | 13,244 | 11,079 | ||||||||
| Prepaid expenses and other | 2,390 | 567 | ||||||||
| Total current assets | $ | 39,110 | $ | 43,032 | ||||||
| Property and equipment, net | 2,859 | 2,458 | ||||||||
| Deposits and other | 294 | 309 | ||||||||
| Total assets | $ | 42,263 | $ | 45,799 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 4,461 | $ | 4,036 | ||||||
| Accrued expenses | 5,134 | 4,948 | ||||||||
| Deferred revenue | 3,064 | 4,568 | ||||||||
| Revolving line of credit | 5,535 | 5,535 | ||||||||
| Total current liabilities | $ | 18,194 | $ | 19,087 | ||||||
| Long-term liabilities | 737 | 713 | ||||||||
| Stockholders' equity | ||||||||||
| Preferred stock - $0.001 par value; 2,000 shares authorized | - | - | ||||||||
| Common stock - $0.001 par value; 30,000 shares authorized; 19,421 and 19,171 issued and 19,362 and 19,125 outstanding at September 30, 2013 and December 31, 2012, respectively | 19 | 19 | ||||||||
| Treasury stock | (200 | ) | (144 | ) | ||||||
| Additional paid-in capital | 290,193 | 288,619 | ||||||||
| Accumulated deficit | (267,041 | ) | (262,817 | ) | ||||||
| Other accumulated comprehensive income | 361 | 322 | ||||||||
| Total stockholders' equity | 23,332 | 25,999 | ||||||||
| Total liabilities and stockholders' equity | $ | 42,263 | $ | 45,799 | ||||||
| Active Power, Inc. | |||||||||||||||||||||||||
| Supplemental Information | |||||||||||||||||||||||||
| Revenue by Product | 3 Months Ended | 9 Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||
| 2013 | % of total | 2012 | % of total | 2013 | % of total | 2012 | % of total | ||||||||||||||||||
| UPS | $ | 6,495 | 49 | % | $ | 14,783 | 75 | % | $ | 16,731 | 35 | % | $ | 28,551 | 47 | % | |||||||||
| MIS | 1,528 | 12 | % | 1,864 | 10 | % | 18,127 | 38 | % | 21,983 | 36 | % | |||||||||||||
| Total Product Revenue | 8,023 | 61 | % | 16,647 | 85 | % | 34,858 | 73 | % | 50,534 | 83 | % | |||||||||||||
| Service | 5,131 | 39 | % | 2,964 | 15 | % | 12,915 | 27 | % | 10,534 | 17 | % | |||||||||||||
| Total Revenue | $ | 13,154 | 100 | % | $ | 19,611 | 100 | % | $ | 47,773 | 100 | % | $ | 61,068 | 100 | % | |||||||||
| Revenue by Geography | |||||||||||||||||||||||||
| Americas | $ | 8,522 | 65 | % | $ | 7,973 | 41 | % | $ | 39,087 | 82 | % | $ | 36,557 | 60 | % | |||||||||
| Asia | 2,914 | 22 | % | 2,177 | 11 | % | 3,193 | 7 | % | 4,931 | 8 | % | |||||||||||||
| EMEA | 1,718 | 13 | % | 9,461 | 48 | % | 5,493 | 11 | % | 19,580 | 32 | % | |||||||||||||
| Total Revenue | $ | 13,154 | 100 | % | $ | 19,611 | 100 | % | $ | 47,773 | 100 | % | $ | 61,068 | 100 | % | |||||||||
| Adjusted EBITDA | |||||||||||||||||
| (Thousands) | |||||||||||||||||
| Three | Nine | ||||||||||||||||
| Months Ended | Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| Net Income (Loss) | $ | (3,135 | ) | $ | (847 | ) | $ | (4,224 | ) | $ | (1,504 | ) | |||||
| Interest Expense | 118 | 80 | 282 | 246 | |||||||||||||
| Depreciation Expense | 245 | 308 | 804 | 955 | |||||||||||||
| Stock Based Compensation | 388 | 358 | 916 | 1,131 | |||||||||||||
| Impairment of Long-Lived Assets | 132 | 4 | 102 | 31 | |||||||||||||
| Adjusted EBITDA | $ | (2,252 | ) | $ | (97 | ) | $ | (2,120 | ) | $ | 859 | ||||||
About Presentation of Adjusted EBITDA
Beginning with the reporting of results for the fourth quarter of 2012, the company began to report the measure of adjusted EBITDA. Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (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 is 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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