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Fri, January 30, 2009 Active Power Announces Fourth Quarter and 2008 Results
AUSTIN, Texas--([ BUSINESS WIRE ])--Active Power, Inc. (NASDAQ: ACPW) announced results for its fourth quarter and fiscal year ended Dec. 31, 2008. Revenue for the fourth quarter was a record $16.2 million, a 30 percent increase from the third quarter and an increase of 59 percent from the fourth quarter in 2007. For the year ended Dec. 31, 2008, revenue was $43.0 million compared to $33.6 million in 2007, an increase of 28 percent for the year.
For the fourth quarter, net loss was $431,000, or 1 cent per share. This compares to a net loss of $4.1 million, or 7 cents per share, in the prior quarter and a net loss of $5.9 million, or 10 cents per share, for the same period in the prior year. For the year ended Dec. 31, 2008, the net loss was $13.4 million, or 22 cents per share. This compares to a net loss of $20.5 million, or 38 cents per share, in 2007.
EBITDA was a loss of $62,000 for the fourth quarter, or 0 cents per share, compared to an EBITDA loss of $3.7 million or 6 cents per share in the prior quarter and an EBITDA loss of $5.6 million, or 9 cents per share, in the fourth quarter of 2007. For the year ended Dec. 31, 2008, the EBITDA loss was $12 million, or 20 cents per share, compared to an EBITDA loss of $ 19.3 million, or 36 cents per share, in 2007, a 38 percent decrease.
Active Power recorded positive Adjusted EBITDA in the fourth quarter. Adjusted EBITDA was $374,000 for the fourth quarter, or 1 cent per share, compared to an Adjusted EBITDA loss of $ 1.7 million, or 3 cents per share, in the prior quarter and an Adjusted EBITDA loss of $3.0 million or 5 cents per share in the fourth quarter of 2007. For the year ended Dec. 31, 2008, the Adjusted EBITDA loss was $8.7 million, or 15 cents per share, compared to an Adjusted EBITDA loss of $15.1 million, or 28 cents per share in 2007, a 42 percent decrease. A reconciliation of EBITDA and Adjusted EBITDA to net income (loss), which is their most directly comparable GAAP measures, is provided below in a table immediately following the Condensed Statement of Operations. A reconciliation of EBITDA per share and Adjusted EBITDA per share to earnings per share, which is their most directly comparable GAAP measures, is provided below in a table immediately following the Condensed Statement of Operations.
In the fourth quarter, Active Power reported a record gross profit margin of 32 percent. This compares to a 9 percent gross profit margin in the prior quarter and a negative gross profit margin of 2 percent in fourth quarter 2007. For the full year, Active Power reported a gross profit margin of 19 percent compared to 10 percent in 2007.
Cash and investments declined $0.6 million during the quarter compared to a decrease of $2.4 million in the previous quarter and a decrease of $0.3 million in fourth quarter 2007. Cash and investments at Dec. 31, 2008, were $11.2 million.
"We are pleased to have accomplished these significant financial and operational milestones," said Jim Clishem, president and CEO, Active Power. "We have been working diligently to achieve quarterly operating profitability and have achieved positive adjusted EBITDA for the first time in our history. We reached this goal through a focused strategy designed to grow the top line while reducing expenses. Active Power's space and power efficient systems deliver savings in a way unmatched by our competition. Our focus will remain on preserving cash and improving our own operational efficiencies and operating profitability. Despite a challenging economic outlook ahead, we believe that we will continue to grow market share as clients focus now more than ever on improving efficiency and reducing operating expenses."
Business Highlights
- Reduced quarterly net loss by 93 percent to $431,000 from the $5.9 million loss in the fourth quarter of 2007. Achieved first ever positive Adjusted EBITDA of $374,000 for fourth quarter
- Highest quarterly revenue of $16.2 million achieved in the fourth quarter and highest annual revenue achieved of $43.0 million, an annual growth of 28 percent
- Highest quarterly gross profit margin of 32 percent achieved in the fourth quarter
- Annual service revenues up 51 percent compared to 2007, which continue to reflect valuable annuity revenues and benefit of having a direct sales model in place
- Revenue for the second half of 2008 was $28.7 million, a 100 percent increase over revenue of $14.3 million in the first six months of 2008
- Shipped 2,000th flywheel, representing more than 500 megawatts of power delivered to customers further validating market acceptance for Active Power solutions
- Received and shipped single largest order to date of 12 megawatts to leading Internet search engine provider
- Announced strategic relationship with Sun Microsystems to broaden global distribution channels and capitalize on the modular data center opportunity
Outlook
Active Power expects first quarter 2009 revenues to be between $11 and $14 million. This would represent an increase between 46 and 86 percent compared to first quarter 2008. First quarter earnings per share are expected to be a loss of approximately 2 to 4 cents. Active Power expects its cash and investments balance at the end of the first quarter to remain at the same level as year end.
Conference Call Details
Active Power will host a conference call today, Friday, Jan. 30, 2009, at 11:00 a.m. (ET), to further review fourth quarter and fiscal 2008 results. Interested parties can listen via Web cast at [ http://www.videonewswire.com/event.asp?id=55242 ]. A replay of the Web cast will be available until Feb. 13, 2009. Investors may access the live broadcast and replay via Active Power's Web site at [ www.activepower.com ].
About Active Power
Active Power (NASDAQ: ACPW) provides efficient, reliable and green critical power solutions and uninterruptible power supply (UPS) systems to enable business continuity in the event of power disturbances. Founded in 1992, Active Power's flywheel-based UPS systems protect critical operations in data centers, healthcare facilities, manufacturing plants, broadcast stations and governmental agencies in more than 40 countries. With expert power system engineers and worldwide services and support, Active Power ensures organizations have the power to perform. For more information, please visit [ www.activepower.com ].
Cautionary Note Regarding Forward-Looking Statements
This release may contain forward-looking statements that involve risks and uncertainties. Any 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. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.
Active Power, CleanSource and CoolAir are registered trademarks of Active Power, Inc. The Active Power logo, PowerHouse and PowerCentre are trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.
Non-GAAP Financial Measures
In addition to disclosing financial information prepared on a GAAP basis, this release and the accompanying tables include non-GAAP measures of EBITDA, Adjusted EBITDA, EBITDA per share and Adjusted EBITDA per share. EBITDA represents our GAAP based net income (loss) adjusted to exclude the impact of interest, taxes and depreciation expense. Adjusted EBITDA represents our GAAP based net income (loss) adjusted to exclude the impact of interest, taxes and depreciation expense, as well as stock-based compensation expense and any other one-time non-cash charges, such as the inventory impairment charge we recorded in the third quarter of 2008. We believe these adjustments provide meaningful supplemental information regarding our performance to our investorsand enhance the overall understanding of our past financial performance. These non-GAAP measures are an indication of our baseline performance that are considered by management for purposes of making operational decisions. In addition these non-GAAP measures are the primary indicators management uses as a basis for our planning and forecasting for future periods. The presentation of this additional information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of our non-GAAP financial measures to the GAAP basis results is provided below in a table immediately following the Condensed Consolidated Statement of Operations.
| ACTIVE POWER, INC. | ||||||||
| CONDENSED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
| December 31 | ||||||||
| 2008 | 2007 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 10,468 | $ | 15,504 | ||||
| Short-term investments in marketable securities | 703 | 6,581 | ||||||
| Accounts receivable, net | 9,450 | 5,177 | ||||||
| Inventories | 6,689 | 9,198 | ||||||
| Prepaid expenses and other | 470 | 540 | ||||||
| Total current assets | 27,780 | 37,000 | ||||||
| Property and equipment, net | 4,492 | 5,530 | ||||||
| Long-term investments | - | 407 | ||||||
| Deposits and other | 399 | 389 | ||||||
| Total assets | $ | 32,671 | $ | 43,326 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,412 | $ | 2,342 | ||||
| Accrued expenses | 5,713 | 5,793 | ||||||
| Deferred revenue | 1,698 | 1,918 | ||||||
| Revolving line of credit | 2,000 | - | ||||||
| Total current liabilities | 11,823 | 10,053 | ||||||
| Long-term liabilities | 25 | 25 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 60 | 60 | ||||||
| Treasury stock | (59 | ) | (5 | ) | ||||
| Additional paid-in capital | 260,344 | 258,630 | ||||||
| Accumulated deficit | (238,841 | ) | (225,401 | ) | ||||
| Other accumulated comprehensive income (loss) | (681 | ) | (36 | ) | ||||
| Total stockholders' equity | 20,823 | 33,248 | ||||||
| Total liabilities and stockholders' equity | $ | 32,671 | $ | 43,326 | ||||
| ACTIVE POWER, INC. | ||||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||||
| (Thousands, except per share amounts) (unaudited) | ||||||||||
| Three | ||||||||||
| Months Ended | Year Ended | |||||||||
| Dec. 31, | Dec. 31, | |||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||
| Product revenue | $ 13,739 | $ 8,832 | $ 35,772 | $ 28,835 | ||||||
| Service and other revenue | 2,472 | 1,380 | 7,213 | 4,766 | ||||||
| Total revenue | 16,211 | 10,212 | 42,985 | 33,601 | ||||||
| Cost of product revenue | 9,443 | 9,348 | 29,380 | 26,402 | ||||||
| Cost of service and other revenue | 1,628 | 1,107 | 5,617 | 3,973 | ||||||
| Total cost of revenue | 11,071 | 10,455 | 34,997 | 30,375 | ||||||
| Gross profit (loss) | 5,140 | (243) | 7,988 | 3,226 | ||||||
| Operating expenses: | ||||||||||
| Research and development | 1,213 | 1,428 | 5,116 | 5,749 | ||||||
| Selling and marketing | 3,039 | 3,070 | 11,839 | 10,970 | ||||||
| General & administrative | 1,434 | 1,408 | 5,119 | 7,860 | ||||||
| Total operating expenses | 5,686 | 5,906 | 22,074 | 24,579 | ||||||
| Operating loss | (546) | (6,149) | (14,086) | (21,353) | ||||||
| Interest income | 125 | 206 | 447 | 773 | ||||||
| Other income (expense) | (10) | 33 | 197 | 88 | ||||||
| Net loss | $ (431) | $ (5,910) | $ (13,442) | $ (20,492) | ||||||
| Net loss per share, basic & diluted | $ (0.01) | $ (0.10) | $ (0.22) | $ (0.38) | ||||||
| Shares used in computing net loss per share, basic & diluted | 60,124 | 60,109 | 60,124 | 53,905 | ||||||
| Comprehensive loss: | ||||||||||
| Net loss | $ (431) | $ (5,910) | $ (13,442) | $ (20,492) | ||||||
| Translation loss on subsidiaries in foreign currencies | (461) | (167) | (640) | (193) | ||||||
| Unrealized gain (loss) on investments in marketable securities | 1 | 8 | (5) | 34 | ||||||
| Comprehensive loss | $ (891) | $ (6,206) | $ (14,087) | $ (20,651) | ||||||
Active Power, Inc GAAP to Non-GAAP Reconciliation | |||||||||
Three months ended Dec. 31 | Three months ended Sept. 30 | Year Ended Dec. 31 | |||||||
| 2008 | 2007 | 2008 | 2008 | 2007 | |||||
| Net profit (loss) | $ (431) | $(5,910) | $ (4,115) | $(13,442) | $(20,492) | ||||
| Plus: | |||||||||
Interest expense (income) | (125) | (206) | ( 68) | (447) | (773) | ||||
| Depreciation expense | 494 | 487 | 474 | 1,896 | 1,986 | ||||
| EBITDA (loss) | $ (62) | $(5,629) | $ (3,709) | $(11,993) | $(19,279) | ||||
| Inventory impairment charge | - | 2,115 | 1,554 | 1,554 | 2,115 | ||||
| Stock-based compensation (a) | 436 | 537 | 449 | 1,701 | 2,098 | ||||
| Adjusted EBITDA (loss) | $ 374 | $(2,977) | $ (1,706) | $ (8,738) | $(15,066) | ||||
| EBITDA (loss) per share | $ 0.00 | $ (0.09) | $ (0.06) | $ (0.20) | $ (0.36) | ||||
| Adjusted EBITDA (loss) per share | $ 0.01 | $ (0.05) | $ (0.03) | $ (0.15) | $ (0.28) | ||||
| Number of shares used in computing non-GAAP EBITDA (loss) per share |
60,124 |
60,109 |
60,124 |
60,124 |
53,905 | ||||
(a) Stock-based compensation expense:
Three months ended Dec. 31 | Three months ended Sept. 30 | Year Ended Dec. 31 | |||||||
| 2008 | 2007 | 2008 | 2008 | 2007 | |||||
| Cost of revenue | $ 81 | $ 100 | $ 73 | $ 311 | $ 383 | ||||
| Research and development | 87 | 147 | 99 | 384 | 581 | ||||
| Sales and marketing | 97 | 114 | 103 | 343 | 446 | ||||
| General and administrative | 171 | 176 | 174 | 663 | 688 | ||||
| total | $ 436 | $ 537 | $ 449 | $ 1,701 | $ 2,098 | ||||
Excluded amount represents stock-based compensation expense. Stock-based compensation is a non-cash expense accounted for in accordance with the intrinsic value method under Accounting Principles Board No. 25 through December 31, 2005, and with the fair value recognition provisions of Statement of Financial Accounting Standards No. 123(R) effective January 1, 2006. While a large component of our expense, we believe investors want to exclude the effects of stock-based compensation expense in order to compare our financial performance with that of other companies and between time periods.
