Active Power Reports Fourth Quarter and 2011 Results
Annual Revenues Up 16% to Record $75.5 Million
AUSTIN, Texas (Feb. 14, 2012) – Active Power (NASDAQ: ACPW), manufacturer of continuous power and infrastructure solutions, reported results for its fourth quarter and fiscal year ended Dec. 31, 2011.
Q4 and Full Year 2011 Highlights
| | · | $18.3 million in quarterly revenue and a record $75.5 million in full year revenue |
| | · | Achieved annual sales growth from previous year across all regions – EMEA up 47%; Americas up 2%; and Asia up 76% for the year |
| | · | UPS systems revenue was $5.6 million for the quarter and $26.4 million for the year, a decrease of 20% compared to the prior year |
| | · | $40.5 million in continuous power and infrastructure solutions revenue, representing 54% of revenue for the year, compared to 38% of revenue in 2010 |
| | · | $12.8 million in service revenues for 2011, an increase of $3.5 million or 38% compared to the prior year |
| | · | 62% increase in information technology (IT) channel revenues compared to the prior year |
| | · | Received the company’s single largest order to date for a $10 million flywheel UPS solution to be deployed in Switzerland |
| | · | Closed Japan operations and reduced scale of UK manufacturing operations during fourth quarter |
| | · | Appointed Noel Foley vice president of Engineering to build on company’s technology leadership position |
Management Commentary
“We closed out 2011 as expected with our UPS business performing under expectations for the year and lower than anticipated margins in our solutions business,” said Jan Lindelow, interim president and CEO of Active Power. “Our decline in profitability was primarily due to these factors and expense related to restructuring actions.”
“As we shared last quarter, we are taking definitive steps to grow our core UPS business and improve margins in our solutions business. We are seeing early positive returns from our focus on these areas, having received orders for more than 140 flywheels that we plan to process for delivery this year. In addition, we have significantly improved margins on our solutions business by implementing more structured processes and pricing changes. This progress, coupled with prudent expense actions, puts us in a strong position to improve operating results and track towards achieving annual profitability.”
Q4 and Full Year 2011 Financial Results
Fourth quarter 2011 revenues were $18.3 million, a decrease of $1 million or 5% versus the same year-ago quarter. For the year ended Dec. 31, 2011, total revenues were a record $75.5 million, a 16% increase compared to $65 million in 2010.
Net loss for the fourth quarter was $3.3 million or $(0.04) per share, which included one-time costs of $1.4 million or $(0.02) per share, associated with the departure of our chief executive officer and costs associated with closure of certain foreign operations. This compares to a net loss of $1.3 million in the third quarter of 2011 and compares to a net income of $145,000 or $0.00 per share in the same year-ago quarter. For the year ended Dec. 31, 2011, net loss was $7.1 million or $(0.09) per share, compared to a net loss of $3.9 million or $(0.05) per share in 2010.
Outlook
Active Power expects first quarter 2012 revenues to be between $17 million and $21 million, reflecting traditional seasonality when compared to the previous quarter. First quarter earnings per share is expected to be a loss of $(0.01) to $(0.03) per share. Changes in cash and investments are expected to be minimal and driven by changes in working capital requirements.
Conference Call and Webcast
Active Power will host a conference call today, Tuesday, Feb. 14, 2012, at
4:30 p.m. (ET) to discuss its fourth quarter and 2011 results. Interested parties can dial into the call at the time of the event at (877) 551-8082. For callers outside the United States and Canada, please dial (904) 520-5770.
To listen to the live Webcast, please click here. A replay of the Webcast will be available via Active Power’s investor relations site at http://ir.activepower.com.
About Active Power
Founded in 1992, Active Power (NASDAQ: ACPW) designs and manufactures continuous power solutions and critical backup power systems that enable datacenters and other mission critical operations to remain ‘on’ 24 hours a day, seven days a week. Active Power solutions are intelligently efficient, inherently reliable and economically green, providing environmental benefits and energy and space efficiencies to customers’ financial benefit. The company’s products and solutions are built with pride in Austin, Texas, at a state-of-the-art, ISO 9001:2008 registered manufacturing and test facility. Global customers are served via Austin and three regional operations centers located in the United Kingdom, Germany, and China, supporting the deployment of systems in more than 40 countries. For more information, visit www.activepower.com.
Cautionary Note Regarding Forward-Looking Statements
This release may contain forward-looking statements that involve risks and uncertainties, including statements relating to Active Power’s current expectations of operating results for the first quarter of 2011, its future operating results and customers’ current intentions. 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. Factors that could cause the actual results to differ materially from the results predicted include, among others, the deferral or cancellation of sales commitments as a result of general economic conditions or uncertainty, risks related to our international operations, and product performance and quality issues. For more information on the risk factors that could cause actual results to differ from these forward looking statements, please refer to Active Power filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K filed since such year ended. Active Power assumes no obligation to update any forward-looking statements or information which are in effect as of their respective dates.
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.
| Investor Contact: | Media Contact: |
| Ron Both | Lee Higgins |
| Liolios Group, Inc. | Senior Public Relations Manager |
| 949-574-3860 | 512-744-9488 |
| acpw@liolios.com | lhiggins@activepower.com |
ACTIVE POWER, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Thousands, except per share amounts)
(unaudited)
| | | Three | | | | | | | |
| | | Months Ended | | | Year Ended | |
| | | Dec. 31, | | | Dec. 31, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Revenues: | | | | | | | | | | | | |
| Product revenue | | $ | 14,760 | | | $ | 16,291 | | | $ | 62,650 | | | $ | 55,647 | |
| Service and other revenue | | | 3,570 | | | | 3,044 | | | | 12,832 | | | | 9,308 | |
| Total revenue | | | 18,330 | | | | 19,335 | | | | 75,482 | | | | 64,955 | |
| | | | | | | | | | | | | | | | | |
| Cost of goods sold: | | | | | | | | | | | | | | | | |
| Cost of product revenue | | | 12,039 | | | | 11,722 | | | | 47,664 | | | | 40,045 | |
| Cost of service and other revenue | | | 2,580 | | | | 2,284 | | | | 9,917 | | | | 6,890 | |
| Total cost of goods sold | | | 14,619 | | | | 14,006 | | | | 57,581 | | | | 46,935 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 3,711 | | | | 5,329 | | | | 17,901 | | | | 18,020 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Research and development | | | 1,460 | | | | 895 | | | | 4,739 | | | | 3,412 | |
| Selling and marketing | | | 3,415 | | | | 2,770 | | | | 13,812 | | | | 13,093 | |
| General & administrative | | | 2,147 | | | | 1,494 | | | | 6,230 | | | | 5,319 | |
| Total operating expenses | | | 7,022 | | | | 5,159 | | | | 24,781 | | | | 21,824 | |
| Operating profit ( loss) | | | (3,311 | ) | | | 170 | | | | (6,880 | ) | | | (3,804 | ) |
| | | | | | | | | | | | | | | | | |
| Interest expense, net | | | (76 | ) | | | (40 | ) | | | (225 | ) | | | (122 | ) |
| Other income (expense), net | | | 45 | | | | 15 | | | | 11 | | | | (40 | ) |
| Income (loss) before income taxes | | | (3,342 | ) | | | 145 | | | | (7,094 | ) | | | (3,966 | ) |
| Income tax benefit | | | - | | | | - | | | | - | | | | 41 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (3,342 | ) | | $ | 145 | | | $ | (7,094 | ) | | $ | (3,925 | ) |
| | | | | | | | | | | | | | | | | |
| Basic net income (loss) per share | | $ | (0.04 | ) | | $ | 0.00 | | | $ | (0.09 | ) | | $ | (0.05 | ) |
| Diluted net income (loss) per share | | $ | (0.04 | ) | | $ | 0.00 | | | $ | (0.09 | ) | | $ | (0.05 | ) |
| Shares used in computing basic net income (loss) per share | | | 80,324 | | | | 79,741 | | | | 80,085 | | | | 77,677 | |
| Shares used in computing diluted net income (loss) per share | | | 80,324 | | | | 82,501 | | | | 80,085 | | | | 77,677 | |
| Comprehensive income (loss): | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (3,342 | ) | | $ | 145 | | | $ | (7,094 | ) | | $ | (3,925 | ) |
| Translation gain (loss) on subsidiaries in foreign currencies | | | (56 | ) | | | 28 | | | | 360 | | | | 18 | |
| Comprehensive income (loss) | | $ | (3,398 | ) | | $ | 173 | | | $ | (6,734 | ) | | $ | (3,907 | ) |
| | | December 31 | |
| | | 2011 | | | 2010 | |
| Assets | | (unaudited) | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 10,357 | | | $ | 15,416 | |
| Short-term investments | | | - | | | | 134 | |
| Restricted cash | | | 389 | | | | - | |
| Accounts receivable, net | | | 11,163 | | | | 14,708 | |
| Inventories | | | 9,439 | | | | 6,430 | |
| Prepaid expenses and other | | | 414 | | | | 511 | |
| Total current assets | | | 31,762 | | | | 37,199 | |
| Property and equipment, net | | | 2,861 | | | | 2,005 | |
| Deposits and other | | | 404 | | | | 314 | |
| Total assets | | $ | 35,027 | | | $ | 39,518 | |
| | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 4,757 | | | $ | 6,022 | |
| Accrued expenses | | | 5,351 | | | | 7,068 | |
| Deferred revenue | | | 2,366 | | | | 2,492 | |
| Revolving line of credit | | | 5,535 | | | | 2,535 | |
| Total current liabilities | | | 18,009 | | | | 18,117 | |
| | | | | | | | | |
| Long-term liabilities | | | 726 | | | | 579 | |
| Stockholders' equity: | | | | | | | | |
| Common stock | | | 80 | | | | 80 | |
| Treasury stock | | | (115 | ) | | | (103 | ) |
| Additional paid-in capital | | | 277,023 | | | | 274,807 | |
| Accumulated deficit | | | (260,895 | ) | | | (253,801 | ) |
| Other accumulated comprehensive loss | | | 199 | | | | (161 | ) |
| Total stockholders’ equity | | | 16,292 | | | | 20,822 | |
| Total liabilities and stockholders’ equity | | $ | 35,027 | | | $ | 39,518 | |
ACTIVE POWER, INC.
SUPPLEMENTAL FINANCIAL DATA
| | | Three Months Ended Dec. 31, | | | Year Ended Dec. 31, | |
| $’000 | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| Product Revenue: | | | | | | | | | | | | | | | | |
| UPS products | | $ | 5,630 | | | $ | 9,795 | | | $ | 26,394 | | | $ | 33,005 | |
| Continuous Power Solutions | | | 2,117 | | | | 5,297 | | | | 22,222 | | | | 11,595 | |
| Infrastructure Solutions | | | 7,013 | | | | 1,199 | | | | 14,034 | | | | 11,047 | |
| | | $ | 14,760 | | | $ | 16,291 | | | $ | 62,650 | | | $ | 55,647 | |
| | | | | | | | | | | | | | | | | |
| MW of critical Power delivered | | 16.6MW | | | 28.6MW | | | 93.5MW | | | 100.4MW | |
| Revenue per MW of Critical Power ($’000) | | $ | 414 | | | $ | 568 | | | $ | 538 | | | $ | 478 | |
Selected Balance Sheet Data: ($’000) | | Dec. 31, 2011 | | | Sept. 30, 2011 | | | June 30, 2011 | | | Dec. 31, 2010 | |
| Inventory: | | | | | | | | | | | | | | | | |
| Raw materials | | $ | 6,493 | | | $ | 6,859 | | | $ | 6,655 | | | $ | 5,243 | |
| Work in progress | | | 3,085 | | | | 3,452 | | | | 5,461 | | | | 2,382 | |
| Finished goods | | | 1,680 | | | | 2,246 | | | | 1,750 | | | | 1,148 | |
| Less reserves for obsolescence | | | (1,819 | ) | | | (1,826 | ) | | | (1,815 | ) | | | (2,343 | ) |
| | | $ | 9,439 | | | $ | 10,731 | | | $ | 12,051 | | | $ | 6,430 | |
| | | | | | | | | | | | | | | | | |
| Americas | | $ | 7,058 | | | $ | 11,511 | | | $ | 10,132 | | | $ | 10,681 | |
| EMEA | | | 2,597 | | | | 1,947 | | | | 4,866 | | | | 4,020 | |
| Asia | | | 1,508 | | | | 3,267 | | | | 2,807 | | | | 7 | |
| | | $ | 11,163 | | | $ | 16,725 | | | $ | 17,805 | | | $ | 14,708 | |
