EXHIBIT 99.1
NEWS RELEASE
For Immediate Release |
| Contact: Michael Sund |
May 6, 2003 |
| (858) 503-5171 |
MAXWELL TECHNOLOGIES REPORTS FIRST QUARTER FINANCIAL RESULTS
Ultracapacitor Sales Growing Rapidly Despite Weak Global Manufacturing Activity
CONFERENCE CALL AT 11 A.M. (EASTERN) TOMORROW, MAY 7, 2003 — DETAILS BELOW
SAN DIEGO, Calif. — Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported a net loss of $4.4 million, or $0.32 per share, on revenue of $10.2 million for its first quarter ended March 31, 2003. That compares with a net loss of $6.7 million, or $0.65 per share, on revenue of $12.8 million for the first quarter ended March 31, 2002. Cash and short-term investments totaled $10.2 million at the end of the first quarter.
Rich Balanson, Maxwell’s president and chief executive officer, said that deferred recognition of a substantial, non-refundable, cash payment received in February as part of an ultracapacitor manufacturing and marketing alliance with Yeong-Long Technologies, Co., Ltd., resulted in lower revenue and a larger net loss than had been expected.
“Although recognition of the initial revenue from the Yeong-Long alliance is being deferred, the strategic value of this relationship is immediate,” Balanson said. “It gives Maxwell access to Yeong-Long’s high-volume, low-cost manufacturing capabilities in China, enhances our reach as a global supplier and provides a royalty-bearing sales outlet for our BOOSTCAP® ultracapacitor products in China, all of which are integral to our growth strategy for ultracapacitors.”
James Baumker, Maxwell’s chief financial officer, said that the revenue deferral is consistent with recent rulings of the Emerging Issues Task Force that provide guidance on the timing of revenue recognition for contractual agreements with “multiple deliverables”. He said that instead of immediately recognizing an initial payment received from Yeong-Long for a technology license and other services, the company now expects to recognize it later in 2003, or in early 2004.
Balanson noted that, with the exception of ultracapacitors, which are now on a strong growth track, driven by multiple design-ins that have advanced to commercial production, sales and bookings for Maxwell’s other products continue to be affected by weak global manufacturing activity.
“We are experiencing soft demand for virtually all of our other components and systems products, as are most other suppliers to the manufacturing sector,” Balanson said. “Despite this challenging sales environment, we are gaining market share and doing a good job on controlling costs. With our current lean expense structure, we will have tremendous leverage when the general economy picks up and our revenue increases, but our OEM customers are proceeding very cautiously right now, and it appears that any turnaround will be gradual.”
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Cash used by operating activities in the current quarter was approximately $0.8 million, compared with $5.0 million in the same period in 2002.
“The balance sheet is solid, and we expect to augment our cash reserves when we complete the sale of a vacant facility in San Diego later this year,” Balanson said.
The company will file its Form 10-Q, containing complete financial data and Management’s Discussion and Analysis of Financial Conditions and Results of Operations for the first quarter ended March 31, 2003, by May 15, 2003. That document will be available via the Internet at the company’s web site, through the following link: www.maxwell.com/investors/sec_filings.html, or in hard copy by calling the company’s Investor Relations Department, toll-free at (888) 307-7886, extension 3320.
Management will conduct a conference call and simultaneous webcast to discuss first quarter financial results and the outlook for the balance of 2003, and answer analysts’ questions at 11 a.m. (eastern) tomorrow, May 7, 2003. The call may be accessed by dialing toll-free, (888) 584-2147 from the U.S. and Canada, or (706) 679-7677 for international callers. The webcast and subsequent replay may be accessed at the company’s web site, via the following link: www.maxwell.com/investors/presentations.html .
Maxwell sells reliability. We develop, manufacture and market electronic components and systems that perform reliably for the life of the end products into which they are integrated. Our power products address applications in transportation, telecommunications, consumer and industrial electronics, electric utility infrastructure and medical imaging. Our microelectronic products primarily address applications in aerospace. Our power product lines are comprised of ultracapacitors, high voltage capacitors, and custom power and energy storage systems. Our microelectronic product lines are comprised of radiation-shielded power modules, memory modules, and single board computers. We also design and sell automated winding equipment used to manufacture metalized film capacitors and lithium batteries.
This news release contains forward-looking statements that are subject to risks and uncertainties. These include development and acceptance of products based on new technologies, demand for original equipment manufacturers’ products reaching anticipated levels, general economic conditions in the markets served by the company’s products, cost-effective manufacturing of new products, the impact of competitive products and pricing and risks and uncertainties involved in foreign operations. These and other risks are detailed from time-to-time in the Company’s SEC reports, including the report on Form 10-K for the fiscal year ended December 31, 2002. Actual results may differ materially from those projected. These forward-looking statements represent the Company’s judgment as of the date of this news release. The Company disclaims any intent or obligation to update these forward-looking statements.
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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
|
| March 31 |
| December 31 |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 4,619 |
| $ | 3,545 |
|
Short-term investments |
| 5,595 |
| 7,546 |
| ||
Trade and other accounts receivable, net |
| 6,363 |
| 8,530 |
| ||
Inventories |
| 11,584 |
| 11,833 |
| ||
Prepaid expenses and other current assets |
| 1,114 |
| 1,037 |
| ||
Assets held-for-sale |
| 7,356 |
| 7,356 |
| ||
|
|
|
|
|
| ||
Total current assets |
| 36,631 |
| 39,847 |
| ||
Property, plant and equipment, net |
| 11,237 |
| 11,653 |
| ||
Other intangible assets, net |
| 2,046 |
| 2,009 |
| ||
Goodwill |
| 17,716 |
| 17,577 |
| ||
Other non-current assets |
| 295 |
| 294 |
| ||
|
| $ | 67,925 |
| $ | 71,380 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable and accrued liabilities |
| $ | 8,294 |
| $ | 11,508 |
|
Deferred Revenue |
| 5,098 |
| 2,305 |
| ||
Accrued employee compensation |
| 1,900 |
| 1,590 |
| ||
Short-term borrowings and current portion of long-term debt |
| 884 |
| 570 |
| ||
Deferred tax liability |
| 279 |
| 272 |
| ||
Net liabilities of discontinued operations |
| 2,573 |
| 2,326 |
| ||
Total current liabilities |
| 19,028 |
| 18,571 |
| ||
|
|
|
|
|
| ||
Deferred tax liability |
| 183 |
| 183 |
| ||
Long-term debt, excluding current portion |
| 2,600 |
| 2,675 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock, $0.10 par value per share, 40,000 shares authorized; 13,765 and 13,726 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively |
| 1,377 |
| 1,373 |
| ||
Additional paid-in capital |
| 112,372 |
| 112,255 |
| ||
|
|
|
|
|
| ||
Accumulated deficit |
| (68,376 | ) | (64,015 | ) | ||
Accumulated other comprehensive income |
| 741 |
| 338 |
| ||
Total stockholders’ equity |
| 46,114 |
| 49,951 |
| ||
|
| $ | 67,925 |
| $ | 71,380 |
|
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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
| Three Months Ended March 31, |
| |||||||
|
| 2003 |
| 2002 |
| |||||
|
|
|
|
|
| |||||
Sales |
| $ | 10,241 |
| $ | 12,789 |
| |||
Costs and expenses: |
|
|
|
|
| |||||
Cost of sales |
| 8,930 |
| 11,842 |
| |||||
Selling, general and administrative |
| 4,040 |
| 4,691 |
| |||||
Research and development |
| 1,307 |
| 2,667 |
| |||||
Other deductions, net |
| (236 | ) | (214 | ) | |||||
Total costs and expenses |
| 14,041 |
| 18,986 |
| |||||
Loss from continuing operations before income taxes |
| (3,800 | ) | (6,197 | ) | |||||
Provision for income taxes |
| (14 | ) | (291 | ) | |||||
Loss from continuing operations |
| (3,786 | ) | (5,906 | ) | |||||
Discontinued operations, net of taxes: |
|
|
|
|
| |||||
Loss from operations |
| (575 | ) | (805 | ) | |||||
Gain on disposal |
| — |
| — |
| |||||
Net loss from discontinued operations |
| (575 | ) | (805 | ) | |||||
|
|
|
|
|
| |||||
Net loss |
| $ | (4,361 | ) | $ | (6,711 | ) | |||
|
|
|
|
|
| |||||
Basic net loss per share: |
|
|
|
|
| |||||
Loss from continuing operations |
| $ | (0.28 | ) | $ | (0.57 | ) | |||
Loss from discontinued operations |
| (0.04 | ) | (0.08 | ) | |||||
Net loss |
| $ | (0.32 | ) | $ | (0.65 | ) | |||
|
|
|
|
|
| |||||
Diluted net loss per share: |
|
|
|
|
| |||||
Loss from continuing operations |
| $ | (0.28 | ) | $ | (0.57 | ) | |||
Loss from discontinued operations |
| (0.04 | ) | (0.08 | ) | |||||
Net loss |
| $ | (0.32 | ) | $ | (0.65 | ) | |||
|
|
|
|
|
| |||||
Shares used in computing: |
|
|
|
|
| |||||
Basic net loss per share |
| 13,741 |
| 10,395 |
| |||||
Diluted net loss per share |
| 13,741 |
| 10,395 |
| |||||
|
|
|
|
|
| |||||
Other deductions (credits), net |
|
|
|
|
| |||||
(Gain) loss on sale of business |
| $ | (228 | ) | $ | — |
| |||
Interest expense (income) , net |
| (27 | ) | 27 |
| |||||
Amortization of other intangibles |
| 19 |
| — |
| |||||
Minority interest in net loss of subsidiaries |
| — |
| (241 | ) | |||||
|
| $ | (236 | ) | $ | (214 | ) | |||
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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
SEGMENT STATEMENTS OF OPERATIONS
(in thousands)
|
| For the Three Months Ended March 31, |
| ||||
|
| 2003 |
| 2002 |
| ||
Revenue: |
|
|
|
|
| ||
High Reliability |
| $ | 7,833 |
| $ | 7,555 |
|
Winding Equipment |
| 2,408 |
| — |
| ||
I-Bus Computing Systems |
| — |
| 4,139 |
| ||
Sierra and TeknaSeal |
| — |
| 1,095 |
| ||
Consolidated total |
| $ | 10,241 |
| $ | 12,789 |
|
|
|
|
|
|
| ||
Income (loss): |
|
|
|
|
| ||
High Reliability |
| $ | (2,495 | ) | $ | (3,030 | ) |
Winding Equipment |
| (237 | ) | — |
| ||
I-Bus Computing Systems |
| (114 | ) | (2,721 | ) | ||
Sierra and TeknaSeal |
| — |
| 274 |
| ||
Total segment operating loss |
| (2,846 | ) | (5,477 | ) | ||
Corporate expenses |
| 1,209 |
| 934 |
| ||
(Gain) loss on sale of businesses |
| (228 | ) | — |
| ||
Minority interest |
| — |
| (241 | ) | ||
Interest and other, net |
| (27 | ) | 27 |
| ||
Loss from continuing operations before income taxes |
| $ | (3,800 | ) | $ | (6,197 | ) |
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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
| Three Months Ended March 31, |
| ||||
|
| 2003 |
| 2002 |
| ||
Operating activities: |
|
|
|
|
| ||
Loss from continuing operations |
| $ | (3,786 | ) | $ | (5,906 | ) |
Adjustments to reconcile loss from continuing operating activities, net of cash used in operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 877 |
| 1,069 |
| ||
Other noncash items |
| (222 | ) | (241 | ) | ||
Changes in operating assets and liabilities, net |
| 2,352 |
| 40 |
| ||
|
|
|
|
|
| ||
Net cash used in operating activities |
| (779 | ) | (5,038 | ) | ||
Investing activities: |
|
|
|
|
| ||
Proceeds from sale of businesses and equipment |
| 278 |
| — |
| ||
Purchases of property and equipment |
| (397 | ) | (468 | ) | ||
Proceeds from sale of short-term investments |
| 2,836 |
| 7,739 |
| ||
Purchases of short-term investments |
| (924 | ) | (5,067 | ) | ||
Net cash provided by investing activities |
| 1,793 |
| 2,204 |
| ||
Financing activities: |
|
|
|
|
| ||
Principal payments on long-term debt and short-term borrowings |
| (75 | ) | (50 | ) | ||
Proceeds from short-term borrowings |
| 314 |
| — |
| ||
Proceeds from issuance of Company and subsidiary stock |
| 121 |
| 446 |
| ||
Net cash provided by financing activities |
| 360 |
| 396 |
| ||
Net cash provided by (used in) discontinued operations |
| (328 | ) | 915 |
| ||
Effect of exchange rate changes on cash and cash equivalents |
| 28 |
| (2 | ) | ||
Increase (decrease) in cash and cash equivalents |
| 1,074 |
| (1,525 | ) | ||
Cash and cash equivalents at beginning of period |
| 3,545 |
| 13,673 |
| ||
Cash and cash equivalents at end of period |
| $ | 4,619 |
| $ | 12,148 |
|
|
|
|
|
|
| ||
Cash, cash equivalents and short-term Investments at end of period |
| $ | 10,214 |
| $ | 21,307 |
|
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