EXHIBIT 99.1
NEWS RELEASE
For Immediate Release |
| Contact: | Michael Sund |
October 29, 2003 |
|
| (858) 503-5171 |
MAXWELL TECHNOLOGIES REPORTS THIRD QUARTER FINANCIAL RESULTS
High-Reliability Product Sales Growth and Margin Improvement Continue;
Divestiture of Non-Core Businesses to be Completed by Year-End
CONFERENCE CALL AT 11 A.M. (EST) TOMORROW, OCTOBER 30, 2003 – DETAILS BELOW
SAN DIEGO, Calif. — Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported a net loss of $2.1 million, or $0.15 per share, on revenue of $10.9 million for its third quarter ended September 30, 2003. That compares with a net loss $23.5 million, or $1.73 per share, on revenue of $16.5 million, for the third quarter ended September 30, 2002. Cash and short-term investments totaled $5.8 million as of September 30, 2003.
Dr. Richard Balanson, Maxwell’s president and chief executive officer, said that, in line with the company’s strategy of focusing exclusively on high-reliability, high-margin product lines and eliminating non-core and low-margin products, it will divest its winding equipment business by the end of 2003. Balanson said that the company completed the previously announced divestiture of its tester business during the third quarter. Excluding charges of $.6 million, or $0.04 per share, associated with exiting the tester business, the third quarter net loss was $1.5 million.
Revenue for Maxwell’s core high-reliability products, which include ultracapacitor components and systems, high voltage capacitors and radiation-mitigated microelectronics, totaled $8.2 million for the third quarter. Balanson noted that, exclusive of tester-related charges, gross margins for high-reliability products increased by two percentage points sequentially from the second quarter to the third quarter, benefiting from continuing revenue mix improvement driven mainly by increasing ultracapacitor sales and the phase-out of low-margin, transformer based, power systems products.
“As we promised earlier in the year, Maxwell will enter 2004 with a highly focused line of core high-reliability products that will contribute gross margins above 60 percent on each dollar of incremental revenue,” Balanson said. “Significant cost reductions and efficiency improvements in each of our core businesses have reduced the company’s quarterly breakeven revenue threshold from more than $15 million at the beginning of 2003 to about $12.5 million in Q4. Further reductions are underway that should enable the company to turn profitable by the second half of next year.”
Cash used by operating activities in the third quarter was approximately $2.0 million, compared with $2.5 million in the same period in 2002.
“Our cash position is adequate for the near term, and we will net more than $5 million to augment cash reserves when we complete the sale of a vacant facility in San Diego, which is now in escrow and scheduled to close during the fourth quarter,” Balanson said.
-more-
3
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 third quarter ended September 30, 2003, by November 14. That document will be available at the company’s web site via the following link: www.maxwell.com/investors/sec_filings.html, or in hard copy by calling the company’s Investor Relations Department, at (858) 503-5165.
Management will conduct a conference call and simultaneous webcast to discuss third quarter financial results and the company’s future outlook and answer analysts’ questions at 11 a.m. (eastern) tomorrow, October 30, 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 applications into which they are integrated. Our BoostCap® ultracapacitors and ultracapacitor-based energy storage systems uniquely address applications in transportation and consumer and industrial electronics. Our high-voltage grading and coupling capacitors are used in electric utility infrastructure and other applications involving transport, distribution and measurement of high voltage electrical energy. Our radiation-mitigated microelectronic products include power modules, memory modules and single board computers that primarily address applications in aerospace. For more information, please visit our website: www.maxwell.com.
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.
# # #
4
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
|
| September 30, |
| December 31, |
| ||
|
| (unaudited) |
|
|
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 3,086 |
| $ | 3,545 |
|
Short-term investments |
| 2,689 |
| 7,546 |
| ||
Trade and other accounts receivable, net |
| 7,893 |
| 8,530 |
| ||
Inventories |
| 9,340 |
| 11,833 |
| ||
Prepaid expenses and other current assets |
| 1,938 |
| 1,037 |
| ||
Assets held-for-sale |
| 7,356 |
| 7,356 |
| ||
Total current assets |
| 32,302 |
| 39,847 |
| ||
Property, plant and equipment, net |
| 10,598 |
| 11,653 |
| ||
Other intangible assets, net |
| 1,981 |
| 2,009 |
| ||
Goodwill |
| 18,190 |
| 17,577 |
| ||
Other non-current assets |
| 293 |
| 294 |
| ||
|
| $ | 63,364 |
| $ | 71,380 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable and accrued liabilities |
| $ | 8,001 |
| $ | 11,508 |
|
Deferred revenue |
| 5,126 |
| 2,305 |
| ||
Accrued employee compensation |
| 2,079 |
| 1,590 |
| ||
Short-term borrowings and current portion of long-term debt |
| 3,692 |
| 570 |
| ||
Deferred tax liability |
| 498 |
| 272 |
| ||
Liabilities of discontinued operations |
| 2,161 |
| 2,326 |
| ||
Total current liabilities |
| 21,557 |
| 18,571 |
| ||
|
|
|
|
|
| ||
Deferred tax liability |
| 183 |
| 183 |
| ||
Long-term debt, excluding current portion |
| — |
| 2,675 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock, $0.10 par value per share, 40,000 shares authorized; 13,816 and 13,726 shares issued and outstanding at September 30, 2003 and December 31, 2002, respectively |
| 1,382 |
| 1,373 |
| ||
Additional paid-in capital |
| 108,824 |
| 112,255 |
| ||
Common shares issuable |
| 4,098 |
| — |
| ||
Accumulated deficit |
| (73,889 | ) | (64,015 | ) | ||
Accumulated other comprehensive income |
| 1,209 |
| 338 |
| ||
Total stockholders’ equity |
| 41,624 |
| 49,951 |
| ||
|
| $ | 63,364 |
| $ | 71,380 |
|
5
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Sales |
| $ | 10,993 |
| $ | 16,564 |
| $ | 31,887 |
| $ | 42,509 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
Cost of sales |
| 9,408 |
| 13,858 |
| 27,634 |
| 39,651 |
| ||||
Selling, general and administrative |
| 2,611 |
| 5,171 |
| 10,188 |
| 14,766 |
| ||||
Research and development |
| 1,597 |
| 2,167 |
| 4,478 |
| 7,080 |
| ||||
Impairment of long lived assets |
| — |
| 7,628 |
| — |
| 7,628 |
| ||||
Loss (gain) on sale of business |
| (263 | ) | 7,219 |
| (726 | ) | 7,219 |
| ||||
Restructuring charge |
| — |
| 922 |
| — |
| 1,734 |
| ||||
Other |
| (23 | ) | 261 |
| (18 | ) | 29 |
| ||||
Total costs and expenses |
| 13,330 |
| 37,226 |
| 41,556 |
| 78,107 |
| ||||
Loss from continuing operations before income taxes |
| (2,337 | ) | (20,662 | ) | (9,669 | ) | (35,598 | ) | ||||
Provision (benefit) for income taxes |
| (149 | ) | 124 |
| (249 | ) | (155 | ) | ||||
Minority interest in net loss of subsidiaries |
| — |
| — |
| — |
| (241 | ) | ||||
Loss from continuing operations |
| (2,188 | ) | (20,786 | ) | (9,420 | ) | (35,202 | ) | ||||
Discontinued operations, net of taxes: |
|
|
|
|
|
|
|
|
| ||||
Net income (loss) from discontinued operations |
| 115 |
| (2,761 | ) | (453 | ) | (4,445 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
| $ | (2,073 | ) | $ | (23,547 | ) | $ | (9,873 | ) | $ | (39,647 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Basic net loss per share: |
|
|
|
|
|
|
|
|
| ||||
Loss from continuing operations |
| $ | (0.16 | ) | $ | (1.53 | ) | $ | (0.68 | ) | $ | (2.99 | ) |
Income (loss) from discontinued operations |
| 0.01 |
| (0.20 | ) | (0.03 | ) | (0.38 | ) | ||||
Net loss |
| $ | (0.15 | ) | $ | (1.73 | ) | $ | (0.71 | ) | $ | (3.37 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Diluted net loss per share: |
|
|
|
|
|
|
|
|
| ||||
Loss from continuing operations |
| $ | (0.16 | ) | $ | (1.53 | ) | $ | (0.68 | ) | $ | (2.99 | ) |
Income (loss) from discontinued operations |
| 0.01 |
| (0.20 | ) | (0.03 | ) | (0.38 | ) | ||||
Net loss |
| $ | (0.15 | ) | $ | (1.73 | ) | $ | (0.71 | ) | $ | (3.37 | ) |
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares used in computing: |
|
|
|
|
|
|
|
|
| ||||
Basic net loss per share |
| 13,949 |
| 13,597 |
| 13,804 |
| 11,770 |
| ||||
Diluted net loss per share |
| 13,801 |
| 13,597 |
| 13,754 |
| 11,770 |
|
6
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
|
| For the Three Months Ended September 30, |
| For the Nine Months Ended September 30, |
| ||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| ||||
Revenue: |
|
|
|
|
|
|
|
|
| ||||
High Reliability |
| $ | 8,297 |
| $ | 11,509 |
| $ | 24,047 |
| $ | 26,937 |
|
Winding Equipment |
| 2,696 |
| 1,284 |
| 7,840 |
| 1,284 |
| ||||
I-Bus Computing Systems |
| — |
| 2,707 |
| — |
| 11,002 |
| ||||
Sierra Tekna Seal |
| — |
| 1,064 |
| — |
| 3,286 |
| ||||
Consolidated total |
| $ | 10,993 |
| $ | 16,564 |
| $ | 31,887 |
| $ | 42,509 |
|
|
|
|
|
|
|
|
|
|
| ||||
Income (loss): |
|
|
|
|
|
|
|
|
| ||||
High Reliability |
| $ | (2,257 | ) | $ | (1,264 | ) | $ | (7,220 | ) | $ | (5,520 | ) |
Winding Equipment |
| 25 |
| (317 | ) | (501 | ) | (317 | ) | ||||
I-Bus Computing Systems |
| 250 |
| (2,663 | ) | 136 |
| (11,513 | ) | ||||
Sierra Tekna Seal |
| — |
| 330 |
| — |
| 940 |
| ||||
Total segment operating loss |
| (1,982 | ) | (3,914 | ) | (7,585 | ) | (16,410 | ) | ||||
Corporate expenses |
| 660 |
| 1,066 |
| 2,885 |
| 2,926 |
| ||||
Gain (loss) on sale of businesses |
| (263 | ) | 7,219 |
| (726 | ) | 7,628 |
| ||||
Restructuring |
| — |
| 922 |
| — |
| 1,734 |
| ||||
Impairment of long lived assets |
| — |
| 7,628 |
| — |
| 7,219 |
| ||||
Minority interest |
| — |
| — |
| — |
| (241 | ) | ||||
Interest and other, net |
| (42 | ) | (87 | ) | (75 | ) | (319 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss from continuing operations before income taxes |
| $ | (2,337 | ) | $ | (20,662 | ) | $ | (9,669 | ) | $ | (35,357 | ) |
7
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
| Nine Months Ended September 30, |
| ||||
|
| 2003 |
| 2002 |
| ||
Operating activities: |
|
|
|
|
| ||
Loss from continuing operations |
| $ | (9,420 | ) | $ | (35,202 | ) |
Adjustments to reconcile loss from continuing operating activities, to net of cash used in operating activities: |
|
|
|
|
| ||
Depreciation and amortization |
| 2,701 |
| 3,638 |
| ||
Other noncash items |
| (391 | ) | 11,311 |
| ||
Changes in operating assets and liabilities, net |
| 2,369 |
| 9,464 |
| ||
Net cash used in operating activities |
| (4,741 | ) | (10,789 | ) | ||
Investing activities: |
|
|
|
|
| ||
Proceeds from sale of businesses and equipment |
| 726 |
| — |
| ||
Purchase of business, net of cash acquired |
| — |
| (2,692 | ) | ||
Purchases of property and equipment |
| (1,589 | ) | (1,583 | ) | ||
Proceeds from sale of short-term investments |
| 8,100 |
| 13,075 |
| ||
Purchases of short-term investments |
| (3,332 | ) | (8,789 | ) | ||
Net cash provided by investing activities |
| 3,905 |
| 11 |
| ||
Financing activities: |
|
|
|
|
| ||
Principal payments on long-term debt and short-term borrowings |
| (1,022 | ) | (200 | ) | ||
Proceeds from short-term borrowings |
| 1,469 |
| — |
| ||
Proceeds from issuance of Company and subsidiary stock |
| 363 |
| 1,223 |
| ||
Net cash provided by financing activities |
| 810 |
| 1,023 |
| ||
Net cash used in discontinued operations |
| (618 | ) | (2,911 | ) | ||
Effect of exchange rate changes on cash and cash equivalents |
| 185 |
| (292 | ) | ||
Decrease in cash and cash equivalents |
| (459 | ) | (12,958 | ) | ||
Cash and cash equivalents at beginning of period |
| 3,545 |
| 13,673 |
| ||
Cash and cash equivalents at end of period |
| $ | 3,086 |
| $ | 715 |
|
8