Exhibit 99.1
Capstone Turbine Announces Fiscal-Year 2005 Results
CHATSWORTH, Calif.--(BUSINESS WIRE)--July 6, 2005--Capstone
Turbine Corporation(R) (Nasdaq:CPST) (www.microturbine.com) reported
results for its fiscal year 2005 in its Form 10-K filed with the
Securities and Exchange Commission on June 29, 2005.
"We are pleased with the progress we made in fiscal 2005 to build
Capstone," said John Tucker, President and CEO of Capstone. "A year
ago, we developed our strategic plan for transitioning Capstone into a
cash flow positive and profitable company. In the first year of
executing on that plan, we made progress in all of our identified
initiatives. Focusing our marketing efforts and growing business in
our targeted markets was one key element of the plan. The growth in
orders, with fiscal 2005 orders more than 190% of the order rate
recorded in fiscal 2004, demonstrates our initial success in
penetrating these targeted markets. This success came in part from our
work to rationalize our channels and to create a more tailored
approach to the targeted markets. In fiscal 2005, approximately 90% of
our sales were still generated by our distributors and dealers."
Tucker continued, "A key enabling factor to our market success
came from the improvements we made in our product robustness. As a
result of these improvements, we are more confident today that
customers' applications of Capstone MicroTurbines(R) will produce
positive performance for their businesses. The improvements also
resulted in an ability to lower our standard warranty costs by
one-third for new sales. We are very pleased that more than 9 million
operating hours have been accumulated for Capstone MicroTurbines. We
look forward to the continuing growth in the run-time hours for our
products." In announcing Capstone's expanded fuel capabilities for its
C60 microturbines, Tucker said, "We believe the additions we have made
to the operating fuels for our model C60 microturbines, gaseous
propane and compress natural gas, and our expected introduction of a
C60 biogas model in late fall of this year, will provide even greater
appeal to our target markets."
"Our success has come in part from our expanded market presence,"
said Tony Hynes, Vice President of Sales and Service for Capstone. "In
fiscal 2005, we opened a field service office in Japan to support our
distributors and end users in that region. We also opened sales and
service offices in New York and Italy. Our Italian office, which
serves as our European headquarters, has already reported orders for
fiscal year 2006 of more than 7 megawatts. This represents roughly the
same level of business in Europe, in just over three months in fiscal
2006, as Capstone has received from Europe since its first sales of
microturbines in 1998. We are delighted at the success our regional
presence has delivered." Further, Hynes announced, "As a result of the
success we have had with our local presence, we are opening Capstone
Mexico and are exploring the possibility of an office in Boston. Our
new office in New York has already produced 2.4 megawatts of new
orders since it opened in December 2004. We believe our prospects are
very strong for continuing business growth in the Northeastern United
States."
Year-to-date orders in fiscal 2006 reported by Capstone were 9.8
megawatts and backlog as of July 6th stands at 17.1 megawatts. "This
level represents more megawatts in backlog today than Capstone shipped
in all of fiscal 2005," said Tucker. "The investments we made in
building our business in fiscal 2005 are already paying off in fiscal
2006. With our tremendous early successes in fiscal 2006, we are
closing in on our targeted sales level for the year. We expect that
further changes we are making in the business, such as our new
National Sales Representative agreement with WESCO Distribution that
we announced earlier today, and additional developments we expect to
announce soon, will provide us even more momentum in our targeted
markets."
In summarizing Capstone's revisit of its three-year strategic
plan, Tucker said, "We reconfirmed our target markets of CHP/CCHP,
Resource Recovery, Power Reliability and Remote Power when we
revisited our strategic plan. Our approach to our distribution
channels, combining sales through distributors and dealers, as well as
direct sales and lead generation by sales representatives, was also
reaffirmed. Our goals for fiscal 2006 include doubling our sales as
compared with fiscal 2005, reaching a positive gross margin and
reducing our cash burn. We continue to target reaching cash flow
positive in our fiscal year 2007 that ends March 31, 2007."
Capstone's financial highlights for fiscal 2005 included sales of
$17.0 million, up $4.4 million from $12.6 million reported for fiscal
2004. The majority of the increase in sales reflected higher demand
for the Company's C60 model microturbines. Backlog at the end of
fiscal 2005 was 10.8 megawatts, reflecting backlog at the beginning of
the year of 6.5 megawatts, orders during the period of 20.8 megawatts
and shipments of 16.5 megawatts.
The reported gross loss was $6.9 million for fiscal 2005, an
improvement of $9.9 million from the $16.8 million loss reported in
fiscal 2004. Lower warranty costs accounted for the change between
periods.
Operating expenses were $34.2 million for the year, up $2.1
million from the prior year. The higher spending resulted primarily
from higher consulting costs for Sarbanes-Oxley compliance work,
information technology systems developments and market development
activities.
Capstone's net loss was $39.4 million, an improvement of $8.3
million from the $47.7 million loss reported in fiscal 2004. Fiscal
2005's reported net loss was $0.47 per share as compared with $0.58 a
year earlier.
Cash usage in the fiscal year was $38.8 million, an increase of
$8.6 million from fiscal year's cash usage of $30.2 million. The
higher cash usage was largely attributable to cash used for inventory
purchases in the current year as opposed to cash sources from
inventory reductions in the prior year.
Cash and cash equivalents at the end of the year were $63.6
million.
Conference Call
The Company will host a conference call today, Wednesday, July 6,
at 2:00 p.m. Pacific Time. Access to the live broadcast and a replay
of the webcast will be available for 90-days through the Company's
website: www.microturbine.com.
About Capstone Turbine
Capstone Turbine Corporation(R) (www.microturbine.com)
(Nasdaq:CPST) is the world's leading producer of low-emission
microturbine systems. In 1998, Capstone was the first to offer
commercial energy products utilizing microturbine technology, the
result of more than ten years of focused research. Capstone Turbine
has shipped more than 3,000 Capstone MicroTurbine(R) systems to
customers worldwide. These award-winning systems have logged more than
9 million hours of documented operation. An ISO 9001:2000 certified
company, Capstone Turbine is headquartered in the Los Angeles area
with sales and/or service centers in New York, Milan and Tokyo.
"Capstone Turbine Corporation" and "Capstone MicroTurbine" are
registered trademarks of Capstone Turbine Corporation. All other
trademarks mentioned are the property of their respective owners.
This press release contains "forward-looking statements," as that
term is used in the federal securities laws, about Capstone's
business, with regard to, among other items, expectations of reaching
cash flow positive or positive gross margin, reducing cash usage,
increasing sales, penetrating target markets, the success of
customers' applications, and expected results from Capstone's sales
offices. Forward-looking statements may be identified by words such as
"believe," "expects," "objective," "intend," "targeted," "plan," "on
track" and similar phrases. These forward-looking statements are
subject to numerous assumptions, risks and uncertainties that may
cause Capstone's actual results to be materially different from any
future results expressed or implied in such statements. Many of these
risks and uncertainties are described in our periodic filings with the
Securities and Exchange Commission. Capstone cautions readers not to
place undue reliance on these forward-looking statements, which speak
only as of the date of this release. Capstone undertakes no
obligation, and specifically disclaims any obligation, to release any
revisions to any forward-looking statements to reflect events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated events.
CAPSTONE TURBINE CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, March 31,
2005 2004
------------- -------------
Assets
Current Assets:
Cash and cash equivalents $63,593,000 $102,380,000
Accounts receivable, net of allowance for
doubtful accounts and sales returns of
$536,000 in 2005 and $479,000 in 2004 3,150,000 4,170,000
Inventory 11,273,000 7,893,000
Prepaid expenses and other current assets 912,000 1,099,000
Assets held for sale 80,000 --
------------- -------------
Total current assets 79,008,000 115,542,000
------------- -------------
Equipment and Leasehold Improvements:
Machinery, equipment and furniture 18,760,000 20,877,000
Leasehold improvements 8,563,000 8,499,000
Molds and tooling 3,096,000 4,363,000
------------- -------------
30,419,000 33,739,000
Less accumulated depreciation and
amortization 19,890,000 18,718,000
------------- -------------
Total equipment and leasehold
improvements 10,529,000 15,021,000
Non-Current Portion of Inventory 3,990,000 3,936,000
Intangible Asset, net 1,427,000 1,694,000
Other Assets 236,000 352,000
------------- -------------
Total $95,190,000 $136,545,000
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $3,324,000 $2,790,000
Accrued salaries and wages 1,442,000 1,664,000
Other accrued liabilities 2,472,000 2,043,000
Accrued warranty reserve 8,667,000 11,695,000
Deferred revenue 1,522,000 1,166,000
Current portion of notes payable and
capital lease obligations 19,000 582,000
------------- -------------
Total current liabilities 17,446,000 19,940,000
------------- -------------
Long-Term Portion of Note Payable and
Capital Lease Obligations 64,000 13,000
Other Long-Term Liabilities 1,002,000 1,149,000
Commitments and Contingencies -- --
Stockholders' Equity:
Preferred stock, $.001 par value;
10,000,000 shares authorized; none issued -- --
Common stock, $.001 par value; 415,000,000
shares authorized; 85,379,446 shares
issued and 84,828,238 shares outstanding
at March 31, 2005; 85,025,817 shares
issued and 84,474,609 shares outstanding
at March 31, 2004 85,000 85,000
Additional paid-in capital 530,931,000 530,394,000
Accumulated deficit (453,469,000) (414,020,000)
Less deferred stock compensation (356,000) (503,000)
Less treasury stock, at cost; 551,208
shares in 2005 and 2004 (513,000) (513,000)
------------- -------------
Total stockholders' equity 76,678,000 115,443,000
------------- -------------
Total $95,190,000 $136,545,000
============= =============
CAPSTONE TURBINE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three
Years Ended Months
March 31, Ended Year Ended
--------------------------- March 31, December 31,
2005 2004 2003 2002
------------- ------------- ------------ -------------
Net Revenues $16,968,000 $12,607,000 $2,782,000 $19,529,000
Cost of Goods
Sold 23,908,000 29,385,000 4,956,000 41,530,000
------------- ------------- ------------ -------------
Gross Loss (6,940,000) (16,778,000) (2,174,000) (22,001,000)
Operating
Expenses:
Research and
development 11,761,000 11,221,000 1,006,000 6,966,000
Selling,
general and
administrative 22,419,000 20,840,000 4,821,000 31,846,000
Impairment loss
on marketing
rights -- -- -- 15,999,000
------------- ------------- ------------ -------------
Total
operating
costs and
expenses 34,180,000 32,061,000 5,827,000 54,811,000
------------- ------------- ------------ -------------
Loss from
Operations (41,120,000) (48,839,000) (8,001,000) (76,812,000)
Interest Income 1,338,000 1,284,000 439,000 2,840,000
Interest Expense (37,000) (183,000) (73,000) (407,000)
Other Income, net 372,000 1,000 2,000 26,000
------------- ------------- ------------ -------------
Loss Before
Income Taxes (39,447,000) (47,737,000) (7,633,000) (74,353,000)
Provision for
Income Taxes 2,000 2,000 2,000 2,000
------------- ------------- ------------ -------------
Net Loss $(39,449,000) $(47,739,000) $(7,635,000) $(74,355,000)
============= ============= ============ =============
Net Loss Per
Share of Common
Stock -- Basic
and Diluted $(0.47) $(0.58) $(0.09) $(0.95)
============= ============= ============ =============
Weighted Average
Common Shares
Outstanding 84,377,794 82,348,711 81,410,614 78,130,795
============= ============= ============ =============
CAPSTONE TURBINE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Year Ended
March 31, March 31,
2005 2004
------------- -------------
Cash Flows from Operating Activities:
Net loss $(39,449,000) $(47,739,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 5,181,000 6,180,000
Non-cash reversal of administrative
expenses -- --
Impairment loss on fixed assets and
manufacturing license 614,000 --
Impairment loss on marketing rights -- --
Provision for doubtful accounts and
returns 57,000 280,000
Inventory write-down 744,000 931,000
(Benefit) provision for warranty
expenses (682,000) 9,749,000
Loss on disposal of fixed assets 24,000 315,000
Non-employee stock compensation 129,000 92,000
Employee and director stock
compensation 251,000 528,000
Changes in operating assets and
liabilities:
Accounts receivable 963,000 (509,000)
Inventory (4,062,000) 3,871,000
Prepaid expenses and other assets 187,000 258,000
Accounts payable 534,000 440,000
Accrued salaries and wages and other
accrued and long term liabilities 60,000 890,000
Accrued warranty reserve (2,346,000) (4,551,000)
Deferred revenue 356,000 (247,000)
------------- -------------
Net cash used in operating activities (37,439,000) (29,512,000)
------------- -------------
Cash Flows from Investing Activities:
Acquisition of and deposits on equipment
and leasehold improvements (1,057,000) (1,299,000)
Proceeds from sale of equipment 3,000 28,000
------------- -------------
Net cash used in investing activities (1,054,000) (1,271,000)
------------- -------------
Cash Flows from Financing Activities:
Repayment of capital lease obligations (598,000) (1,415,000)
Exercise of stock options, restricted
stock award and employee stock purchases 304,000 2,086,000
Purchase of treasury stock -- (92,000)
Net proceeds from issuance of common stock -- --
------------- -------------
Net cash provided by (used in)
financing activities (294,000) 579,000
------------- -------------
Net Decrease in Cash and Cash Equivalents (38,787,000) (30,204,000)
Cash and Cash Equivalents, Beginning of
Year 102,380,000 132,584,000
------------- -------------
Cash and Cash Equivalents, End of Year $63,593,000 $102,380,000
============= =============
Supplemental Disclosures of Cash Flow
Information
Cash paid during the year for:
Interest $35,000 $183,000
Income taxes $2,000 $2,000
Three Months
Ended Year Ended
March 31, December 31,
2003 2002
------------- -------------
Cash Flows from Operating Activities:
Net loss $(7,635,000) $(74,355,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,573,000 9,891,000
Non-cash reversal of administrative
expenses (1,099,000)
Impairment loss on fixed assets and
manufacturing license -- 5,016,000
Impairment loss on marketing rights -- 15,999,000
Provision for doubtful accounts and
returns 220,000 215,000
Inventory write-down 243,000 4,793,000
(Benefit) provision for warranty
expenses 385,000 6,175,000
Loss on disposal of fixed assets -- 102,000
Non-employee stock compensation 4,000 --
Employee and director stock compensation 210,000 1,024,000
Changes in operating assets and
liabilities:
Accounts receivable 732,000 2,907,000
Inventory (967,000) 1,272,000
Prepaid expenses and other assets 990,000 (1,202,000)
Accounts payable (873,000) 830,000
Accrued salaries and wages and other
accrued and long term liabilities (580,000) 683,000
Accrued warranty reserve (634,000) (3,406,000)
Deferred revenue 512,000 (737,000)
------------- -------------
Net cash used in operating activities (6,919,000) (30,793,000)
------------- -------------
Cash Flows from Investing Activities:
Acquisition of and deposits on equipment
and leasehold improvements (271,000) (2,515,000)
Proceeds from sale of equipment -- --
------------- -------------
Net cash used in investing activities (271,000) (2,515,000)
------------- -------------
Cash Flows from Financing Activities:
Repayment of capital lease obligations (343,000) (1,309,000)
Exercise of stock options, restricted stock
award and employee stock purchases 22,000 280,000
Purchase of treasury stock (215,000) (206,000)
Net proceeds from issuance of common stock -- 3,985,000
------------- -------------
Net cash provided by (used in) financing
activities (536,000) 2,750,000
------------- -------------
Net Decrease in Cash and Cash Equivalents (7,726,000) (30,558,000)
Cash and Cash Equivalents, Beginning of
Year 140,310,000 170,868,000
------------- -------------
Cash and Cash Equivalents, End of Year $132,584,000 $140,310,000
============= =============
Supplemental Disclosures of Cash Flow
Information
Cash paid during the year for:
Interest $73,000 $407,000
Income taxes $2,000 $2,000
CONTACT: Capstone Turbine Corporation
General Media Inquiries:
Keith Field, 818-734-5465
Investor and Investment Media Inquiries:
Cindy Martinez, 818-407-3643 (Investor Info.)