Exhibit 99.1
Capstone Turbine Corporation Announces Second Quarter
Fiscal 2007 Operating Results
CHATSWORTH, Calif.--(BUSINESS WIRE)--Nov. 9, 2006--Capstone
Turbine Corporation (Nasdaq:CPST) (www.microturbine.com) reported
operating results for its second quarter ended September 30, 2006 in
its Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on November 9, 2006.
Financial Summary
Capstone's revenue for the fiscal 2007 second quarter was $2.9
million, representing a decrease of approximately 48% from the prior
year comparable quarter and a decrease of 55% from the prior quarter.
Product sales to the European and Russian markets declined
approximately $2.3 million from the first quarter, although new orders
of approximately $2.5 million were received from these markets during
the quarter.
Backlog at the end of the second quarter was $6.8 million, an
increase of over 26% from the prior quarter, although decreased over
45% from the end of the prior year comparable quarter. In October,
after the close of the second quarter, we received a new order for 1.6
megawatts or $1.4 million dollars from our major OEM customer.
"We are pleased with the traction we have experienced in Europe
and Russia over the past year, despite lower sales this quarter. John
Fink, our Executive Vice President, Sales and Service, is continuing
to build momentum with our relationships in the New York market. We
have increased our commitment to the New York market by expanding our
lease to build out sales and service offices, warehousing,
manufacturing and light component assembly work in Brooklyn," said
Mark Gilbreth, Capstone's Interim President and CEO.
The reported gross loss for the second quarter was $2.3 million,
or 79% of revenue compared to $1.1 million, or 19% of revenue from the
prior year comparable quarter and $1.2 million, or 19% of revenue from
the prior quarter. The increase in the gross loss and corresponding
decline in the gross loss percentage reflects lower volume and
increased warranty charges.
Research and development costs were $2.6 million for the fiscal
2007 second quarter, an improvement of $0.1 million, or 5%, from the
prior year comparable quarter and $0.2 million, or 8% from the prior
quarter. The improvement was primarily related to continued lower
spending on development hardware and reduced payroll costs.
Selling general and administrative costs were $6.1 million for the
fiscal 2007 second quarter, an improvement of $0.7 million, or 11%,
from the prior year comparable quarter, of $6.8 million. The decrease
from the prior year comparable quarter is primarily attributable to
lower payroll and professional fees, offset by approximately $0.2
million of increased non-cash stock compensation charges related to
the Company's adoption of SFAS 123(R). Selling, general and
administrative costs increased $0.1 million, or 2% from the prior
quarter. The increase from the prior quarter is due to slightly
increased sales and marketing expenses and increased administrative
costs associated with our Annual Shareholders Meeting and Proxy
Statement distribution.
Capstone's net loss was $10.4 million for the fiscal 2007 second
quarter, or $0.10 per diluted common share, an increase of $1.1
million from the $9.3 million loss, or $0.09 per diluted common share,
reported for the first quarter of fiscal 2007.
Cash balances decreased by $9.4 million during the second quarter
of fiscal 2007. As of September 30, 2006, cash and cash equivalents
were $39.3 million.
Conference Call
The Company will host a conference call today, Thursday, November
9, at 1:45 p.m. Pacific Time. Access to the live broadcast and a
replay of the webcast will be available for 90 days through the
Investor Relations page on the Company's website: www.microturbine.com
About Capstone Turbine
Capstone Turbine Corporation (www.microturbine.com) (Nasdaq:CPST)
is the world's leading producer of low-emission microturbine systems,
and was the first to market commercially viable microturbine energy
products. Capstone Turbine has shipped more than 3,500 Capstone
MicroTurbine systems to customers worldwide. These award-winning
systems have logged millions of documented runtime operating hours.
Capstone Turbine is a member of the U.S. Environmental Protection
Agency's Combined Heat and Power Partnership, which is committed to
improving the efficiency of the nation's energy infrastructure and
reducing emissions of pollutants and greenhouse gases. A UL-Certified
ISO 9001:2000 certified company; Capstone Turbine is headquartered in
the Los Angeles area with sales and/or service centers in New York,
Mexico City, Milan, Nottingham, Shanghai 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, with regard to business
momentum in the New York market. Forward-looking statements may be
identified by words such as "expects," "objective," "intend,"
"targeted," "plan" and similar phrases. These forward-looking
statements are subject to numerous assumptions, risks and
uncertainties, including the fact that certain product applications in
the New York market may require further regulatory approvals, that we
may not achieve the growth we currently anticipated, we may not be
able to retain a permanent replacement to our former CEO, and other
factors described in Capstone's filings with the Securities and
Exchange Commission may cause Capstone's actual results to be
materially different from any future results expressed or implied in
such statements. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
September 30, March 31,
2006 2006
------------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $39,329 $58,051
Accounts receivable, net of allowance for
doubtful accounts and sales returns of
$805 at September 30, 2006 and $858 at
March 31, 2006 2,532 5,869
Inventories 18,968 12,545
Prepaid expenses and other current assets 1,695 1,050
------------- ---------
Total current assets 62,524 77,515
Property, plant and equipment, net 6,762 7,816
Non-current portion of inventories 2,569 3,113
Intangible asset, net and other long-term
assets 1,139 1,273
------------- ---------
Total $72,994 $89,717
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $8,445 $8,144
Accrued salaries and wages 1,376 1,623
Accrued warranty reserve 6,876 6,998
Deferred revenue 688 632
Current portion of notes payable 19 19
------------- ---------
Total current liabilities 17,404 17,416
------------- ---------
Long-term portion of notes payable 37 47
Other long-term liabilities 592 626
Stockholders' Equity:
Preferred stock, $.001 par value;
10,000,000 shares authorized; none issued -- --
Common stock, $.001 par value; 415,000,000
shares authorized; 104,765,257 shares
issued and 104,214,049 shares outstanding
at September 30, 2006; 103,521,829 shares
issued and 102,970,621 shares outstanding
at March 31, 2006 104 104
Additional paid-in capital 575,663 572,787
Accumulated deficit (520,293) (500,542)
Deferred stock compensation -- (208)
Treasury stock, at cost; 551,208 shares (513) (513)
------------- ---------
Total stockholders' equity 54,961 71,628
------------- ---------
Total $72,994 $89,717
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CAPSTONE TURBINE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
September 30, September 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue $2,946 $5,705 $9,512 $9,512
Cost of goods sold (includes
stock-based compensation of
$23, $0, $51 and $0, for the
periods presented,
respectively) 5,282 6,768 13,084 13,992
--------- --------- --------- ---------
Gross loss (2,336) (1,063) (3,572) (4,480)
Operating expenses:
Research and development
(includes stock-based
compensation of $56, $0,
$112 and $0, for the
periods presented,
respectively) 2,592 2,728 5,398 4,833
Selling, general and
administrative (includes
stock-based compensation of
$591, $449, $1,266 and
$577, for the periods
presented, respectively) 6,061 6,788 11,976 12,525
--------- --------- --------- ---------
Total operating expenses 8,653 9,516 17,374 17,358
--------- --------- --------- ---------
Loss from operations (10,989) (10,579) (20,946) (21,838)
Interest income 571 377 1,198 773
Interest expense (1) (19) (2) (21)
Other income -- 22 1 24
--------- --------- --------- ---------
Loss before income taxes (10,419) (10,199) (19,749) (21,062)
Provision for income taxes -- -- 2 2
--------- --------- --------- ---------
Net loss $(10,419) $(10,199) $(19,751) $(21,064)
--------- --------- --------- ---------
Net loss per share of common
stock -- Basic and Diluted $(0.10) $(0.12) $(0.19) $(0.25)
========= ========= ========= =========
Weighted average shares used
to calculate Basic and
Diluted net loss per share 103,901 84,955 103,612 84,673
========= ========= ========= =========
CONTACT: Capstone Turbine Corporation
Investor and investment media inquiries:
Alice Barsoomian, 818-407-3628