EXHIBIT 99.1
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PRESS RELEASE DATED FEBRUARY 1, 2006
ACTIVE POWER ANNOUNCES FOURTH QUARTER RESULTS
AUSTIN, Texas (February 1, 2006) -- Active Power, Inc. (NASDAQ: ACPW) today
announced results for its fourth quarter ended December 31, 2005. Revenue for
the fourth quarter of fiscal 2005 was $5.2 million, up 9% from the same period
last year and 14% from the previous quarter. Revenue for the year ended December
31, 2005 was $17.8 million, up 13% from the 2004 total of $15.8 million.
Net loss for the fourth quarter of 2005 was $6.8 million, or 14 cents per share,
compared to a net loss of $5.1 million, or 12 cents per share, for the same
period last year and a net loss of $5.2 million, or 11 cents per share in the
third quarter of 2005. Net loss for the current quarter was affected by $2.1
million in charges for technology impairments related to license agreements
signed in 2000 and 2001 for third party technologies that we have decided not to
commercialize and by an increase in our provision for doubtful accounts relating
to certain foreign customer receivables.
Cash and investments usage for the quarter was $6.4 million, as compared to
$10.8 million for the same period last year and $6.8 million for the previous
quarter. The fourth quarter's cash and investment usage was greater than
expected due to lower than anticipated collections from certain foreign
customers. Cash and investments at December 31, 2005 were $42.0 million.
"We continue to see growth in our megawatt-class UPS business, with five systems
shipping during the fourth quarter and the receipt of our largest megawatt-class
UPS order to date earlier this week," said Joe Pinkerton, Chairman and CEO of
Active Power. "We have also made significant progress on our newest product,
CoolAir(TM) DC, with its public launch and the first sale during the quarter.
Our company enters 2006 with the broadest offering of three-phase UPS and energy
storage systems on the market. We are making significant investments in sales
and marketing to increase our market penetration with these products. To that
end, we promoted Jim Clishem to be our President and COO. Jim is focusing our
sales teams by geography and has hired two industry veterans to run these
groups."
Recent Business Highlights:
o Announced this week the receipt of an 11 Megawatt UPS order from
Caterpillar that will be used to protect a large datacenter in the
United States. This order is our largest single megawatt-class UPS
order received to date. We believe this order will be shipped over the
first half of this year.
o Launched our new battery-free extended runtime product, CoolAir(TM)
DC, at the 7 x 24 Exchange Fall Conference in November. We followed up
this launch with the first sale of a CoolAir(TM) DC product in
December. The sale followed a detailed evaluation process over several
months in which a leading utility company tested the unit in a number
of different applications.
o Completed the enlistment and training of manufacturer's representative
firms that will sell our CoolAir(TM) DC product throughout North
America. We now have over 25 representative firms engaged, trained and
ready to sell our equipment.
o Shipped 1.8 MVA of UPS systems to protect the runway lights at the
largest airport in Mexico, Aeropuerto Internacional de la Ciudad de
Mexico. We shipped an additional 1 MVA of UPS equipment to an airport
in the Middle East.
o Entered into an early adopter agreement with a multi-billion dollar
corporation and UPS systems manufacturer to test and evaluate our
CoolAir(TM) DC at one of its test facilities in Europe.
o Shipped multiple DC and UPS flywheel units to seven separate
datacenter customers in Q4. We believe equipment sales will continue
to increase with the resurgent growth of the datacenter market.
o Continued our strong international presence with shipments to seven
countries. International sales constituted 36% of revenue in Q4.
o Received the 2005 Award for Customer Development Leadership from Frost
& Sullivan, a leading backup power industry analyst.
o Announced the appointment of Jim Clishem as President and Chief
Operating Officer of the Company. Mr. Clishem will run the day-to-day
operations of the company, with a particular focus on sales, marketing
and operating expense reduction.
o Announced Ian Bitterlin as the new Vice President of Sales for the
European, Middle East, and African (EMEA) markets. Mr. Bitterlin
brings a wealth of international UPS sales experience to Active Power.
His appointment reinforces our strategy to dramatically grow our
global power quality solutions business.
o Promoted industry veteran John Rodenhausen to be our Vice President of
Sales for the Americas. Mr. Rodenhausen had been serving as our
Director of Static UPS Business, focusing primarily on the
establishment of a North American manufacturer's representative sales
channel selling our double conversion UPS line and new CoolAir(TM) DC
product.
Outlook:
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Active Power expects Q1 2006 revenue to be approximately $4.5 to $5.5 million,
and Q1 earnings per share to be a loss of approximately 13 to 15 cents, which
includes approximately 2 cents per share for stock compensation expenses
pursuant to FAS 123R. We expect cash and investments usage in Q1 to be in the
range of $5.0 to $6.0 million.
CONFERENCE CALL:
The Company will host a conference call today, Wednesday, February 1, at 11:00
a.m. Eastern Time, to further review the Company's fiscal Q4 results. A replay
of the webcast will be available until February 15th. Investors may access the
live broadcast and replay through our web site: www.activepower.com.
ABOUT ACTIVE POWER:
Active Power, Inc. (www.activepower.com) designs, manufactures and markets
battery-free power quality products that provide the consistent, reliable
electric power required by today's digital economy. An ISO 9001-certified
company, Active Power is the first to commercialize a flywheel energy storage
system, CleanSource(R), that provides a highly reliable, low-cost and non-toxic
replacement for lead-acid batteries used in conventional power quality
installations. Active Power has also recently developed a new battery-free
extended runtime product line (CoolAir(TM)) based on its proprietary thermal and
compressed air storage technology.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This release may contain forward-looking statements that involve risks and
uncertainties. Among the important factors that could cause actual results to
materially differ from those in the forward-looking statements are: the
potential for significant losses to continue; inability to accurately predict
revenue and budget for expenses for future periods; fluctuations in revenue and
operating results; overall market performance; decreases and/or delays in
capital spending; limited product offerings; inability to expand and integrate
new distribution channels; inability to manage new and existing product
distribution relationships; our dependence on our relationship with
Caterpillar(R); competition; delays in research and development; dependence on
sole or limited source suppliers; inability to increase product sales; inventory
risks; dependence upon key personnel; inability to protect our intellectual
property rights; potential future acquisitions; potential Sarbanes-Oxley Section
404 compliance issues; the volatility of our stock price regardless of our
actual financial performance; and other factors detailed in our filings with the
Securities and Exchange Commission. Additional risks and uncertainties that we
are unaware of or that we currently deem immaterial also may become important
factors that affect us. Active Power expressly disclaims any obligation to
release publicly any updates or revisions to the information contained in this
press release or to update or revise any forward-looking statements to reflect
any changes in expectations, or any change in events or circumstances on which
those statements are based, unless otherwise required by law.
Active Power and our Active Power logo and CleanSource are registered trademarks
of Active Power, Inc. All other trademarks are the properties of their
respective companies.
ACTIVE POWER CONTACTS:
Michael Chibib, Investors, 512.744.9453, mchibib@activepower.com
Derek Jones, Corporate Communications, 512.744.9210, djones@activepower.com
ACTIVE POWER, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Thousands, except per share amounts)
(unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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2005 2004 2005 2004
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Product revenue $ 4,786 $ 4,368 $ 15,854 $ 14,050
Service and spares revenue 374 386 1,934 1,733
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Total revenue 5,160 4,754 17,788 15,783
Operating expenses:
Cost of product revenue 4,811 4,152 16,159 16,130
Cost of service and spares revenue 327 473 1,869 1,900
Research and development 3,341 2,520 11,172 9,837
Selling, general & administrative 3,793 2,979 13,854 11,559
Litigation settlement expense - - - 5,080
Amortization of deferred stock compensation 54 - 54 34
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Total operating expenses 12,326 10,124 43,108 44,540
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Operating loss (7,166) (5,370) (25,320) (28,757)
Interest income 420 234 1,632 1,066
Other income (expense) (26) 3 (167) (89)
Gain due to change in market value of investment rights - - 964 -
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Net loss $ (6,772) $ (5,133) $ (22,891) $ (27,780)
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Net loss per share, basic & diluted $ (0.14) $ (0.12) $ (0.48) $ (0.65)
Shares used in computing net loss per share, basic & diluted 48,792 42,677 48,058 42,471
Comprehensive loss:
Net loss $ (6,772) $ (5,133) $ (22,891) $ (27,780)
Unrealized gain (loss) on investments in marketable securities (6) (51) (97) (322)
Realized loss on marketable securities - 78 91 156
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Comprehensive loss $ (6,778) $ (5,106) $ (22,897) $ (27,946)
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ACTIVE POWER, INC.
CONDENSED BALANCE SHEETS
(Thousands)
DECEMBER 31, DECEMBER 31,
2005 2004
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(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 7,590 $ 17,625
Restricted cash 116 741
Short-term investments in marketable securities 31,364 21,308
Accounts receivable, net 5,769 4,143
Inventories 4,242 3,966
Prepaid expenses and other 596 1,028
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Total current assets 49,677 48,811
Property and equipment, net 7,530 7,829
Intangible assets, net - 725
Long-term investments in marketable securities 2,970 6,001
Deposits and other 188 -
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Total assets $ 60,365 $ 63,366
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 2,264 $ 1,649
Accrued expenses 3,780 3,410
Deferred revenue 205 214
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Total current liabilities 6,249 5,273
Stockholders' equity:
Common stock 49 43
Treasury stock (5) (2)
Deferred stock compensation (293) -
Additional paid-in capital 235,147 215,937
Accumulated deficit (180,689) (157,798)
Other accumulated comprehensive income (93) (87)
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Total stockholders' equity 54,116 58,093
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Total liabilities and stockholders' equity $ 60,365 $ 63,366
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