SAN DIEGO, July 30, 2015 /PRNewswire/ -- Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported revenue of $37.8 million for its second quarter ended June 30, 2015, an increase of 9 percent from the $34.7 million recorded in the first quarter of 2015, but down 18 percent from the $46.1 million recorded in the second quarter of 2014.
Second quarter ultracapacitor revenue increased by 7 percent to $23.4 million, compared with $21.9 million recorded in the first quarter of 2015, but was down 31 percent compared with the $33.9 million recorded in the second quarter of 2014. Sales of high voltage capacitor and microelectronics products totaled $14.3 million in Q215, up 13 percent compared with the $12.7 million recorded in the first quarter of 2015 and up 18 percent from the $12.2 million recorded in Q214.
On a U.S. generally accepted accounting principles (GAAP) basis, the operating loss for the second quarter 2015 was $6.3 million, compared with an operating loss of $8.6 million in Q115 and an operating loss of $335,000 in Q214. GAAP net loss for Q215 was $9.4 million, or $0.31 per share, compared with a net loss of $9.3 million, or $0.32 per share, in Q115 and a net loss of $1.2 million, or $0.04 per share, in Q214.
On a non-GAAP basis, the company reported an operating loss of $2.2 million in Q215 compared with an operating loss of $7.7 million in Q115 and operating income of $833,000 in Q214. Non-GAAP net loss for Q215 was $3.2 million, or $0.11 cents per share, compared with a net loss of $8.5 million, or $0.29 cents per share, in Q115 and a net loss of $13,000, or $0.00 per share, in Q214. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.
GAAP gross margin was 32 percent in Q215, compared with 30 percent in Q115 and 36 percent in Q214. GAAP operating expenses totaled $18.4 million, or 49 percent of revenue, in Q215, compared with $18.9 million, or 54 percent of revenue, in Q115, and $16.9 million, or 37 percent of revenue, in Q214. Non-GAAP operating expenses totaled $14.6 million, or 39 percent of revenue, in Q215 compared with $18.2 million, or 53 percent of revenue, in Q115 and $16.0 million, or 35 percent of revenue, in Q214. Cash and cash equivalents totaled $25.0 million as of June 30, 2015, compared with $23.1 million as of March 31, 2015. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations will be available with the filing of the Company's Quarterly Report on Form 10-Q with the Securities & Exchange Commission.
Management has initiated a restructuring plan to consolidate U.S. manufacturing operations and to reduce headcount and operating expenses in order to align the company's cost structure with the current business forecast, and improve operational efficiency. The plan also includes the potential divestiture of the microelectronics product line. In connection with the restructuring plan, the company expects to incur total restructuring and related charges, including accelerated equipment depreciation expense, of approximately $4.2 million, of which $2.5 million was recorded in Q215. Upon completion of the plan, which is anticipated to be by the end of the first quarter of 2016, total cash expenditures related to restructuring activities are expected to be approximately $2.2 million.
"Second quarter revenue and gross margin were in line with our guidance and operating expenses improved substantially," said Dr. Franz Fink, Maxwell's president and CEO. "Operating expenses came in ahead of plan in the second quarter, already beating our quarterly target of $15 million on a non-GAAP basis originally targeted for Q4 of this year. The restructuring actions we are taking should allow us to achieve our goal of significantly accelerating our path to profitability."
Non-GAAP Financial Measures: The Company uses non-GAAP financial measures for internal evaluation and to report the results of its business. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss), and non-GAAP net income (loss) per diluted share. These measures are not in accordance with, nor an alternative to, GAAP. These measures are intended to supplement GAAP financial information, and may be computed differently from non-GAAP financial measures used by other companies. The Company believes that these measures provide useful information to its management, board of directors and investors about its operating activities and business trends related to its financial condition and results of operations. The Company believes that it is useful to provide investors with information to understand how specific line items in the statement of operations are affected by certain non-cash or non-recurring items, such as stock-based compensation expense, significant non-standard tax charges, and restructuring-related costs.
In addition, the Company's management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the Company's results of operations, as non-cash and non-recurring items have limited impact on current and future operating decisions. Additionally, the Company believes that inclusion of non-GAAP financial measures provide consistency and comparability with its past reports of financial results. However, investors should be aware that non-GAAP measures have inherent limitations and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Please refer to the accompanying tables for a detailed reconciliation of GAAP to non-GAAP gross profit, operating expenses, income from operations, net income, and net income per share.
Management will conduct a conference call and simultaneous webcast to discuss second quarter of 2015 financial results and the future outlook at 5 p.m. (EDT) today. The call may be accessed by dialing toll-free, (888) 632-3383 from the U.S. and Canada, or (785) 424-1676 for international callers, and entering the conference ID, MAXWELL. The live web cast and subsequent archived replay may be accessed at the Company's web site via the following link: http://investors.maxwell.com/phoenix.zhtml?c=94560&p=irol-calendar.
Maxwell is a global leader in the development and manufacture of innovative, cost-effective energy storage and power delivery solutions. Our ultracapacitor products provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation, renewable energy and information technology. Our CONDIS® high-voltage grading and coupling capacitors help to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy. Our radiation-hardened microelectronic products for satellites and spacecraft include single board computers and components incorporating our proprietary RADPAK® packaging and shielding technology that enables them to perform reliably in space. For more information, visit www.maxwell.com.
Forward-looking statements: Statements in this news release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and contingencies include, but are not limited to, the following:
- Our ability to remain competitive and stimulate customer demand through successful introduction of new products, and to educate our prospective customers on the products we offer;
- Dependence upon the sale of products to a small number of customers and vertical markets, some of which are heavily dependent on government funding or government subsidies which may or may not continue in the future;
- Dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside our control may adversely affect our sales;
- Risks related to our international operations including, but not limited to, our ability to adequately comply with the changing rules and regulations in countries where our business is conducted, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively manage foreign currency exchange rate fluctuations arising from our international operations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act as well as the anti-bribery laws of foreign jurisdictions;
- Risk that our restructuring efforts may not be successful and that we may not be able to realize the anticipated cost savings and other benefits;
- Successful acquisition, development and retention of key personnel;
- Our ability to effectively manage our reliance upon certain suppliers of key component parts, specialty equipment and logistical services;
- Our ability to match production volume to actual customer demand;
- Our ability to manage product quality problems;
- Our ability to protect our intellectual property rights and to defend claims against us;
- Our ability to effectively identify, enter into, manage and benefit from strategic alliances;
- Occurrence of a catastrophic event at any of our facilities;
- Occurrence of a technology systems failure, network disruption, or breach in data security;
- Our ability to obtain sufficient capital to meet our operating or other needs; and,
- Our ability to manage and minimize the impact of unfavorable legal proceedings.
For further information regarding risks and uncertainties associated with Maxwell's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of our SEC filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these documents may be obtained by contacting Maxwell's investor relations department at (858) 503-3434, or at our investor relations website: investors.maxwell.com. All information in this release is as of July 30, 2015. The Company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the Company's expectations.
Media & Investor Contact: Michael Sund, +1 858.503.3233; msund@maxwell.com
MAXWELL TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||||||
Revenue | $ | 37,796 | $ | 34,670 | $ | 46,074 | $ | 72,466 | $ | 92,075 | |||||||||||
Cost of revenue | 25,643 | 24,367 | 29,477 | 50,010 | 57,615 | ||||||||||||||||
Gross profit | 12,153 | 10,303 | 16,597 | 22,456 | 34,460 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Selling, general and administrative | 10,142 | 10,957 | 10,709 | 21,099 | 21,353 | ||||||||||||||||
Research and development | 5,930 | 7,918 | 6,223 | 13,848 | 12,394 | ||||||||||||||||
Restructuring and exit costs | 2,340 | — | — | 2,340 | — | ||||||||||||||||
Total operating expenses | 18,412 | 18,875 | 16,932 | 37,287 | 33,747 | ||||||||||||||||
Income (loss) from operations | (6,259) | (8,572) | (335) | (14,831) | 713 | ||||||||||||||||
Interest expense, net | 75 | 89 | 28 | 164 | 67 | ||||||||||||||||
Amortization of prepaid debt costs | 2 | 5 | 5 | 7 | 10 | ||||||||||||||||
Foreign currency exchange loss, net | 85 | 328 | 232 | 413 | 520 | ||||||||||||||||
Income (loss) before income taxes | (6,421) | (8,994) | (600) | (15,415) | 116 | ||||||||||||||||
Income tax provision | 2,955 | 347 | 581 | 3,302 | 978 | ||||||||||||||||
Net loss | $ | (9,376) | $ | (9,341) | $ | (1,181) | $ | (18,717) | $ | (862) | |||||||||||
Net loss per common share: | |||||||||||||||||||||
Basic and diluted | $ | (0.31) | $ | (0.32) | $ | (0.04) | $ | (0.63) | $ | (0.03) | |||||||||||
Weighted average common shares | |||||||||||||||||||||
Basic and diluted | 30,323 | 29,445 | 29,206 | 29,886 | 29,127 | ||||||||||||||||
MAXWELL TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) (Unaudited) | ||||||||
June 30, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 25,031 | $ | 24,732 | ||||
Trade and other accounts receivable, net | 31,857 | 43,698 | ||||||
Inventories | 41,147 | 44,856 | ||||||
Prepaid expenses and other current assets | 2,872 | 2,426 | ||||||
Total current assets | 100,907 | 115,712 | ||||||
Property and equipment, net | 35,847 | 39,223 | ||||||
Goodwill | 24,915 | 23,599 | ||||||
Pension asset | 8,318 | 7,362 | ||||||
Other non-current assets | 595 | 704 | ||||||
Total assets | $ | 170,582 | $ | 186,600 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities | $ | 19,364 | $ | 27,011 | ||||
Accrued employee compensation | 8,643 | 9,348 | ||||||
Deferred revenue and customer deposits | 878 | 703 | ||||||
Short-term borrowings and current portion of long-term debt | 5,937 | 15,549 | ||||||
Deferred tax liability | 1,160 | 1,111 | ||||||
Total current liabilities | 35,982 | 53,722 | ||||||
Deferred tax liability, long-term | 5,515 | 3,304 | ||||||
Long-term debt, excluding current portion | 5 | 20 | ||||||
Other long-term liabilities | 3,318 | 2,601 | ||||||
Total liabilities | 44,820 | 59,647 | ||||||
Stockholders' equity: | ||||||||
Common stock, $0.10 par value per share, 40,000 shares authorized; 31,738 and 29,846 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 3,171 | 2,982 | ||||||
Additional paid-in capital | 289,050 | 277,314 | ||||||
Accumulated deficit | (176,783) | (158,066) | ||||||
Accumulated other comprehensive income | 10,324 | 4,723 | ||||||
Total stockholders' equity | 125,762 | 126,953 | ||||||
Total liabilities and stockholders' equity | $ | 170,582 | $ | 186,600 | ||||
MAXWELL TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands, except per share data) (Unaudited) | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | ||||||||||||||||
Gross Profit Reconciliation: | ||||||||||||||||||||
GAAP gross profit | $ | 12,153 | $ | 10,303 | $ | 16,597 | $ | 22,456 | $ | 34,460 | ||||||||||
Stock-based compensation expense included in cost of sales | A | 147 | 206 | 190 | 353 | 442 | ||||||||||||||
Accelerated depreciation | D | 184 | — | — | 184 | — | ||||||||||||||
Non-GAAP gross profit | $ | 12,484 | $ | 10,509 | $ | 16,787 | $ | 22,993 | $ | 34,902 | ||||||||||
Total Operating Expenses Reconciliation: | ||||||||||||||||||||
GAAP total operating expenses | $ | 18,412 | $ | 18,875 | $ | 16,932 | $ | 37,287 | $ | 33,747 | ||||||||||
Stock-based compensation expense | A | (864) | (633) | (978) | (1,497) | (1,479) | ||||||||||||||
Restructuring and exit costs | C | (2,340) | — | — | (2,340) | — | ||||||||||||||
CFO transition | E | (284) | — | — | (284) | — | ||||||||||||||
Legal costs for SEC and FCPA matters | F | (282) | — | — | (267) | — | ||||||||||||||
Non-GAAP total operating expenses | $ | 14,642 | $ | 18,242 | $ | 15,954 | $ | 32,899 | $ | 32,268 | ||||||||||
Income (Loss) From Operations Reconciliation: | ||||||||||||||||||||
GAAP income (loss) from operations | $ | (6,259) | $ | (8,572) | $ | (335) | $ | (14,831) | $ | 713 | ||||||||||
Stock-based compensation expense | A | 1,011 | 839 | 1,168 | 1,850 | 1,921 | ||||||||||||||
Restructuring and exit costs | C | 2,340 | — | — | 2,340 | — | ||||||||||||||
Accelerated depreciation | D | 184 | — | — | 184 | — | ||||||||||||||
CFO transition | E | 284 | — | — | 284 | — | ||||||||||||||
Legal costs for SEC and FCPA matters | F | 282 | — | — | 282 | — | ||||||||||||||
Non-GAAP income (loss) from operations | $ | (2,158) | $ | (7,733) | $ | 833 | $ | (9,891) | $ | 2,634 | ||||||||||
Net Income (Loss) Reconciliation: | ||||||||||||||||||||
GAAP net loss | $ | (9,376) | $ | (9,341) | $ | (1,181) | $ | (18,717) | $ | (862) | ||||||||||
Stock-based compensation expense | A | 1,011 | 839 | 1,168 | 1,850 | 1,921 | ||||||||||||||
Tax impact of potential cash repatriation | B | 2,085 | — | — | 885 | — | ||||||||||||||
Restructuring and exit costs | C | 2,340 | — | — | 2,340 | — | ||||||||||||||
Accelerated depreciation | D | 184 | — | — | 184 | — | ||||||||||||||
CFO transition | E | 284 | — | — | 284 | — | ||||||||||||||
Legal costs for SEC and FCPA matters | F | 282 | — | — | 267 | — | ||||||||||||||
Non-GAAP net income (loss) | $ | (3,190) | $ | (8,502) | $ | (13) | $ | (12,907) | $ | 1,059 | ||||||||||
Net Income (Loss) per Diluted Share Reconciliation: | ||||||||||||||||||||
GAAP net loss per share | $ | (0.31) | $ | (0.32) | $ | (0.04) | $ | (0.63) | $ | (0.03) | ||||||||||
Stock-based compensation expense | A | 0.03 | 0.03 | 0.04 | 0.06 | 0.07 | ||||||||||||||
Tax impact of potential cash repatriation | B | 0.07 | — | — | 0.03 | — | ||||||||||||||
Restructuring and exit costs | C | 0.07 | — | — | 0.08 | — | ||||||||||||||
Accelerated depreciation | D | 0.01 | — | — | 0.01 | — | ||||||||||||||
CFO transition | E | 0.01 | — | — | 0.01 | — | ||||||||||||||
Legal costs for SEC and FCPA matters | F | 0.01 | — | — | 0.01 | — | ||||||||||||||
Non-GAAP net income (loss) per diluted share | $ | (0.11) | $ | (0.29) | $ | — | $ | (0.43) | $ | 0.04 | ||||||||||
See note on next page
MAXWELL TECHNOLOGIES, INC. | |||||||||||||||||||||
(A) | Stock-based compensation expense consists of non-cash charges for employee stock options, restricted stock awards, restricted stock units and employee stock purchase plan awards. Results include stock-based compensation expense as follows (in thousands): | ||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
June 30, 2015 | March 31, 2015 | June 30, 2014 | June 30, 2015 | June 30, 2014 | |||||||||||||||||
Cost of revenue | $ | 147 | $ | 206 | $ | 190 | $ | 353 | $ | 442 | |||||||||||
Selling, general and administrative | 657 | 366 | 734 | 1,023 | 988 | ||||||||||||||||
Research and development | 207 | 267 | 244 | 474 | 491 | ||||||||||||||||
Total stock-based compensation expense | $ | 1,011 | $ | 839 | $ | 1,168 | $ | 1,850 | $ | 1,921 | |||||||||||
(B) | During the quarter ended June 30, 2015, the Company recorded a tax charge of $2.1 million associated with a portion of the unremitted earnings of a foreign subsidiary that may be repatriated to the U.S. | ||||||||||||||||||||
(C) | During the quarter ended June 30, 2015, the Company recorded restructuring charges of $2.3 million. | ||||||||||||||||||||
(D) | During the quarter ended June 30, 2015, the Company recorded accelerated depreciation charges of $184,000 related to the adjustment of the remaining useful life for certain manufacturing equipment. | ||||||||||||||||||||
(E) | During the quarter ended June 30, 2015, the Company recorded one time severance charges of $284,000 related to the departure of its former CFO. | ||||||||||||||||||||
(F) | Legal costs for the FCPA and SEC matters represent external legal expenses related to the U.S. Securities and Exchange Commission's investigation of the facts and circumstances surrounding the restatement of the Company's financial statements for fiscal years 2011 and 2012, as well as for ongoing legal matters related to previous Foreign Corrupt Practices Act (FCPA) violations. | ||||||||||||||||||||
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SOURCE Maxwell Technologies, Inc.
