Maxwell Technologies Reports First Quarter Financial Results
Ultracapacitor Sales Up 55%, Total Revenue Up 32% vs. Q110
SAN DIEGO, April 28, 2011 /PRNewswire/ -- Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported revenue of $35.3 million for its first quarter ended March 31, 2011, up 32 percent over the $26.6 million recorded in the same period in 2010. BOOSTCAP® ultracapacitor revenue increased by 55 percent, to $21.4 million in Q111, compared with $13.8 million for the same period last year. Sales of high voltage capacitor and microelectronics products totaled $13.9 million in Q111, up 8 percent from the $12.8 million recorded in Q110.
"Energy storage solutions for wind turbine blade pitch systems and hybrid and electric transit vehicle drive systems continued to be primary drivers of ultracapacitor sales growth, along with increasing contributions from automotive stop-start idle elimination systems and various backup power applications," said David Schramm, Maxwell's president and chief executive officer. "This strong top line growth and ongoing cost reduction and efficiency improvements also enabled the company to continue improving operating results."
On a U.S. generally accepted accounting principles (GAAP) basis, operating loss for Q111 was $73,000, compared with an operating loss of $1.6 million in Q110. GAAP net income for the first quarter 2011 was $196,000, or $0.01 per diluted share, compared with GAAP net income of $1.2 million, or $0.05 per diluted share, in the same period last year. The GAAP net income comparison is affected by a non-cash gain of $1.1 million, or $0.04 per diluted share, in Q111 vs. a non-cash gain of $3.2 million, or $0.12 per diluted share, in Q110, based on the quarterly valuation of conversion features and warrants associated with convertible debentures issued in 2005. As previously disclosed, the warrants were exercised in December 2010, and the company retired the convertible debentures in February 2011. Therefore, the company will not record non-cash gains or losses related to the conversion features and warrants going forward.
On a non-GAAP basis, the company reported operating income of $978,000 in Q111, compared with an operating loss of $849,000 in the same period last year, and net income of $161,000, or $0.01 per diluted share in Q111, compared with a net loss of $1.2 million, or $0.05 per share in Q110. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.
GAAP gross margin was 39 percent in Q111, compared with 38 percent in Q110 and 37 percent in Q410. GAAP operating expenses totaled approximately $14.0 million, or 39 percent of revenue in Q111, compared with $11.8 million, or 44 percent of revenue in Q110. Non-GAAP operating expenses totaled approximately $13.1 million, or 37 percent of revenue, in Q111, compared with $11.3 million, or 42 percent of revenue, in Q110. Cash and cash equivalents totaled $33.1 million as of March 31, 2011, compared with $47.8 million of cash, cash equivalents and restricted cash as of December 31, 2010. 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.
Outlook: "We expect sequential top line growth of five to seven percent in the second quarter," Schramm said. "For the full year, we continue to expect top line growth of more than 20 percent over 2010, and steadily improving operating performance should enable the company to generate cash from operations and be profitable on a non-GAAP basis going forward."
On January 31, 2011 the company reached settlements with the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) with respect to charges asserted by the SEC and DOJ relating to the anti-bribery, books and records, internal controls, and disclosure provisions of the Foreign Corrupt Practices Act (FCPA) and other securities law violations. The Company settled civil charges with the SEC, agreeing to an injunction against further violations of the FCPA. Under the terms of the settlement with the SEC, the Company will pay a total of $6.35 million in profit disgorgement and prejudgment interest in two installments, of which $3.175 million was paid in February, and the remaining $3.175 million is payable in the first quarter of 2012. Under the terms of the settlement with the DOJ, the Company will pay a total of $8.0 million in penalties in three installments, of which $3.5 million was paid in February, and $2.25 million installments are payable in the first quarters of 2012 and 2013. As part of the settlement, the Company entered into a three-year deferred prosecution agreement (DPA) with the DOJ. If the Company remains in compliance with the terms of the DPA, at the conclusion of the term, the charges against the Company will be dismissed with prejudice. Further, under the terms of the agreements, the Company will periodically report to the SEC and DOJ on its internal compliance program concerning anti-bribery. The amounts to be paid in connection with these settlements had been fully accrued by the Company as of September 30, 2010.
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 diluted net income (loss) per 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:
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 provides 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 (loss) from operations, net income (loss), and diluted net income (loss) per share.
Conference Call: Management will conduct a conference call and simultaneous webcast to discuss first quarter financial results and the future outlook at 5 p.m. (EDT) today. The call may be accessed by dialing toll-free, (800) 895-1085 from the U.S. and Canada, or (785) 424-1055 for international callers, and entering the conference ID, 7MAXWELL. 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-IRHome.
Maxwell is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions. Our BOOSTCAP® ultracapacitor cells and multi-cell modules provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation and telecommunications. 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-mitigated microelectronic products include power modules, memory modules and single board computers that incorporate powerful commercial silicon for superior performance and high reliability in aerospace applications.
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. Such risks, uncertainties and contingencies include, but are not limited to, the following:
Many of these factors are beyond our control, and there can be no assurance that we will not incur additional unforeseen costs in the conduct of our business. Forward-looking statements included herein do not purport to be predictions of future events or circumstances and may not be realized. 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: http://investors.maxwell.com/phoenix.zhtml?c=94560&p=irol-sec. All information in this release is as of April 28, 2011. The company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the company's expectations.
SOURCE Maxwell Technologies, Inc.
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