SOURCE: Active Power

Active Power

February 14, 2012 16:05 ET

Active Power Reports Fourth Quarter and 2011 Results

Annual Revenues Up 16% to Record $75.5 Million

AUSTIN, TX--(Marketwire - Feb 14, 2012) - Active Power (NASDAQ: ACPW), manufacturer of continuous power and infrastructure solutions, reported results for its fourth quarter and fiscal year ended Dec. 31, 2011.

Q4 and Full Year 2011 Highlights

  • $18.3 million in quarterly revenue and a record $75.5 million in full year revenue

  • Achieved annual sales growth from previous year across all regions -- EMEA up 47%; Americas up 2%; and Asia up 76% for the year

  • UPS systems revenue was $5.6 million for the quarter and $26.4 million for the year, a decrease of 20% compared to the prior year

  • $40.5 million in continuous power and infrastructure solutions revenue, representing 54% of revenue for the year, compared to 38% of revenue in 2010

  • $12.8 million in service revenues for 2011, an increase of $3.5 million or 38% compared to the prior year

  • 62% increase in information technology (IT) channel revenues compared to the prior year

  • Received the company's single largest order to date for a $10 million flywheel UPS solution to be deployed in Switzerland

  • Closed Japan operations and reduced scale of UK manufacturing operations during fourth quarter

  • Appointed Noel Foley vice president of Engineering to build on company's technology leadership position

Management Commentary

"We closed out 2011 as expected with our UPS business performing under expectations for the year and lower than anticipated margins in our solutions business," said Jan Lindelow, interim president and CEO of Active Power. "Our decline in profitability was primarily due to these factors and expense related to restructuring actions."

"As we shared last quarter, we are taking definitive steps to grow our core UPS business and improve margins in our solutions business. We are seeing early positive returns from our focus on these areas, having received orders for more than 140 flywheels that we plan to process for delivery this year. In addition, we have significantly improved margins on our solutions business by implementing more structured processes and pricing changes. This progress, coupled with prudent expense actions, puts us in a strong position to improve operating results and track towards achieving annual profitability."

Q4 and Full Year 2011 Financial Results

Fourth quarter 2011 revenues were $18.3 million, a decrease of $1 million or 5% versus the same year-ago quarter. For the year ended Dec. 31, 2011, total revenues were a record $75.5 million, a 16% increase compared to $65 million in 2010.

Net loss for the fourth quarter was $3.3 million or $(0.04) per share, which included one-time costs of $1.4 million or $(0.02) per share, associated with the departure of our chief executive officer and costs associated with closure of certain foreign operations. This compares to a net loss of $1.3 million in the third quarter of 2011 and compares to a net income of $145,000 or $0.00 per share in the same year-ago quarter. For the year ended Dec. 31, 2011, net loss was $7.1 million or $(0.09) per share, compared to a net loss of $3.9 million or $(0.05) per share in 2010.

Outlook

Active Power expects first quarter 2012 revenues to be between $17 million and $21 million, reflecting traditional seasonality when compared to the previous quarter. First quarter earnings per share is expected to be a loss of $(0.01) to $(0.03) per share. Changes in cash and investments are expected to be minimal and driven by changes in working capital requirements.

Conference Call and Webcast

Active Power will host a conference call today, Tuesday, Feb. 14, 2012, at 4:30 p.m. (ET) to discuss its fourth quarter and 2011 results. Interested parties can dial into the call at the time of the event at (877) 551-8082. For callers outside the United States and Canada, please dial (904) 520-5770.

To listen to the live Webcast, please click here. A replay of the Webcast will be available via Active Power's investor relations site at http://ir.activepower.com.

About Active Power
Founded in 1992, Active Power (NASDAQ: ACPW) designs and manufactures continuous power solutions and critical backup power systems that enable datacenters and other mission critical operations to remain 'on' 24 hours a day, seven days a week. Active Power solutions are intelligently efficient, inherently reliable and economically green, providing environmental benefits and energy and space efficiencies to customers' financial benefit. The company's products and solutions are built with pride in Austin, Texas, at a state-of-the-art, ISO 9001:2008 registered manufacturing and test facility. Global customers are served via Austin and three regional operations centers located in the United Kingdom, Germany, and China, supporting the deployment of systems in more than 40 countries. For more information, visit www.activepower.com.

Cautionary Note Regarding Forward-Looking Statements
This release may contain forward-looking statements that involve risks and uncertainties, including statements relating to Active Power's current expectations of operating results for the first quarter of 2011, its future operating results and customers' current intentions. Any forward-looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Factors that could cause the actual results to differ materially from the results predicted include, among others, the deferral or cancellation of sales commitments as a result of general economic conditions or uncertainty, risks related to our international operations, and product performance and quality issues. For more information on the risk factors that could cause actual results to differ from these forward looking statements, please refer to Active Power filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K filed since such year ended. Active Power assumes no obligation to update any forward-looking statements or information which are in effect as of their respective dates.

Active Power, CleanSource and CoolAir are registered trademarks of Active Power, Inc. The Active Power logo, PowerHouse and PowerCentre are trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.

ACTIVE POWER, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Thousands, except per share amounts)
(unaudited)
Three
Months Ended Year Ended
Dec. 31, Dec. 31,
2011 2010 2011 2010
Revenues:
Product revenue $ 14,760 $ 16,291 $ 62,650 $ 55,647
Service and other revenue 3,570 3,044 12,832 9,308
Total revenue 18,330 19,335 75,482 64,955
Cost of goods sold:
Cost of product revenue 12,039 11,722 47,664 40,045
Cost of service and other revenue 2,580 2,284 9,917 6,890
Total cost of goods sold 14,619 14,006 57,581 46,935
Gross profit 3,711 5,329 17,901 18,020
Operating expenses:
Research and development 1,460 895 4,739 3,412
Selling and marketing 3,415 2,770 13,812 13,093
General & administrative 2,147 1,494 6,230 5,319
Total operating expenses 7,022 5,159 24,781 21,824
Operating profit (loss) (3,311 ) 170 (6,880 ) (3,804 )
Interest expense, net (76 ) (40 ) (225 ) (122 )
Other income (expense), net 45 15 11 (40 )
Income (loss) before income taxes (3,342 ) 145 (7,094 ) (3,966 )
Income tax benefit - - - 41
Net income (loss) $ (3,342 ) $ 145 $ (7,094 ) $ (3,925 )
Basic net income (loss) per share $ (0.04 ) $ 0.00 $ (0.09 ) $ (0.05 )
Diluted net income (loss) per share $ (0.04 ) $ 0.00 $ (0.09 ) $ (0.05 )
Shares used in computing basic net income (loss) per share 80,324 79,741 80,085 77,677
Shares used in computing diluted net income (loss) per share 80,324 82,501 80,085 77,677
Comprehensive income (loss):
Net income (loss) $ (3,342 ) $ 145 $ (7,094 ) $ (3,925 )
Translation gain (loss) on subsidiaries in foreign currencies (56 ) 28 360 18
Comprehensive income (loss) $ (3,398 ) $ 173 $ (6,734 ) $ (3,907 )
ACTIVE POWER, INC.
CONDENSED BALANCE SHEETS
(In thousands)
December 31
2011 2010
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 10,357 $ 15,416
Short-term investments - 134
Restricted cash 389 -
Accounts receivable, net 11,163 14,708
Inventories 9,439 6,430
Prepaid expenses and other 414 511
Total current assets 31,762 37,199
Property and equipment, net 2,861 2,005
Deposits and other 404 314
Total assets $ 35,027 $ 39,518
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,757 $ 6,022
Accrued expenses 5,351 7,068
Deferred revenue 2,366 2,492
Revolving line of credit 5,535 2,535
Total current liabilities 18,009 18,117
Long-term liabilities 726 579
Stockholders' equity:
Common stock 80 80
Treasury stock (115 ) (103 )
Additional paid-in capital 277,023 274,807
Accumulated deficit (260,895 ) (253,801 )
Other accumulated comprehensive loss 199 (161 )
Total stockholders' equity 16,292 20,822
Total liabilities and stockholders' equity $ 35,027 $ 39,518
ACTIVE POWER, INC.
SUPPLEMENTAL FINANCIAL DATA
Three Months Ended
Dec. 31,
Year Ended
Dec. 31,
$'000 2011 2010 2011 2010
Product Revenue:
UPS products $ 5,630 $ 9,795 $ 26,394 $ 33,005
Continuous Power Solutions 2,117 5,297 22,222 11,595
Infrastructure Solutions 7,013 1,199 14,034 11,047
$ 14,760 $ 16,291 $ 62,650 $ 55,647
MW of critical Power delivered 16.6MW 28.6MW 93.5MW 100.4MW
Revenue per MW of Critical Power ($'000) $ 414 $ 568 $ 538 $ 478
Selected Balance Sheet Data: ($'000) Dec. 31, 2011 Sept. 30, 2011 June 30, 2011 Dec. 31, 2010
Inventory:
Raw materials $ 6,493 $ 6,859 $ 6,655 $ 5,243
Work in progress 3,085 3,452 5,461 2,382
Finished goods 1,680 2,246 1,750 1,148
Less reserves for obsolescence (1,819 ) (1,826 ) (1,815 ) (2,343 )
$ 9,439 $ 10,731 $ 12,051 $ 6,430
Receivables:
Americas $ 7,058 $ 11,511 $ 10,132 $ 10,681
EMEA 2,597 1,947 4,866 4,020
Asia 1,508 3,267 2,807 7
$ 11,163 $ 16,725 $ 17,805 $ 14,708