SOURCE: Active Power

Active Power

July 30, 2012 16:05 ET

Active Power Reports Second Quarter 2012 Results

Company Achieves Record Quarterly Revenue and Profits

AUSTIN, TX--(Marketwire - Jul 30, 2012) - Active Power (NASDAQ: ACPW), manufacturer of continuous power and infrastructure solutions, reported results for its second quarter ended June 30, 2012.

Q2 2012 Highlights

  • $21.7 million in quarterly revenue, up 13% from same year-ago quarter, representing a record level of quarterly revenue

  • Improved gross margin to a record level of 36%, up from 24% in the same year-ago quarter and 27% in prior quarter

  • Achieved net income of $490,000, or $0.01 per share

  • 61% increase in UPS revenues versus same year-ago quarter

  • 37% increase in service revenues versus same year-ago quarter

  • $9.4 million in infrastructure solutions revenue, representing 43% of revenue for the quarter

  • $3.6 million, or 34%, increase in revenue from the U.S. compared to the same year-ago quarter

  • Announced two large UPS projects, Parkland Health and Hospital System and one of the largest collocation data center facilities in China

Management Commentary
"As we have consistently stated, a top priority has been to return our core UPS segment to growth," said Doug Milner, president and CEO. "Our focus on this part of our business yielded positive results as UPS revenue nearly doubled compared to the previous quarter and we saw better traction for UPS opportunities across all geographies. More importantly, we achieved these results profitably, recording a net income for the quarter."

"In line with our ongoing efforts to improve margins and operational efficiency, we have been evaluating ways to fine tune our fixed cost position. As a result, we have recently executed cost savings measures that we expect to yield annualized savings of about $1.8 million, with a one-time restructuring charge of approximately $350,000 in the third quarter. We believe these prudent measures will ensure we are making appropriate investments for the future while also aligning our overhead to support consistent and profitable growth."

"For the remainder of 2012, we will continue to focus on our top priorities of increasing sales productivity and growth within our UPS business, market introduction of our new UPS product platform, and lean process initiatives to improve efficiency throughout the company. We believe the results of these efforts will positively impact our financials, particularly in the fourth quarter, and place us in a favorable position to achieve annual profitability in 2012."

Q2 2012 Financial Results
Second quarter 2012 revenue was $21.7 million, an increase of $1.9 million, or 9%, from the previous quarter and an increase of $2.4 million, or 13%, from the same year-ago quarter. For the six months ended June 30, 2012, revenue of $41.5 million was $4.9 million, or 13%, higher than the comparable period of 2011.

Gross margin for the quarter was 36% of revenue compared to 27% in the previous quarter and 24% in the same year-ago quarter.

Net income for the quarter was $490,000, or about $0.01 per share. This compares to a loss of $1.1 million, or $(0.01) per share, in the previous quarter and a loss of $1.4 million, or $(0.02) per share, in the same year-ago quarter. For the six-months ended June 30, 2012, net loss was $0.7 million, or $(0.01) per share, compared to a net loss of $2.5 million, or $(0.03) per share in the same period of 2011.

Outlook
Active Power expects third quarter 2012 revenue to range between $17 million and $20 million. Third quarter earnings per share are expected to be a loss between $(0.03) to $(0.01) per share, which includes the effect of our restructuring expenses.

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, Monday, July 30, 2012, at 4:30 p.m. (ET) to discuss its second quarter 2012 results. Interested parties can dial into the call at the time of the event at (877) 551-8082. For callers outside the United States, please dial (904) 520-5770.

To listen to the live webcast, 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 second quarter of 2012, 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, our dependence on our relationships with Hewlett Packard and Caterpillar, our increased emphasis on larger and more complex system solutions, 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, 2011, and its Current Reports on Form 8-K filed since then. 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     Six  
  Months Ended     Months Ended  
  June 30,     June 30,  
  2012     2011     2012     2011  
           
                       
Product revenue $ 17,481     $ 16,156     $ 33,887     $ 30,894  
Service and other revenue   4,178       3,059       7,570       5,650  
      Total revenue   21,659       19,215       41,457       36,544  
                               
  Cost of product revenue   11,358       11,991       23,354       22,513  
Cost of service and other revenue   2,529       2,591       5,024       4,688  
      Total cost of goods sold   13,887       14,582       28,378       27,201  
                               
Gross profit   7,772       4,633       13,079       9,343  
                               
Operating expenses:                              
  Research and development   1,432       1,086       2,720       2,007  
  Selling and marketing   3,897       3,400       7,444       6,870  
    General & administrative   1,940       1,435       3,484       2,803  
       Total operating expenses   7,269       5,921       13,648       11,680  
Operating income (loss)   503       (1,288 )     (569 )     (2,337 )
                               
Interest expense, net   (52 )     (48 )     (166 )     (81 )
Other income (expense), net   . 39       (58 )     . 78       . (42 )
Net income (loss) $ 490     $ (1,394 )   $ (657 )   $ (2,460 )
                               
Basic net income (loss) per share $ 0.01     $ (0.02 )   $ (0.01 )   $ (0.03 )
Diluted net income (loss) per share $ 0.01     $ (0.02 )   $ (0.01 )   $ (0.03 )
Shares used in computing basic net income (loss) per share   95,470       80,045       90,179       79,934  
Shares used in computing diluted net income (loss) per share   95,965       80,045       90,179       79,934  
                               
Comprehensive loss:                              
  Net income (loss) $ 490     $ (1,394 )   $ (657 )   $ (2,460 )
  Translation gain (loss) on subsidiaries in foreign currencies   (347 )     299       (311 )     609  
  Comprehensive income (loss) $ 143     $ (1,095 )   $ (968 )   $ (1,851 )
                               
                               
   
ACTIVE POWER, INC.  
CONDENSED BALANCE SHEETS  
(In thousands)  
           
  June 30     December 31  
  2012     2011  
Assets (unaudited)        
           
Current assets:          
  Cash and cash equivalents $ 14,624     $ 10,357  
  Restricted cash   1,380       389  
  Accounts receivable, net   17,088       11,163  
  Inventories   8,925       9,439  
  Prepaid expenses and other   2,317       414  
    Total current assets   44,334       31,762  
Property and equipment, net   3,048       2,861  
Deposits and other   405       404  
    Total assets $ 47,787     $ 35,027  
               
Liabilities and stockholders' equity              
               
Current liabilities:              
  Accounts payable $ 7,127     $ 4,757  
  Accrued expenses   4,428       5,351  
  Deferred revenue   3,722       2,366  
  Revolving line of credit   5,535       5,535  
    Total current liabilities   20,812       18,009  
               
Long-term liabilities   834       726  
Stockholders' equity:              
  Common stock   95       80  
  Treasury stock   (125 )     (115 )
  Additional paid-in capital   287,835       277,023  
  Accumulated deficit   (261,552 )     (260,895 )
  Other accumulated comprehensive income (loss)   (112 )     199  
    Total stockholders' equity   26,141       16,292  
    Total liabilities and stockholders' equity $ 47,787     $ 35,027