2014

Maxwell Technologies Completes Restatement Of Financial Results Company announces financial results for fourth quarter of 2012 and first and second quarters of 2013; restates financial results for FY 2011 and first three quarters of 2012; expects to regain compliance with Nasdaq listing rules

CONFERENCE CALL & WEBCAST AT 5 P.M. (EDT) TODAY - DETAILS BELOW

SAN DIEGO, Aug. 1, 2013 /PRNewswire/ -- Maxwell Technologies, Inc. (Nasdaq: MXWL) filed today with the Securities and Exchange Commission (SEC) its Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and its Quarterly Reports on Form 10-Q for the first and second quarters of 2013, ended March 31, 2013 and June 30, 2013. Maxwell has concluded its previously-announced financial statement restatement, has filed all required and delinquent periodic SEC filings, and expects to regain compliance with NASDAQ listing rules.

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"We are pleased that the financial restatement is complete, and we look forward to moving ahead with business," said David Schramm, Maxwell's president and chief executive officer. 

Fourth Quarter 2012
Net revenue for the fourth quarter ended December 31, 2012 was $44.5 million, up 19 percent over the $37.4 million recorded in the same period in 2011.  Fourth quarter ultracapacitor revenue was $29.5 million, up 40 percent from the $21.1 million recorded in fourth quarter of 2011. Sales of high voltage capacitor and microelectronics products totaled $15.1 million in the fourth quarter of 2012, down 7 percent from the $16.3 million recorded in the fourth quarter of 2011.

On a U.S. generally accepted accounting principles (GAAP) basis, operating income for the fourth quarter of 2012 was $3.4 million, compared with $1.2 million for the fourth quarter of 2011. GAAP net income for the fourth quarter of 2012 was $2.9 million, or $0.10 per diluted share, compared with $515,000, or $0.02 per diluted share, in the fourth quarter of 2011.

On a non-GAAP basis, the Company reported operating income of $3.9 million in the fourth quarter of 2012 compared with $1.3 million in the fourth quarter of 2011. Non-GAAP net income for the fourth quarter of 2012 was $3.4 million, or $0.12 per diluted share, compared with $657,000, or $0.02 per diluted share in the fourth quarter of 2011.  A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.

GAAP gross margin was 39 percent in the fourth quarter of 2012, compared with 40 percent in the fourth quarter of 2011, and 42 percent in the third quarter of 2012. GAAP operating expenses totaled $13.9 million, or 31 percent of revenue, in the fourth quarter of 2012 compared with $13.8 million, or 37 percent of revenue in the fourth quarter of 2011. Non-GAAP operating expenses totaled $13.5 million, or 30 percent of revenue, in the fourth quarter of 2012 compared with $13.8 million, or 37 percent of revenue, in the fourth quarter of 2011. Cash and cash equivalents totaled $28.7 million as of December 31, 2012, compared with $20.1 million as of September 30, 2012. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations are available in the Company's Annual Report on Form 10-K.

First Quarter 2013
Net revenue for the first quarter ended March 31, 2013 was $47.7 million, up 33 percent over the $35.8 million recorded in the same period in 2012.  First quarter ultracapacitor revenue was $33.8 million, up 82 percent from the $18.6 million recorded in first quarter of 2012. Sales of high voltage capacitor and microelectronics products totaled $14.0 million in the first quarter of 2013, down 19 percent from the $17.2 million recorded in the first quarter of 2012.

On a GAAP basis, operating income for the first quarter of 2013 was $705,000, compared with an operating loss of $201,000 for the first quarter of 2012. GAAP net loss for the first quarter of 2013 was $278,000, or $0.01 per diluted share, compared with a net loss of $1.0 million, or $0.03 per diluted share, in the first quarter of 2012.

On a non-GAAP basis, the Company reported operating income of $1.7 million in the first quarter of 2013 compared with $1.1 million in the first quarter of 2012.  Non-GAAP net income for the first quarter of 2013 was $679,000, or $0.02 per diluted share, compared with $334,000, or $0.01 per diluted share in the first quarter of 2012.  A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.

GAAP gross margin was 38 percent in the first quarter of 2013, compared with 42 percent in the first quarter of 2012 and 39 percent in the fourth quarter of 2012. GAAP operating expenses totaled $17.5 million, or 37 percent of revenue, in the first quarter of 2013 compared with $15.4 million, or 43 percent of revenue in the first quarter of 2012. Q113 selling, general and administrative expense included $2.0 million of legal and accounting expenses related to the Company's investigation, internal review and restatement. Non-GAAP operating expenses totaled $16.8 million, or 35 percent of revenue, in the first quarter of 2013 compared with $14.2 million, or 40 percent of revenue, in the first quarter of 2012. Cash and cash equivalents totaled $34.1 million as of March 31, 2013, compared with $28.7 million as of December 31, 2012. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations are available in the Company's Quarterly Report on Form 10-Q.

Second Quarter 2013
Net revenue for the second quarter ended June 30, 2013 was $55.6 million, up 53 percent over the $36.2 million recorded in the same period in 2012. Second quarter ultracapacitor revenue was $39.3 million, up 101 percent from the $19.6 million recorded in second quarter of 2012. Sales of high voltage capacitor and microelectronics products totaled $16.4 million in the second quarter of 2013, down 2 percent from the $16.7 million recorded in the second quarter of 2012.

On a GAAP basis, operating income for the second quarter of 2013 was $4.2 million, compared with $821,000 for the second quarter of 2012. GAAP net income for the second quarter of 2013 was $3.4 million, or $0.12 per diluted share, compared with $31,000, or $0.00 per diluted share, in the second quarter of 2012.

On a non-GAAP basis, the Company reported operating income of $5.2 million in the second quarter of 2013 compared with $1.6 million in the second quarter of 2012. Non-GAAP net income for the second quarter of 2013 was $4.4 million, or $0.15 per diluted share, compared with $801,000, or $0.03 per diluted share in the second quarter of 2012. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.

GAAP gross margin was 39 percent in the second quarter of 2013, compared with 40 percent in the second quarter of 2012 and 38 percent in the first quarter of 2013. GAAP operating expenses totaled $17.4 million, or 31 percent of revenue, in the second quarter of 2013 compared with $13.7 million, or 38% of revenue in the second quarter of 2012. Q213 selling, general and administrative expense included $1.8 million of legal and accounting expenses related to the Company's investigation, internal review and restatement. Non-GAAP operating expenses totaled $16.7 million, or 30 percent of revenue, in the second quarter of 2013 compared with $13.2 million, or 36 percent of revenue, in the second quarter of 2012. Cash and cash equivalents totaled $34.6 million, with an additional $4.0 million in restricted cash for a total of $38.6 million as of June 30, 2013, compared with $34.1 million as of March 31, 2013. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations are available in the Company's Quarterly Report on Form 10-Q.

Restatement Update:  The effect of the restatement was to decrease revenue for the fiscal year 2011 by $10.1 million.  Of the amount subject to restatement for the fiscal year 2011, $2.6 million is a reclassification of a settlement charge from G&A expense to contra revenue, bringing the restatement amount for 2011, net of the reclassification to $7.5 million.  Further, the restatement decreased revenue in the first three quarters of 2012 by $9.2 million, for a total reduction in revenue, net of the reclassification of $2.6 million in 2011, of $16.7 million related to the year ended December 31, 2011 and the three quarters ended September 30, 2012, all of which has been collected as of June 30, 2013.  Of this $16.7 million, $7.2 million has been recognized as revenue and $9.5 million has yet to be recognized as revenue as of June 30, 2013.   In addition to this amount, another $5.9 million of shipments subsequent to September 30, 2012 have yet to be recognized as revenue as of June 30, 2013. 

As such, as of June 30, 2013, $15.4 million in shipments have not yet been recognized as revenue.  We expect these shipments to be recognized as revenue in future periods.  For additional details of the restatement please see the Company's annual report on Form 10-K and quarterly reports on Form 10-Q filed today with the SEC.

Outlook:  "Strong ultracapacitor sales through the first half of the year were driven mainly by hybrid bus and wind energy applications in China, and a European automotive program." Schramm said. "Automotive and wind-related demand continue to be consistent with our expectations, but Chinese transit agencies and bus OEMs are proceeding cautiously as they await release of a new Chinese government subsidy program, so we may experience softness in order volume until the details of the subsidy program are confirmed."                                                           

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 from operations, non-GAAP net income, and non-GAAP net income 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;
  • expense in a prior period for a legal settlement, and
  • a gain in a prior period on embedded derivatives.

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 fourth quarter of 2012, and first and second quarters of 2013, financial results and the future outlook at 5 p.m. (EDT) today. The call may be accessed by dialing toll-free, (866) 952-1906 from the U.S. and Canada, or (785) 424-1825 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-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. 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. Such risks, uncertainties and contingencies include, but are not limited to, the following:

  • 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 China and Europe, where macroeconomic factors outside our control may adversely affect our sales;
  • 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;
  • 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 and the terms and conditions of our settlement agreements with the Securities and Exchange Commission and the Department of Justice;
  • 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 August 1, 2013. 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  


Twelve Months Ended





June 30, 2013


March 31, 2013


December 31, 2012


June 30, 2012
(Restated)


March 31, 2012
(Restated)


December 31, 2011
(Restated)


December 31, 2012


December 31, 2011
(Restated)




















Revenue


$ 55,610


$    47,748


$          44,503


$    36,238


$    35,804


$          37,376


$        159,258


$        147,176

Cost of revenue

34,034


29,518


27,274


21,714


20,647


22,366


94,206


90,106

Gross profit

21,576


18,230


17,229


14,524


15,157


15,010


65,052


57,070

Operating expenses:

















Selling, general and administrative

11,988


11,502


8,117


8,409


9,788


8,459


33,656


35,218


Research and development

5,378


6,023


5,752


5,294


5,570


5,380


21,700


22,356



Total operating expenses

17,366


17,525


13,869


13,703


15,358


13,839


55,356


57,574

Income (loss) from operations

4,210


705


3,360


821


(201)


1,171


9,696


(504)

Interest income (expense), net

(41)


(44)


22


(56)


(26)


(21)


(116)


(109)

Amortization of debt discount and prepaid debt costs

(15)


(15)


(15)


(15)


(11)


-


(57)


(55)

Gain on embedded derivatives

-


-


-


-


-


-


-


1,086

Income (loss) before income taxes

4,154


646


3,367


750


(238)


1,150


9,523


418

Income tax provision 

749


924


500


719


714


635


2,349


1,856



Net income (loss)

$   3,405


$       (278)


$            2,867


$           31


$       (952)


$               515


$            7,174


$           (1,438)




















Net income (loss) per common share:

















Basic 


$     0.12


$      (0.01)


$              0.10


$           -


$      (0.03)


$              0.02


$              0.25


$             (0.05)


Diluted

$     0.12


$      (0.01)


$              0.10


$           -


$      (0.03)


$              0.02


$              0.25


$             (0.05)




















Weighted average common shares outstanding:

















Basic


28,858


28,825


27,851


28,672


28,122


27,851


28,568


27,637


Diluted

28,860


28,825


28,759


28,780


28,122


28,285


28,709


27,637

 

 

 

MAXWELL TECHNOLOGIES, INC. 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(Unaudited)












June 30,


March 31,


December 31,


December 31,



2013


2013


2012


2011

ASSETS







(Restated)

Current assets:









Cash and cash equivalents

$   34,571


$    34,124


$          28,739


$          29,289


Restricted cash

4,050


-


-


-


Trade and other accounts receivable, net

35,217


32,819


33,420


27,973


Inventories

39,435


42,336


41,620


33,234


Prepaid expenses and other current assets

3,443


3,090


3,228


3,152


  Total current assets

116,716


112,369


107,007


93,648

Property and equipment, net

39,519


36,165


36,235


28,541

Intangible assets, net

484


575


669


1,111

Goodwill

24,710


24,603


25,416


24,887

Pension asset

7,179


6,918


6,939


6,359

Other non-current assets

216


212


206


200


  Total assets

$ 188,824


$  180,842


$        176,472


$        154,746










LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:









Accounts payable and accrued liabilities

$   32,635


$    31,206


$          27,181


$          36,100


Accrued warranty

176


267


269


258


Accrued employee compensation

7,253


5,889


4,743


6,343


Deferred revenue

8,906


7,994


6,408


1,042


Short-term borrowings and current portion of long-term debt

8,573


8,973


9,452


5,431


Deferred tax liability

980


980


980


499


  Total current liabilities

58,523


55,309


49,033


49,673

Deferred tax liability, long-term

1,368


1,376


1,384


933

Long-term debt, excluding current portion

75


85


83


68

Other long-term liabilities

950


979


1,039


3,028


  Total liabilities

60,916


57,749


51,539


53,702










Stockholders' equity:









Common stock, $0.10 par value per share

2,951


2,953


2,913


2,815

Additional paid-in capital

269,726


268,801


267,623


252,907

Accumulated deficit

(155,007)


(158,412)


(158,134)


(165,308)

Accumulated other comprehensive income

10,238


9,751


12,531


10,630


  Total stockholders' equity

127,908


123,093


124,933


101,044


  Total liabilities and stockholders' equity

$ 188,824


$  180,842


$        176,472


$        154,746

 

 

MAXWELL TECHNOLOGIES, INC. 

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(Unaudited)


























Three Months Ended 


Twelve Months Ended 






June 30, 2013


March 31, 2013


December 31, 2012


June 30, 2012


March 31, 2012


December 31, 2011


December 31, 2012


December 31, 2011









(Restated)


(Restated)


(Restated)



(Restated)

Gross Profit Reconciliation:

















GAAP gross profit


$ 21,576


$    18,230


$          17,229


$           14,524


$    15,157


$          15,010


$          65,052


$          57,070


Stock-based compensation expense included in cost of sales

A

261


273


157


238


142


64


700


356

Non-GAAP gross profit

D

$ 21,837


$    18,503


$          17,386


$           14,762


$    15,299


$          15,074


$          65,752


$          57,426





















Total Operating Expenses Reconciliation:

















GAAP total operating expenses


$ 17,366


$    17,525


$          13,869


$           13,703


$    15,358


$          13,839


$          55,356


$          57,574


Stock-based compensation expense

A

(685)


(684)


(370)


(532)


(1,144)


(78)


(2,388)


(2,226)


Accrual for anticipated legal settlement

B

-


-


-


-


-


-


-


(2,600)

Non-GAAP total operating expenses

D

$ 16,681


$    16,841


$          13,499


$           13,171


$    14,214


$          13,761


$          52,968


$          52,748





















Income From Operations Reconciliation:

















GAAP income from operations


$   4,210


$         705


$            3,360


$                821


$       (201)


$            1,171


$            9,696


$              (504)


Stock-based compensation expense

A

946


957


527


770


1,286


142


3,088


2,582


Accrual for anticipated legal settlement

B

-


-


-


-


-


-


-


2,600

Non-GAAP income from operations

D

$   5,156


$      1,662


$            3,887


$             1,591


$      1,085


$            1,313


$          12,784


$            4,678





















Net Income Reconciliation:

















GAAP net income (loss)


$   3,405


$       (278)


$            2,867


$                  31


$       (952)


$               515


$            7,174


$           (1,438)


Stock-based compensation expense

A

946


957


527


770


1,286


142


3,088


2,582


Accrual for anticipated legal settlement

B

-


-


-


-


-


-


-


2,035


Gain on embedded derivatives

C

-


-


-


-


-


-


-


(1,086)

Non-GAAP net income 

D

$   4,351


$         679


$            3,394


$                801


$         334


$               657


$          10,262


$            2,093





















Diluted Net Income per Share Reconciliation:

















GAAP diluted net income (loss) per share


$     0.12


$      (0.01)


$              0.10


$                   -


$      (0.03)


$              0.02


$              0.25


$             (0.05)


Stock-based compensation expense

A

0.03


0.03


0.02


0.03


0.04


-


0.11


0.09


Accrual for anticipated legal settlement

B

-


-


-


-


-


-


-


0.07


Gain on embedded derivatives

C

-


-


-


-


-


-


-


(0.03)

Non-GAAP diluted net income per share

D

$     0.15


$        0.02


$              0.12


$               0.03


$        0.01


$              0.02


$              0.36


$              0.08





















See notes 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 as follows (in thousands):

























Three Months Ended


Twelve Months Ended 





June 30, 2013


March 31, 2013


December 31, 2012


June 30, 2012


March 31, 2012


December 31, 2011


December 31, 2012


December 31, 2011























Cost of revenue

$      261


$         273


$               157


$      238


$         142


$           64


$               700


$               356




Selling, general and administrative

507


497


250


411


962


(4)


1,836


1,769




Research and development

178


187


120


121


182


82


552


457























Total stock-based compensation expense

$      946


$         957


$               527


$      770


$      1,286


$         142


$            3,088


$            2,582





















(B)

Accrual for settlement of product defect matter of $2.6 million, or $2.0 million net of the related tax impact.























(C)

Gain on embedded derivatives associated with the Company's convertible debt. As the convertible debentures were retired in February 2011, the company no longer records gains or losses related to the conversion features.





















(D)

Non-GAAP measures for periods prior to December 31, 2012 have been adjusted to conform to the current methodology wherein amortization of intangible assets is no longer excluded from GAAP financial measures for purposes of non-GAAP measures. This adjustment to the Company's non-GAAP measures was made because amortization of intangible assets is no longer a significant expense to the Company.




 

 

 

SOURCE Maxwell Technologies, Inc.



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