Maxwell Technologies Reports Second Quarter Financial Results

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

Jul 31, 2014, 16:01 ET from Maxwell Technologies, Inc.

SAN DIEGO, July 31, 2014 /PRNewswire/ -- Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported revenue of $46.1 million for its second quarter ended June 30, 2014, up slightly from the $46.0 million recorded in the first quarter ended March 31, 2014, but down 17 percent from the $55.6 million recorded in the second quarter of 2013.

Second quarter ultracapacitor revenue increased by 6 percent sequentially to $33.9 million, compared with $32.0 million in the first quarter ended March 31, 2014, but was down 14 percent compared with the $39.3 million recorded in the second quarter of 2013. Sales of high voltage capacitor and microelectronics products totaled $12.2 million in Q214, down 13 percent sequentially from the $14.0 million recorded in the first quarter and down 26 percent from the $16.4 million recorded in Q213.

"This was a solid quarter in line with our expectations despite lower ultracapacitor sales into the hybrid bus market in China and challenging market conditions for our microelectronics products," said Dr. Franz Fink, Maxwell's president and CEO. "Increasing sales for wind energy and electric rail applications were mainly responsible for the sequential growth in ultracapacitor sales."

On a U.S. generally accepted accounting principles (GAAP) basis, operating loss for the second quarter 2014 was $567,000, compared with operating income of $760,000 in Q114 and $4.2 million in Q213. GAAP net loss for Q214 was $1.2 million, or $0.04 per share, compared with net income of $319,000, or $0.01 per diluted share in Q114 and $3.4 million, or $0.12 per diluted share, in Q213.

On a non-GAAP basis, the Company reported operating income of $599,000 in Q214 compared with $1.5 million in Q114 and $5.2 million in Q213. Non-GAAP net loss for Q214 was $15,000, or zero cents per share, compared with net income of $1.1 million, or $0.04 per diluted share in Q114 and $4.4 million, or $0.15 per diluted share, in Q213. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.

GAAP gross margin was 36 percent in Q214, compared with 39 percent in both Q114 and Q213. GAAP operating expenses totaled approximately $17.2 million, or 37 percent of revenue, in Q214 compared with $17.1 million, or 37 percent of revenue, in Q114, and $17.4 million, or 31 percent of revenue, in Q213.  Non-GAAP operating expenses totaled approximately $16.2 million, or 35 percent of revenue, in Q214 compared with $16.6 million, or 36 percent of revenue, in Q114 and $16.7 million, or 30 percent of revenue, in Q213. Cash and cash equivalents totaled $30.7 million as of June 30, 2014, compared with cash, cash equivalents and restricted cash of $32.6 million as of March 31, 2014. 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: Limited visibility into the plug-in hybrid bus market in China makes it difficult to forecast ultracapacitor sales with a high degree of certainty. Based on customer forecasts for bus and other ultracapacitor applications and order flow for microelectronics and high voltage capacitor products, total revenue for the third quarter is likely to be down as much as 15% compared with that recorded in the second quarter.

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.

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 2014 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 webcast 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. 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 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 July 31, 2014. 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,   2014

March 31,   2014

June 30,   2013

June 30,  2014

June 30,   2013

Revenue

$

46,074

$

46,001

$

55,610

$

92,075

$

103,358

Cost of revenue

29,474

28,131

34,034

57,605

63,552

Gross profit

16,600

17,870

21,576

34,470

39,806

Operating expenses:

Selling, general and administrative

10,944

10,939

11,988

21,883

23,490

Research and development

6,223

6,171

5,378

12,394

11,401

Total operating expenses

17,167

17,110

17,366

34,277

34,891

Income (loss) from operations

(567)

760

4,210

193

4,915

Interest expense, net

28

39

41

67

85

Amortization of debt discount and prepaid debt costs

5

5

15

10

30

Income (loss) before income taxes

(600)

716

4,154

116

4,800

Income tax provision

581

397

749

978

1,673

Net income (loss)

$

(1,181)

$

319

$

3,405

$

(862)

$

3,127

Net income (loss) per common share:

Basic

$

(0.04)

$

0.01

$

0.12

$

(0.03)

$

0.11

Diluted

$

(0.04)

$

0.01

$

0.12

$

(0.03)

$

0.11

Weighted average common shares outstanding:

Basic

29,206

29,047

28,858

29,127

28,842

Diluted

29,206

29,216

28,860

29,127

28,859

 

 

MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(Unaudited)

June 30,   2014

December 31,   2013

ASSETS

Current assets:

Cash and cash equivalents

$

30,748

$

30,647

Trade and other accounts receivable, net

39,850

29,869

Inventories

44,973

44,736

Prepaid expenses and other current assets

3,170

2,314

  Total current assets

118,741

107,566

Property and equipment, net

42,192

44,941

Intangible assets, net

268

369

Goodwill

26,140

25,978

Pension asset

11,139

10,568

Other non-current assets

665

665

  Total assets

$

199,145

$

190,087

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

26,643

$

25,436

Accrued warranty

583

180

Accrued employee compensation

8,935

8,788

Deferred revenue and customer deposits

3,181

1,043

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

10,106

7,914

Deferred tax liability

874

890

  Total current liabilities

50,322

44,251

Deferred tax liability, long-term

2,155

2,125

Long-term debt, excluding current portion

65

100

Other long-term liabilities

3,513

3,401

  Total liabilities

56,055

49,877

Stockholders' equity:

Common stock, $0.10 par value per share, 40,000 shares authorized; 29,897 and 29,563 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively

2,987

2,953

Additional paid-in capital

274,946

271,928

Accumulated deficit

(152,656)

(151,794)

Accumulated other comprehensive income

17,813

17,123

  Total stockholders' equity

143,090

140,210

  Total liabilities and stockholders' equity

$

199,145

$

190,087

 

 

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,   2014

March 31,   2014

June 30,   2013

June 30,   2014

June 30,   2013

Gross Profit Reconciliation:

GAAP gross profit

$

16,600

$

17,870

$

21,576

$

34,470

$

39,806

Stock-based compensation expense included in cost of sales

A

190

251

261

442

534

Non-GAAP gross profit

$

16,790

$

18,121

$

21,837

$

34,912

$

40,340

Total Operating Expenses Reconciliation:

GAAP total operating expenses

$

17,167

$

17,110

$

17,366

$

34,277

$

34,891

Stock-based compensation expense

A

(976)

(504)

(685)

(1,479)

(1,369)

Non-GAAP total operating expenses

$

16,191

$

16,606

$

16,681

$

32,798

$

33,522

Income (Loss) From Operations Reconciliation:

GAAP income (loss) from operations

$

(567)

$

760

$

4,210

$

193

$

4,915

Stock-based compensation expense

A

1,166

755

946

1,921

1,903

Non-GAAP income from operations

$

599

$

1,515

$

5,156

$

2,114

$

6,818

Net Income (Loss) Reconciliation:

GAAP net income (loss)

$

(1,181)

$

319

$

3,405

$

(862)

$

3,127

Stock-based compensation expense

A

1,166

755

946

1,921

1,903

Non-GAAP net income (loss)

$

(15)

$

1,074

$

4,351

$

1,059

$

5,030

Net Income (Loss) per Diluted Share Reconciliation:

GAAP net income (loss) per diluted share

$

(0.04)

$

0.01

$

0.12

$

(0.03)

$

0.11

Stock-based compensation expense

A

0.04

0.03

0.03

0.07

0.06

Non-GAAP net income (loss) per diluted share

$

$

0.04

$

0.15

$

0.04

$

0.17

 

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,   2014

March 31,   2014

June 30,   2013

June 30,   2014

June 30,   2013

Cost of revenue

$

190

$

251

$

261

$

442

$

534

Selling, general and administrative

733

255

507

988

1,004

Research and development

243

249

178

491

365

Total stock-based compensation expense

$

1,166

$

755

$

946

$

1,921

$

1,903

 

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SOURCE Maxwell Technologies, Inc.



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