Active Power Announces Second Quarter Results.AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas -- Active Power, Inc. (Nasdaq:ACPW ACPW Asymmetrical Coplanar Waveguide ACPW Advisory Committee of the Purity of Water (Australia) ) today announced results for its second quarter ended June June: see month. 30, 2004. Revenues for the second quarter of fiscal 2004 were $3.7 million, an increase of 99% from the same period last year. Second quarter's revenue growth was driven by a 32% increase in unit volume as compared to the second quarter of 2003, and an increase in project revenue, which comprises revenue from installation and start-up Start-up The earliest stage of a new business venture. services and third party equipment. Net loss for the second quarter of 2004 was $6.1 million, or 14 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to a net loss of $5.9 million, or 14 cents per share, for the same period last year. Product gross margin improvements from higher sales volume and lower product material costs were offset by higher legal and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. costs. Consumption of cash and investments for the quarter was $5.5 million, as compared to $4.0 million for the same period last year. The increase in cash and investment consumption was due primarily to changes in our working capital balances. "End user demand for our products continues to strengthen in traditional markets, such as broadcasting, utilities, hospitals and airports," said Joe Pinkerton Pin·ker·ton , Allan 1819-1884. Scottish-born American detective. His agency was notorious for breaking strikes and disrupting labor efforts to unionize. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Active Power. "Continued success in these markets along with a growing demand for our new 1000 & 1200 kVA UPS products will be the primary drivers for sequential growth in the second half of this year. Our battery-free extended runtime Refers to the actual execution of a program. "At runtime" means while the program is running. See runtime library, runtime engine, runtime environment and runtime error. product continues to meet its technical milestones. This system powered an 80 kW load for 15 minutes in April, which is the energy equivalent of 22 of our current flywheels. We plan to showcase the underlying technology of this product in September September: see month. at the International Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. Energy Conference and to ship alpha units by the end of the year." Business Highlights: --Received a $2.7 million order for four high power continuous power systems (CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ) from an existing customer for an industrial application. In addition to the four high power UPS systems, this CPS order features project revenue from installation and start-up services as well as third party equipment. We expect to ship product against this order in Q3 and Q4 of this year. --Shipped five systems to hospital facilities in Q2, including one of our new 1000 kVA high power UPS systems for a hospital installation in Italy. --Furthered our efforts in the gaming industry market with shipments of UPS systems to two casinos A list of casinos. Antigua and Barbuda
--Reduced the stocking inventory at our primary OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and , Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. and its dealer network, by approximately $1.0 million or 12%. --Continued the success of our mid-range UPS in the broadcast market by shipping systems to five broadcast customers, including one of the three major networks. --Added to our airport runway runway: see airport. lighting customers by shipping a UPS system to an airport in Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi . --Received a multi-system UPS order from a semiconductor fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. facility in North America, to be shipped in Q3. --Shipped multiple CleanSource(R) DC systems to our Japanese OEM customer, Fuji Electric. --Achieved a significant development milestone on our battery-free extended runtime energy storage product, discharging the system at 80 kW for over 15 minutes. This system is targeted to replace lead-acid batteries Noun 1. lead-acid battery - a battery with lead electrodes with dilute sulphuric acid as the electrolyte; each cell generates about 2 volts lead-acid accumulator in the 3-phase UPS market below 100 kVA. We anticipate a technology launch for this product in September 2004, and are on schedule to ship alpha units to customers in the fourth quarter of this year. Outlook: Active Power expects Q3 2004 revenue to increase to approximately $4.0 to $4.5 million, and Q3 earnings per share to be a loss of approximately 13 to 15 cents. Included in our Q3 earnings estimate is $500,000 or approximately 1 cent per share for attorney fees associated with our ongoing litigation. For a further discussion of this litigation see our most recent SEC filings. We expect consumption of cash and investments in Q3 to be in the range of $5.0 to $6.0 million. Conference Call: The Company will host a conference call today, Wednesday, July 28, at 11:00 a.m. Eastern Time, to further review the Company's fiscal Q2 results. A replay of the webcast will be available until August 11. Investors may access the live broadcast and replay through our web site: www.activepower.com. About Active Power: Active Power, Inc. (www.activepower.com) designs, manufactures and markets battery-free power quality products that provide the consistent, reliable electric power required by today's digital economy. An ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001-certified company, Active Power is the first to commercialize a flywheel energy storage Flywheel Energy Storage (FES) works by accelerating a rotor (flywheel) to a very high speed and maintaining the energy in the system as rotational energy. The energy is converted back by slowing down the flywheel. system, CleanSource(R) that provides a highly reliable, low-cost and non-toxic replacement for lead-acid batteries used in conventional power quality installations. Cautionary Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors that could cause actual results to materially differ from those in the forward-looking statements are: the potential for significant losses to continue; inability to accurately predict revenue and budget for expenses for future periods; fluctuations in revenue and operating results; overall market performance; decreases and/or delays in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. ; limited product offerings; inability to expand and integrate new distribution channels; inability to manage new and existing product distribution relationships; our dependence on our relationship with Caterpillar(R); competition; delays in research and development; dependence on sole or limited source suppliers; inability to increase product sales; inventory risks; dependence upon key personnel; inability to protect our intellectual property rights, including the possibility of an adverse outcome in the litigation in which we are currently engaged; potential future acquisitions; the volatility of our stock price regardless of our actual financial performance; and other factors detailed in our filings with the Securities and Exchange Commission. Additional risks and uncertainties that we are unaware of or that we currently deem immaterial Not essential or necessary; not important or pertinent; not decisive; of no substantial consequence; without weight; of no material significance. immaterial adj. also may become important factors that affect us. Active Power expressly disclaims any obligation to release publicly any updates or revisions to the information contained in this press release or to update or revise any forward-looking statements to reflect any changes in expectations, or any change in events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which those statements are based, unless otherwise required by law. Active Power and our Active Power logo and CleanSource are registered 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,
2004 2003 2004 2003
-------- -------- --------- ---------
Revenue $3,715 $1,871 $6,955 $3,496
Operating expenses:
Cost of revenue 4,651 2,881 8,472 6,172
Research and development 2,271 2,352 4,624 4,894
Selling, general &
administrative 3,202 2,910 6,211 5,616
Amortization of deferred
stock compensation 17 33 34 66
-------- -------- --------- ---------
Total operating expenses 10,141 8,176 19,341 16,748
-------- -------- --------- ---------
Operating loss (6,426) (6,305) (12,386) (13,252)
Interest income 272 387 669 1,006
Other income (expense) 61 (15) -- (11)
-------- -------- --------- ---------
Net loss $(6,093) $(5,933) $(11,717) $(12,257)
======== ======== ========= =========
Net loss per share, basic &
diluted $(0.14) $(0.14) $(0.28) $(0.29)
Shares used in computing net
loss per share, basic &
diluted 42,375 41,861 42,304 41,805
Comprehensive loss:
Net loss $(6,093) $(5,933) $(11,717) $(12,257)
Unrealized gain (loss) on
investments in marketable
securities (431) (88) (403) (206)
-------- -------- --------- ---------
Comprehensive loss $(6,524) $(6,021) $(12,120) $(12,463)
======== ======== ========= =========
ACTIVE POWER, INC.
CONDENSED BALANCE SHEETS
(Thousands)
June 30, December 31,
2004 2003
(unaudited)
Assets
Current assets:
Cash and cash equivalents $30,111 $28,438
Restricted cash 805 805
Short-term investments in marketable
securities 10,876 21,763
Accounts receivable, net 2,093 1,528
Inventories 3,860 4,531
Prepaid expenses and other 1,397 1,404
------------ ------------
Total current assets 49,142 58,469
Property and equipment, net 8,756 9,796
Intangible assets, net 781 838
Long-term investments in marketable
securities 20,526 21,158
------------ ------------
Total assets $79,205 $90,261
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,735 $1,694
Accrued expenses 3,054 3,323
Deferred revenue 1,068 184
------------ ------------
Total liabilities 5,857 5,201
Stockholders' equity:
Common stock 42 42
Treasury stock (2) (2)
Deferred stock compensation -- (34)
Additional paid-in capital 215,367 214,993
Accumulated deficit (141,735) (130,018)
Other accumulated comprehensive income (324) 79
------------ ------------
Total stockholders' equity 73,348 85,060
------------ ------------
Total liabilities and stockholders'
equity $79,205 $90,261
============ ============
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