Capstone Announces Third Quarter Results.Business Editors CHATSWORTH Chatsworth, estate, Derbyshire, central England, near Chesterfield. It is the seat of the dukes of Devonshire. Begun in 1552, the present Classical-style Chatsworth House was rebuilt in 1686. , Calif.--(BUSINESS WIRE)--Oct. 24, 2000 Capstone Turbine Capstone Turbine Corporation NASDAQ: CPST, incorporated in 1988, is a California based gas turbine manufacturer that specializes in microturbine power and heat cogeneration systems. Capstone has sold and shipped more than 3,000 of these one-moving-part systems worldwide. Corporation (Nasdaq:CPST CPST Cable Programming Services Tier CPST Commission on Professionals in Science and Technology CPST Community Psychiatric Supportive Treatment (Ohio) CPST Child Passenger Safety Technician CPST Classical Perturbation Scattering Theory ), a leading producer of low-emission adj. 1. producing little emission of atmospheric pollutants; as, a low-emission vehicle s>. microturbine systems, today reported revenue of $6.2 million for the third quarter ended September September: see month. 30, 2000, compared with revenue of $759,000 for the third quarter of 1999. The increase in revenue reflects greater sales to a larger customer base, which has resulted from the Company's expanding marketing efforts. "We made great progress in the third quarter and were able to achieve a number of important milestones that are key to the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth of the Company," said Dr. Ake Almgren, President 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 Capstone Turbine Corporation. Quarterly highlights -- Capstone shipped its first commercial 60-kilowatt microturbine power system. -- Capstone was awarded a $10 million grant by the United States Department of Energy to develop an Advanced Microturbine System. -- Capstone moved into a new 100,000 sq. ft. facility in Los Angeles that has the capacity to produce up to 20,000 Capstone MicroTurbine systems per year. -- Capstone announced a licensing agreement with Solar Turbines Incorporated to acquire the manufacturing technology and fixed assets to produce recuperator cores, an integral part of the Capstone MicroTurbine system. -- Capstone signed distribution agreements covering 756 units. Agreements were signed with American Energy Savings (126 units), Cinergy Corp. (52 units), Energy Co-Opportunity (76 units), The Hanover Co. (100 units), Harza Engineering Co. Inc. (250 units), Mariah Energy (126 units), and RealEnergy, Inc. (26 units). "As evidenced by the distribution agreements we signed during the quarter with some of the leading players in the energy, engineering and oil and natural gas industries, we are seeing strong and growing demand for our microturbine systems," said Dr. Almgren. "Shortly after the quarter ended, we had some exciting developments in regards to the hybrid electric vehicle A hybrid electric vehicle (HEV) is a vehicle which combines a conventional propulsion system with an on-board rechargeable energy storage system (RESS) to achieve better fuel economy than a conventional vehicle without being hampered by range from a charging unit like an market. Capstone entered into an agreement with Hyundai Motor Co. and Enova Enova can refer to:
Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. sport-utility vehicle sport-u·til·i·ty vehicle n. Abbr. SUV A four-wheel-drive vehicle with a roomy body, designed for off-road travel. for testing and evaluation, and then expand the application to commercial buses in 2002," said Dr. Almgren. Dr. Almgren noted that while the Company experienced a temporary slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in production while it transitioned to its new facility, Capstone shipped 211 units in the third quarter. "During this period, our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. grew to 890 units, as well," added Dr. Almgren. "From a research and development perspective, we achieved a major milestone by shipping our first 60-kilowatt microturbine system," said Dr. Almgren. "We expect to ramp-up shipments of the 60-kilowatt system in the fourth quarter and continue that trend next year. Our current research and development efforts are focused on multiple additional 60-kilowatt product releases, which include stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." operation, dual-mode operation, and operation on additional gaseous gas·e·ous adj. 1. Of, relating to, or existing as a gas. 2. Full of or containing gas; gassy. and liquid fuels." Quarterly Financials Capstone posted revenues of $6.2 million for the third quarter, as compared with $759,000 in the comparable prior year quarter. Capstone reported a net loss attributable to common shareholders of $8.1 million, or $0.11 per share, for the third quarter. This compares with a net loss of $11.4 million, or $4.85 per share, for the same period of 1999. The decrease in the net loss per share was primarily attributable to revenue growth resulting from an increase in the number of units shipped, 211 in the third quarter 2000, compared with 22 units in the same period of 1999. Research and Development expenses increased to $3.0 million, compared with $2.3 million in the third quarter of 1999. Research and development expenses related primarily to the development of the Company's 60-kilowatt microturbine system and the broadening of its existing product line for new fuel types and applications. SG&A increased to $7.2 million, compared with $2.7 million in the third quarter of 1999. This increase is primarily attributable to expanding sales and marketing efforts, including the hiring of additional employees and general overhead expenses. The Company anticipates that this trend will continue as it enters into new markets and develops expanded sales and marketing programs. $1.8 million of the increase was attributable to non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc stock-based compensation expense and marketing rights amortization. Company Overview and Outlook "During the third quarter, we took steps to begin production of a key component of our microturbines -- the recuperative re·cu·per·ate v. re·cu·per·at·ed, re·cu·per·at·ing, re·cu·per·ates v.intr. 1. To return to health or strength; recover. 2. To recover from financial loss. v.tr. core. When complete, we will have eliminated a key supply risk affecting the company," said Jeff Watts Watts, residential section of south central Los Angeles. Named after C. H. Watts, a Pasadena realtor, the section became part of Los Angeles in 1926. Artist Simon Rodia's celebrated Watts Towers are there. , Chief Financial Officer. "Having exercised our rights under our agreement with Solar Turbine turbine, rotary engine that uses a continuous stream of fluid (gas or liquid) to turn a shaft that can drive machinery. A water, or hydraulic, turbine is used to drive electric generators in hydroelectric power stations. Inc., we expect to begin working in a collaborative manner with Solar to manufacture recuperator Re`cu´per`a`tor n. 1. (Steel Manuf.) Same as Regenerator. cores in our own facilities. As a result, Capstone should add another substantial competitive advantage by having the only automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. recuperator core manufacturing processes in the world. "We are also pleased that we have been able to achieve diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. within the total sales of our microturbine systems," said Mr. Watts. "We are diversified diversified (di·verˑ·s geographically, as we ship roughly two-thirds of our production into the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. market and one-third into the rest of the world, primarily Japan and Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). . "We are diversified in the number of sales made for each application of our microturbine systems. Shipments are spread pretty evenly among the core applications, which include resource recovery, micro-cogeneration, backup and stand-by power/peak shaving, and hybrid electric vehicles. "And from both a geographic perspective and an application perspective, we are diversified by customer. We will continue to work to achieve a high level of diversification within our current markets, while also identifying new and emerging markets. An emerging market about which we are particularly excited is the Power Quality and Reliability market, otherwise known as the `9s market.' This market focuses on the provision of a reliable primary or back-up power supply for increasingly electricity-dependent enterprises. We expect to see substantial growth in this market in the years to come," said Mr. Watts. About Capstone Turbine Corporation Capstone Turbine Corporation (www.microturbine.com) (Nasdaq:CPST) is a leading producer of low-emission microturbine systems. In 1998, Capstone was the first to offer commercial power products utilizing microturbine technology, the result of more than ten years of focused research. Worldwide, hundreds of commercial production Capstone MicroTurbine systems serve, among others, the following applications: -- Hybrid electric vehicles (HEVs): onboard Refers to a chip or other hardware component that is directly attached to the printed circuit board (motherboard). Contrast with offboard. See inboard. generation -- Resource recovery: converting oilfield and biomass waste gases into electricity -- Micro-cogeneration: combined heat/power/chilling solutions -- The 9s Market: power quality and reliability This news release contains "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. ," as that term is used in the federal securities laws, about Capstone's business, including statements regarding the expected future of microturbine technology and future sales. Readers can find many of these statements by looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. words such as "believes," "expects," "anticipates," "estimates," or similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. These risks and uncertainties include those risks, uncertainties and risk factors identified, among other places, under "Risk Factors" in Capstone's registration statement on Form S-1, SEC File No. 333-33024. Capstone cautions readers not to place undue reliance on these statements, which speak only as of the date of this release. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect 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 after the date of this release or to reflect the occurrence of unanticipated events.
CAPSTONE TURBINE CORPORATION
STATEMENT OF OPERATIONS
(Unaudited)
Three Nine
Months Ended Months Ended
September 30, September 30,
1999 2000 1999 2000
Revenues $ 759,000 $ 6,197,000 $ 1,315,000 $ 16,029,000
Cost of Goods
Sold 1,990,000 7,278,000 4,570,000 20,658,000
Gross Profit
(Loss) (1,231,000) (1,081,000) (3,255,000) (4,629,000)
Operating Costs
and Expenses:
Research and
development 2,259,000 2,953,000 6,681,000 8,416,000
Selling,
general and
administrative 2,748,000 7,203,000 7,818,000 17,264,000
Total operating
costs and
expenses 5,007,000 10,156,000 14,499,000 25,680,000
Income (Loss) from
Operations (6,238,000) (11,237,000) (17,754,000) (30,309,000)
Interest Income 133,000 3,385,000 350,000 6,007,000
Interest Expense (151,000) (197,000) (463,000) (733,000)
Other Income
(Expense) 3,000 (32,000) 5,000 (31,000)
Profit (Loss)
Before Income
Taxes (6,253,000) (8,081,000) (17,862,000) (25,066,000)
Provision for
Income Taxes - - 1,000 1,000
Net Income
(Loss) (6,253,000) (8,081,000) (17,863,000) (25,067,000)
Preferred Stock
Dividends,
Accretion, and
Repurchase (5,167,000) - (6,287,000) (559,862,000)
Net Loss
Attributable to
Common
Shareholders $(11,420,000) $(8,081,000) $(24,150,000) $(584,929,000)
Weighted Average
Common Shares
Outstanding 2,352,736 74,931,668 2,267,993 36,317,944
Net Loss Per
Share of
Common Stock -
Basic and Diluted $ (4.85) $ (0.11) $ (10.65) $ (16.11)
-0-
CAPSTONE TURBINE CORPORATION
BALANCE SHEETS
December 31, September 30,
1999 2000
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 6,858,000 $ 229,783,000
Accounts receivable, net of
allowance for doubtful accounts
of $50,000 at December 31, 1999
and $85,000 at September 30, 2000 2,425,000 3,384,000
Inventory 8,803,000 10,976,000
Prepaid expenses and other current
assets 2,217,000 1,440,000
Total Current Assets 20,303,000 245,583,000
Equipment and Leasehold Improvements:
Machinery, equipment and furniture 11,824,000 13,336,000
Leasehold improvements 137,000 2,902,000
Molds and tooling 541,000 994,000
12,502,000 17,232,000
Less accumulated depreciation and
amortization 4,570,000 6,203,000
Total equipment and leasehold
improvements 7,932,000 11,029,000
Deposits on fixed assets 3,374,000 5,296,000
Other assets 422,000 752,000
Intangible assets, net 4,896,000 26,856,000
Total $ 36,927,000 $ 289,516,000
Liabilities and Stockholders'
(Deficiency) Equity
Current Liabilities:
Accounts payable $ 1,728,000 $ 4,581,000
Accrued salaries and wages 677,000 1,026,000
Other accrued liabilities 2,340,000 978,000
Accrued warranty reserve 3,168,000 6,037,000
Deferred revenue 4,696,000 5,951,000
Current portion of capital lease
obligations 1,400,000 1,582,000
Total current liabilities 14,009,000 20,155,000
Non-current Liabilities:
Long-term portion of capital lease
obligations 4,499,000 4,381,000
Other long-term liabilities - 161,000
Accrued dividends payable 6,175,000 -
Total non-current liabilities 10,674,000 4,542,000
Commitments and Contingencies
Total redeemable preferred stock 156,469,000 -
Stockholders' (Deficiency) Equity:
Common stock, $.001 par value;
415,000,000 shares authorized;
2,377,826 and 74,938,602 shares
issued and outstanding at
December 31, 1999 and
September 30, 2000, respectively 2,000 75,000
Additional paid in capital - 495,818,000
Accumulated deficit (144,227,000) (231,074,000)
Total stockholders' (deficiency)
equity (144,225,000) 264,819,000
Total $ 36,927,000 $ 289,516,000
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