Capstone Turbine Corporation Announces First Quarter Fiscal 2007 Results; First Quarter Revenue of $6.6 Million Increases Over 70% From Prior Year Comparable Quarter; Gross Loss Improves 71 Points From Prior Year.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. -- 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 ) (www.microturbine.com) reported results for its first quarter ended June June: see month. 30, 2006 in its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. filed with the Securities and Exchange Commission on August 9, 2006. Financial Summary Capstone's revenue for the fiscal 2007 first quarter was $6.6 million, representing an increase of over 70% from $3.8 million for the prior year comparable quarter. However, this represents a decrease of 13% from the fourth quarter fiscal 2006 revenue of $7.6 million. "The year-over-year growth in revenue indicates that demand for microturbines is growing; however, new sales from the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of market are not increasing as quickly as originally planned. The delay in the MEA MEA Multiple endocrine adenomatosis. See Multiple endocrine neoplasia. approval and extended product demonstrations have resulted in a longer than anticipated sales cycle. We remain confident that the New York market offers Capstone a substantial opportunity to grow; therefore, we have redoubled re·dou·ble v. re·dou·bled, re·dou·bling, re·dou·bles v.tr. 1. To double. 2. To repeat. 3. Games To double the doubling bid of (an opponent) in bridge. v. our efforts in this market," said Mark Gilbreth, Capstone's Interim 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. . 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. at the end of the first quarter was $5.4 million, a decrease of over 55% from the end of the prior year comparable quarter and approximately 24% from the end of the prior quarter. The decrease in backlog reflects improved lead times from order to shipment and a relatively flat order rate for the last three quarters. The reported gross loss for the first quarter was $1.2 million, or 19% of revenue compared to $3.4 million, or 90% of revenue from the prior year comparable quarter and $3.2 million, or 43% of revenue for the fiscal 2006 fourth quarter. Over the past year Capstone improved its gross loss by 71 points and by 24 points from the prior quarter due to higher volume and improved reliability. Research and development costs were $2.8 million for the fiscal 2007 first quarter, an improvement of $0.3 million, or 10%, from the prior quarter. The improvement was primarily related to lower spending on development hardware and reduced payroll costs. Selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were $5.9 million for the fiscal 2007 first quarter, an improvement of $0.3 million, or 4% from the prior quarter. Included in SG&A expenses in the quarter ended June 30, 2006 was $0.7 million of non-cash stock compensation primarily related to the Company's adoption of Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") 123R during the first quarter of fiscal 2007. Net of the non-cash stock compensation charges, SG&A expenses decreased approximately $0.8 million compared to the same period last year. The improvement was primarily related to reduced payroll and related costs. Capstone's net loss was $9.3 million for the fiscal 2007 first quarter, or $0.09 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share, an improvement of $2.5 million from the $11.8 million loss, or $0.12 per diluted common share, reported for the fourth quarter of fiscal 2006. The first quarter fiscal 2007 net loss includes an aggregate of approximately $0.8 million of stock-based compensation expense due primarily to the Company's adoption of SFAS 123R on April 1, 2006. Excluding the increased costs associated with the implementation of SFAS 123R, total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. included in the fiscal 2007 first quarter net loss improved $1.1 million, or 12%, over the prior quarter as a result of the Company's continuing efforts to reduce expenses. Cash balances decreased by $9.3 million during the first quarter of fiscal 2007. As of June 30, 2006, cash and cash equivalents were $48.8 million. Mr. Gilbreth, added, "The foundation for operational success is in place. The task ahead of us now is to further develop and expand our sales in our key markets." Conference Call The Company will host a conference call today, Wednesday Wednesday: see week. , August 9, at 1:45 p.m. Pacific Time. Access to the live broadcast and a replay of the webcast will be available for 90 days through the Investor Relations Investor relations The process by which the corporation communicates with its investors. page on the Company's website: www.microturbine.com About Capstone Turbine Capstone Turbine Corporation (www.microturbine.com) (Nasdaq:CPST) is the world's leading producer of low-emission adj. 1. producing little emission of atmospheric pollutants; as, a low-emission vehicle s>. microturbine systems, and was the first to market commercially viable microturbine energy products. Capstone Turbine has shipped more than 3,500 Capstone MicroTurbine systems to customers worldwide. These award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" systems have logged more than 12 million documented 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. operating hours. Capstone Turbine is a member of the U.S. Environmental Protection Agency's Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation's energy infrastructure and reducing emissions of pollutants pollutants see environmental pollution. and greenhouse gases greenhouse gas n. Any of the atmospheric gases that contribute to the greenhouse effect. greenhouse gas . A UL-Certified 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. 9001:2000 certified See certification. company, Capstone Turbine is headquartered in the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. area with sales and/or service centers in New York, 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 , Milan, Shanghai Shanghai (shăng`hī`, shäng`hī`), city (1994 est. pop. 12,980,000), in, but independent of, Jiangsu prov., E China, on the Huangpu (Whangpoo) River where it flows into the Chang (Yangtze) estuary. and Tokyo. "Capstone Turbine Corporation" and "Capstone MicroTurbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners. This press 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, with regard to business growth in the New York market and generally, top line growth, operational success and sales expansion. Forward-looking statements may be identified by words such as "expects," "objective," "intend," "targeted," "plan" and similar phrases. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, including the fact that certain product applications in the New York market may require further regulatory approvals, that we may not achieve the growth we currently anticipated, we may not be able to retain a permanent replacement to our former CEO, and other factors described in Capstone's filings with the Securities and Exchange Commission may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. Capstone cautions readers not to place undue reliance on these forward-looking 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(Unaudited)
June 30, March 31,
2006 2006
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $48,755 $58,051
Accounts receivable, net of allowance for doubtful
accounts and sales returns of $845 at June 30,
2006 and $858 at March 31, 2006 6,303 5,869
Inventories 13,852 12,545
Prepaid expenses and other current assets 1,004 1,050
--------- ---------
Total current assets 69,914 77,515
Property, plant and equipment, net 6,967 7,816
Non-current portion of inventories 3,691 3,113
Intangible asset, net and other long-term assets 1,206 1,273
--------- ---------
Total $81,778 $89,717
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $8,295 $8,144
Accrued salaries and wages 1,130 1,623
Accrued warranty reserve 6,936 6,998
Deferred revenue 561 632
Current portion of notes payable 19 19
--------- ---------
Total current liabilities 16,941 17,416
--------- ---------
Long-term portion of notes payable 42 47
Other long-term liabilities 607 626
Stockholders' Equity:
Preferred stock, $.001 par value; 10,000,000
shares authorized; none issued -- --
Common stock, $.001 par value; 415,000,000 shares
authorized; 104,229,674 shares issued and
103,678,466 shares outstanding at June 30, 2006;
103,521,829 shares issued and 102,970,621 shares
outstanding at March 31, 2006 104 104
Additional paid-in capital 574,471 572,787
Accumulated deficit (509,874) (500,542)
Deferred stock compensation -- (208)
Treasury stock, at cost; 551,208 shares (513) (513)
--------- ---------
Total stockholders' equity 64,188 71,628
--------- ---------
Total $81,778 $89,717
========= =========
CAPSTONE TURBINE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three
Months Ended
June 30,
------------------
2006 2005
-------- ---------
Revenue $6,566 $3,807
Cost of goods sold (includes stock-based
compensation of $28 and $0, for 2006 and 2005,
respectively) 7,802 7,224
-------- ---------
Gross Loss (1,236) (3,417)
Operating expenses:
Research and development (includes stock-based
compensation of $56 and $0, for 2006 and 2005,
respectively) 2,806 2,105
Selling, general and administrative (includes
stock-based compensation of $674 and $76, for
2006 and 2005, respectively) 5,915 5,737
-------- ---------
Total operating expenses 8,721 7,842
-------- ---------
Loss from operations (9,957) (11,259)
Interest income 627 396
-------- ---------
Loss before income taxes (9,330) (10,863)
Provision for income taxes 2 2
-------- ---------
Net loss $(9,332) $(10,865)
======== =========
Net loss per share of common stock -- Basic and
Diluted $(0.09) $(0.13)
======== =========
Weighted average shares used to calculate Basic and
Diluted net loss per share 103,323 84,575
======== =========
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