Active Power Reports First Quarter 2013 Results

Active Power Reports First Quarter 2013 Results 
UPS Sales Increase $7.4 Million to $11.6 Million Versus First Quarter
of 2012 
AUSTIN, TX -- (Marketwired) -- 04/30/13 --  Active Power (NASDAQ:
ACPW), manufacturer of uninterruptible power supply (UPS) systems and
modular infrastructure solutions, reported results for the first
quarter ended March 31, 2013. 
Q1 2013 Highlights 


 
--  UPS sales increased $7.4 million to $11.6 million from first quarter
    of 2012.
    
    
--  Gross margin increased to 29.6% versus 26.8% in the first quarter of
    2012.
    
    
--  Cash and cash equivalents increased to $15.0 million at March 31,
    2013, from $13.5 million at December 31, 2012.
    
    
--  New strategic distribution partnership agreement with Digital China
    Information Service Company Limited, the largest IT solutions provider
    in China.
    
    
--  Deployed CleanSource(R) UPS systems to a number of marquee
    customers including a leading oil and gas producer and 21Vianet, one
    of the largest data center services provider in China.
    
    
--  Introduced new PowerHouse(TM) products that provide lower
    acquisition cost, faster time to deployment, and superior management
    capability, particularly when compared to a conventional data center
    electrical room.

  
Q1 2013 Financial Results
 Revenue in the first quarter of 2013 was
$18.6 million compared to $15.2 million in the previous quarter and
$19.8 million in the first quarter of 2012. The sequential increase
was due to the increase in UPS sales, while the decrease from the
year-ago quarter was attributed to a decline in modular IT
infrastructure revenues partially offset by the increase in UPS
sales. The improvement in UPS sales was driven by a large order in
the fourth quarter of 2012 for which revenue was recognized in the
first quarter of 2013 as well as an increase in sales to China. 
Gross margin in the first quarter of 2013 was 29.6% compared to 39.5%
in the previous quarter and 26.8% in the first quarter of 2012. The
sequential decrease in gross margin is primarily due to higher
percentage of sales derived from a distributor channel in Asia, which
typically carries lower overall margins. The improvement in gross
margin from the year-ago quarter was primarily due to a shift in
sales mix from lower margin modular infrastructure solutions sales
into higher margin UPS products sales as well as improved service
margins due to cost containment.  
Net loss in the first quarter was $0.3 million or $(0.01) per share.
compared to a loss of $0.4 million or $(0.02) per share in the
previous quarter and a loss of $1.1 million or $(0.07) per share in
the first quarter of 2012. The net loss reduction from the prior
quarter was due primarily to a decrease in operating expenses,
partially offset by the decrease in gross profit. The net loss
reduction from the first quarter of last year was due to improved
gross margins and reduced operating expenses. 
Adjusted EBITDA for the first quarter of 2013 was $0.2 million,
compared to $0.5 million in the previous quarter and an adjusted
EBITDA loss of $0.4 million in the first quarter of 2012. The
sequential quarterly decrease was due to the change in net loss, the
impairment charge in the previous quarter, and lower stock
compensation expenses in the first quarter. The increase in adjusted
EBITDA from the year-ago quarter was primarily due to a reduction in
the year-over-year net loss.  
Cash and cash equivalents increased to $15.0 million at March 31,
2013 from $13.5 million at December 31, 2012.  
Management Commentary 
 "Our first quarter results reflect our focus
on the 2013 priorities laid out at the beginning of the year,
particularly in the growth of core power systems sales," said Doug
Milner, president and CEO, at Active Power. "We also broadened our
market reach in Asia with the addition of Digital China as one of our
strategic distribution partners. We have already engaged with Digital
China on large data center projects for which we anticipate field
product deployments later this year." 
"We are pleased with the improvement in our gross margin compared to
the first quarter of 2012 which reflects a more favorable overall
product mix and cost containment efforts."  
"Moving ahead, we plan to leverage our products' unmatched power
density, reliability, and total cost of ownership to build on the
steady growth of our CleanSource UPS and CleanSource(R) High Density
UPS product lines. We will also accelerate growth of our modular
infrastructure solutions supported by our new PowerHouse products. We
believe these highly differentiated products coupled with a rapidly
expanding data center market places us in a favorable position to
compete and to grow the business profitably."   
Outlook
 Active
Power expects second quarter 2013 revenue to range between $19
million and $22 million. Second quarter earnings per share is
expected to be between $(0.02) and $0.03 per share.  
Changes in cash and investments in the second quarter are expected to
be minimal and driven by changes in working capital requirements. 
Conference Call and Webcast
 Active Power will host a conference call
today, Tuesday, April 30, 2013, at 4:30 p.m. (ET) to discuss its
first quarter 2013 results. Interested parties can dial into the call
at the time of the event at (866) 963-1214. For callers outside the
United States, please dial (904) 520-5765. 
To listen to the live webcast, click here. A replay of the webcast
will be available via Active Power's investor relations website at
http://ir.activepower.com. 
About Active Power
 Founded in 1992, Active Power (NASDAQ: ACPW)
designs and manufactures uninterruptible power supply (UPS) systems
and modular infrastructure solutions that enable data centers and
other mission critical operations to remain 'on' 24 hours a day,
seven days a week. The combined benefits of its products' power
density, reliability, and total cost of ownership are unmatched in
the market and enable the world's leading companies to achieve their
most forward thinking data center designs. The company's products and
solutions are built with pride in Austin, Texas, at a
state-of-the-art, ISO 9001:2008 registered manufacturing and test
facility. Global customers are served via Austin and three regional
operations centers located in the United Kingdom, Germany, and China,
supporting the deployment of systems in more than 50 countries. For
more information, visit www.activepower.com. 
Non-GAAP Financial Information
 See "About Presentation of Adjusted
EBITDA" below for the definition of adjusted EBITDA, a non-GAAP
financial metric, and an important discussion about the use of this
metric and its reconciliation to GAAP net income, the most directly
comparable GAAP financial measure. 
Cautionary Note Regarding Forward-Looking Statements
 This release
contains forward-looking statements that involve risks and
uncertainties, including statements relating to anticipating field
product deployments later this year; plans to leverage our products
to build on the steady growth of our CleanSource UPS and CleanSource
High Density UPS product lines; accelerating the growth of our
modular infrastructure solutions; our belief that these highly
differentiated products coupled with a rapidly expanding data center
market places us in a favorable position to compete and to grow the
business profitably; our revenue and earnings per share guidance for
the second quarter of 2013; and our expected changes in
 cash and
investments in the second quarter.  
Any forward-looking statements and all other statements that may be
made in this news release that are not historical facts are subject
to a number of risks and uncertainties, and actual results may differ
materially. Factors that could cause the actual results to differ
materially from the results predicted include, among others, our
dependence on our relationships with Hewlett Packard, Caterpillar,
other original equipment manufacturers (OEM), other strategic IT
partners, and on our distributors including Digital China Information
Service Company; our increased emphasis on larger and more complex
system solutions; the success of our product development efforts and
our ability to manufacture and deliver products in a timely manner;
the level of acceptance of our current and future products in the
market; the deferral or cancellation of sales commitments as a result
of general economic conditions or uncertainty; risks related to our
international operations; and product performance and quality issues. 
For more information on the risk factors that could cause actual
results to differ from these forward looking statements, please refer
to Active Power filings with the Securities and Exchange Commission,
including its annual report on Form 10-K for the year ended December
31, 2012, its Quarterly Reports on Form 10-Q, and its Current Reports
on Form 8-K filed since then. Active Power assumes no obligation to
update any forward-looking statements or information which are in
effect as of their respective dates. 
Active Power and CleanSource are registered trademarks of Active
Power, Inc. The Active Power logo and PowerHouse are trademarks of
Active Power, Inc. All other trademarks are the properties of their
respective companies. 


 
                                                                            
                             Active Power, Inc.                             
               Condensed Consolidated Statement of Operations               
            (in thousands, except per share amounts; unaudited)             
                                                                            
                                               Three Months Ended March 31, 
                                               ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Revenues:                                                                   
  Product revenue                              $      15,636  $      16,406 
  Service and other revenue                            2,974          3,392 
                                               -------------  ------------- 
    Total revenue                                     18,610         19,798 
                                                                            
Cost of goods sold:                                                         
  Cost of product revenue                             11,004         11,996 
  Cost of service and other revenue                    2,104          2,495 
                                               -------------  ------------- 
    Total cost of goods sold                          13,108         14,491 
                                               -------------  ------------- 
Gross profit                                           5,502          5,307 
                                                                            
Operating expenses:                                                         
  Research and development                             1,631          1,288 
  Selling and marketing                                2,937          3,547 
  General and administrative                           1,134          1,544 
                                               -------------  ------------- 
    Total operating expenses                           5,702          6,379 
                                               -------------  ------------- 
Loss from Operations                                    (200)        (1,072)
                                                                            
Interest expense, net                                    (82)          (114)
Other income, net                                          9             39 
                                               -------------  ------------- 
                                                                            
Net loss                                       $        (273) $      (1,147)
                                               =============  ============= 
Net loss per share, basic and diluted          $       (0.01) $       (0.07)
                                               -------------  ------------- 
                                                                            
Shares used in computing net loss per share,                                
 basic and diluted                                    19,225         16,966 
                                                                            
                                                                            
                                                                            
                             Active Power, Inc.                             
                   Condensed Consolidated Balance Sheets                    
                               (in thousands)                               
                                                                            
                                                 March 31,     December 31, 
                                                    2013           2012     
                                               -------------  ------------- 
                                                (unaudited)                 
                                                                            
ASSETS                                                                      
                                                                            
Current assets:                                                             
  Cash and cash equivalents                    $      15,049  $      13,524 
  Restricted cash                                        129              - 
  Accounts receivable, net of allowance for                                 
   doubtful accounts of $446 and $488 at March                              
   31, 2012 and December 31, 2012,                                          
   respectively                                       17,560         17,862 
  Inventories                                          9,430         11,079 
  Prepaid expenses and other                             999            567 
                                               -------------  ------------- 
    Total current assets                       $      43,167         43,032 
Property and equipment, net                            2,427          2,458 
Deposits and other                                       302            309 
                                               -------------  ------------- 
    Total assets                               $      45,896
  $      45,799 
                                               =============  ============= 
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                                                            
Current liabilities:                                                        
  Accounts payable                             $       4,908  $       4,036 
  Accrued expenses                                     4,925          4,948 
  Deferred revenue                                     3,840          4,568 
  Revolving line of credit                             5,535          5,535 
                                               -------------  ------------- 
    Total current liabilities                  $      19,208         19,087 
Long-term liabilities                                    774            713 
Stockholders' equity                                                        
  Preferred stock - $0.001 par value; 2,000                                 
   shares authorized                                       -              - 
  Common stock - $0.001 par value; 30,000                                   
   shares authorized; 19,298 and 19,171 issued                              
   and 19,244 and 19,125 outstanding at March                               
   31, 2013 and December 31, 2012,                                          
   respectively                                           19             19 
  Treasury stock                                        (180)          (144)
  Additional paid-in capital                         289,144        288,619 
  Accumulated deficit                               (263,090)      (262,817)
  Other accumulated comprehensive income                  21            322 
                                               -------------  ------------- 
    Total stockholders' equity                        25,914         25,999 
                                               -------------  ------------- 
    Total liabilities and stockholders' equity $      45,896  $      45,799 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                             Active Power, Inc.                             
                          Supplemental Information                          
                                                                            
Revenue by Product                        3 Months Ended                    
                                            March 31,                       
                          2013      % of total       2012       % of total  
                      ------------ ------------  ------------  ------------ 
UPS                   $     11,606           62% $      4,216            21%
MIS                          4,030           22%       12,190            62%
                      ------------ ------------  ------------  ------------ 
  Total Product                                                             
   Revenue                  15,636           84%       16,406            83%
Service                      2,973           16%        3,392            17%
                      ------------ ------------  ------------  ------------ 
  Total Revenue       $     18,610          100% $     19,798           100%
                      ============ ============  ============  ============ 
                                                                            
Revenue by Geography                                                        
                                                                            
Americas              $     12,092           65% $     13,408            68%
Asia                         3,960           21%        1,609             8%
EMEA                         2,558           14%        4,781            24%
                      ------------ ------------  ------------  ------------ 
  Total Revenue       $     18,610          100% $     19,798           100%
                      ============ ============  ============  ============ 
                                                                            
                                                                            
                                                                            
                              Adjusted EBITDA                               
                                (Thousands)                                 
                                                                            
                                                     Three                  
                                                 Months Ended               
                                            March 31,             Dec 31,   
                                       2013          2012          2012     
                                   ------------  ------------  ------------ 
Net Loss                           $       (273) $     (1,147) $       (418)
  Interest Expense                           82           114            81 
  Depreciation                                                              
   Expense                                  262           252           327 
  Stock Based                                                               
   Compensation                             137           364           279 
  Impairment of Long-                                                       
   Lived Assets                             (17)            -           218 
                                   ------------  ------------  ------------ 
Adjusted EBITDA                    $        191  $       (417) $        487 
                                   ============  ============  ============ 

 
About Presentation of Adjusted EBITDA 
 Beginning with the reporting
of results for the fourth quarter of 2012, the company began to
report the measures of adjusted EBITDA. Adjusted EBITDA is not a
financial measure calculated and presented in accordance with U.S.
generally accepted accounting principles (GAAP) and should not be
considered as an alternative to net income, operating income or any
other financial measures so calculated and presented, nor as an
alternative to cash flow from operating activities as a measure of
liquidity. The company defines adjusted EBITDA as net loss before
impairment of long-lived assets, depreciation, interest, and non-cash
stock based compensation. Other companies (including competitors) may
define adjusted EBITDA differently. The company presents adjusted
EBITDA because management believes it is to be an important
supplemental measure of performance that is commonly used by
securities analysts, investors and other interested parties in the
evaluation of companies in our industry. Management also uses this
information internally for forecasting and budgeting. It may not be
indicative of the historical operating results of Active Power Inc.
nor is it intended to be predictive of potential future results.
Investors should not consider adjusted EBITDA in isolation or as a
substitute for analysis of the company's results as reported under
GAAP. 
SOURCE: Active Power, Inc. 
Media Contact:
Lee Higgins
Senior Public Relations Manager
512-744-9488
lhiggins@activepower.com 
Investor Contact:
Ron Both
Liolios Group, Inc.
949-574-3860
acpw@liolios.com 
 
 
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