Capstone Turbine Announces Fourth Quarter and Fiscal Year 2013 Operating Results

Capstone Turbine Announces Fourth Quarter and Fiscal Year 2013 Operating
Results

                 Best Annual Performance in Company's History

               Record Revenue of $127.6 Million for Fiscal 2013

              Record Annual Gross Margin of 11% for Fiscal 2013

            Record Backlog of $148.9 Million at End of Fiscal 2013

CHATSWORTH, Calif., June 13, 2013 (GLOBE NEWSWIRE) -- Capstone Turbine
Corporation (Nasdaq:CPST), the world's leading clean technology manufacturer
of microturbine energy systems, today announced its financial results for the
fourth quarter and fiscal year ended March 31, 2013.

Fourth Quarter 2013 Highlights

  *Record quarterly revenue of $35.4 million, up 18% year-over-year
  *Product revenue of $29.1 million, up 17% year-over-year
  *Gross margin of $5.0 million, or 14%, compared to $0.9 million, or 3%, in
    fourth quarter Fiscal 2012
  *Second consecutive quarter of double-digit gross margin
  *New product orders of $41.5 million resulting in book-to-bill ratio of
    1.4:1
  *Record product backlog of $148.9 million at March 31, 2013

Fiscal Year 2013 Highlights

  *Record annual revenue of $127.6 million, up 17% from Fiscal 2012
  *Product revenue of $102.7 million, up 14% from Fiscal 2012
  *Gross margin of $14.4 million, or 11% of revenue, compared to $5.4
    million, or 5% of revenue, for Fiscal 2012
  *Operating loss decreased 31% year-over-year
  *New product orders of $112.6 million resulting in book-to-bill ratio of
    1.1:1
  *Strong cash balance of $38.8 million at March 31, 2013
  *Inventory turns were 5.4x at the end of Fiscal 2013 compared to 5.1x for
    Fiscal 2012

Management Commentary

"Our outstanding results for Fiscal 2013 showcase the progress we've made in
transforming Capstone for long-term profitability," said Darren Jamison,
Capstone's President and Chief Executive Officer. "This was the best year in
Capstone's history – an extraordinary achievement for a team that has worked
diligently to align all of our resources in operations, R&D, customer service,
and sales and marketing, and position the company for long-term success. I'm
also pleased to report that the fourth quarter of this year was the best
year-end period in company history, with record revenue, an excellent
book-to-bill ratio, substantially reduced operating loss, and a healthy cash
balance.

"Over the past several years we have injected much greater predictability into
our operations which has resulted in improved cost controls, increasing
margin, reduced cash burn and heightened visibility," Jamison continued."We
have implemented lean manufacturing principles, bolstered our product
development efficiency and enhanced our customer service
resources.Additionally, our compounded annual revenue growth of 35% over the
past 6 years reflects our targeted penetration of key markets that offer
maximum potential.By focusing our resources in all the right areas, our
foundation for continued success is in place.Capstone has entered Fiscal 2014
with brisk order momentum and expanding market drivers, and we are determined
to deliver another banner year for growth and margin expansion."

Fourth Quarter 2013 Financial Summary

Revenue for the fourth quarter of Fiscal 2013 was $35.4 million, an increase
of 6% from $33.3 million for the third quarter of Fiscal 2013, and an increase
of 18% from $30.1 million for the fourth quarter of Fiscal 2012. 

Capstone's backlog as of March 31, 2013 was $148.9 million, an increase of 9%
from $136.5 million at December 31, 2012, and an increase of 7% from $139.0
million at March 31, 2012.

Gross margin for the fourth quarter of Fiscal 2013 was $5.0 million, or 14% of
revenue,compared to $4.6 million, or 14% of revenue, for the third quarter of
Fiscal 2013, and $0.9 million, or 3% of revenue, for the fourth quarter of
Fiscal 2012.

Research and development expenses were $2.2 million for the fourth quarter of
Fiscal 2013, compared to $2.2 million for the third quarter of Fiscal 2013 and
$2.0 million for the fourth quarter of Fiscal 2012.

Selling, general and administrative expenses were $6.7 million for the fourth
quarter of Fiscal 2013, compared to $6.8 million for the third quarter of
Fiscal 2013 and $7.4 million for the fourth quarter of Fiscal 2012.

Capstone's net loss was $4.1 million, or $0.01 loss per share, for the fourth
quarter of Fiscal 2013,compared to a net loss of $4.5 million, or $0.01 loss
per share, for the third quarter of Fiscal 2013, and a net loss of $8.3
million, or $0.03 per share, for the fourth quarter of Fiscal 2012.
Capstone's loss from operations for the fourth quarter of Fiscal 2013
decreased to $3.9 million, compared to $4.4 million for the third quarter of
Fiscal 2013 and $8.5 million for the fourth quarter of Fiscal 2012.

Fiscal Year 2013 Financial Summary

Revenue for the fiscal year ended March 31, 2013 was $127.6 million, an
increase of 17% from $109.4 million for the prior fiscal year.

Fiscal 2013 gross margin was $14.4 million, or 11% of revenue, compared to
Fiscal 2012 gross margin of $5.4 million, or 5% of revenue.The year-over-year
increase in gross margin of $9.0 million was primarily related to a higher
volume of C200 and C1000 Series product shipments, microturbine parts and
service revenue, and lower direct material costs during Fiscal 2013, partially
offset by increased warranty and royalty expenses.

Research and development expenses were $9.0 million for Fiscal 2013, compared
to $8.2 million for Fiscal 2012.The increase in R&D expenses of $0.8 million
resulted from increased supplies, salaries and consulting expense, offset by
increased cost-sharing benefits.

Selling, general and administrative expenses were $27.4 million for Fiscal
2013, compared to $28.9 million for Fiscal 2012.The net decrease in SG&A
expenses was comprised primarily of a decrease in bad debt expense and
professional services, partially offset by increased salaries and related
expenses, business travel expense and marketing expense.

Capstone's net loss was $22.6 million, or $0.07 loss per share, for Fiscal
2013, compared to a net loss of $18.8 million, or $0.07 loss per share, for
Fiscal 2012.Capstone's loss from operations for Fiscal 2013 was $22.0
million, a 31% reduction from the Fiscal 2012 loss from operations of $31.7
million.

The adoption of Accounting Standards Codification 815 "Derivatives and
Hedging" affects the Company's accounting for warrants with certain
anti-dilution provisions. The Company recorded a non-cash benefit of $0.7
million to change in fair value of warrant liability for Fiscal 2013.
Capstone's net loss for Fiscal 2013 before considering the non-cash warrant
liability benefit would have been $23.3 million (calculated by subtracting the
$0.7 million warrant liability benefit from the $22.6 million reported net
loss), or $0.08 loss per share (calculated by subtracting a $0.01 gain per
share attributable to the warrant liability benefit from the $0.07 loss per
share reported). The Company recorded a non-cash benefit of $14.0 million to
change in fair value of warrant liability for Fiscal 2012. Capstone's net loss
for Fiscal 2012 before considering the non-cash warrant liability benefit
would have been $32.8 million (calculated by subtracting the $14.0 million
warrant liability benefit from the $18.8 million reported net loss), or $0.12
loss per share (calculated by subtracting a $0.05 gain per share attributable
to the warrant liability benefit from $0.07 loss per share reported). 

Liquidity and Capital Resources

At March 31, 2013, cash and cash equivalents totaled $38.8 million, compared
to $41.9 million at December 31, 2012 and $50.0 million at March 31, 2012.

During the quarter ended March 31, 2013, Capstone used $3.6 million of cash in
operating activities and spent $0.3 million in capital expenditures. This
compares to cash generated from operating activities of $4.5 million and $0.6
million in capital expenditures during the quarter ended March 31, 2012.

During the year ended March 31, 2013, Capstone used $17.1 million of cash in
operating activities and spent $1.2 million in capital expenditures.This
compares to cash used in operating activities of $21.4 million and $1.4
million in capital expenditures during the year ended March 31, 2012.

Conference Call and Webcast

The Company will host a conference call today, June 13, 2013, at 1:45 p.m.
Pacific Time (4:45 p.m. Eastern).Access to the live broadcast and a replay of
the webcast will be available for 30 days through the Investor Relations page
on the Company's website: www.capstoneturbine.com.

About Capstone Turbine Corporation

Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST) is the
world's leading producer of low-emission microturbine systems, and was the
first to market commercially viable microturbine energy products. Capstone
Turbine has shipped over 6,500 Capstone MicroTurbine(R) systems to customers
worldwide. These award-winning systems have logged millions of documented
runtime 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 and greenhouse gases. A UL-Certified ISO
9001:2008 and ISO 14001:2004 certified company, Capstone is headquartered in
the Los Angeles area with sales and/or service centers in the New York Metro
Area, Mexico City, Nottingham, Shanghai and Singapore.

"Capstone" and "Capstone MicroTurbine" are registered trademarks of Capstone
Turbine Corporation. All other trademarks mentioned are the property of their
respective owners.

The Capstone Turbine Corporation logo is available here.

Forward-Looking Statements

This press release contains "forward-looking statements," as that term is used
in the federal securities laws, about progress towards profitability, growth
in key markets and margin 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 described in Capstone's Form
10-K, Form 10-Q and other recent filings with the Securities and Exchange
Commission that may cause Capstone's actual results to be materially different
from any future results expressed or implied in such statements. Capstone
cautions investors not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. Capstone
undertakes no obligation, and specifically disclaims any obligation, to
release any revisions to any forward-looking statements to reflect events or
circumstances after the date of this press release or to reflect the
occurrence of unanticipated events.

                         – Financial Tables Follow –

CAPSTONE TURBINE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
                                                                   
                                                          March31, March31,
                                                          2013      2012
Assets                                                              
Current Assets:                                                     
Cash and cash equivalents                                 $38,817   $49,952
Accounts receivable, net of allowance for doubtful
accounts of $2,142 at March 31, 2013 and $2,228 at March   17,941    18,576
31, 2012
Inventories                                               18,513    18,881
Prepaid expenses and other current assets                 2,588     2,974
Total current assets                                      77,859    90,383
Property, plant and equipment, net                        3,543     4,833
Non-current portion of inventories                        3,252     1,313
Intangible assets, net                                    2,313     2,811
Other assets                                              371       452
Total                                                     $87,338   $99,792
Liabilities and Stockholders' Equity                                
Current Liabilities:                                                
Accounts payable and accrued expenses                     $24,121   $23,061
Accrued salaries and wages                                1,721     1,716
Accrued warranty reserve                                  2,299     1,494
Deferred revenue                                          3,089     2,995
Revolving credit facility                                 13,476    10,431
Current portion of notes payable and capital lease         361       363
obligations
Warrant liability                                         10        791
Total current liabilities                                45,077    40,851
Long-term portion of notes payable and capital lease       233       70
obligations
Other long-term liabilities                               142       254
Commitments and contingencies                                      
Stockholders' Equity:                                               
Preferred stock, $.001 par value; 10,000,000 shares                 
authorized; none issued
Common stock, $.001 par value; 515,000,000 shares
authorized, 305,661,276 shares issued and 304,622,573
shares outstanding at March31, 2013; 415,000,000 shares   306       300
authorized, 300,315,313 shares issued and 299,317,493
shares outstanding at March31, 2012
Additional paid-in capital                                796,767   790,901
Accumulated deficit                                       (753,975) (731,412)
Treasury stock, at cost; 1,038,703 shares at March31,     (1,212)   (1,172)
2013 and 997,820 shares at March31,2012
Total stockholders' equity                                41,886    58,617
Total                                                     $87,338   $99,792


CAPSTONE TURBINE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
                                                                  
                                                Years Ended March31,
                                                2013      2012      2011
Revenue                                         $127,557  $109,371  $81,890
Cost of goods sold                              113,172   103,944   82,427
Gross margin (loss)                             14,385    5,427     (537)
Operating expenses:                                                
Research and development                        8,979     8,237     6,986
Selling, general and administrative             27,364    28,927    26,203
Total operating expenses                        36,343    37,164    33,189
Loss from operations                            (21,958)  (31,737)  (33,726)
Other income                                    25        31        32
Interest income                                 —         2         4
Interest expense                                (717)     (857)     (873)
Change in fair value of warrant liability       781       13,983    (3,667)
Loss before income taxes                        (21,869)  (18,578)  (38,230)
Provision for income taxes                      694       186       240
Net loss                                        $(22,563) $(18,764) $(38,470)
Net loss per common share—basic and diluted     $(0.07)   $(0.07)   $(0.16)
Weighted average shares used to calculate basic  302,168   266,945   245,941
and diluted net loss per common share

CONTACT: Investor and Investment Media Inquiries:
         818-407-3628
         ir@capstoneturbine.com

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