Maxwell Technologies Reports Second Quarter Financial Results

        Maxwell Technologies Reports Second Quarter Financial Results

CONFERENCE CALL & WEBCAST AT 5 P.M. (EDT) TODAY - DETAILS BELOW

PR Newswire

SAN DIEGO, July 31, 2014

SAN DIEGO, July 31, 2014 /PRNewswire/ --Maxwell Technologies, Inc. (Nasdaq:
MXWL) today reported revenue of $46.1 million for its second quarter ended
June30, 2014, up slightly from the $46.0 million recorded in the first
quarter ended March31, 2014, but down 17 percent from the $55.6 million
recorded in the second quarter of 2013.

Enabling Energy's Future.

Second quarter ultracapacitor revenue increased by 6 percent sequentially to
$33.9 million, compared with $32.0 million in the first quarter ended
March31, 2014, but was down 14 percent compared with the $39.3 million
recorded in the second quarter of 2013. Sales of high voltage capacitor and
microelectronics products totaled $12.2 million in Q214, down 13 percent
sequentially from the $14.0 million recorded in the first quarter and down 26
percent from the $16.4 million recorded in Q213.

"This was a solid quarter in line with our expectations despite lower
ultracapacitor sales into the hybrid bus market in China and challenging
market conditions for our microelectronics products," said Dr. Franz Fink,
Maxwell's president and CEO. "Increasing sales for wind energy and electric
rail applications were mainly responsible for the sequential growth in
ultracapacitor sales."

On a U.S. generally accepted accounting principles (GAAP) basis, operating
loss for the second quarter 2014 was $567,000, compared with operating income
of $760,000 in Q114 and $4.2 million in Q213. GAAP net loss for Q214 was $1.2
million, or $0.04 per share, compared with net income of $319,000, or $0.01
per diluted share in Q114 and $3.4 million, or $0.12 per diluted share, in
Q213.

On a non-GAAP basis, the Company reported operating income of $599,000 in Q214
compared with $1.5 million in Q114 and $5.2 million in Q213. Non-GAAP net loss
for Q214 was $15,000, or zero cents per share, compared with net income of
$1.1 million, or $0.04 per diluted share in Q114 and $4.4 million, or $0.15
per diluted share, in Q213. A reconciliation of GAAP to non-GAAP financial
measures is included as an addendum to this release.

GAAP gross margin was 36 percent in Q214, compared with 39 percent in both
Q114 and Q213. GAAP operating expenses totaled approximately $17.2 million, or
37 percent of revenue, in Q214 compared with $17.1 million, or 37 percent of
revenue, in Q114, and $17.4 million, or 31 percent of revenue, in Q213.
Non-GAAP operating expenses totaled approximately $16.2 million, or 35 percent
of revenue, in Q214 compared with $16.6 million, or 36 percent of revenue, in
Q114 and $16.7 million, or 30 percent of revenue, in Q213. Cash and cash
equivalents totaled $30.7 million as of June30, 2014, compared with cash,
cash equivalents and restricted cash of $32.6 million as of March31, 2014.
Complete financial statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations will be available with the
filing of the Company's Quarterly Report on Form 10-Q with the Securities &
Exchange Commission.

Outlook: Limited visibility into the plug-in hybrid bus market in China makes
it difficult to forecast ultracapacitor sales with a high degree of certainty.
Based on customer forecasts for bus and other ultracapacitor applications and
order flow for microelectronics and high voltage capacitor products, total
revenue for the third quarter is likely to be down as much as 15% compared
with that recorded in the second quarter.

Non-GAAP Financial Measures: The Company uses non-GAAP financial measures for
internal evaluation and to report the results of its business. These non-GAAP
financial measures include non-GAAP gross profit, non-GAAP operating expenses,
non-GAAP income (loss) from operations, non-GAAP net income (loss), and
non-GAAP net income (loss) per diluted share. These measures are not in
accordance with, nor an alternative to, GAAP. These measures are intended to
supplement GAAP financial information, and may be computed differently from
non-GAAP financial measures used by other companies. The Company believes that
these measures provide useful information to its management, board of
directors and investors about its operating activities and business trends
related to its financial condition and results of operations. The Company
believes that it is useful to provide investors with information to understand
how specific line items in the statement of operations are affected by certain
non-cash or non-recurring items, such as stock-based compensation expense.

In addition, the Company's management and board of directors use these
non-GAAP financial measures in developing operating budgets and in reviewing
the Company's results of operations, as non-cash and non-recurring items have
limited impact on current and future operating decisions. Additionally, the
Company believes that inclusion of non-GAAP financial measures provide
consistency and comparability with its past reports of financial results.
However, investors should be aware that non-GAAP measures have inherent
limitations and should be read in conjunction with the Company's consolidated
financial statements prepared in accordance with GAAP. Please refer to the
accompanying tables for a detailed reconciliation of GAAP to non-GAAP gross
profit, operating expenses, income from operations, net income, and net income
per share.

Management will conduct a conference call and simultaneous webcast to discuss
second quarter of 2014 financial results and the future outlook at 5 p.m.
(EDT) today. The call may be accessed by dialing toll-free, (866) 952-1906
from the U.S. and Canada, or (785) 424-1825 for international callers, and
entering the conference ID, MAXWELL. The live webcast and subsequent archived
replay may be accessed at the Company's web site via the following link:
http://investors.maxwell.com/phoenix.zhtml?c=94560&p=irol-calendar.

Maxwell is a global leader in the development and manufacture of innovative,
cost-effective energy storage and power delivery solutions. Our ultracapacitor
products provide safe and reliable power solutions for applications in
consumer and industrial electronics, transportation, renewable energy and
information technology. Our CONDIS® high-voltage grading and coupling
capacitors help to ensure the safety and reliability of electric utility
infrastructure and other applications involving transport, distribution and
measurement of high-voltage electrical energy. Our radiation-hardened
microelectronic products for satellites and spacecraft include single board
computers and components incorporating our proprietary RADPAK® packaging and
shielding technology that enables them to perform reliably in space. For more
information, visit www.maxwell.com.

Forward-looking statements: Statements in this news release that are
"forward-looking statements" are based on current expectations and assumptions
that are subject to risks and uncertainties. Such risks, uncertainties and
contingencies include, but are not limited to, the following:

  oour ability to remain competitive and stimulate customer demand through
    successful introduction of new products, and to educate our prospective
    customers on the products we offer;
  odependence upon the sale of products to a small number of customers and
    vertical markets, some of which are heavily dependent on government
    funding or government subsidies which may or may not continue in the
    future;
  odependence upon the sale of products into Asia and Europe, where
    macroeconomic factors outside our control may adversely affect our sales;
  orisks related to our international operations including, but not limited
    to, our ability to adequately comply with the changing rules and
    regulations in countries where our business is conducted, our ability to
    oversee and control our foreign subsidiaries and their operations, our
    ability to effectively manage foreign currency exchange rate fluctuations
    arising from our international operations, and our ability to continue to
    comply with the U.S. Foreign Corrupt Practices Act as well as the
    anti-bribery laws of foreign jurisdictions and the terms and conditions of
    our settlement agreements with the Securities and Exchange Commission and
    the Department of Justice;
  osuccessful acquisition, development and retention of key personnel;
  oour ability to effectively manage our reliance upon certain suppliers of
    key component parts, specialty equipment and logistical services;
  oour ability to match production volume to actual customer demand;
  oour ability to manage product quality problems;
  oour ability to protect our intellectual property rights and to defend
    claims against us;
  oour ability to effectively identify, enter into, manage and benefit from
    strategic alliances;
  ooccurrence of a catastrophic event at any of our facilities;
  ooccurrence of a technology systems failure, network disruption, or breach
    in data security;
  oour ability to obtain sufficient capital to meet our operating or other
    needs; and,
  oour ability to manage and minimize the impact of unfavorable legal
    proceedings.

For further information regarding risks and uncertainties associated with
Maxwell's business, please refer to the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Risk Factors" sections
of our SEC filings, including, but not limited to, our annual report on Form
10-K and quarterly reports on Form 10-Q. Copies of these documents may be
obtained by contacting Maxwell's investor relations department at (858)
503-3434, or at our investor relations website: investors.maxwell.com. All
information in this release is as of July31, 2014. The Company undertakes no
duty to update any forward-looking statement to reflect actual results or
changes in the Company's expectations.

Media & Investor Contact: Michael Sund, +1 858.503.3233; msund@maxwell.com



MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)
                      Three Months Ended                 Six Months Ended
                      June 30,   March 31,  June 30,  June 30,   June 30,
                      2014       2014       2013      2014      2013
Revenue               $ 46,074    $  46,001   $ 55,610   $ 92,075   $ 103,358
Cost of revenue       29,474      28,131      34,034     57,605     63,552
Gross profit          16,600      17,870      21,576     34,470     39,806
Operating expenses:
Selling, general and  10,944      10,939      11,988     21,883     23,490
administrative
Research and          6,223       6,171       5,378      12,394     11,401
development
Total operating       17,167      17,110      17,366     34,277     34,891
expenses
Income (loss) from    (567)       760         4,210      193        4,915
operations
Interest expense,     28          39          41         67         85
net
Amortization of debt
discount and prepaid  5           5           15         10         30
debt costs
Income (loss) before  (600)       716         4,154      116        4,800
income taxes
Income tax provision  581         397         749        978        1,673
Net income (loss)     $ (1,181)   $  319      $ 3,405    $ (862)    $ 3,127
Net income (loss)
per common share:
Basic                 $ (0.04)    $  0.01     $ 0.12     $ (0.03)   $ 0.11
Diluted               $ (0.04)    $  0.01     $ 0.12     $ (0.03)   $ 0.11
Weighted average
common shares
outstanding:
Basic                 29,206      29,047      28,858     29,127     28,842
Diluted               29,206      29,216      28,860     29,127     28,859





MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(Unaudited)
                                                     June 30,   December 31,
                                                     2014       2013
ASSETS
Current assets:
Cash and cash equivalents                            $ 30,748    $  30,647
Trade and other accounts receivable, net             39,850      29,869
Inventories                                          44,973      44,736
Prepaid expenses and other current assets            3,170       2,314
 Total current assets                               118,741     107,566
Property and equipment, net                          42,192      44,941
Intangible assets, net                               268         369
Goodwill                                             26,140      25,978
Pension asset                                        11,139      10,568
Other non-current assets                             665         665
 Total assets                                       $ 199,145   $  190,087
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities             $ 26,643    $  25,436
Accrued warranty                                     583         180
Accrued employee compensation                        8,935       8,788
Deferred revenue and customer deposits               3,181       1,043
Short-term borrowings and current portion of         10,106      7,914
long-term debt
Deferred tax liability                               874         890
 Total current liabilities                          50,322      44,251
Deferred tax liability, long-term                    2,155       2,125
Long-term debt, excluding current portion            65          100
Other long-term liabilities                          3,513       3,401
 Total liabilities                                  56,055      49,877
Stockholders' equity:
Common stock, $0.10 par value per share, 40,000
shares authorized; 29,897 and 29,563 shares issued   2,987       2,953
and outstanding at June 30, 2014 and December31,
2013, respectively
Additional paid-in capital                           274,946     271,928
Accumulated deficit                                  (152,656)   (151,794)
Accumulated other comprehensive income               17,813      17,123
 Total stockholders' equity                         143,090     140,210
 Total liabilities and stockholders' equity         $ 199,145   $  190,087





MAXWELL TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data)

(Unaudited)
                       Three Months Ended                 Six Months Ended
                       June 30,   March 31,  June 30,  June 30,  June 30,
                       2014       2014       2013      2014      2013
Gross Profit
Reconciliation:
GAAP gross profit      $ 16,600    $  17,870   $ 21,576   $ 34,470   $ 39,806
Stock-based
compensation expense A 190         251         261        442        534
included in cost of
sales
Non-GAAP gross         $ 16,790    $  18,121   $ 21,837   $ 34,912   $ 40,340
profit
Total Operating
Expenses
Reconciliation:
GAAP total operating   $ 17,167    $  17,110   $ 17,366   $ 34,277   $ 34,891
expenses
Stock-based          A (976)       (504)       (685)      (1,479)    (1,369)
compensation expense
Non-GAAP total         $ 16,191    $  16,606   $ 16,681   $ 32,798   $ 33,522
operating expenses
Income (Loss) From
Operations
Reconciliation:
GAAP income (loss)     $ (567)     $  760      $ 4,210    $ 193      $ 4,915
from operations
Stock-based          A 1,166       755         946        1,921      1,903
compensation expense
Non-GAAP income from   $ 599       $  1,515    $ 5,156    $ 2,114    $ 6,818
operations
Net Income (Loss)
Reconciliation:
GAAP net income        $ (1,181)   $  319      $ 3,405    $ (862)    $ 3,127
(loss)
Stock-based          A 1,166       755         946        1,921      1,903
compensation expense
Non-GAAP net income    $ (15)      $  1,074    $ 4,351    $ 1,059    $ 5,030
(loss)
Net Income (Loss)
per Diluted Share
Reconciliation:
GAAP net income
(loss) per diluted     $ (0.04)    $  0.01     $ 0.12     $ (0.03)   $ 0.11
share
Stock-based          A 0.04        0.03        0.03       0.07       0.06
compensation expense
Non-GAAP net income
(loss) per diluted     $ —         $  0.04     $ 0.15     $ 0.04     $ 0.17
share



MAXWELL TECHNOLOGIES, INC.

    Stock-based compensation expense consists of non-cash charges for employee
(A) stock options, restricted stock awards, restricted stock units and
    employee stock purchase plan awards. Results include stock-based
    compensation expense as follows (in thousands):
                       Three Months Ended                   Six Months Ended
                       June 30,      March      June 30,  June      June
                       2014          31,       2013      30,      30,
                                      2014                 2014     2013
    Cost of revenue    $   190        $  251     $  261     $ 442     $ 534
    Selling, general
    and                733            255        507        988       1,004
    administrative
    Research and       243            249        178        491       365
    development
    Total
    stock-based        $   1,166      $  755     $  946     $ 1,921   $ 1,903
    compensation
    expense



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SOURCE Maxwell Technologies, Inc.

Website: http://www.maxwell.com
 
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