CHATSWORTH, Calif., Feb. 03, 2016 - Microturbine energy systems manufacturer Capstone Turbine Corp reported financial results for its third quarter of fiscal 2016 ended December 31, 2015. Total revenue for the third quarter of fiscal 2016 was $21.5 million and net loss was $6.0 million, or $0.34 per share, which includes the 1-for-20 reverse stock split that was effected in November 2015.
During the third quarter 2016, management continued to implement several strategic initiatives and measures to further reduce operating expenses, increase its focus on new geographies and increase microturbine adoption in the energy efficiency market vertical. These measures have been a part of management’s strategy to counteract the macroeconomic headwinds on its revenue stream as the Company works toward returning to growth and becoming EBITDA breakeven.
Financial results for the third quarter reflect sequential quarterly improvements as a result of these new strategic initiatives and measures.
On a sequential quarterly basis for the third quarter, compared with the second quarter:
-- Revenue increased 20 percent to $21.5 million, compared with $17.9 million in the second quarter
-- Gross margin improved to 19 percent from 11 percent in the second quarter
-- Production, labor and overhead expenses dropped 28 percent on lower variable manufacturing costs
-- Bookings improved to $12.3 million compared with $8.4 million in the second quarter
-- Net loss declined by 24 percent to $6.0 million from $7.9 million in the second quarter
-- Cash position (including restricted cash) increased by $2.9 million to $18.5 million
-- Loss from operations dropped by $1.7 million to $5.9 million
-- Inventories decreased by $8.3 million on lower finished goods and raw materials
-- Working capital was $7.3 million compared to negative $4.6 million in the second quarter
-- Borrowings decreased $5.6 million on the Wells Fargo credit facility to $9.6 million
Darren Jamison, President and Chief Executive Officer of Capstone Turbine, said, "The positive reception we received for our new Capstone C1000 Signature Series that was launched at the PowerGen International tradeshow in December and the recent formation of the new Capstone Energy Finance" entity are significant milestones in the third quarter. These notable milestones, combined with our team’s resilience and proactive measures, have placed Capstone back into the driver’s seat as we increased revenue, reduced expenses, improved the gross margin and increased bookings compared to the prior quarter."
Jamison continued, "New order flow in the third quarter strengthened as our geographical diversification efforts continued to increase, resulting in new bookings from Europe, Latin America, Australia and Asia. Concurrently, the energy efficiency market vertical continued to grow and the oil and gas sector began to improve as customers focused on improving operational efficiencies as oil prices declined."
Business and Operational Highlights Include:
Energy efficiency comprised 71 percent of shipments in the third quarter New product orders received this quarter reflect our geographic diversity and include:
-- Colombia: C600 for a gas compression station for an oil and gas customer
-- Germany: 20 microturbines (C200 and 19 C65s) for multiple CHP projects
-- Germany: C800 and C200 microturbines for heat generation CHP projects
-- U.S.: Microturbines for two gas producing companies operating in the Marcellus and Utica Shale regions
-- U.S.: C1000 power package for CHP at a U.S. Marine Corps base in Virginia
-- Hungary: two C1000 power packages for a repeat CHP customer
-- Peru: First order for a C200 to provide CHP for an industrial application
-- Canada: three C1000s and two C800s for an associated gas to energy project
-- U.S.: First Signature Series sold (two C1000s and two C600s)
-- Colombia: C600 power package for CHP at a hotel in Cartagena
-- China: Two C1000 power packages for a leading Chinese offshore oil company Partnership programs announced this quarter include:
-- Strategic partnership with MultiChill Technologies to delivery air-cooled absorption chiller and water-making systems to be used in conjunction with our C65 series microturbines in CCHP applications -- Research pilot program with Argonne National Laboratory, a non-profit research facility operated by the University of Chicago for the U.S. Department of Energy, for participation in the innovative Technologist-in-Residence pilot program to advance adoption of low-emission, high-efficiency power solution.