Maxwell Technologies, Inc. (Nasdaq: MXWL)reported a net loss of $7.5 million, or $0.45 per share, on revenue of $12 million for the first quarter ended March 31, 2006.
That compares with a net loss of $2.2 million or $0.14 per share, on revenue of $9.8 million for the same period in 2005.
The Q1 06 loss reflects the impact of non-cash provisions totaling $5.4 million, or $0.32 per share, including $936,000 of compensation expense for stock options and restricted stock grants and charges of $904,000 for amortization and $3.5 million for a change in “fair value” of conversion features in $25 million of convertible debentures and warrants issued in December 2005.
Dr. Richard Balanson, Maxwell’s president and chief executive officer said that the first four months of 2006 brought a number significant developments in the company’s evolution from an emerging research and development-oriented organization to a rapidly growing global manufacturer of ultracapacitors and other proprietary, high-value products, including:
* High-volume ultracapacitor purchase orders from Enercon GmbH for wind energy systems and General Hydrogen for fuel cell-based power packs for forklifts;
* Formation of an offshore ultracapacitor manufacturing alliance with Belton Technology Group in China to support future high-volume production requirements;
* Introduction of more than 30 new BOOSTCAP ultracapacitor cells and multi-cell modules;
* An agreement to license ultracapacitor technology and supply ultracapacitor electrode material to Shanghai Urban Electric Power Investment Development Corp. in China, and an electrode supply agreement with Yeong-Long Technologies Co, Ltd. in Taiwan, and
* Significant strengthening of the company’s management team with the addition of George Kreigler as vice president, operations, and Michael Liedtke as vice president, business development.
“These events continue to demonstrate that ultracapacitor applications are expanding rapidly, and that Maxwell is moving aggressively to position itself to capture a significant share of what we believe will be a multi-billion- dollar market opportunity in the coming decade,” Balanson said.
Balanson said that, although ultracapacitor revenue declined sequentially to $2.8 million in the first quarter, BOOSTCAP product sales are rebounding strongly with the completion of new product qualifications, and are expected to approach $4 million in the second quarter ending June 30.
“Recent major wins in the telecommunications market already have generated initial orders in Q2, and we expect them to combine with ongoing ramps in industrial and transportation applications to drive accelerating growth in the second half of the year,” Balanson said. “The level of design-in activity in the transportation and automotive sectors is growing month-to-month, and we continue to expect additional wins by the end of the year.”
Balanson said that total revenue for Q1 also was negatively impacted by delays in Microelectronics product shipments. On a more positive note, sales of CONDIS high-voltage capacitor products, which achieved an all-time high in 2005, are on pace to exceed last year’s record levels, requiring a 24 hour-per-day, seven days-a-week production schedule at the company’s Rossens, Switzerland facility.
Gross margin on first quarter sales was 30 percent, compared with 29 percent in Q1 2005, and is expected to improve with increasing revenue in Q2 2006. Cash and investments in marketable securities totaled $31.7 million as of March 31, 2006.
Maxwell is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions. Its BOOSTCAP ultracapacitor cells and multi-cell modules and POWERCACHE backup power systems provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation and telecommunications. Its 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. Its radiation-mitigated microelectronic products include power modules, memory modules and single board computers that incorporate powerful commercial silicon for superior performance and high reliability in aerospace applications.
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