Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 24, 2008

 

 

Active Power, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   000-30939   74-2961657

(State or other jurisdiction of

incorporation)

  (Commission File Number)  

(IRS Employer

Identification No.)

 

 

2128 W. Braker Lane, BK12

Austin, Texas 78758

(Address of principal executive offices, including zip code)

(512) 836-6464

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operation and Financial Condition.

On October 24, 2008, Active Power, Inc. issued a press release reporting its results of operations for its fiscal quarter ended September 30, 2008. A copy of the press release is furnished herewith as Exhibit 99.1.

The information furnished in this Current Report and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

99.1    Press Release of Active Power, Inc. dated October 24, 2008.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    ACTIVE POWER, INC.
Date: October 24, 2008     By:   /s/ JOHN PENVER
       

John Penver

Chief Financial Officer


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release of Active Power, Inc. dated October 24, 2008.

 

Press Release

Exhibit 99.1

LOGO

Active Power Announces Strong Third Quarter 2008 Results

Record Revenues Grow 83 Percent from Prior Quarter; Reduced Operating Losses

AUSTIN, Texas (Oct. 24, 2008) – Active Power, Inc. (NASDAQ: ACPW) today announced results for its third quarter ended Sept. 30, 2008. Revenue for the third quarter was $12.4 million representing the highest quarterly revenue recognized in the company’s history. The $12.4 million in revenue for the third quarter was an 83 percent increase from the previous quarter and an increase of 51 percent from the same period last year. For the nine months ended Sept. 30, 2008, revenues were $26.8 million, compared to $23.4 million in 2007, an increase of 14 percent.

The net loss for the quarter was $4.1 million, or 7 cents per share, which included $1.5 million, or 2 cents per share, for an inventory impairment charge relating to the CoolAir product. This compared to a net loss of $4.4 million or 7 cents per share in the prior quarter, and a loss of $3.5 million, or 6 cents per share, for the same period last year. For the quarter, Active Power reported a gross profit margin of 9 percent and non-GAAP gross profit margin of 21 percent, compared to 14 percent in the previous quarter and 19 percent in the same period last year.

The decrease in cash and investments during the quarter was $2.4 million compared to a decrease of $3.2 million in the previous quarter and a decrease of $2.8 million in the same period last year. Of the cash and investments used during the third quarter, $1.4 million funded operating losses and the remaining $1 million was used to fund working capital to fulfill orders as the business continues to grow. Cash and investments at Sept. 30, 2008, were $11.8 million.

“Our strong performance this quarter is attributable to the order growth we have seen since the beginning of our second quarter,” said Jim Clishem, president and CEO of Active Power. “As previously indicated, we expected and are achieving strong revenue growth in the second half of this year. The improved performance was across all of our major markets and all of our sales channels. We expect to significantly build upon this momentum into the current quarter as well. The increasing market acceptance of our products is driven by our key solution differentiators of efficient, reliable and green. Our brand is becoming more recognizable as we are taking share from several competitors. With the prospect of continued economic uncertainty, increasing energy demand and client operating cost sensitivities, our solutions are simply more compelling to major data center operators or consumers of electricity to support mission critical operations.”


Business Highlights

 

   

Experienced substantial growth in revenues across all geographies with EMEA revenues increasing by 302 percent and Americas’ revenue increasing by 20 percent from the prior quarter.

 

   

Service revenues for 2008 were 40 percent higher compared to 2007 levels, which continue to reflect benefits of having a direct sales model in place and selling full turnkey solutions.

 

 

 

Shipped 2,000th flywheel, representing more than 500 megawatts of delivered power to customers.

 

   

Received more than $20 million in new customer orders during the third quarter and to date.

 

 

 

Announced multiple sales orders for Megawatt Class CleanSource® UPS (uninterruptible power supply) systems and PowerHouse containerized solutions from global customers including a large U.S. based global Internet search provider, Sun Microsystems, Star Technology Services and a European based health care facility.

 

   

Direct sales accounted for 57 percent of total third quarter sales while indirect channels contributed 43 percent.

Outlook

Active Power expects fourth quarter 2008 revenues to be between $12 and $15 million. We also expect our fourth quarter operating profit, excluding depreciation and stock-based compensation, to be positive for the first time in the company’s 16-year history. Fourth quarter earnings per share are expected to be a loss of approximately 2 to 4 cents. Active Power expects its cash and investments balance to decrease in the fourth quarter by up to $3 million primarily to meet is working capital requirements.

Conference Call Details

Active Power will host a conference call today, Friday, Oct. 24, 2008, at 11:00 a.m. (ET), to further review third quarter 2008 results. Interested parties can listen via Web cast at http://www.videonewswire.com/event.asp?id=52363. A replay of the Web cast will be available until Nov. 7, 2008. Investors may access the live broadcast and replay via Active Power’s Web site at www.activepower.com.

# # #

About Active Power

Active Power (NASDAQ: ACPW) provides efficient, reliable and green critical power solutions and uninterruptible power supply (UPS) systems to enable business continuity in the event of power disturbances. Founded in 1992, Active Power’s flywheel-based UPS systems protect critical operations in


data centers, healthcare facilities, manufacturing plants, broadcast stations and governmental agencies in more than 40 countries. With expert power system engineers and worldwide services and support, Active Power ensures organizations have the power to perform. For more information, please visit www.activepower.com.

Cautionary Note Regarding Forward-Looking Statements

This release may contain forward-looking statements that involve risks and uncertainties. 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. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

Active Power, CleanSource and CoolAir are registered trademarks of Active Power, Inc. The Active Power logo is a trademark of Active Power, Inc. All other trademarks are the properties of their respective companies.

Non-GAAP Gross Profit Margin

The company’s non-GAAP gross profit margin is its gross profit margin determined under GAAP adjusted to exclude the $1.5 million inventory impairment charge. Management believes the non-GAAP gross profit margin for third quarter 2008 represents a more meaningful number when comparing its gross profit margin against prior periods because of the non-recurring nature of the inventory impairment charge.

 

Active Power Investor Contact:    Active Power Media Contact:

John Penver

   Lee Higgins

Chief Financial Officer

   Public Relations Manager

512-744-9234

   512-744-9488

jpenver@activepower.com

   lhiggins@activepower.com


ACTIVE POWER, INC.

CONDENSED STATEMENTS OF OPERATIONS

(Thousands, except per share amounts)

(unaudited)

 

     Three
Months Ended
Sept. 30,
    Nine
Months Ended
Sept. 30,
 
     2008     2007     2008     2007  

Product revenue

   $ 10,193     $ 7,007     $ 22,033     $ 20,003  

Service and spares revenue

     2,255       1,227       4,741       3,386  
                                

Total revenue

     12,448       8,234       26,774       23,389  

Cost of product revenue

     9,515       5,675       19,937       17,055  

Cost of service and spares revenue

     1,810       974       3,989       2,865  
                                

Total cost of revenue

     11,325       6,649       23,926       19,920  

Gross profit

     1,123       1,585       2,848       3,469  

Operating expenses:

        

Research and development

     1,197       1,412       3,903       4,322  

Selling and marketing

     2,795       2,654       8,800       7,900  

General & administrative

     1,317       1,244       3,685       6,451  
                                

Total operating expenses

     5,309       5,310       16,388       18,673  
                                

Operating loss

     (4,186 )     (3,725 )     (13,540 )     (15,204 )

Interest income

     68       207       322       567  

Other income (expense)

     3       6       207       55  
                                

Net loss

   $ (4,115 )   $ (3,512 )   $ (13,011 )   $ (14,582 )
                                

Net loss per share, basic & diluted

   $ (0.07 )   $ (0.06 )   $ (0.22 )   $ (0.28 )

Shares used in computing net loss per share, basic & diluted

     60,124       55,210       60,124       51,821  

Comprehensive loss:

        

Net loss

   $ (4,115 )   $ (3,512 )   $ (13,011 )   $ (14,582 )

Translation loss on subsidiaries in foreign currencies

     (501 )     217       (179 )     111  

Unrealized gain (loss) on investments in marketable securities

     (4 )     9       (6 )     26  
                                

Comprehensive loss

   $ (4,620 )   $ (3,286 )   $ (13,196 )   $ (14,445 )
                                


ACTIVE POWER, INC.

CONDENSED BALANCE SHEETS

(In thousands)

 

     Sept. 30,
2008
    December 31,
2007
 
     (unaudited)        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 9,717     $ 15,504  

Short-term investments in marketable securities

     1,302       6,581  

Accounts receivable, net

     8,728       5,177  

Inventories

     8,866       9,198  

Prepaid expenses and other

     463       540  
                

Total current assets

     29,076       37,000  

Property and equipment, net

     4,943       5,530  

Long-term investments

     800       407  

Deposits and other

     399       389  
                

Total assets

   $ 35,218     $ 43,326  
                

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 4,400     $ 2,342  

Accrued expenses

     5,271       5,793  

Deferred revenue

     3,244       1,918  

Revolving line of credit

     1,000       —    
                

Total current liabilities

     13,915       10,053  

Long-term liabilities

     25       25  

Stockholders’ equity:

    

Common stock

     60       60  

Treasury stock

     (59 )     (5 )

Additional paid-in capital

     259,910       258,630  

Accumulated deficit

     (238,412 )     (225,401 )

Other accumulated comprehensive income (loss)

     (221 )     (36 )
                

Total stockholders’ equity

     21,278       33,248  
                

Total liabilities and stockholders’ equity

   $ 35,218     $ 43,326