EX-99.1 3 a03-4573_1ex99d1.htm EX-99.1

EXHIBIT 99.1

 

NEWS RELEASE

 

For Immediate Release

 

Contact:

Michael Sund

October 29, 2003

 

 

(858) 503-5171

 

MAXWELL TECHNOLOGIES REPORTS THIRD QUARTER FINANCIAL RESULTS

 

 

High-Reliability Product Sales Growth and Margin Improvement Continue;

 Divestiture of Non-Core Businesses to be Completed by Year-End

 

CONFERENCE CALL AT 11 A.M. (EST) TOMORROW, OCTOBER 30, 2003 – DETAILS BELOW

 

SAN DIEGO, Calif. — Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported a net loss of $2.1 million, or $0.15 per share, on revenue of $10.9 million for its third quarter ended September 30, 2003.  That compares with a net loss $23.5 million, or $1.73 per share, on revenue of $16.5 million, for the third quarter ended September 30, 2002.  Cash and short-term investments totaled $5.8 million as of September 30, 2003.

 

Dr. Richard Balanson, Maxwell’s president and chief executive officer, said that, in line with the company’s strategy of focusing exclusively on high-reliability, high-margin product lines and eliminating non-core and low-margin products, it will divest its winding equipment business by the end of 2003.  Balanson said that the company completed the previously announced divestiture of its tester business during the third quarter.  Excluding charges of $.6 million, or $0.04 per share, associated with exiting the tester business, the third quarter net loss was $1.5 million.

 

Revenue for Maxwell’s core high-reliability products, which include ultracapacitor components and systems, high voltage capacitors and radiation-mitigated microelectronics, totaled $8.2 million for the third quarter.  Balanson noted that, exclusive of tester-related charges, gross margins for high-reliability products increased by two percentage points sequentially from the second quarter to the third quarter, benefiting from continuing revenue mix improvement driven mainly by increasing ultracapacitor sales and the phase-out of low-margin, transformer based, power systems products.

 

“As we promised earlier in the year, Maxwell will enter 2004 with a highly focused line of core high-reliability products that will contribute gross margins above 60 percent on each dollar of incremental revenue,” Balanson said.  “Significant cost reductions and efficiency improvements in each of our core businesses have reduced the company’s quarterly breakeven revenue threshold from more than $15 million at the beginning of 2003 to about $12.5 million in Q4. Further reductions are underway that should enable the company to turn profitable by the second half of next year.”

 

Cash used by operating activities in the third quarter was approximately $2.0 million, compared with $2.5 million in the same period in 2002.

 

“Our cash position is adequate for the near term, and we will net more than $5 million to augment cash reserves when we complete the sale of a vacant facility in San Diego, which is now in escrow and scheduled to close during the fourth quarter,” Balanson said.

 

-more-

 

3

 

The company will file its Form 10-Q, containing complete financial data and Management’s Discussion and Analysis of Financial Conditions and Results of Operations for the third quarter ended September 30, 2003, by November 14.  That document will be available at the company’s web site via the following link: www.maxwell.com/investors/sec_filings.html, or in hard copy by calling the company’s Investor Relations Department, at (858) 503-5165.

 

Management will conduct a conference call and simultaneous webcast to discuss third quarter financial results and the company’s future outlook and answer analysts’ questions at 11 a.m. (eastern) tomorrow, October 30, 2003.  The call may be accessed by dialing toll-free, (888) 584-2147 from the U.S. and Canada, or (706) 679-7677 for international callers.  The webcast and subsequent replay may be accessed at the company’s web site, via the following link: www.maxwell.com/investors/presentations.html .

 

Maxwell sells reliability.  We develop, manufacture and market electronic components and systems that perform reliably for the life of the applications into which they are integrated.  Our BoostCap® ultracapacitors and ultracapacitor-based energy storage systems uniquely address applications in transportation and consumer and industrial electronics.  Our high-voltage grading and coupling capacitors are used in electric utility infrastructure and other applications involving transport, distribution and measurement of high voltage electrical energy.  Our radiation-mitigated microelectronic products include power modules, memory modules and single board computers that primarily address applications in aerospace.  For more information, please visit our website: www.maxwell.com.

 

This news release contains forward-looking statements that are subject to risks and uncertainties. These include development and acceptance of products based on new technologies, demand for original equipment manufacturers’ products reaching anticipated levels, general economic conditions in the markets served by the company’s products, cost-effective manufacturing of new products, the impact of competitive products and pricing and risks and uncertainties involved in foreign operations.  These and other risks are detailed from time-to-time in the Company’s SEC reports, including the report on Form 10-K for the fiscal year ended December 31, 2002.  Actual results may differ materially from those projected.  These forward-looking statements represent the Company’s judgment as of the date of this news release.  The Company disclaims any intent or obligation to update these forward-looking statements.

 

# # #

 

4

 

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

September 30,
2003

 

December 31,
2002

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

3,086

 

$

3,545

 

Short-term investments

 

2,689

 

7,546

 

Trade and other accounts receivable, net

 

7,893

 

8,530

 

Inventories

 

9,340

 

11,833

 

Prepaid expenses and other current assets

 

1,938

 

1,037

 

Assets held-for-sale

 

7,356

 

7,356

 

Total current assets

 

32,302

 

39,847

 

Property, plant and equipment, net

 

10,598

 

11,653

 

Other intangible assets, net

 

1,981

 

2,009

 

Goodwill

 

18,190

 

17,577

 

Other non-current assets

 

293

 

294

 

 

 

$

63,364

 

$

71,380

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

8,001

 

$

11,508

 

Deferred revenue

 

5,126

 

2,305

 

Accrued employee compensation

 

2,079

 

1,590

 

Short-term borrowings and current portion of long-term debt

 

3,692

 

570

 

Deferred tax liability

 

498

 

272

 

Liabilities of discontinued operations

 

2,161

 

2,326

 

Total current liabilities

 

21,557

 

18,571

 

 

 

 

 

 

 

Deferred tax liability

 

183

 

183

 

Long-term debt, excluding current portion

 

—

 

2,675

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.10 par value per share, 40,000 shares authorized; 13,816 and 13,726 shares issued and outstanding at September 30, 2003 and December 31, 2002, respectively

 

1,382

 

1,373

 

Additional paid-in capital

 

108,824

 

112,255

 

Common shares issuable

 

4,098

 

—

 

Accumulated deficit

 

(73,889

)

(64,015

)

Accumulated other comprehensive income

 

1,209

 

338

 

Total stockholders’ equity

 

41,624

 

49,951

 

 

 

$

63,364

 

$

71,380

 

 

5

 

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

10,993

 

$

16,564

 

$

31,887

 

$

42,509

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of sales

 

9,408

 

13,858

 

27,634

 

39,651

 

Selling, general and administrative

 

2,611

 

5,171

 

10,188

 

14,766

 

Research and development

 

1,597

 

2,167

 

4,478

 

7,080

 

Impairment of long lived assets

 

—

 

7,628

 

—

 

7,628

 

Loss (gain) on sale of business

 

(263

)

7,219

 

(726

)

7,219

 

Restructuring charge

 

—

 

922

 

—

 

1,734

 

Other

 

(23

)

261

 

(18

)

29

 

Total costs and expenses

 

13,330

 

37,226

 

41,556

 

78,107

 

Loss from continuing operations before income taxes

 

(2,337

)

(20,662

)

(9,669

)

(35,598

)

Provision (benefit) for income taxes

 

(149

) 

124

 

(249

) 

(155

)

Minority interest in net loss of subsidiaries

 

—

 

—

 

—

 

(241

)

Loss from continuing operations

 

(2,188

)

(20,786

)

(9,420

)

(35,202

)

Discontinued operations, net of taxes:

 

 

 

 

 

 

 

 

 

Net income (loss) from discontinued operations

 

115

 

(2,761

)

(453

)

(4,445

)

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,073

)

$

(23,547

)

$

(9,873

)

$

(39,647

)

 

 

 

 

 

 

 

 

 

 

Basic net loss per share:

 

 

 

 

 

 

 

 

 

Loss from continuing operations

 

$

(0.16

)

$

(1.53

)

$

(0.68

)

$

(2.99

)

Income (loss) from discontinued operations

 

0.01

 

(0.20

)

(0.03

)

(0.38

)

Net loss

 

$

(0.15

)

$

(1.73

)

$

(0.71

)

$

(3.37

)

 

 

 

 

 

 

 

 

 

 

Diluted net loss per share:

 

 

 

 

 

 

 

 

 

Loss  from continuing operations

 

$

(0.16

)

$

(1.53

)

$

(0.68

)

$

(2.99

)

Income (loss) from discontinued operations

 

0.01

 

(0.20

)

(0.03

)

(0.38

)

Net loss

 

$

(0.15

)

$

(1.73

)

$

(0.71

)

$

(3.37

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in computing:

 

 

 

 

 

 

 

 

 

Basic net loss per share

 

13,949

 

13,597

 

13,804

 

11,770

 

Diluted net loss per share

 

13,801

 

13,597

 

13,754

 

11,770

 

 

6

 

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(in thousands)

 

 

 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

Revenue:

 

 

 

 

 

 

 

 

 

High Reliability

 

$

8,297

 

$

11,509

 

$

24,047

 

$

26,937

 

Winding Equipment

 

2,696

 

1,284

 

7,840

 

1,284

 

I-Bus Computing Systems

 

—

 

2,707

 

—

 

11,002

 

Sierra Tekna Seal

 

—

 

1,064

 

—

 

3,286

 

Consolidated total

 

$

10,993

 

$

16,564

 

$

31,887

 

$

42,509

 

 

 

 

 

 

 

 

 

 

 

Income (loss):

 

 

 

 

 

 

 

 

 

High Reliability

 

$

(2,257

)

$

(1,264

)

$

(7,220

)

$

(5,520

)

Winding Equipment

 

25

 

(317

)

(501

)

(317

)

I-Bus Computing Systems

 

250

 

(2,663

)

136

 

(11,513

)

Sierra Tekna Seal

 

—

 

330

 

—

 

940

 

Total segment operating loss

 

(1,982

)

(3,914

)

(7,585

)

(16,410

)

Corporate expenses

 

660

 

1,066

 

2,885

 

2,926

 

Gain (loss) on sale of businesses

 

(263

)

7,219

 

(726

)

7,628

 

Restructuring

 

—

 

922

 

—

 

1,734

 

Impairment of long lived assets

 

—

 

7,628

 

—

 

7,219

 

Minority interest

 

—

 

—

 

—

 

(241

)

Interest and other, net

 

(42

)

(87

)

(75

)

(319

)

 

 

 

 

 

 

 

 

 

 

Loss from continuing operations before income taxes

 

$

(2,337

)

$

(20,662

)

$

(9,669

)

$

(35,357

)

 

7

 

MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2003

 

2002

 

Operating activities:

 

 

 

 

 

Loss from continuing operations

 

$

(9,420

)

$

(35,202

)

Adjustments to reconcile loss from continuing operating activities, to net of cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

 

2,701

 

3,638

 

Other noncash items

 

(391

)

11,311

 

Changes in operating assets and liabilities, net

 

2,369

 

9,464

 

Net cash used in operating activities

 

(4,741

)

(10,789

)

Investing activities:

 

 

 

 

 

Proceeds from sale of businesses and equipment

 

726

 

—

 

Purchase of business, net of cash acquired

 

—

 

(2,692

)

Purchases of property and equipment

 

(1,589

)

(1,583

)

Proceeds from sale of short-term investments

 

8,100

 

13,075

 

Purchases of short-term investments

 

(3,332

)

(8,789

)

Net cash provided by investing activities

 

3,905

 

11

 

Financing activities:

 

 

 

 

 

Principal payments on long-term debt and short-term borrowings

 

(1,022

)

(200

)

Proceeds from short-term borrowings

 

1,469

 

—

 

Proceeds from issuance of Company and subsidiary stock

 

363

 

1,223

 

Net cash provided by financing activities

 

810

 

1,023

 

Net cash used in discontinued operations

 

(618

)

(2,911

)

Effect of exchange rate changes on cash and cash equivalents

 

185

 

(292

)

Decrease in cash and cash equivalents

 

(459

)

(12,958

)

Cash and cash equivalents at beginning of period

 

3,545

 

13,673

 

Cash and cash equivalents at end of period

 

$

3,086

 

$

715

 

 

8