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): July 28, 2011
MAXWELL TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 1-15477 | 95-2390133 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
5271 Viewridge Court, Suite 100
San Diego, California 92123
(Addresses of principal executive offices, including zip code)
(858) 503-3200
(Registrants telephone number, including area code)
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 (see General Instruction A.2. below):
¨ | 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 Operations and Financial Condition.
On July 28, 2011, Maxwell Technologies, Inc. (the Company) issued a press release announcing the Companys results for its fiscal quarter ended June 30, 2011. A copy of this press release is attached hereto as Exhibit 99.1.
This information and the exhibits hereto are being furnished and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description | |
Exhibit 99.1 | Press release issued by Maxwell Technologies, Inc. on July 28, 2011 |
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.
MAXWELL TECHNOLOGIES, INC. |
By: /s/ David J. Schramm |
David J. Schramm |
Chief Executive Officer |
Date: July 28, 2011
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | Press Release issued by Maxwell Technologies, Inc. on July 28, 2011 |
Exhibit 99.1
NEWS RELEASE
For Immediate Release
July 28, 2011
MAXWELL TECHNOLOGIES REPORTS SECOND QUARTER FINANCIAL RESULTS
Ultracapacitor Sales Up 54%, Total Revenue Up 30% vs. Q210
CONFERENCE CALL & WEBCAST AT 5 P.M. (EDT) TODAY DETAILS BELOW
SAN DIEGO, Calif. Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported revenue of $38.5 million for its second quarter ended June 30, 2011, up 30 percent over the $29.6 million recorded in the same period in 2010. Ultracapacitor revenue increased by 54 percent, to $24.4 million in Q211, compared with $15.9 million in the same period last year. Sales of high voltage capacitor and microelectronics products totaled $14.0 million in Q211, up two percent from the $13.7 million recorded in Q210.
Rapidly increasing sales into stop-start idle elimination systems in micro hybrid autos and various backup power applications augmented continuing strong sales for wind turbine blade pitch systems and hybrid and electric transit vehicle drive systems to generate another record quarter for ultracapacitor sales, said David Schramm, Maxwells president and chief executive officer.
On a U.S. generally accepted accounting principles (GAAP) basis, operating loss for Q211 was $1.6 million compared with an operating loss of $3.3 million in Q210. GAAP net loss for the second quarter 2011 was $1.2 million or $0.04 per share, compared with a GAAP net loss of $2.6 million, or $0.10 per share, in the same period last year. GAAP operating and net loss comparisons are affected by:
| A reserve of $2.6 million, $2.0 million net of tax, or $0.07 per diluted share, in Q211 for an anticipated legal settlement. |
| A non-cash gain of $1.2 million, or $0.05 per diluted share, in Q210, based on the quarterly valuation of conversion features and warrants associated with convertible debentures. As the warrants were exercised in December 2010, and the convertible debentures were retired in February 2011, the company will no longer record gains or losses related to the conversion features and warrants. |
| An accrual of $3.4 million, or $0.13 per diluted share, in Q210 for settlement of U.S. Foreign Corrupt Practices Act violations. |
On a non-GAAP basis, the company reported operating income of $1.9 million in Q211, compared with operating income of $933,000 in the same period last year, and net income of $1.7 million or $0.06 per diluted share in Q211, compared with net income of $455,000, or $0.02 per diluted share in Q210. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.
GAAP gross margin was 40 percent in Q211, compared with 40 percent in Q210 and 39 percent in Q111. GAAP operating expenses totaled approximately $17.1 million, or 44 percent of revenue in Q211, compared with $15.2 million, or 51 percent of revenue in Q210. Non-GAAP operating expenses totaled approximately $13.7 million, or 36 percent of revenue, in Q211, compared with $11.1 million, or 37 percent of revenue, in Q210. Cash and cash equivalents totaled $29.8 million as of June 30, 2011, compared with $33.1 million as of March 31, 2011. Complete financial statements and Managements Discussion and Analysis of Financial Condition and Results of Operations will be available with the filing of the companys Quarterly Report on Form 10-Q with the Securities & Exchange Commission.
Outlook: We expect sequential top line growth of five to seven percent in the third quarter, Schramm said. For the full year, we continue to expect that year-over-year top line growth will exceed 20 percent, and steadily improving operating performance should enable the company to be profitable on a non-GAAP basis going forward.
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MAXWELL TECHNOLOGIES REPORTS SECOND QUARTER FINANCIAL RESULTS
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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 diluted net income (loss) per 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; |
| amortization of intangible assets; |
| accruals and reserves for FCPA and legal settlements, and |
| prior period gains or losses on embedded derivative and warrants. |
In addition, the companys management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the companys 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 provides 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 companys 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 (loss) from operations, net income (loss), and diluted net income (loss) per share.
Conference Call: Management will conduct a conference call and simultaneous webcast to discuss reported financial results and the future outlook at 5 p.m. (EDT) today. The call may be accessed by dialing toll-free, (800) 895-1085 from the U.S. and Canada, or (785) 424-1055 for international callers, and entering the conference ID, 7MAXWELL. The live web cast and subsequent archived replay may be accessed at the companys web site via the following link: investors.maxwell.com.
Maxwell is a leading developer and manufacturer 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 and telecommunications. Our 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-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.
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:
| risks related to our international operations, including, but not limited to, our ability to comply with changing rules and regulations in countries where we conduct business, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively |
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MAXWELL TECHNOLOGIES REPORTS SECOND QUARTER FINANCIAL RESULTS
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manage foreign currency exchange rate fluctuations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act, anti-bribery laws of foreign jurisdictions and the terms and conditions of our settlement agreements with the U.S. Securities and Exchange Commission and Department of Justice. |
| our ability to remain competitive and stimulate customer demand by successfully introducing new products and matching our production capacity to customer demand; |
| dependence upon the sale of products to a small number of customers and vertical markets, some of which depend heavily on government funding or subsidies which may not continue in the future; |
| acquisition, development and retention of key personnel; |
| our ability to effectively manage our reliance upon certain suppliers of key component parts and specialty equipment; |
| our ability to manage product quality problems; |
| our ability to protect our intellectual property rights and to defend claims against us; |
| our ability to enter into, manage and benefit from strategic alliances; |
| occurrence of a catastrophic event at any of our facilities; and, |
| our ability to obtain sufficient capital to meet our operating or other needs. |
Many of these factors are beyond our control, and there can be no assurance that we will not encounter unforeseen risks and costs in the conduct of our business. Forward-looking statements included herein do not purport to be predictions of future events or circumstances and may not be realized. For further information regarding risks and uncertainties associated with our business, please refer to the Managements 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 10-KA and quarterly reports on Form 10-Q. Copies of these documents may be obtained by contacting Maxwell Investor Relations at (858) 503-3434 or at our investor relations website: investors.maxwell.com. All information in this release is as of July 28, 2011. The company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the companys expectations.
Contact: Michael Sund, +1 858.503.3233; msund@maxwell.com
# # #
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue |
$ | 38,463 | $ | 29,579 | $ | 73,722 | $ | 56,202 | ||||||||
Cost of revenue |
22,987 | 17,742 | 44,362 | 34,154 | ||||||||||||
Gross profit |
15,476 | 11,837 | 29,360 | 22,048 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
11,747 | 11,164 | 19,681 | 18,339 | ||||||||||||
Research and development |
5,297 | 3,954 | 11,269 | 8,536 | ||||||||||||
Amortization of intangibles |
51 | 51 | 102 | 132 | ||||||||||||
Total operating expenses |
17,095 | 15,169 | 31,052 | 27,007 | ||||||||||||
Loss from operations |
(1,619 | ) | (3,332 | ) | (1,692 | ) | (4,959 | ) | ||||||||
Interest expense, net |
(25 | ) | (48 | ) | (61 | ) | (98 | ) | ||||||||
Amortization of debt discount and prepaid debt costs |
| (20 | ) | (55 | ) | (41 | ) | |||||||||
Gain on embedded derivatives and warrants |
| 1,226 | 1,086 | 4,475 | ||||||||||||
Loss before income taxes |
(1,644 | ) | (2,174 | ) | (722 | ) | (623 | ) | ||||||||
Income tax provision (benefit) |
(427 | ) | 410 | 299 | 719 | |||||||||||
Net loss |
$ | (1,217 | ) | $ | (2,584 | ) | $ | (1,021 | ) | $ | (1,342 | ) | ||||
Net loss per common share: |
||||||||||||||||
Basic and diluted |
$ | (0.04 | ) | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.05 | ) | ||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic and diluted |
27,669 | 26,155 | 27,478 | 26,125 |
MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)
June 30, 2011 |
December 31, 2010 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 29,791 | $ | 39,829 | ||||
Restricted cash |
| 8,000 | ||||||
Trade and other accounts receivable, net |
35,791 | 27,141 | ||||||
Inventories, net |
26,911 | 19,290 | ||||||
Prepaid expenses and other current assets |
2,939 | 2,713 | ||||||
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|
|
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Total current assets |
95,432 | 96,973 | ||||||
Property and equipment, net |
24,952 | 20,129 | ||||||
Intangible assets, net |
1,438 | 1,651 | ||||||
Goodwill |
27,423 | 24,956 | ||||||
Pension asset |
6,387 | 5,321 | ||||||
Other non-current assets |
382 | 781 | ||||||
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Total assets |
$ | 156,014 | $ | 149,811 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities |
$ | 31,758 | $ | 28,115 | ||||
Accrued warranty |
304 | 449 | ||||||
Accrued employee compensation |
6,931 | 6,079 | ||||||
Short-term borrowings and current portion of long-term debt |
3,685 | 3,511 | ||||||
Deferred tax liability |
1,373 | 1,373 | ||||||
|
|
|
|
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Total current liabilities |
44,051 | 39,527 | ||||||
Deferred tax liability, long-term |
1,166 | 1,166 | ||||||
Long-term debt, excluding current portion |
2,504 | 12,608 | ||||||
Other long-term liabilities |
3,070 | 8,487 | ||||||
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|
|
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Total liabilities |
50,791 | 61,788 | ||||||
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|
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Stockholders equity: |
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Common stock, $0.10 par value per share, 40,000 shares authorized; 27,955 and 27,182 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively |
2,780 | 2,715 | ||||||
Additional paid-in capital |
250,341 | 238,419 | ||||||
Accumulated deficit |
(164,891 | ) | (163,870 | ) | ||||
Accumulated other comprehensive income |
16,993 | 10,759 | ||||||
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|
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Total stockholders equity |
105,223 | 88,023 | ||||||
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|
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Total liabilities and stockholders equity |
$ | 156,014 | $ | 149,811 | ||||
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MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, 2011 | March 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||||||||||
Gross Profit Reconciliation: |
||||||||||||||||||||||||
GAAP gross profit |
$ | 15,476 | $ | 13,884 | $ | 11,837 | $ | 29,360 | $ | 22,048 | ||||||||||||||
Stock-based compensation expense included in cost of sales |
A | 84 | 119 | 89 | 203 | 205 | ||||||||||||||||||
Amortization of intangible assets included in cost of sales |
B | 90 | 83 | 71 | 173 | 145 | ||||||||||||||||||
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Non-GAAP gross profit |
$ | 15,650 | $ | 14,086 | $ | 11,997 | $ | 29,736 | $ | 22,398 | ||||||||||||||
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Total Operating Expenses Reconciliation: |
||||||||||||||||||||||||
GAAP total operating expenses |
$ | 17,095 | $ | 13,957 | $ | 15,169 | $ | 31,052 | $ | 27,007 | ||||||||||||||
Stock-based compensation expense |
A | (705 | ) | (798 | ) | (654 | ) | (1,503 | ) | (1,161 | ) | |||||||||||||
Amortization of intangible assets |
B | (51 | ) | (51 | ) | (51 | ) | (102 | ) | (132 | ) | |||||||||||||
Accrual for settlements with the SEC and DOJ |
C | | | (3,400 | ) | | (3,400 | ) | ||||||||||||||||
Accrual for anticipated legal settlement |
D | (2,600 | ) | | | (2,600 | ) | | ||||||||||||||||
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Non-GAAP total operating expenses |
$ | 13,739 | $ | 13,108 | $ | 11,064 | $ | 26,847 | $ | 22,314 | ||||||||||||||
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Income (Loss) From Operations Reconciliation: |
||||||||||||||||||||||||
GAAP loss from operations |
$ | (1,619 | ) | $ | (73 | ) | $ | (3,332 | ) | $ | (1,692 | ) | $ | (4,959 | ) | |||||||||
Stock-based compensation expense |
A | 789 | 917 | 743 | 1,706 | 1,366 | ||||||||||||||||||
Amortization of intangible assets |
B | 141 | 134 | 122 | 275 | 277 | ||||||||||||||||||
Accrual for settlements with the SEC and DOJ |
C | | | 3,400 | | 3,400 | ||||||||||||||||||
Accrual for anticipated legal settlement |
D | 2,600 | | | 2,600 | | ||||||||||||||||||
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Non-GAAP income from operations |
$ | 1,911 | $ | 978 | $ | 933 | $ | 2,889 | $ | 84 | ||||||||||||||
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Net Income (Loss) Reconciliation: |
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GAAP net income (loss) |
$ | (1,217 | ) | $ | 196 | $ | (2,584 | ) | $ | (1,021 | ) | $ | (1,342 | ) | ||||||||||
Stock-based compensation expense |
A | 789 | 917 | 743 | 1,706 | 1,366 | ||||||||||||||||||
Amortization of intangible assets |
B | 141 | 134 | 122 | 275 | 277 | ||||||||||||||||||
Accrual for settlements with the SEC and DOJ |
C | | | 3,400 | | 3,400 | ||||||||||||||||||
Accrual for anticipated legal settlement, net of tax |
D | 2,035 | | | 2,035 | | ||||||||||||||||||
Gain on embedded derivative and warrants |
E | | (1,086 | ) | (1,226 | ) | (1,086 | ) | (4,475 | ) | ||||||||||||||
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Non-GAAP net income (loss) |
$ | 1,748 | $ | 161 | $ | 455 | $ | 1,909 | $ | (774 | ) | |||||||||||||
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Diluted Net Income (Loss) per Share Reconciliation: |
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GAAP diluted net income (loss) per share |
$ | (0.04 | ) | $ | 0.01 | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.05 | ) | ||||||||||
Stock-based compensation expense |
A | 0.03 | 0.03 | 0.03 | 0.07 | 0.05 | ||||||||||||||||||
Amortization of intangible assets |
B | | 0.01 | 0.01 | 0.01 | 0.01 | ||||||||||||||||||
Accrual for settlements with the SEC and DOJ |
C | | | 0.13 | | 0.13 | ||||||||||||||||||
Accrual for anticipated legal settlement, net of tax |
D | 0.07 | | | 0.07 | | ||||||||||||||||||
Gain on embedded derivative and warrants |
E | | (0.04 | ) | (0.05 | ) | (0.04 | ) | (0.17 | ) | ||||||||||||||
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Non-GAAP diluted net income (loss) per share |
$ | 0.06 | $ | 0.01 | $ | 0.02 | $ | 0.07 | $ | (0.03 | ) | |||||||||||||
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See notes on next page
Notes:
(A) | Stock-based compensation expense consists of non-cash charges for employee 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, 2011 | March 31, 2011 | June 30, 2010 | June 30, 2011 | June 30, 2010 | ||||||||||||||||
Cost of revenue |
$ | 84 | $ | 119 | $ | 89 | $ | 203 | $ | 205 | ||||||||||
Selling, general and administrative |
597 | 646 | 575 | 1,243 | 1,068 | |||||||||||||||
Research and development |
108 | 152 | 79 | 260 | 93 | |||||||||||||||
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Total stock-based compensation expense |
$ | 789 | $ | 917 | $ | 743 | $ | 1,706 | $ | 1,366 | ||||||||||
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(B) | Amortization of intangible assets associated with acquisitions. |
(C) | Accrual for settlements with the Securities and Exchange Commission and Department of Justice. |
(D) | Accrual for anticipated legal settlement of $2.6 million, or $2.0 million net of the related tax impact. |
(E) | Gain on embedded derivatives and warrants associated with the Companys convertible debt. |