Capstone Green Energy Announces Third Quarter Fiscal 2023 Financial Results
Capstone Green Energy Corporation (NASDAQ: CGRN) reported third quarter revenues of $19.6 million, down 5% year-over-year but up 9.5% year-to-date at $59.0 million. Despite a net loss of $5.2 million, adjusted EBITDA improved 43% to a loss of $1.7 million, driven by growth in the Energy-as-a-Service (EaaS) business. Rental units under contract surged 126% year-over-year to 40 MW. Gross margins improved to 14%, though below expectations due to supply chain costs. The company anticipates further revenue growth through price increases and ongoing strategic shifts towards EaaS.
- Year-to-date revenues increased by 9.5% to $59.0 million.
- Adjusted EBITDA improved by 57% year-to-date, to a loss of $3.5 million.
- EaaS rental units increased 126% year-over-year to 40 MW.
- Gross margins improved to 14%, reflecting a greater revenue share from higher-margin rentals.
- Third quarter revenues declined 5% year-over-year.
- Net loss of $5.2 million for the third quarter, compared to $5.1 million last year.
- Gross product bookings fell from $16.3 million to $6.9 million quarter-over-quarter.
Third Quarter Revenues of
Third Quarter Net Loss is
Rental units under contract increased
“Revenue for the third quarter was
Third Quarter and Nine Months Fiscal 2023 Highlights:
-
Revenues for the third quarter ending
December 31, 2022 , were , down$19.6 million 6% from in revenue during the second quarter ended$20.8 million September 30, 2022 , and down5% from in the year-ago third quarter.$20.6 million
-
Revenues for the first nine months of fiscal 2023 totaled
, up$59.0 million 9.5% from from the nine months of fiscal 2022.$53.9 million
-
EaaS business (Factory Protection Plan (FPP) Service, Spare Parts and Rentals) revenues were up
18% for the nine months of fiscal 2023 mainly due to higher rental and FPP revenues.
-
Gross margins for the third quarter ending
December 31, 2022 , were14% compared to11% in the second quarter endingSeptember 30, 2022 and11% in the year ago third quarter endedDecember 31, 2021 . Gross margins increased primarily due to a greater proportion of revenue from the higher-margin rental fleet offsetting increased costs in the company's supply chain.
-
Gross margins for the nine months of fiscal 2023 increased to
16% from14% for the nine months of fiscal 2022, but were below Company expectations of25% because of ongoing supply chain expenses, freight and expediting charges.
-
Net loss was
for the third quarter ending$5.2 million December 31, 2022 , compared to a net loss of in the same quarter last year. Prior year net loss included a$5.1 million benefit from the Paycheck Protection Program loan forgiveness. Without such forgiveness, the net loss would have been$2.6 million . The improvement in the current quarter is mainly due to higher gross margin.$7.7 million
-
Adjusted EBITDA for the third quarter ending
December 31, 2022 , improved43% to negative from negative$1.7 million in the third quarter last year, primarily due to higher gross margin contribution from the EaaS business.$3.0 million
-
Net loss was
for nine months ending$12.2 million December 31, 2022 , compared to a net loss of in the same period last year. Prior year net loss included a$13.3 million benefit from the Paycheck Protection Program loan forgiveness. Without such forgiveness, the net loss would have been$2.6 million .$15.9 million
-
Adjusted EBITDA improved
57% to negative for nine months ended$3.5 million December 31, 2022 , compared to negative for the same period last year driven by solid execution in our high-margin EaaS business and ongoing cost reduction efforts, offset by ongoing supply chain expenses, freight and expediting charges.$8.1 million
-
EaaS long-term rental units and re-rental units under contract on
December 31, 2022 , totaled approximately 40 MW versus 17.7 MW onDecember 31, 2021 , representing126% growth year-over-year.
-
The Company remains on track to reach its goal of 50 MW under contract by
March 31, 2023 .
-
Gross product bookings for the third quarter ending
December 31, 2022 , were , down from$6.9 million in the previous quarter ended$16.3 million September 30, 2022 , as bookings slowed in December.
-
Total cash as of
December 31, 2022 , was , down from$16.6 million as of$23.8 million September 30, 2022 . The decrease of was primarily related to the net loss and manufacturing of 4.6 MW of new rental assets for the growing EaaS rental fleet.$7.2 million
-
Net cash used by operating activities was
, primarily as a result of net loss funding and$4.9 million in cash used by working capital mainly due to the purchase of long lead-time inventory.$1.7 million
-
The Company’s Days Sales Outstanding, or DSO, dropped from 85 days in the quarter ending
September 30, 2022 , to 66 days in the most recent quarter.
-
To mitigate global supply chain shortages, parts price increases, and higher freight costs, the Company enacted an across-the-board product, spare parts, and FPP service contract price increase on
January 30, 2023 .
“We project a confluence of positive events over the next 12 months with new price increases taking effect, the Inflation Reduction Act (IRA) taking hold, and new markets like EV charging gaining increasing momentum. Our centerpiece will remain our EaaS rental business and the benefits it brings us including higher margins, predictable revenues, and consistent cash flow while transitioning us away from being only a manufacturing company. Our progress since implementing this major strategic shift is demonstrated in our results as we have effectively marched towards our goal of 50 MW. The numbers show our customers both need and want this solution and that we can provide it, solving both our customer’s needs and driving returns for our stockholders,” continued
“Our overall financial goals are unchanged, and we are focused on growing revenue and reaching positive Adjusted EBITDA on a sustainable basis. EaaS is a pivotal factor in achieving this goal in conjunction with our ongoing price increases and cost control initiatives. There are several drivers as we look ahead including the IRA (and similar global initiatives), leveraging Capstone’s Direct Sales organization, targeting large global customers, and growing our global Distribution network to reach more geographies,” concluded
Conference Call Information
- The live webcast of the call and supporting slide presentation will be available on the Investor Relations page of the company website www.capstonegreenenergy.com, or click here.
The replay of the conference call will be available via webcast on the Company’s Investor Relations page at www.capstonegreenenergy.com.
About
To date, Capstone has shipped over 10,000 units to 83 countries and estimates that in FY22, it saved customers over
For customers with limited capital or short-term needs, Capstone offers rental systems; for more information, contact: rentals@CGRNenergy.com.
For more information about the Company, please visit www.CapstoneGreenEnergy.com. Follow
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements regarding expectations relating to the Company’s efforts to increase margins, grow revenues and achieve and maintain profitability and other statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "will," "plan," "goal" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the ability of the Company to increase prices; continuing supply chain issues; the impact of inflation and other factors on the Company’s cost structure; the ongoing effects of the COVID-19 pandemic; the availability of credit and compliance with the agreements governing the Company's indebtedness; the Company's ability to develop new products, enhance existing products and grow its EaaS business; product quality issues, including the adequacy of reserves therefor and warranty cost exposure; intense competition; financial performance of the oil and natural gas industry and other general business, industry and economic conditions; the Company's ability to adequately protect its intellectual property rights; and the impact of pending or threatened litigation. For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(In thousands, except share amounts) |
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(Unaudited) |
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||
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2022 |
|
2022 |
||||
Assets |
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
16,618 |
|
|
$ |
22,559 |
|
Accounts receivable, net of allowances of |
|
15,119 |
|
|
|
24,665 |
|
Inventories, net |
|
25,602 |
|
|
|
18,465 |
|
Prepaid expenses and other current assets |
|
7,125 |
|
|
|
5,519 |
|
Total current assets |
|
64,464 |
|
|
|
71,208 |
|
Property, plant, equipment and rental assets, net |
|
25,906 |
|
|
|
18,038 |
|
Non-current portion of accounts receivable |
|
107 |
|
|
|
1,212 |
|
Non-current portion of inventories |
|
3,055 |
|
|
|
1,680 |
|
Other assets |
|
11,334 |
|
|
|
8,635 |
|
Total assets |
$ |
104,866 |
|
|
$ |
100,773 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
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Current Liabilities: |
|
|
|
|
|
||
Accounts payable and accrued expenses |
$ |
26,087 |
|
|
$ |
25,130 |
|
Accrued salaries and wages |
|
1,421 |
|
|
|
1,147 |
|
Accrued warranty reserve |
|
1,540 |
|
|
|
1,483 |
|
Deferred revenue |
|
9,699 |
|
|
|
9,185 |
|
Current portion of notes payable and lease obligations |
|
2,201 |
|
|
|
675 |
|
Term note payable |
|
50,974 |
|
|
|
— |
|
Total current liabilities |
|
91,922 |
|
|
|
37,620 |
|
Deferred revenue - non-current |
|
817 |
|
|
|
981 |
|
Term note payable - non-current |
|
— |
|
|
|
50,949 |
|
Long-term portion of notes payable and lease obligations |
|
11,036 |
|
|
|
5,809 |
|
Total liabilities |
|
103,775 |
|
|
|
95,359 |
|
Commitments and contingencies |
|
|
|
|
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Stockholders’ Equity: |
|
|
|
|
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||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
18 |
|
|
|
15 |
|
Additional paid-in capital |
|
954,982 |
|
|
|
946,969 |
|
Accumulated deficit |
|
(951,770 |
) |
|
|
(939,482 |
) |
|
|
(2,139 |
) |
|
|
(2,088 |
) |
Total stockholders’ equity |
|
1,091 |
|
|
|
5,414 |
|
Total liabilities and stockholders' equity |
$ |
104,866 |
$ |
100,773 |
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share data) |
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(Unaudited) |
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Three Months Ended |
Nine Months Ended |
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2022 |
|
2021 |
|
2022 |
|
2021 |
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product and accessories |
|
$ |
10,003 |
|
|
$ |
12,329 |
|
|
$ |
29,773 |
|
|
$ |
29,183 |
|
Parts, service and rentals |
|
|
9,603 |
|
|
|
8,280 |
|
|
|
29,260 |
|
|
|
24,704 |
|
Total revenue |
|
|
19,606 |
|
|
|
20,609 |
|
|
|
59,033 |
|
|
|
53,887 |
|
Cost of goods sold: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product and accessories |
|
|
11,629 |
|
|
|
12,689 |
|
|
|
33,017 |
|
|
|
30,479 |
|
Parts, service and rentals |
|
|
5,308 |
|
|
|
5,703 |
|
|
|
16,465 |
|
|
|
15,833 |
|
Total cost of goods sold |
|
|
16,937 |
|
|
|
18,392 |
|
|
|
49,482 |
|
|
|
46,312 |
|
Gross profit |
|
|
2,669 |
|
|
|
2,217 |
|
|
|
9,551 |
|
|
|
7,575 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
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Research and development |
|
|
634 |
|
|
|
767 |
|
|
|
1,726 |
|
|
|
2,637 |
|
Selling, general and administrative |
|
|
5,397 |
|
|
|
5,293 |
|
|
|
15,423 |
|
|
|
17,055 |
|
Total operating expenses |
|
|
6,031 |
|
|
|
6,060 |
|
|
|
17,149 |
|
|
|
19,692 |
|
Loss from operations |
|
|
(3,362 |
) |
|
|
(3,843 |
) |
|
|
(7,598 |
) |
|
|
(12,117 |
) |
Other income (expense) |
|
|
5 |
|
|
|
(21 |
) |
|
|
(43 |
) |
|
|
639 |
|
Interest income |
|
|
43 |
|
|
|
5 |
|
|
|
74 |
|
|
|
16 |
|
Interest expense |
|
|
(1,900 |
) |
|
|
(1,287 |
) |
|
|
(4,618 |
) |
|
|
(3,800 |
) |
Gain (loss) on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,950 |
|
Loss before provision for income taxes |
|
|
(5,214 |
) |
|
|
(5,146 |
) |
|
|
(12,185 |
) |
|
|
(13,312 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
10 |
|
Net loss |
|
|
(5,214 |
) |
|
|
(5,146 |
) |
|
|
(12,191 |
) |
|
|
(13,322 |
) |
Less: Deemed dividend on purchase warrant for common shares |
|
|
— |
|
|
|
— |
|
|
|
97 |
|
|
|
— |
|
Net loss attributable to common stockholders |
|
$ |
(5,214 |
) |
|
$ |
(5,146 |
) |
|
$ |
(12,288 |
) |
|
$ |
(13,322 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per common share attributable to common stockholders—basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.92 |
) |
Weighted average shares used to calculate basic and diluted net loss per common share attributable to common stockholders |
18,351 |
15,236 |
16,824 |
14,548 |
CAPSTONE GREEN ENERGY CORPORATION AND SUBSIDIARIES |
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURE |
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(In thousands, except per share data) |
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(Unaudited) |
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|
|
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|
|
Three Months Ended |
|
Nine Months Ended |
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Reconciliation of Reported Net Loss to EBITDA and Adjusted EBITDA |
|
|
|
|
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net loss, as reported |
|
$ |
(5,214 |
) |
|
$ |
(5,146 |
) |
|
$ |
(12,191 |
) |
|
$ |
(13,322 |
) |
Interest expense |
|
|
1,900 |
|
|
|
1,287 |
|
|
|
4,618 |
|
|
|
3,800 |
|
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
10 |
|
Depreciation and amortization |
|
|
852 |
|
|
|
493 |
|
|
|
2,378 |
|
|
|
1,337 |
|
EBITDA |
|
$ |
(2,462 |
) |
|
$ |
(3,366 |
) |
|
$ |
(5,189 |
) |
|
$ |
(8,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss (gain) on debt extinguishment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,950 |
) |
Additional PPP Loan forgiveness |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(660 |
) |
Stock-based compensation and other expense |
|
|
232 |
|
|
|
335 |
|
|
|
617 |
|
|
|
1,985 |
|
Debt compliance costs/legal settlements |
|
|
499 |
|
|
|
— |
|
|
|
1,089 |
|
|
|
750 |
|
Adjusted EBITDA |
|
$ |
(1,731 |
) |
|
$ |
(3,031 |
) |
|
$ |
(3,483 |
) |
|
$ |
(8,050 |
) |
To supplement the company’s unaudited financial data presented on a generally accepted accounting principles (GAAP) basis, management has presented Adjusted EBITDA, a non-GAAP financial measure. This non-GAAP financial measure is among the indicators management uses as a basis for evaluating the company’s financial performance as well as for forecasting future periods. Management establishes performance targets, annual budgets and makes operating decisions based in part upon this metric. Accordingly, disclosure of this non-GAAP financial measure provides investors with the same information that management uses to understand the company’s economic performance year-over-year.
EBITDA is defined as net income before interest, provision for income taxes, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA before gain on debt extinguishment, additional PPP loan forgiveness, stock-based compensation, consulting and legal expenses related to compliance with debt covenants, and legal settlements. Gain on debt extinguishment and additional PPP loan forgiveness relates to the Paycheck Protection Program loan forgiveness. Stock-based compensation and other expense includes expense related to stock issued to employees, directors, vendors, and for extraordinary, non-recurring expenses. Debt compliance costs/legal settlements include costs associated with our debt restructuring and legal settlements.
Adjusted EBITDA is not a measure of the company’s liquidity or financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of its liquidity.
While management believes that the non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of this measure. The measures are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the methods of calculation. Management compensates for these limitations by relying primarily on the company’s GAAP results and by using Adjusted EBITDA only supplementally.
Non-GAAP financial measures are not in accordance with generally accepted accounting principles in
View source version on businesswire.com: https://www.businesswire.com/news/home/20230213005624/en/
Investor and investment media inquiries:
818-407-3628
ir@CGRNenergy.com
Source:
FAQ
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