Satcon Technology Corp. (MM) (NASDAQ:SATC)
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SatCon Technology Corporation© (NASDAQ CM:
SATC), a developer and supplier of power management and system
architecture solutions for the alternative energy and distributed power
markets, today announced its operating results for the quarter ended
June 30, 2007.
“This has been a strong revenue growth quarter
for SatCon,” said David Eisenhaure, President
and Chief Executive Officer. “As we have been
predicting for some time, the Photovoltaic Inverter market opportunity
is experiencing rapid growth and we have been positioned well to take
advantage of the technical strength of our products.”
For the quarter our:
Revenues increased 31% over last year to $11.7 million.
Photovoltaic Inverters represented $3.8 million or over 30% of that
total, a 70% increase over last year - highlighting our growth in this
major market segment.
Year to date our photovoltaic inverter revenues have more than doubled
over last year to $7 million dollars.
In addition to our revenue increases:
Our backlog grew to a record $48 million at the end of the quarter, an
80% increase over last year.
We have continued to deliver a positive sales order booking to revenue
ratio for the last 9 quarters.
As a result, we continue to project that we will have revenues of $50
million for the year with an expectation of over $30 million of
revenue in the second half of 2007. This compares to our 2006 annual
revenue of $34 million, an increase of over 47%.
We also stated that we would need to find additional working capital to
fund our growth. To that end, this July we:
Executed a warrant conversion that raised $4.7 million, which improved
our cash position and will allow us to fund the manufacture of
photovoltaic inverters and other products that will bolster our
increasing revenues.
As we go forward we will continue to evaluate our capital needs to
meet our revenue targets, but for the remainder of the year our
current cash on hand and that generated from revenues should be
sufficient to support our $50 million revenue projection for 2007. As
we stated last quarter, we will need to raise additional funds to
properly support our continued revenue growth.
In addition, we said that with the increased revenue of $50 million for
the year that our losses from operations would decline.
Had we not incurred unanticipated losses from a couple of 5-year-old
legacy products in the Power Systems group, our losses in fact would
have dropped over last year.
As we look forward to the second half of 2007, we anticipate that the
trend in the reduction of our operating losses will continue.
Revenues for the quarter ended June 30, 2007 were $11.7 million compared
with $8.1 million in the second quarter of 2006, an increase of 31%.
Revenues for the first six months totaled $20.1 million, a 27% increase
over the $15.7 million in 2006.
Revenues within the Power Systems Division in Canada increased by 59% to
$5.2 million for the quarter compared to $3.3 million in the second
quarter of 2006 for a total in the first six months of $8.8 million, a
58% increase over $5.6 million in 2006. In addition, the Applied
Technology Division revenue recorded growth of over 42% to $1.8 million
from $1.3 million for a total growth of over 62% to $3.6 million in 2007
from $2.2 million in 2006. Revenues in the Motors and Hybrid Electric
Vehicle business was up 66% to $1.0 million compared to $0.6 million in
2006 with total increases of approximately $0.4 million from $1.4 to
$1.8 million in 2007. This revenue growth reflects the results of the
company’s effort to focus on products targeted
at the alternative energy and distributed power markets.
Operating Losses for the second Quarter of 2007 were $3.5 million,
virtually equal to the same period of 2006 with a total six-month loss
of $6.5 million compared to $6.7 million in 2006. However, included in
the Q2 2007 losses are approximately $1.0 million of excess costs
associated with older legacy products primarily in our Power Systems
Division. In addition, we experienced increased labor costs as well as
increased materials costs due to the availability of materials from our
supplier base to meet increased demand for photovoltaic inverters and a
strengthening of the Canadian dollar during the last quarter. The
company continued to increase direct investment spending in R&D with a
modest increase of $0.1M to $0.6M in Q1 2007 for a total of $1.3M for
the first half of 2007, an increase from $0.2M in 2006, primarily to
support the development of new photovoltaic products. These cost
increases were partially offset by reduced SG&A expenses by $0. 3
million or 11% and $0.9 million or 13% for the first six months,
primarily due to a decrease in corporate costs related to legal and
other fees, reduced payroll and other overhead costs.
About SatCon Technology Corporation
SatCon Technology Corporation is a developer and manufacturer of
electronics and motors for the Alternative Energy, Hybrid-Electric
Vehicle, Grid Support, High Reliability Electronics and Advanced Power
Technology markets. For further information, please visit the SatCon
website at www.satcon.com. SATC-E
Statements made in this document that are not historical facts or
which apply prospectively are forward-looking statements that involve
risks and uncertainties. These forward-looking statements are
identified by the use of terms and phrases such as “will,”
“believes,” “expects,”
“plans,” “anticipates”
and similar expressions. Investors should not rely on forward
looking statements because they are subject to a variety of risks and
uncertainties and other factors that could cause actual results to
differ materially from the Company’s
expectation. There can be no assurance that the company will
continue to maintain this level of new orders or that it can
successfully deliver the components and systems ordered. Additional
information concerning risk factors is contained from time to time in
the Company’s SEC filings. The Company
expressly disclaims any obligation to update the information contained
in this release.
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30,
2007
December 31,
2006
ASSETS
(Unaudited)
Current assets:
Cash and cash equivalents
$1,833,797
$7,190,827
Restricted cash and cash equivalents
84,000
84,000
Accounts receivable, net of allowance of $193,506 and $792,245 at
June 30, 2007 and December 31, 2006, respectively
9,240,562
8,549,923
Unbilled contract costs and fees
311,743
267,247
Inventory
14,396,715
7,945,874
Prepaid expenses and other current assets
3,394,063
756,884
Total current assets
$29,260,880
$24,794,755
Property and equipment, net
2,891,034
2,783,900
Goodwill, net
704,362
704,362
Intangibles, net
990,883
1,224,488
Restricted cash
1,000,000
1,000,000
Other long-term assets
71,382
69,782
Total assets
$34,918,541
$30,577,287
LIABILITIES AND STOCKHOLDERS' Deficit
Current liabilities:
Current portion of long-term debt
$41,689
$123,219
Accounts payable
6,819,982
4,538,569
Accrued payroll and payroll related expenses
1,615,970
1,449,185
Other accrued expenses
3,157,051
2,405,447
Accrued restructuring costs
-
1,200,326
Current portion of senior secured convertible notes
5,500,000
5,500,000
Current portion of warrant liability
-
436,919
Deferred revenue
13,103,405
5,834,537
Total current liabilities
$30,238,097
$21,488,202
Redeemable convertible Series B preferred stock (345 shares issued
and outstanding at June 30, 2007 and December 31, 2006,
respectively; face value $5,000 per share; liquidation preference
$1,725,000)
1,725,000
1,725,000
Long-term senior secured convertible notes, net of current portion
4,259,446
7,240,482
Long-term warrant liability, net of current portion
2,542,489
2,483,634
Other long-term liabilities
105,643
108,049
Total liabilities
38,870,675
$33,045,367
Commitments and contingencies (Note H)
Stockholders' deficit:
Common stock; $0.01 par value, 100,000,000 shares authorized;
43,967,441 and 40,105,073 shares issued and outstanding at June 30,
2007 and December 31, 2006, respectively
$439,675
$401,051
Additional paid-in capital
161,571,515
156,379,193
Accumulated deficit
(166,112,865)
(158,991,838)
Accumulated other comprehensive loss
149,541
(256,486)
Total stockholders' deficit
$(3,952,134)
$(2,468,080)
Total liabilities and stockholders' deficit
$34,918,541
$30,577,287
Three Months Ended
Six Months Ended
June 30,
July 1,
June 30,
July 1,
2007
2006
2007
2006
Revenue:
Product revenue
$ 9,919,486
$ 6,852,666
$16,452,072
$13,513,223
Funded research and development and other revenue
1,774,666
1,250,491
3,559,845
2,196,772
Total revenue
$11,694,152
$ 8,103,157
$20,011,917
$15,709,995
Operating costs and expenses:
Cost of product revenue
10,044,974
6,675,853
16,415,446
12,520,998
Research and development and other revenue expenses:
Funded research and development and other revenue expenses
1,312,047
1,100,077
2,668,846
2,078,084
Unfunded research and development expenses
645,603
512,819
1,323,012
1,072,901
Total research and development and other revenue expenses
$1,957,650
$ 1,612,896
$3,991,858
$ 3,150,985
Selling, general and administrative expenses
3,113,879
3,393,602
5,937,720
6,752,976
Amortization of intangibles
83,773
111,671
193,594
223,342
Gain on sale of assets held for sale
—
(189,960)
—
(189,960)
Total operating costs and expenses
$15,200,276
$11,604,062
$26,538,618
$22,458,341
Operating loss
$ (3,506,124)
$ (3,500,905)
$ (6,526,701)
$ (6,748,346)
Change in fair value of notes and warrants
385,035
—
584,628
—
Other (loss) income
(24,925)
42,535
(65,479)
63,371
Interest income
36,692
57,483
122,231
152,782
Interest expense
(626,322)
( 85,568)
(1,235,706)
(188,116)
Net loss
$ (3,735,644)
$(3,486,455)
$ (7,121,027)
$ (6,720,309)
Net loss attributable to common stockholders per weighted average
share, basic and diluted
$(0.09)
$(0.09)
$(0.17)
$(0.17)
Weighted average number of common shares, basic and diluted
42,869,473
39,114,884
42,132,067
38,819,563