Satcon Technology Corp. (MM) (NASDAQ:SATC)
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Satcon Technology Corporation (NASDAQ CM:SATC)
Revenue increased 38% to $18.5 million from $13.4 million in Q2’08
Gross margin improved to 18.9% from 11.7% in Q2’08
Backlog grew 30% over Q2’08
Company expects to achieve operating profitability in 2H 2009
Satcon Technology Corporation (NASDAQ CM:SATC), a leading provider of
utility scale distributed power solutions for the renewable energy
market, today announced its financial results for the third quarter
ended September 27, 2008. These results reflect the sale of the company’s
Electronics and Motors businesses during the quarter, which have been
classified as discontinued operations.
Satcon reported revenue for the third quarter of $18.5 million, up from
$17.4 million in the third quarter of fiscal 2007, and up from $13.4
million in the second quarter of fiscal 2008. For the nine months ended
September 27, 2008, revenue grew 45% to $43.2 million from $29.8 million
in the first nine months of 2007. Gross margin for the quarter was 18.9%
compared with 12.4% in the third quarter of 2007, and 11.7% in the
second quarter of 2008. For the nine months ended September 27, 2008,
gross margin more than doubled to 13.6%, compared with 5.5% in the same
period last year.
Net loss from continuing operations for the third quarter was
approximately $1.3 million, compared with a net loss of $2.4 million for
the third quarter of 2007. Third-quarter 2008 net loss included a
non-cash gain related to the valuation of warrant liability of $2.0
million, a loss from discontinued operations of $1.0 million,
restructuring costs of $0.5 million, and stock-based compensation of
$0.7 million. Third-quarter 2008 net loss was offset by a gain on the
sale of the company’s non-strategic businesses
of $0.3 million. For the nine month period of 2008, net loss was $13.3
million, compared with a net loss of $9.8 million for the same period in
2007.
Net loss attributable to common shareholders was $3.0 million, or
($0.06) per share, and $16.5 million, or ($0.33) per share, for the
three- and nine-month periods ending September 27, 2008, respectively.
Cash and cash equivalents at September 27, 2008 were $10.5 million,
compared with $9.8 million at June 28, 2008.
The company reported an ending backlog on September 27, 2008 of $39
million, compared with backlog of $30 million at June 28, 2008.
Comments on the Third Quarter
“We are very pleased with our third quarter
results, which reflect the continued growth of our solar PV and fuel
cell inverter business,” said Steve Rhoades,
President and Chief Executive Officer of Satcon. “Sales
of our power conditioning systems increased 120% over the same period in
2007 highlighting the increasing global demand for our utility ready
solutions. In addition, we achieved gross margin of 18.9% demonstrating
the success of our strategy to improve our operational and manufacturing
efficiencies.”
Business Outlook
“With the sale of our Electronics and Motors
divisions, we have focused the company on a core business model that
will accelerate Satcon’s ability to meet our
financial objectives,” said Rhoades. “Looking
ahead, we continue to expect strong sales of our photovoltaic and fuel
cell solutions. We also expect to continue to improve our margins as we
remain focused on managing the overall costs of our business. Based on
our current financial momentum, we believe Satcon will achieve operating
profitability in the second half of 2009.”
Conference Call Reminder
The company will hold a conference call to review its financial results
and business highlights today, November 6, 2008 at 5:00 p.m. ET. During
the conference call, the company may answer questions concerning
business and financial developments and trends, and other business and
financial matters. The company’s responses to
these questions, as well as other matters discussed during the
conference call, may contain or constitute information that has not been
previously disclosed.
The conference call will be webcast live over the Internet and can be
accessed on the Investor Relations section of the company’s
website at www.Satcon.com.
The conference call also can be accessed by dialing (800) 967-7134 (U.S.
and Canada) or (719) 325-2445 (International). Interested parties that
are unable to listen to the live call may access an archived version of
the webcast on Satcon’s website.
About Satcon
Satcon Technology Corporation is a leading provider of utility scale
distributed power solutions for the renewable energy market, enabling
the industry’s most advanced, reliable, and
proven clean energy alternatives. For over 22 years, Satcon has designed
and delivered the next generation of efficient energy systems for solar
photovoltaic, stationary fuel cells, wind-turbines, and energy storage
systems. To learn more about Satcon, please visit www.Satcon.com.
Safe Harbor
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," "intends," "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. Additional information concerning risk factors is contained
from time to time in the company's SEC filings, including its Annual
Report on Form 10-K and other periodic reports filed with the SEC.
Forward-looking statements contained in this press release speak only as
of the date of this release. Subsequent events or circumstances
occurring after such date may render these statements incomplete or out
of date. The company expressly disclaims any obligation to update the
information contained in this release.
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 27,
December 31,
ASSETS
2008
2007
Current assets:
Cash and cash equivalents
$10,445,529
$12,615,566
Restricted cash and cash equivalents
84,000
84,000
Accounts receivable, net of allowance of $128,312 and $124,279 at
September 27, 2008 and December 31, 2007, respectively
9,517,751
8,532,141
Unbilled contract costs and fees
561,233
536,567
Inventory, net
16,287,671
13,807,201
Prepaid expenses and other current assets
1,168,194
1,002,187
Current assets of discontinued operations
—
5,384,412
Total current assets
38,064,378
41,962,074
Property and equipment, net
2,275,285
1,765,453
Goodwill, net
123,714
123,714
Intangibles, net
498,023
793,739
Other long-term assets
1,561
32,931
Non-current assets of discontinued operations
—
1,930,766
Total assets
$40,962,961
$46,608,677
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Bank line of credit
$3,000,000
$—
Accounts payable
8,071,237
7,631,486
Accrued payroll and payroll related expenses
2,511,645
1,838,792
Other accrued expenses
3,286,330
3,182,157
Accrued contract losses
1,338,753
1,300,000
Accrued restructuring
936,964
—
Deferred revenue
9,034,026
7,672,451
Current liabilities of discontinued operations
—
2,266,191
Total current liabilities
$28,178,955
$23,891,077
Warrant liability
3,494,567
3,244,316
Redeemable convertible Series B Preferred Stock (290 and 340 shares
issued and outstanding at September 27, 2008 and December 31, 2007;
face value $5,000 per share; liquidation preference$1,450,000 at
September 27, 2008 and $1,700,000 at December 31, 2007).
1,450,000
1,700,000
Other long-term liabilities
57,616
70,075
Non-current liabilities of discontinued operations
—
63,825
Total liabilities
$33,181,138
$28,969,293
Commitments and contingencies
Redeemable convertible Series C Preferred Stock (25,000 shares
issued and outstanding at September 27, 2008 and December 31, 2007,
face value $1,000 per share, liquidation preference $30,000,000 at
September 27, 2008 and December 31, 2007)
16,137,937
13,276,091
Stockholders' equity (deficit):
Common stock; $0.01 par value, 200,000,000 shares authorized;
51,171,002 and 49,803,979 shares issued and outstanding at September
27, 2008 and December 31, 2007, respectively
$511,710
$498,040
Additional paid-in capital
182,152,809
180,933,100
Accumulated deficit
-190,096,204
-176,757,615
Accumulated other comprehensive loss
-924,429
-310,232
Total stockholders' equity (deficit)
($8,356,114)
$4,363,293
Total liabilities and stockholders' equity (deficit)
$40,962,961
$46,608,677
SATCON TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2008
2007
2008
2007
Revenue:
Product revenue
$17,215,392
$14,698,799
$36,947,201
$23,547,007
Funded research and development and other revenue
1,301,362
2,724,819
6,292,490
6,284,664
Total revenue from continuing operations
$18,516,754
$17,423,618
$43,239,691
$29,831,671
Operating costs and expenses:
Cost of product revenue
13,869,078
13,267,952
32,509,593
23,528,824
Research and development and other revenue expenses:
Funded research and development and other revenue expenses
1,145,719
1,989,552
4,828,139
4,658,398
Unfunded research and development expenses
1,642,265
618,690
3,619,615
1,428,800
Total research and development and other revenue expenses
$2,787,984
$2,608,242
$8,447,754
$6,087,198
Selling, general and administrative expenses
4,585,771
2,344,088
11,830,775
6,759,307
Amortization of intangibles
78,572
78,573
235,716
235,717
Restructuring costs
512,609
—
1,119,216
—
Total operating costs and expenses from continuing operations
$21,834,014
$18,298,855
$54,143,054
$36,611,046
Operating loss from continuing operations
($3,317,260)
($875,237)
($10,903,363)
($6,779,375)
Change in fair value of convertible notes and warrants
2,041,697
-1,008,163
-822,501
-423,535
Other (income) expense, net
57,734
-64,370
62,047
-115,444
Interest income
56,872
56,804
197,143
179,035
Interest expense
-98,139
-496,039
-241,876
-1,729,481
Net loss from continuing operations
($1,259,096)
($2,387,005)
($11,708,550)
($8,868,800)
Loss from discontinued operations, net
($990,434)
($256,854)
($1,957,837)
($896,086)
Gain on sale of discontinued operations, net
327,798
—
327,798
—
Net loss
($1,921,732)
($2,643,859)
($13,338,589)
($9,764,886)
Accretion on Series C Preferred Stock to redemption value
(745,300)
—
(2,062,300)
—
Dividend on Series C Preferred Stock
(310,793)
—
(925,546)
—
Deemed dividend on Series C Preferred Stock
(10,000)
—
(126,000)
—
Net loss attributable to common stockholders
($2,987,825)
($2,643,859)
($16,452,435)
($9,764,886)
Net loss per weighted average share, basic and diluted:
From loss on continuing operations attributable to common
shareholders
($0.05)
($0.05)
($0.29)
($0.20)
From loss on discontinued operations
($0.02)
($0.01)
($0.04)
($0.02)
From gain on sale of discontinued operations
$0.01
—
$0.01
—
Net loss attributable to common stockholders per weighted average
share, basic and diluted
($0.06)
($0.06)
($0.33)
($0.22)
Weighted average number of common shares, basic and diluted
51,013,182
47,841,373
50,454,300
44,035,169