Trading Statement

 

TIDMCWP 
 
RNS Number : 2812I 
Clipper Windpower Plc 
09 March 2010 
 

Clipper Windpower Plc - Operational and Trading Update 
 
·    Doug Pertz resigns as President and CEO and Board Director; Mauricio F. 
Quintana appointed as new President and CEO and Board Director; and Michael E. 
Keane, currently CFO, appointed as Board Director. 
·    Revenue in 2009 expected to be approximately $740 million from the sale of 
259 turbines (647.5 MW). 
·    The blade skin remediation program was completed in January 2010. 
·    Cash balance of $62 million at December 31, 2009, including $12 million 
restricted cash.  On January 12, 2010, Clipper received $206 million from sale 
of 84.3 million ordinary equity shares to United Technologies Corporation 
("UTC"). 
·    Clipper expects to report a loss for 2H2009 approaching the 1H2009 level, 
resulting from: 1) customer order deferrals and delayed commissionings of 
turbines; 2) costs and increased provisions related to the completed blade 
remediation program; and 3) increased warranty provisions for the Company's 
installed fleet of 467 turbines. 
·    Turbine performance continues to improve with fleet-wide availability 
currently exceeding 95%. 
·    Over 1,100 MW of capacity currently installed and operating at 17 
generating sites, consists of 467 Liberty turbines with over 3.1 million 
accumulated operating hours. 
·    Clipper currently expects to deliver approximately 180 turbines (450 MW) to 
customers in 2010, with revenue recognition heavily weighted toward the second 
half of the year.  Accordingly, the Company expects to report an operating loss 
for the first half and positive operating income in the second half leading to 
approximately break even results for the full year. 
·    Advanced stage project development assets have reached 1,000 MW, with a 
portion in advanced negotiations for potential sales of assets and Clipper 
Liberty turbines. 
·    Working groups have been established with UTC to maximize operating 
synergies and benefits.  Clipper should benefit from strong technical and 
operational support from UTC's business units, including but not limited to 
Pratt & Whitney, Hamilton Sundstrand, and Sikorsky. 
·    Clipper Windpower Marine Ltd. has entered into a long-term lease for a 
blade production facility on the Tyne River in Newcastle, Northumberland, 
England. The facility will provide test and production blades for the 10 MW 
offshore turbine (the Britannia Project) planned for testing in 2011/2012. 
 
London (UK), Carpinteria, CA (USA) - March 9, 2010.  Clipper Windpower Plc 
("Clipper" or the "Company") provides an update on its activities. 
 
Preliminary 2009 Results 
Clipper expects to announce audited 2009 results at the end of March 2010. 
Based on unaudited preliminary figures, the Company expects full year 2009 
revenue to be approximately $740 million from the sale of 259 turbines (647.5 
MW). As previously announced, the negotiated deferral of shipments of 130 
turbines from 2009 to 2010 and 2011, (principally due to unavailability of 
customer project financing), negatively impacted 2009 revenue and reduced gross 
margin by an estimated $110 million.  These shipment deferrals, combined with 
increased costs for the now completed blade skin remediation and warranty 
provisions, were the primary contributors to operating losses for the second 
half and all of 2009. 
 
The Company ended the 2009 fiscal year with an estimated cash balance of $62 
million, including $12 million in restricted cash.  In January 2010, Clipper 
completed the previously announced sale of shares to UTC, realizing $206 million 
in gross cash proceeds for 84.3 million ordinary equity shares.  The increased 
liquidity will support the Company's working capital requirements and growth 
initiatives. 
 
Management and Board Changes 
As announced separately on March 9, 2010, Doug Pertz has resigned as President 
and CEO and Board Director. The Board has appointed Mauricio F. Quintana to the 
President and CEO positions and as Board Director effective immediately. Mr. 
Quintana most recently was Director, Corporate Strategy and Development with UTC 
and he has terminated all employment ties with UTC to accept the Clipper 
positions. Michael E. Keane, currently CFO of the Company, has also been 
appointed as a Board Director. The Clipper Board now consists of 12 Directors, 
five of whom have been nominated by UTC. 
 
Blade Remediation Program 
In September 2008, Clipper identified a number of defects on the skins of blades 
of its turbines caused by a deficient manufacturing process at the blade 
supplier. This defect in the manufacturing process was swiftly corrected in 
October 2008 for all subsequent blade production.  Concurrently, Clipper 
together with the blade supplier began a program to inspect and remediate the 
nearly 1,200 blades that had previously been placed in service or held in 
inventory. This field blade remediation program was completed in January 2010. 
 
Clipper Outlook 2010 
In 2009, wind turbine installations in the U.S. exceeded 9,900 MW, surpassing 
previous records. While positive, the Company believes that most of the 2009 
installations were completions of projects that commenced or were committed to 
in 2008, and that very few new projects or turbine orders were added in 2009 for 
future years.  The American Recovery and Reinvestment Act ("ARRA") provided 
incentives and alternatives to monetize tax credits, contributing to a 
resumption of deferred projects in the second half of 2009, and is expected to 
provide some carryforward strength into 2010-2011.  Customers generally were 
reluctant to commit to new projects or place new turbine orders in the uncertain 
energy and capital markets that prevailed throughout 2009. 
 
As stated in the Interim Results, the Company expects to deliver its currently 
contracted 2010 order book of approximately 180 turbines (450 MW) with higher 
sales pricing and lower component costs relative to 2009. Lower sales prices in 
2009 were largely the result of legacy introductory turbine pricing. Average 
2010 Liberty turbine sales prices currently represent more than a 10 percent 
increase compared to 2009. Turbine costs at year end 2009 were slightly lower 
than costs at year end 2008. New orders in 2010 are expected to be, on average, 
at marginally lower pricing than the currently contracted 2010 order book. 
 
Of the 180 projected turbine deliveries for 2010, approximately two-thirds are 
projected to be delivered and recognized as sales in the second half of the 
year; accordingly, gross margin is expected to be heavily weighted toward the 
second half.  The Company projects that it will record operating losses in the 
first half of 2010 and positive operating income in the second half leading to 
approximately break even results for the full year. 
 
The Company recently announced an agreement to sell the 70 MW Criterion Project, 
coupled with a 28 Liberty turbine order for 2010 delivery. Clipper is also in 
negotiations with a number of parties interested in purchasing turbines and wind 
project sites from the 1,000 MW of advanced stage development projects Clipper 
holds within its 9,000 MW wind resource portfolio. 
 
Jim Dehlsen, Chairman of Clipper, said "Clipper responded aggressively to the 
challenges presented by the severe economic conditions of 2009, which impacted 
our customers and the entire wind industry.  During 2009, we steadily increased 
turbine availability to currently over 95%, and now have more than 450 turbines 
in the field with a combined operating record exceeding 3 million hours.  With 
improving financial markets and larger than forecast wind turbine installations 
in 2009, 2010 appears promising for further wind industry recovery.  The 
improving market, combined with the added liquidity and technical and 
operational resources provided by the UTC investment, position Clipper well on 
its path to growth and profitability." 
 
About Clipper 
Clipper Windpower Plc, www.clipperwind.com, is a company engaged in wind energy 
technology, turbine manufacturing, and wind project development.  The Company 
designs advanced wind turbines, manufactures its 2.5 MW Liberty wind turbine, 
and actively develops wind power generating projects in the Americas and Europe. 
Clipper's headquarters are in the United Kingdom and in California, USA.  The 
Company's 330,000 square foot manufacturing and assembly facility for land-based 
wind turbines is located in Cedar Rapids, Iowa; its development center for 
offshore wind turbine development is located in Blyth, UK.  Clipper is a public 
company listed on AIM of the London Stock Exchange. Clipper's ticker symbol is 
CWP. 
 
The ordinary shares of Clipper Windpower Plc are traded on AIM of the London 
Stock Exchange and are not registered under the U.S. Securities Act of 1933, as 
amended. Such shares may not be offered or sold to residents of the United 
States or to persons acting on their behalf, or to other persons who are "United 
States Persons" within the meaning of Regulation S as promulgated under the 
Securities Act of 1933, unless such shares have been registered under the 
Securities Act or there is an available exemption from registration. 
 
 
This press release contains statements about the Company that are or may be 
forward lookingstatements. All statements other than statements of historical 
facts included in this press release may be forward looking statements. Without 
limitation, any statements preceded or followed by or that include the words 
"targets," "plans," "believes," "expects," "aims," "intends," "will," "may," 
"anticipates," "estimates," "projects," or words or terms of similar substance 
or the negative thereof, are forward looking statements. Forward looking 
statements include statements relating to the following: future capital 
expenditures, expenses, revenues, earnings, synergies, economic performance, 
indebtedness, financial condition, losses and future prospects, business and 
management strategies and the expansion and growth of the Company's operations 
and potential synergies between the Company and UTC . 
 
Such forward looking statements involve risks and uncertainties that could 
significantly affect expected results and are based on certain key assumptions. 
Many factors could cause actual results to differ materially from those 
projected or implied in any forward looking statements. Due to such 
uncertainties and risks, readers are cautioned not to place undue reliance on 
such forward looking statements, which speak only as of the date hereof. The 
Company disclaims any obligation to update any forward looking or other 
statements contained herein, except as required by applicable law. 
 
All subsequent written and oral forward looking statements attributable to the 
Company or persons acting on the Company's behalf are expressly qualified in 
their entirety by the cautionary statements above. The forward looking 
statements included herein are made only as of the date of this press release. 
The Company does not intend, and does not undertake any obligation, to update 
these forward looking statements. 
 
### 
 
Contacts 
 
Investors: 
Clipper Windpower Plc 
Jenny Matthews 
Investor Relations 
Tel: [phone] 
 
J.P. Morgan Cazenove (Nominated Adviser and Corporate Broker to Clipper) 
Patrick Magee / Alex Yule-Smith 
Tel: [phone] 
 
Financial Press: 
M:Communications 
Patrick d'Ancona / Charlotte Kirkham 
Tel: [phone] / 2331 
 
Business and Trade: 
Mary Gates 
 Director, Global Communications 
 +1 661 
301 0400 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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