Maxwell Reports Second Quarter 2017 Results
SAN DIEGO, Aug. 7, 2017 /PRNewswire/ -- Maxwell Technologies, Inc. (NASDAQ: MXWL) today reported financial results for the three months ended June 30, 2017. Total revenues for the second quarter of 2017 were $37.1 million, compared with $26.7 million for the first quarter of 2017 and $34.1 million for the prior year quarter. Net loss for the second quarter of 2017 was $10.1 million, compared with a net loss of $10.4 million for the first quarter of 2017 and net income of $2.2 million for the prior year quarter. The Company reported $(1.8) million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the second quarter of 2017, compared with $(3.9) million for the first quarter of 2017 and $(0.7) million for the prior year quarter. Non-GAAP net loss for the second quarter of 2017 was $5.5 million, compared with a non-GAAP net loss of $7.4 million for the first quarter of 2017 and $4.0 million for the prior year quarter. Non-GAAP financial measures are described and defined later in this release.
"We delivered solid sequential revenue growth, building on the momentum we have created over the last 12 months. Our strategy is gaining traction and our business transformation is making progress," said Dr. Franz Fink, Maxwell's President and Chief Executive Officer. "We closed the quarter slightly above the top end of our revenue guidance range, coming in at $37.1 million, a 39% sequential increase over the first quarter, and we narrowed the adjusted EBITDA gap towards breakeven. Furthermore, the integration of Nesscap is progressing nicely, with a high level of collaboration as our teams merge together as one and collectively realize our targeted synergies."
Financial Results and Operating Metrics (1)
(Unaudited; in thousands, except for per share amounts)
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Total revenue $37,103 $26,686 $34,135 $63,789 $69,338
Ultracapacitor revenue $25,079 $14,234 $21,224 $39,313 $44,744
High-Voltage revenue $12,024 $12,452 $11,841 $24,476 $20,018
Microelectronics revenue $ - $ - $1,070 $ - $4,576
Gross margin 21.1% 23.2% 29.2% 22.0% 28.3%
Non-GAAP gross margin 22.7% 23.9% 30.0% 23.2% 29.2%
Loss from operations $(8,673) $(9,032) $(3,812) $(17,705) $(10,052)
Non-GAAP loss from operations $(4,037) $(6,042) $(3,120) $(10,079) $(6,841)
Net income (loss) $(10,118) $(10,399) $2,167 $(20,517) $(4,681)
Net income (loss) per share
Basic and diluted $(0.28) $(0.32) $0.07 $(0.61) $(0.15)
Adjusted EBITDA $(1,778) $(3,894) $(741) $(5,672) $(2,000)
Non-GAAP net loss $(5,482) $(7,409) $(4,038) $(12,891) $(8,367)
Non-GAAP net loss per share
Basic and diluted $(0.15) $(0.23) $(0.13) $(0.38) $(0.26)
Net cash used in operating
activities $(2,677) $(3,825) $(5,394) $(6,502) $(6,988)
Cash purchases of property and
equipment $1,115 $945 $1,391 $2,060 $3,629
Cash, cash equivalents and
restricted cash $19,181 $20,894 $35,775 $19,181 $35,775
(1) For a reconciliation of non-GAAP financial measures, please refer to the section entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" included at the end of this release.
Discussion of Financial Results for the Quarter
Please note that Nesscap is included in all results and outlook beginning May 1, 2017.
Revenue and Gross Margin
-- Total revenue for the second quarter of 2017 was $37.1 million, compared
with $26.7 million for the first quarter of 2017, driven by strong
ultracapacitor revenue in the wind market. Ultracapacitor revenue for
the second quarter of 2017 was $25.1 million, compared with $14.2
million for the first quarter of 2017. High-voltage revenue was $12.0
million for the second quarter of 2017, compared with $12.5 million for
the first quarter of 2017.
-- Gross margin for the second quarter of 2017 was 21.1% compared with
23.2% in the first quarter of 2017, driven by strong ultracapacitor
sales, which generally have lower gross margins than the corporate
average. Q2 gross margin was also impacted by approximately $351,000 of
acquisition related intangible amortization and inventory step-up
expense.
-- Non-GAAP gross margin for the second quarter of 2017 was 22.7% compared
with 23.9% in the first quarter of 2017 and excludes the acquisition
related expense mentioned in the prior bullet and stock-based
compensation expense.
Operating Expense, Net Loss & Adjusted EBITDA
-- Operating expense for the second quarter of 2017 was $16.5 million,
compared with $15.2 million for the first quarter of 2017. The
quarter-over-quarter increase was driven primarily by the inclusion of
the business of Nesscap, beginning in May, and related acquisition
expenses.
-- Non-GAAP operating expense for the second quarter of 2017 was $12.5
million compared with $12.4 million for the first quarter of 2017 and
excludes stock-based compensation, amortization of intangibles,
acquisition related expenses and other non-recurring legal costs.
-- Net loss for the second quarter of 2017 was $10.1 million, or $(0.28)
per share, compared with a net loss of $10.4 million, or $(0.32) per
share, for the first quarter of 2017.
-- Non-GAAP net loss for the second quarter of 2017 was $5.5 million
compared with a non-GAAP net loss of $7.4 million for the first quarter
of 2017.
-- Adjusted EBITDA for the second quarter of 2017 was $(1.8) million,
compared with $(3.9) million for the first quarter of 2017.
Capital Expenditures
-- Capital expenditures during the second quarter of 2017 were $1.1
million, compared with $0.9 million for the first quarter of 2017.
Capital expenditures in the second quarter were primarily related to
research and development activities and the Swiss factory expansion.
Strategic Business & Operational Highlights
-- In February 2017, we announced that we entered into an agreement to
acquire substantially all of the assets and business of Nesscap Energy,
Inc., a developer and manufacturer of ultracapacitor products for use in
transportation, renewable energy, industrial and consumer markets. On
April 28, 2017, we completed this acquisition through the issuance of
approximately 4.1 million shares of Maxwell common stock and the
assumption of certain liabilities. The acquisition of Nesscap adds
complementary businesses to our operations and expands our portfolio of
products and we believe the acquisition will add value for our
customers.
-- In April 2017, we signed a strategic equity investment agreement with
China's SDIC Fund Management Co., Ltd. ("SDIC Fund"), subject to
approval by the Committee on Foreign Investment in the United States
("CFIUS"). On August 4, just prior to the August 7 expiration of the
final phase of the CFIUS review process, we withdrew the filing to allow
more time for review and discussion with CFIUS. To that end, we are
continuing to work with CFIUS, SDIC Fund, and our advisors to address
the remaining open information requests before a refiling. In the
meantime, we are pleased about the momentum we are seeing across our
portfolio and the progress we have made executing on our strategy to
diversify and grow our business. The improving strength of our core
business, coupled with the advancements in our differentiated dry
battery electrode technology platform, positions us well to secure the
strategic investment or other financing which may be required to further
advance our business and to unlock the true value of our technology
platform for our partners, customers and shareholders.
Business Outlook
-- Total revenue for the third quarter of 2017 is expected to be in the
range of $35 million to $38 million.
-- Gross margin for the third quarter of 2017 is expected to be 20.5%, plus
or minus 150 basis points.
-- Non-GAAP gross margin for the third quarter of 2017 is expected to be
22.5%, plus or minus 150 basis points.
-- GAAP operating expense for the third quarter of 2017 is expected to be
in the range of $15.7 million to $16.1 million.
-- Non-GAAP operating expense for the third quarter of 2017 is expected to
be in the range of $12.7 million to $13.1 million.
The Company has reconciled expected GAAP and non-GAAP gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share at the midpoint of expectations. However, the Company is not able to estimate additional potentially excluded and reconciling amounts due to the substantial uncertainties involved. The effect of these excluded items may be significant. The reconciliation of GAAP and non-GAAP third quarter outlook is as follows (in millions, except for percentages and per share data):
Projected at Midpoint Projected at Midpoint
of Guidance of Guidance
----------- -----------
Three Months Ended Three Months Ended
September 30, September 30,
2017 2017
---- ----
Gross Margin Reconciliation: Total Operating Expenses Reconciliation:
---------------------------- ----------------------------------------
GAAP gross margin 20.5% GAAP total operating expenses $15.9
Stock-based compensation expense 0.7% Stock-based compensation expense (2.0)
Acquisition related expense (1) 1.3% Acquisition related expense (1) (0.7)
Non-GAAP gross margin 22.5% Legal costs for SEC and FCPA matters (0.3)
==== ----
Non-GAAP total operating expenses $12.9
=====
Net Loss Reconciliation:
------------------------
GAAP net loss $(9.0) Adjusted EBITDA Reconciliation:
-------------------------------
Stock-based compensation expense 2.3 GAAP net loss $(9.0)
Acquisition related expense (1) 1.2 Interest, taxes, depreciation, amortization 3.3
---
Legal costs for SEC and FCPA matters 0.3 EBITDA (5.7)
---
Non-GAAP net loss $(5.2) Stock-based compensation expense 2.3
=====
Acquisition related expense (1) 0.9
Net Loss per Share Reconciliation: Legal costs for SEC and FCPA matters 0.3
---------------------------------- ---
GAAP net loss per diluted share $(0.24) Adjusted EBITDA $(2.2)
=====
Expenses excluded from GAAP 0.10
Non-GAAP net loss per diluted share $(0.14)
======
(1) Acquisition related expense
is partially recorded in
operating expenses and
partially recorded in cost
of revenue.
Webcast Information
As previously announced, Maxwell management will host a live webcast at approximately 5:00 p.m. EDT / 2:00 p.m. PDT today to discuss these results. Other forward-looking and material information may also be discussed during this call.
The call may be accessed by dialing toll-free, (877) 201-0168 from the U.S. or (647) 788-4901 for international callers, and entering the conference ID, MAXWELL.
More information about this event including a live webcast and other supporting materials may be accessed by visiting http://investors.maxwell.com.
A replay of the conference call will be available for a limited time by visiting http://investors.maxwell.com.
About Maxwell
Maxwell is a global leader in the development and manufacture 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, renewable energy and information technology. Our CONDIS® 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. For more information, visit www.maxwell.com.
Notes Regarding Non-GAAP Financial Measures
The Company uses non-GAAP financial measures for internal evaluation and to report the results of its business. Information presented in this press release and in the attached financial tables includes financial information prepared in accordance with generally accepted accounting principles in the U.S., or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure, within the meaning of Item 10 of Regulation S-K promulgated by the Securities and Exchange Commission (SEC), is a numerical measure of a company's financial performance or cash flows that (a) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, which are included in the most directly comparable measure calculated and presented in accordance with GAAP in the condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive income (loss) or condensed consolidated statements of cash flows; or (b) includes amounts, or is subject to adjustments that have the effect of including amounts, which are excluded from the most directly comparable measure so calculated and presented.
The Company uses the following non-GAAP financial measures in this release, in its earnings conference call and in its on-going evaluation of the business: (a) non-GAAP gross profit; (b) non-GAAP operating expense; (c) non-GAAP income (loss) from operations; (d) EBITDA; (e) adjusted EBITDA; (f) non-GAAP net income (loss); (g) non-GAAP net income (loss) per diluted share and (h) non-GAAP gross margin.
The definitions of non-GAAP financial measures used in this news release are presented below:
-- Non-GAAP gross margin and Non-GAAP gross profit exclude the effect of
stock-based compensation, amortization of intangibles, accelerated
depreciation and acquisition related expense.
-- Non-GAAP operating expense excludes the effect of stock-based
compensation, restructuring and related costs, acquisition related
expense, shareholder proxy advisement fees, release of tax liability and
legal costs for SEC and FCPA matters.
-- Non-GAAP loss from operations excludes the effect of accelerated
depreciation, stock-based compensation, restructuring and related costs,
acquisition related expense, shareholder proxy advisement fees, release
of tax liability and legal costs for SEC and FCPA matters.
-- Adjusted EBITDA excludes the effect of foreign currency exchange loss,
other income, stock-based compensation, restructuring and related costs,
acquisition related expense, shareholder proxy advisement fees, release
of tax liability, gain on sale of product line and legal costs for SEC
and FCPA matters.
-- Non-GAAP net loss and non-GAAP net loss per share exclude the effect of
accelerated depreciation, stock-based compensation, restructuring and
related costs, acquisition related expense, shareholder proxy advisement
fees, release of tax liability, gain on sale of product line and legal
costs for SEC and FCPA matters.
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.
In addition, the Company's management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the Company's results of operations, as non-cash items, non-recurring items and items unrelated to ongoing operating results 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. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. These measures are intended to supplement GAAP financial information, and may be computed differently from non-GAAP financial measures used by other companies. However, investors should be aware that non-GAAP measures have inherent limitations and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.
The Company's non-GAAP financial measures included in this news release exclude the following non-cash items, non-recurring items or items unrelated to its ongoing operating results, as applicable:
-- Stock-based compensation expense consisting of non-cash charges for
stock options, restricted stock awards, restricted stock units, employee
stock purchase plan awards and bonuses expected to be settled with the
Company's fully vested common stock.
-- Amortization of intangibles consisting of non-cash amortization of
purchased intangibles acquired in connection with the Company's
acquisition of the operating subsidiaries of Nesscap Energy, Inc.
-- Restructuring and related costs including restructuring and exit costs
incurred in connection with the Company's restructuring plans,
disposition transaction costs consisting of legal fees and other
expenses incurred in connection with the sale of the microelectronics
product line and executive transition costs representing recruiting and
other expenses incurred in relation to the resignation and hiring of
certain executive officers.
-- Accelerated depreciation charges representing the adjustment of the
remaining useful life for certain manufacturing equipment in connection
with the Company's restructuring plan.
-- Acquisition related expense consisting of costs incurred in connection
with the Company's acquisition of the operating subsidiaries of Nesscap
Energy, Inc. which include both transaction related expenses and the
fair value adjustment for acquired inventory recorded in cost of
revenue.
-- Shareholder proxy advisement fees represent external advisor expenses
incurred in connection with preparing for the Company's 2016 and 2017
shareholder proxy and annual meeting.
-- Legal costs for the FCPA and SEC matters represent external legal
expenses related to the U.S. Securities and Exchange Commission's
investigation of the facts and circumstances surrounding the restatement
of the Company's financial statements for the fiscal years 2011 and
2012, as well as for ongoing legal matters related to previous Foreign
Corrupt Practices Act (FCPA) violations.
Reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures can be found in the section entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" included toward the end of this release.
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 and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and contingencies include, but are not limited to, the following:
-- Dependence upon the sale of products to a small number of customers and
vertical markets, some of which are heavily dependent on government
funding or government subsidy programs which could be reduced, modified
or discontinued in the future;
-- Uncertainties related to the global geopolitical landscape and the
recent elections in the United States;
-- Risks related to acquisitions and potential for unsuccessful integration
of acquired businesses;
-- Risk that our restructuring efforts may not be successful and that we
may not be able to realize the anticipated cost savings and other
benefits;
-- Our ability to obtain sufficient capital to meet our operating or other
needs;
-- Regulatory and other approvals related to the completion of financing
transactions;
-- Downward pressures on product pricing from increased competition and
shifts in sales mix with respect to low margin and high margin business;
-- Our ability to manage and minimize the impact of unfavorable legal
proceedings;
-- Risk that activist stockholders attempt to effect changes to our company
which could adversely affect our corporate governance;
-- Risks related to our international operations including, but not limited
to, our ability to adequately comply with the changing rules and
regulations in countries where our business is conducted, our ability to
oversee and control our foreign subsidiaries and their operations, our
ability to effectively manage foreign currency exchange rate
fluctuations arising from our international operations, and our ability
to continue to comply with the U.S. Foreign Corrupt Practices Act as
well as the anti-bribery laws of foreign jurisdictions;
-- Dependence upon the sale of products into Asia and Europe, where
macroeconomic factors outside our control may adversely affect our
sales;
-- Our ability to remain competitive and stimulate customer demand through
successful introduction of new products, and to educate our prospective
customers on the products we offer;
-- Successful acquisition, development and retention of key personnel;
-- Our ability to effectively manage our reliance upon certain suppliers of
key component parts, specialty equipment and logistical services;
-- Our ability to manage product quality problems;
-- Our ability to protect our intellectual property rights and to defend
claims against us;
-- Our ability to effectively identify, enter into, manage and benefit from
strategic alliances;
-- Occurrence of a catastrophic event at any of our facilities;
-- Occurrence of a technology systems failure, network disruption, or
breach in data security; and
-- Our ability to match production volume to actual customer demand.
For further information regarding risks and uncertainties associated with Maxwell's business, please refer to the "Management's 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 quarterly reports on Form 10-Q. Copies of these documents may be obtained by contacting Maxwell's investor relations department at (858) 503-3368, or at our investor relations website: investors.maxwell.com. All information in this release is as of August 7, 2017. The Company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the Company's expectations.
Investor Contact: Soohwan Kim, CFA, The Blueshirt Group, +1 (858) 503-3368, ir@maxwell.com
Media Contact: Sylvie Tse, Metis Communications, +1 (617) 236-0500, maxwell@metiscomm.com
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Revenue $37,103 $26,686 $34,135 $63,789 $69,338
Cost of revenue 29,276 20,495 24,154 49,771 49,704
------ ------ ------ ------ ------
Gross profit 7,827 6,191 9,981 14,018 19,634
Operating expenses:
Selling, general and administrative 12,070 9,540 8,223 21,610 18,321
Research and development 4,430 4,686 5,461 9,116 11,068
Restructuring and exit costs - 997 109 997 297
--- --- ---
Total operating expenses 16,500 15,223 13,793 31,723 29,686
------ ------ ------ ------ ------
Loss from operations (8,673) (9,032) (3,812) (17,705) (10,052)
Gain on sale of product line - - (6,657) - (6,657)
Interest expense, net 97 63 61 160 131
Other income (52) (1) (47) (53) (131)
Foreign currency exchange loss, net 18 97 64 115 203
--- --- --- ---
Income (loss) before income taxes (8,736) (9,191) 2,767 (17,927) (3,598)
Income tax provision 1,382 1,208 600 2,590 1,083
Net income (loss) $(10,118) $(10,399) $2,167 $(20,517) $(4,681)
======== ======== ====== ======== =======
Net income (loss) per common share:
Basic and diluted $(0.28) $(0.32) $0.07 $(0.61) $(0.15)
Weighted average common shares
outstanding:
Basic 35,526 32,197 31,842 33,871 31,746
Diluted 35,526 32,197 32,027 33,871 31,746
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(Unaudited)
June 30, December 31,
2016
2017
----
ASSETS
Current assets:
Cash and cash equivalents $19,181 $25,359
Trade and other accounts receivable,
net 30,331 20,441
Inventories, net 30,174 32,248
Prepaid expenses and other current
assets 4,101 4,407
-----
Total current assets 83,787 82,455
Property and equipment, net 27,217 26,120
Intangible assets, net 11,469 -
Goodwill 35,592 22,799
Pension asset 9,670 8,887
Other non-current assets 868 613
Total assets $168,603 $140,874
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $26,467 $19,181
Accrued employee compensation 7,564 6,152
Deferred revenue and customer
deposits 5,802 3,967
Short-term borrowings and current
portion of long-term debt 20 40
--- ---
Total current liabilities 39,853 29,340
Deferred tax liability, long-term 8,805 8,580
Long-term debt, excluding current
portion 57 43
Employee severance benefit
obligation 3,354 -
Other long-term liabilities 2,846 2,089
Total liabilities 54,915 40,052
------ ------
Stockholders' equity:
Common stock, $0.10 par value per
share, 80,000 shares authorized at
June 30, 2017 and December 31,
2016; 36,934 and 32,135 shares
issued and outstanding at June 30,
2017 and December 31, 2016,
respectively 3,691 3,210
Additional paid-in capital 325,032 296,316
Accumulated deficit (224,621) (204,104)
Accumulated other comprehensive
income 9,586 5,400
----- -----
Total stockholders' equity 113,688 100,822
Total liabilities and stockholders'
equity $168,603 $140,874
======== ========
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
OPERATING ACTIVITIES:
Net income (loss) $(10,118) $(10,399) $2,167 $(20,517) $(4,681)
Adjustments to reconcile net income
(loss) to net cash used in
operating activities:
Depreciation 2,259 2,148 2,379 4,407 4,966
Amortization of intangible assets 202 - - 202 -
Loss on lease due to restructuring - - 87 - 87
Pension and employee severance
benefit obligation cost 191 86 161 277 318
Stock-based compensation expense 2,254 1,538 1,459 3,792 2,662
Gain on sale of property and
equipment - - (47) - (131)
Gain on sale of product line - - (6,657) - (6,657)
Unrealized (gain) loss on foreign
currency exchange rates (48) 26 (18) (22) 39
Release of tax liability - - (1,518) - (1,518)
Provision for losses on accounts
receivable 2 - 16 2 67
Provision for losses on inventory 811 17 149 828 139
Provision for warranties 20 189 168 209 307
Changes in operating assets and
liabilities:
Trade and other accounts receivable (3,319) (3,432) 1,755 (6,751) 14,831
Inventories 4,135 1,922 (3,810) 6,057 (5,186)
Prepaid expenses and other assets (146) (453) (760) (599) (628)
Pension asset (150) (155) (158) (305) (297)
Accounts payable and accrued
liabilities 3,143 1,571 (156) 4,714 (10,719)
Deferred revenue and customer
deposits (1,275) 2,626 (55) 1,351 249
Accrued employee compensation (545) 785 (303) 240 (495)
Deferred tax liability 19 (209) (91) (190) (10)
Other long-term liabilities (112) (85) (162) (197) (331)
Net cash used in operating
activities (2,677) (3,825) (5,394) (6,502) (6,988)
------ ------ ------ ------ ------
INVESTING ACTIVITIES:
Purchases of property and equipment (1,115) (945) (1,391) (2,060) (3,629)
Proceeds from sale of property and
equipment - - 49 - 133
Cash used in acquisition, net of
cash acquired (97) - - (97) -
Proceeds from sale of product line 1,500 - 20,486 1,500 20,486
Net cash provided by (used in)
investing activities 288 (945) 19,144 (657) 16,990
--- ---- ------ ---- ------
FINANCING ACTIVITIES:
Principal payments on long-term
debt and short-term borrowings (7) (10) (10) (17) (21)
Proceeds from issuance of common
stock under equity compensation
plans 194 - 267 194 613
Net cash provided by (used in)
financing activities 187 (10) 257 177 592
Effect of exchange rate changes on
cash, cash equivalents and
restricted cash 489 315 (221) 804 399
--- --- ---- --- ---
Increase (decrease) in cash, cash
equivalents and restricted cash (1,713) (4,465) 13,786 (6,178) 10,993
Cash, cash equivalents and
restricted cash, beginning of
period 20,894 25,359 21,989 25,359 24,782
Cash, cash equivalents and
restricted cash, end of period $19,181 $20,894 $35,775 $19,181 $35,775
======= ======= ======= ======= =======
MAXWELL TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2017 March 31, 2017 June 30, 2016 June 30, 2017 June 30, 2016
------------- -------------- ------------- ------------- -------------
Gross Margin Reconciliation:
----------------------------
GAAP gross margin 21.1% 23.2% 29.2% 22.0% 28.3%
Stock-based compensation expense 0.7% 0.7% 0.8% 0.7% 0.7%
Amortization of intangible assets 0.1% - % - % 0.1% - %
Accelerated depreciation - % - % - % - % 0.2%
Acquisition related expense 0.8% - % - % 0.4% - %
--- --- --- --- --- --- --- ---
Non-GAAP gross margin 22.7% 23.9% 30.0% 23.2% 29.2%
==== ==== ==== ==== ====
Gross Profit Reconciliation:
----------------------------
GAAP gross profit $7,827 $6,191 $9,981 $14,018 $19,634
Stock-based compensation expense 257 193 262 450 497
Amortization of intangible assets 60 - - 60 -
Accelerated depreciation - - - - 125
Acquisition related expense 291 - - 291 -
--- --- --- --- ---
Non-GAAP gross profit $8,435 $6,384 $10,243 $14,819 $20,256
====== ====== ======= ======= =======
Total Operating Expenses
Reconciliation:
------------------------
GAAP total operating expenses $16,500 $15,223 $13,793 $31,723 $29,686
Stock-based compensation expense (1,997) (1,345) (1,197) (3,342) (2,165)
Amortization of intangible assets (142) - - (142) -
Restructuring and related costs - (997) (279) (997) (853)
Release of tax liability(1) - - 1,278 - 1,278
Acquisition related expense (1,512) (275) - (1,787) -
Shareholder proxy advisement fees (315) (59) - (374) (314)
Legal costs for SEC and FCPA matters (62) (121) (232) (183) (535)
--- ---- ---- ---- ----
Non-GAAP operating expenses $12,472 $12,426 $13,363 $24,898 $27,097
======= ======= ======= ======= =======
Loss from Operations Reconciliation:
------------------------------------
GAAP loss from operations $(8,673) $(9,032) $(3,812) $(17,705) $(10,052)
Stock-based compensation expense 2,254 1,538 1,459 3,792 2,662
Amortization of intangible assets 202 - - 202 -
Restructuring and related costs - 997 279 997 853
Accelerated depreciation - - - - 125
Release of tax liability(1) - - (1,278) - (1,278)
Acquisition related expense 1,803 275 - 2,078 -
Shareholder proxy advisement fees 315 59 - 374 314
Legal costs for SEC and FCPA matters 62 121 232 183 535
Non-GAAP loss from operations $(4,037) $(6,042) $(3,120) $(10,079) $(6,841)
======= ======= ======= ======== =======
Adjusted EBITDA Reconciliation:
-------------------------------
GAAP net income (loss) $(10,118) $(10,399) $2,167 $(20,517) $(4,681)
Interest expense, net 97 63 61 160 131
Income tax provision 1,382 1,208 600 2,590 1,083
Depreciation 2,259 2,148 2,379 4,407 4,966
Amortization of intangible assets 202 - - 202 -
--- --- --- --- ---
EBITDA (6,178) (6,980) 5,207 (13,158) 1,499
Foreign currency exchange loss, net 18 97 64 115 203
Other income (52) (1) (47) (53) (131)
Stock-based compensation expense 2,254 1,538 1,459 3,792 2,662
Gain on sale of product line - - (6,657) - (6,657)
Restructuring and related costs - 997 279 997 853
Acquisition related expense 1,803 275 - 2,078 -
Release of tax liability(1) - - (1,278) - (1,278)
Shareholder proxy advisement fees 315 59 - 374 314
Legal costs for SEC and FCPA matters 62 121 232 183 535
--- --- --- --- ---
Adjusted EBITDA $(1,778) $(3,894) $(741) $(5,672) $(2,000)
======= ======= ===== ======= =======
Three Months Ended Six Months Ended
June 30, 2017 March 31, 2017 June 30, 2016 June 30, 2017 June 30, 2016
------------- -------------- ------------- ------------- -------------
Net Income (Loss)
Reconciliation:
-----------------
GAAP net income (loss) $(10,118) $(10,399) $2,167 $(20,517) $(4,681)
Stock-based compensation
expense 2,254 1,538 1,459 3,792 2,662
Amortization of intangible
assets 202 - - 202 -
Gain on sale of product line - - (6,657) - (6,657)
Restructuring and related
costs - 997 279 997 853
Accelerated depreciation - - - - 125
Release of tax liability(1) - - (1,518) - (1,518)
Acquisition related expense 1,803 275 - 2,078 -
Shareholder proxy advisement
fees 315 59 - 374 314
Legal costs for SEC and FCPA
matters 62 121 232 183 535
--- --- --- --- ---
Non-GAAP net loss $(5,482) $(7,409) $(4,038) $(12,891) $(8,367)
======= ======= ======= ======== =======
Net Income (Loss) per
Diluted Share
Reconciliation:
---------------------
GAAP net income (loss) per
diluted share $(0.28) $(0.32) $0.07 $(0.61) $(0.15)
Stock-based compensation
expense 0.06 0.05 0.04 0.11 0.09
Amortization of intangible
assets 0.01 - - 0.01 -
Gain on sale of product line - - (0.21) - (0.21)
Restructuring and related
costs - 0.03 0.01 0.03 0.03
Accelerated depreciation - - - - *
Release of tax liability(1) - - (0.05) - (0.05)
Acquisition related expense 0.05 0.01 - 0.06 -
Shareholder proxy advisement
fees 0.01 * - 0.01 0.01
Legal costs for SEC and FCPA
matters - * 0.01 0.01 0.02
--- --- ---- ---- ----
Non-GAAP net loss per
diluted share $(0.15) $(0.23) $(0.13) $(0.38) $(0.26)
====== ====== ====== ====== ======
Weighted Average Diluted
Common Shares Outstanding
used for:
--------------------------
GAAP net income (loss) 35,526 32,197 32,027 33,871 31,746
Non-GAAP net loss 35,526 32,197 31,842 33,871 31,746
* Net income (loss) effect of
this reconciling item was
less than $0.01 per share.
Release of tax liability is
partially related to
operating expense and
partially related to income
(1) tax expense.
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SOURCE Maxwell Technologies, Inc.
