Maxwell Reports First Quarter 2018 Results and Provides Business Outlook for Second Quarter 2018
Maxwell Reports First Quarter 2018 Results and Provides Business Outlook for Second Quarter 2018
~ Announces Significant Partnership with Geely/Volvo ~
Note: A webcast of Maxwell's conference call will be available at 5:00 p.m. EDT today at http://investors.maxwell.com.
SAN DIEGO, May 8, 2018 /PRNewswire/ -- Maxwell Technologies, Inc. (NASDAQ: MXWL) today reported financial results for the three months ended March 31, 2018. Total revenues for the first quarter of 2018 were $28.4 million, compared with $30.8 million for the fourth quarter of 2017 and $26.7 million for the prior year quarter. Net loss for the first quarter of 2018 was $9.2 million, compared with a net loss of $8.8 million for the fourth quarter of 2017 and a net loss of $10.4 million for the prior year quarter. Non-GAAP net loss for the first quarter of 2018 was $5.8 million, compared with a non-GAAP net loss of $5.3 million for the fourth quarter of 2017 and $7.4 million for the prior year quarter. The Company reported $(6.9) million of earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2018, compared with $(4.7) million for the fourth quarter of 2017 and $(7.0) million for the prior year quarter. The Company reported $(4.2) million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the first quarter of 2018, compared with $(1.8) million for the fourth quarter of 2017 and $(3.9) million for the prior year quarter.
Strategic Business Highlights
-- Today Maxwell announced a technology partnership with Zhejiang Geely
Holding Group ("Geely"), the parent company of leading brands such as
Volvo and Geely Auto. The collaboration kicks off with the inclusion of
Maxwell's ultracapacitor-based peak power subsystem in five mild-hybrid
and plug-in hybrid vehicles which will initially be available in North
America and Europe. The production ramp for these vehicles is slated to
begin in late 2019 and marks the most significant milestone in Maxwell's
automotive market history.
-- Today Maxwell renewed a $25 million revolving credit facility with its
banking partner, East West Bank, for a 3-year term, providing Maxwell
with further financial flexibility to operate its business and execute
on strategic investments.
"While our energy storage product revenue exceeded expectations for the quarter, our first quarter revenue results reflect a shortfall in orders related to our high voltage capacitor products. We expect a recovery in the high voltage product line in the second half of 2018 and overall we are anticipating revenue growth in Q2," said Dr. Franz Fink, Maxwell's President and Chief Executive Officer. "We continue to make progress each quarter on our strategic objectives and to build momentum in the business. Today's announcement of the Geely design win and partnership represents a significant accomplishment for the team at Maxwell and validates that ultracapacitors are ideally suited to solve many of the challenges faced by the automotive industry as it readies for the coming global megatrend of the electrification of combustion engine vehicles."
Financial Results and Operating Metrics (1)
(Unaudited; in thousands, except for per share amounts)
Three Months Ended
March 31, December 31, March 31,
2018 2017 (2) 2017 (2)
---- ------- -------
Total revenue $28,416 $30,763 $26,686
Energy Storage revenue $23,002 $20,832 $14,234
High-Voltage revenue $5,414 $9,931 $12,452
Gross margin (2) 20.0% 23.8% 22.9%
Non-GAAP gross margin (2) 21.5% 25.4% 23.6%
Loss from operations (2) $(9,366) $(7,065) $(9,187)
Non-GAAP loss from operations (2) $(6,419) $(4,057) $(6,197)
Interest expense, net $993 $1,043 $63
Non-GAAP interest expense, net $554 $623 $63
Net loss $(9,205) $(8,752) $(10,399)
Net loss per share
Basic and diluted $(0.25) $(0.24) $(0.32)
Adjusted EBITDA $(4,205) $(1,790) $(3,894)
Non-GAAP net loss $(5,819) $(5,324) $(7,409)
Non-GAAP net loss per share
Basic and diluted $(0.16) $(0.14) $(0.23)
Net cash used in operating activities $(11,211) $(6,230) $(3,825)
Cash purchases of property and equipment $3,918 $2,502 $945
Cash, cash equivalents and restricted cash $40,103 $50,122 $20,894
(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.
(2) Historical amounts have been reclassified
for the three months ended December 31, 2017
and March 31, 2017 in accordance with our
adoption of ASU 2017-07 on January 1, 2018
which requires the non-service cost
components of income and expense related to
our defined benefit plans to be presented in
the statement of operations separately from
the service cost component and outside the
subtotal of loss from operations.
Discussion of Financial Results for the First Quarter
Revenue and Gross Margin
-- Total revenue for the first quarter of 2018 was $28.4 million, compared
with $30.8 million for the fourth quarter of 2017, driven by a decrease
in high voltage revenue partially offset by higher energy storage
revenue. Energy storage revenue for the first quarter of 2018 was $23.0
million, compared with $20.8 million for the fourth quarter of 2017,
related to higher revenue in the grid, non-China bus and rail markets,
offset by lower revenue in the seasonally soft wind market. High-voltage
capacitor revenue was $5.4 million for the first quarter of 2018,
compared with $9.9 million for the fourth quarter of 2017; the shortfall
is attributable to delays in the processing of Chinese tenders for
infrastructure projects as well as delays in infrastructure investment
by utilities caused by uncertainty from revisions to taxes and
incentives introduced by U.S. tax reform and from potential increased
tariffs on steel.
-- Gross margin for the first quarter of 2018 was 20.0% compared with 23.8%
in the fourth quarter of 2017, driven primarily by decreased
high-voltage capacitor product sales, which generally have higher gross
margins than the corporate average.
-- Non-GAAP gross margin for the first quarter of 2018 was 21.5% compared
with 25.4% in the fourth quarter of 2017 and excludes acquisition
related intangibles amortization and stock-based compensation expense.
Operating Expense, Interest Expense, Net Loss & Adjusted EBITDA
-- Operating expense for the first quarter of 2018 was $15.0 million,
compared with $14.4 million for the fourth quarter of 2017. The
quarter-over-quarter increase was driven primarily by higher payroll
related expense, including the annual FICA tax reset, annual merit
increases and higher vacation accrual, as well as lower expense
reimbursement from funded R&D programs.
-- Non-GAAP operating expense for the first quarter of 2018 was $12.5
million compared with $11.9 million for the fourth quarter of 2017 and
excludes stock-based compensation, amortization of intangibles and other
non-recurring legal costs, offset by a credit for restructuring charges
due to a change in estimate.
-- Net interest expense was approximately $1.0 million for both the first
quarter of 2018 and the fourth quarter of 2017, which includes coupon
interest and non-cash interest from amortization of debt issuance costs
and discounts on convertible notes issued in 2017.
-- Non-GAAP interest expense was approximately $0.6 million for both the
first quarter of 2018 and the fourth quarter of 2017, and excludes the
non-cash interest mentioned above.
-- Net loss for the first quarter of 2018 was $9.2 million, or $(0.25) per
share, compared with a net loss of $8.8 million, or $(0.24) per share,
for the fourth quarter of 2017.
-- Non-GAAP net loss for the first quarter of 2018 was $5.8 million
compared with a non-GAAP net loss of $5.3 million for the fourth quarter
of 2017.
-- Adjusted EBITDA for the first quarter of 2018 was $(4.2) million,
compared with $(1.8) million for the fourth quarter of 2017.
Capital Expenditures
-- Capital expenditures during the first quarter of 2018 were $3.9 million,
compared with $2.5 million for the fourth quarter of 2017. Capital
expenditures in the first quarter were primarily related to the
Switzerland manufacturing facility expansion and equipment upgrades, the
Korea manufacturing facility expansion, ultracapacitor and lithium-ion
capacitor production equipment and IT infrastructure upgrades.
Second Quarter 2018 Business Outlook
-- Total revenue is expected to be in the range of $28 million to $33
million.
-- Gross margin is expected to be 20.1%, plus or minus 150 basis points.
-- Non-GAAP gross margin is expected to be 21.5%, plus or minus 150 basis
points.
-- GAAP operating expense is expected to be in the range of $15.1 million
to $15.5 million.
-- Non-GAAP operating expense is expected to be in the range of $12.6
million to $13.0 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 guidance. 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 second quarter outlook is as follows (in millions, except for percentages and per share data):
Projected at Projected at
Midpoint of Guidance Midpoint of Guidance
-------------------- --------------------
Three Months Ended Three Months Ended
June 30, 2018 June 30, 2018
------------- -------------
Gross Margin
Reconciliation: Total Operating Expenses Reconciliation:
---------------- ----------------------------------------
GAAP gross margin 20.1% GAAP total operating expenses $15.3
Stock-based compensation
expense 1.1% Stock-based compensation expense (2.3)
Amortization of
intangible assets (1) 0.3% Amortization of intangible assets (1) (0.2)
Non-GAAP gross margin 21.5% Non-GAAP total operating expenses $12.8
==== =====
Net Loss Reconciliation: Adjusted EBITDA Reconciliation:
------------------------ -------------------------------
GAAP net loss $(10.4) GAAP net loss $(10.4)
Stock-based compensation
expense 2.7 Non-cash interest expense 0.4
Non-cash interest expense 0.4 Interest, taxes, depreciation,
amortization 3.5
---
Amortization of
intangible assets (1) 0.3 EBITDA (6.5)
Non-GAAP net loss $(7.0) Stock-based compensation expense 2.7
=====
Adjusted EBITDA $(3.8)
=====
Net Loss per Share
Reconciliation:
------------------
GAAP net loss per diluted
share $(0.27)
Expenses excluded from
GAAP 0.09
Non-GAAP net loss per
diluted share $(0.18)
======
___________
(1) Amortization of intangible
assets 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, (866) 393-4306 from the U.S. or (734) 385-2616 for international callers, and entering the conference ID 2368326.
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. We have developed and transformed our patented, proprietary and fundamental dry electrode manufacturing technology that we have historically used to make ultracapacitors to create a breakthrough technology that can be applied to the manufacturing of batteries. 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 intangible assets and
acquisition related expense.
-- Non-GAAP operating expense excludes the effect of stock-based
compensation, amortization of intangible assets, restructuring and
related costs, strategic equity transaction costs, acquisition related
expense, shareholder advisement and settlement costs and SEC and FCPA
legal and settlement costs.
-- Non-GAAP loss from operations excludes the effect of stock-based
compensation, amortization of intangible assets, restructuring and
related costs, strategic equity transaction costs, acquisition related
expense, shareholder advisement and settlement costs and SEC and FCPA
legal and settlement costs.
-- Adjusted EBITDA excludes the effect of foreign currency exchange loss,
other income, stock-based compensation, restructuring and related costs,
strategic equity transaction costs, acquisition related expense,
shareholder advisement and settlement costs and SEC and FCPA legal and
settlement costs.
-- Non-GAAP net loss and non-GAAP net loss per share exclude the effect of
stock-based compensation, amortization of intangible assets, non-cash
interest expense, restructuring and related costs, strategic equity
transaction costs, acquisition related expense, shareholder advisement
and settlement costs and SEC and FCPA legal and settlement costs.
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 and director's fees 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 assets, including the operating subsidiaries, of
Nesscap Energy, Inc.
-- Non-cash interest expense consisting of amortization of convertible debt
discounts and amortization of convertible debt transaction costs.
-- Restructuring and related costs including restructuring and exit costs
incurred in connection with the Company's restructuring plans.
-- Strategic equity transaction costs consisting of expenses incurred in
connection with the Company's strategic equity investment agreement with
China's SDIC Fund which was terminated in the third quarter of 2017.
-- Acquisition related expense consisting of costs incurred in connection
with the Company's acquisition of the assets, including the operating
subsidiaries, of Nesscap Energy, Inc. which include transaction and
integration expenses as well as the fair value adjustment for acquired
inventory recorded in cost of revenue.
-- Shareholder advisement and settlement costs which represent external
advisor expenses incurred in connection with preparing for the Company's
2016 and 2017 shareholder proxy and annual meeting and shareholder
settlement costs.
-- SEC and FCPA legal and settlement costs which represent external legal
expenses and settlement 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
Maxwell cautions you that statements included in this news release or made on the investor conference call referenced herein that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause Maxwell's results to differ materially from historical results or those expressed or implied by such forward-looking statements. In addition, this news release contains selected financial results for the first quarter of 2018, as well as projections for 2018 financial guidance and longer-term financial performance goals. The Company's projections for 2018 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which are subject to the risk of being inaccurate because of the preliminary nature of the forecasts, the risk of further adjustment, or unanticipated difficulty in developing or selling products and technologies. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to:
-- Our intentions, beliefs and expectations regarding our expenses, cost
savings, sales, operations and future financial performance;
-- Our operating results;
-- Our ability to develop, introduce and commercialize new products,
technologies applications or enhancements to existing products and
educate prospective customers;
-- Anticipated growth and trends in our business;
-- Our ability to obtain sufficient capital to meet our operating
requirements, including, but not limited to, our investment requirements
for new technology and products, or other needs;
-- Our ability to manage our long-term debt and our ability to service our
debt, including our convertible debt;
-- Risks related to changes in legislation, regulation and governmental
policy;
-- Risks related to tax laws and tax changes (including U.S. and foreign
taxes on foreign subsidiaries);
-- Risks related to our international operations;
-- Our expectations regarding our revenues, customers and distributors;
-- Our beliefs and expectations regarding our market penetration and
expansion efforts, especially considering the small number of vertical
markets and a small number of geographic regions;
-- Our expectations regarding the benefits and integration of
recently-acquired businesses and our ability to make future acquisitions
and successfully integrate any such future-acquired businesses;
-- Our ability to protect our intellectual property rights and to defend
claims against us;
-- Dependence upon third party manufacturing and other service providers,
many of which are located outside the U.S. and our ability to manage
reliance upon certain key suppliers;
-- Our anticipated trends and challenges in the markets in which we
operate; and
-- Our expectations and beliefs regarding and the impact of investigations,
claims and litigation.
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 any subsequent quarterly reports on Form 10-Q. Copies of these documents are available with the Securities and Exchange Commission at www.sec.gov or may be obtained by contacting Maxwell's investor relations department at (858) 503-3368, or at our investor relations website: investors.maxwell.com. The forward-looking statements contained herein are based on the current expectations and assumptions of Maxwell and not on historical facts. All information in this release is as of May 8, 2018. The Company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the Company's expectations.
Investor Contact: Kimberly Tom, CFA, +1 (858) 503-3368, ir@maxwell.com
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
2018 2017 (1) 2017 (1) 2017 (1) 2017 (1)
---- ------- ------- ------- -------
Revenue $28,416 $30,763 $35,816 $37,103 $26,686
Cost of revenue (1) 22,735 23,449 28,492 29,350 20,578
------ ------ ------
Gross profit (1) 5,681 7,314 7,324 7,753 6,108
Operating expenses:
Selling, general and administrative
(1) 9,572 9,743 14,565 12,120 9,592
Research and development (1) 5,532 4,362 4,909 4,449 4,706
Restructuring and exit costs (57) 34 1,251 - 997
Impairment of assets - 240 - - -
--- --- ---
Total operating expenses (1) 15,047 14,379 20,725 16,569 15,295
------ ------ ------ ------ ------
Loss from operations (1) (9,366) (7,065) (13,401) (8,816) (9,187)
Interest expense, net 993 1,043 152 97 63
Other components of defined benefit
plans, net (1) (221) (134) (141) (143) (155)
Other income - (18) (14) (52) (1)
Foreign currency exchange (gain)
loss, net 89 256 (65) 18 97
--- ---
Loss before income taxes (10,227) (8,212) (13,333) (8,736) (9,191)
Income tax provision (benefit) (1,022) 540 527 1,382 1,208
Net loss $(9,205) $(8,752) $(13,860) $(10,118) $(10,399)
======= ======= ======== ======== ========
Net loss per common share:
Basic and diluted $(0.25) $(0.24) $(0.37) $(0.28) $(0.32)
Weighted average common shares
outstanding:
Basic and diluted 37,522 37,115 37,008 35,526 32,197
(1) Historical amounts have been
reclassified for all quarters of
2017 in accordance with our
adoption of ASU 2017-07 on
January 1, 2018 which requires
the non-service cost components
of income and expense related to
our defined benefit plans to be
presented in the statement of
operations separately from the
service cost component and
outside the subtotal of loss
from operations.
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and per share data)
(Unaudited)
March 31, December 31,
2018 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $40,103 $50,122
Trade and other accounts receivable,
net 32,391 31,643
Inventories 37,485 32,228
Prepaid expenses and other current
assets 3,478 2,983
-----
Total current assets 113,457 116,976
Property and equipment, net 30,174 28,044
Intangible assets, net 11,469 11,715
Goodwill 36,636 36,061
Pension asset 12,095 11,712
Other non-current assets 845 871
Total assets $204,676 $205,379
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $32,966 $32,758
Accrued employee compensation 6,624 9,070
Deferred revenue and customer deposits 6,299 6,669
Short-term borrowings and current
portion of long-term debt 5,034 33
----- ---
Total current liabilities 50,923 48,530
Deferred tax liability, long-term 8,433 8,762
Long-term debt, excluding current
portion 35,556 35,124
Defined benefit plan liability 4,125 3,942
Other long-term liabilities 2,573 2,920
Total liabilities 101,610 99,278
------- ------
Stockholders' equity:
Common stock, $0.10 par value per
share, 80,000,000 shares authorized at
March 31, 2018 and December 31, 2017;
38,000,620 and 37,199,519 shares
issued and outstanding at March 31,
2018 and December 31, 2017,
respectively 3,797 3,717
Additional paid-in capital 341,897 337,541
Accumulated deficit (256,160) (247,233)
Accumulated other comprehensive income 13,532 12,076
------ ------
Total stockholders' equity 103,066 106,101
Total liabilities and stockholders'
equity $204,676 $205,379
======== ========
MAXWELL TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (Unaudited)
Three Months Ended
March 31, December 31, March 31,
2018 2017 2017
---- ---- ----
OPERATING ACTIVITIES:
Net loss $(9,205) $(8,752) $(10,399)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation 1,993 2,133 2,148
Amortization of intangible assets 316 307 -
Non-cash interest expense 439 420 -
Pension and defined benefit plan
cost 251 250 86
Stock-based compensation expense 2,624 2,490 1,538
Gain on sale of property and
equipment (4) - -
Impairment of property and equipment - 240 -
Provision for (recovery of) losses
on accounts receivable (10) 6 -
Losses on write downs of inventory 475 640 17
Provision for (release of)
warranties 65 (302) 189
Changes in operating assets and
liabilities:
Trade and other accounts receivable (252) (4,469) (3,406)
Inventories (5,994) (1,058) 1,922
Prepaid expenses and other assets (455) 332 (453)
Pension asset (156) (565) (155)
Accounts payable and accrued
liabilities 309 1,549 1,571
Deferred revenue and customer
deposits (65) 539 2,626
Accrued employee compensation (776) (581) 785
Deferred tax liability (374) 827 (209)
Other long-term liabilities (392) (236) (85)
----
Net cash used in operating
activities (11,211) (6,230) (3,825)
------- ------ ------
INVESTING ACTIVITIES:
Purchases of property and equipment (3,918) (2,502) (945)
Proceeds from sale of property and
equipment 8 - -
Net cash used in investing
activities (3,910) (2,502) (945)
------ ------ ----
FINANCING ACTIVITIES:
Principal payments on long-term
debt and short-term borrowings (8) (8) (10)
Proceeds from long-term debt and
short-term borrowings, net of
discount and issuance costs 5,000 5,658 -
Proceeds from issuance of common
stock under equity compensation
plans - 133 -
---
Net cash provided by (used in)
financing activities 4,992 5,783 (10)
Effect of exchange rate changes on
cash and cash equivalents 110 219 315
--- --- ---
Decrease in cash and cash
equivalents (10,019) (2,730) (4,465)
Cash and cash equivalents, beginning
of period 50,122 52,852 25,359
Cash and cash equivalents, end of
period $40,103 $50,122 $20,894
======= ======= =======
MAXWELL TECHNOLOGIES, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data) (Unaudited)
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
2018 2017 (1) 2017 (1) 2017 (1) 2017 (1)
---- ------- ------- ------- -------
Gross Margin Reconciliation:
----------------------------
GAAP gross margin (1) 20.0% 23.8% 20.4% 20.9% 22.9%
Stock-based compensation expense 1.2% 1.1% 0.8% 0.7% 0.7%
Amortization of intangible assets 0.3% 0.3% 0.3% 0.1% - %
Acquisition related expense - % 0.2% 0.8% 0.8% - %
--- --- --- --- ---
Non-GAAP gross margin (1) 21.5% 25.4% 22.3% 22.5% 23.6%
==== ==== ==== ==== ====
Gross Profit Reconciliation:
----------------------------
GAAP gross profit (1) $5,681 $7,314 $7,324 $7,753 $6,108
Stock-based compensation expense 346 349 271 257 193
Amortization of intangible assets 93 90 88 60 -
Acquisition related expense - 67 287 291 -
--- --- ---
Non-GAAP gross profit (1) $6,120 $7,820 $7,970 $8,361 $6,301
====== ====== ====== ====== ======
Total Operating Expenses
Reconciliation:
------------------------
GAAP total operating expenses (1) $15,047 $14,379 $20,725 $16,569 $15,295
Stock-based compensation expense (2,278) (2,141) (2,484) (1,997) (1,345)
Amortization of intangible assets (223) (217) (212) (142) -
Restructuring and related costs 57 (34) (1,251) - (997)
Strategic equity transaction
costs - - (503) - -
Acquisition related expense - (46) (46) (1,512) (275)
Shareholder advisement and
settlement costs - - (761) (315) (59)
SEC and FCPA legal and settlement
costs (64) (64) (3,001) (62) (121)
--- --- ----
Non-GAAP operating expenses (1) $12,539 $11,877 $12,467 $12,541 $12,498
======= ======= ======= ======= =======
Loss from Operations
Reconciliation:
--------------------
GAAP loss from operations (1) $(9,366) $(7,065) $(13,401) $(8,816) $(9,187)
Stock-based compensation expense 2,624 2,490 2,755 2,254 1,538
Amortization of intangible assets 316 307 300 202 -
Restructuring and related costs (57) 34 1,251 - 997
Strategic equity transaction
costs - - 503 - -
Acquisition related expense - 113 333 1,803 275
Shareholder advisement and
settlement costs - - 761 315 59
SEC and FCPA legal and settlement
costs 64 64 3,001 62 121
Non-GAAP loss from operations (1) $(6,419) $(4,057) $(4,497) $(4,180) $(6,197)
======= ======= ======= ======= =======
Adjusted EBITDA Reconciliation:
-------------------------------
GAAP net loss $(9,205) $(8,752) (13,860) (10,118) $(10,399)
Interest expense, net 993 1,043 152 97 63
Income tax provision (1,022) 540 527 1,382 1,208
Depreciation 1,993 2,133 $2,231 $2,259 2,148
Amortization of intangible assets 316 307 300 202 -
--- --- ---
EBITDA (6,925) (4,729) (10,650) (6,178) (6,980)
Foreign currency exchange (gain)
loss, net 89 256 (65) 18 97
Other income - (18) (14) (52) (1)
Stock-based compensation expense 2,624 2,490 2,755 2,254 1,538
Restructuring and related costs (57) 34 1,251 - 997
Strategic equity transaction
costs - - 503 - -
Acquisition related expense - 113 333 1,803 275
Shareholder advisement and
settlement costs - - 761 315 59
SEC and FCPA legal and settlement
costs 64 64 3,001 62 121
--- --- ---
Adjusted EBITDA $(4,205) $(1,790) $(2,125) $(1,778) $(3,894)
======= ======= ======= ======= =======
Three Months Ended
March 31, December 31, September 30, June 30, March 31,
2018 2017 (1) 2017 (1) 2017 (1) 2017 (1)
---- ------- ------- ------- -------
Interest Expense, net
Reconciliation
---------------------
GAAP interest expense,
net $993 $1,043 152 97 $63
Non-cash interest expense (439) (420) (24) - -
Non-GAAP interest
expense, net $554 $623 $128 $97 $63
==== ==== ==== === ===
Net Loss Reconciliation
-----------------------
GAAP net loss $(9,205) $(8,752) (13,860) (10,118) $(10,399)
Stock-based compensation
expense 2,624 2,490 2,755 2,254 1,538
Amortization of
intangible assets 316 307 300 202 -
Non-cash interest expense 439 420 24 - -
Restructuring and related
costs (57) 34 1,251 - 997
Strategic equity
transaction costs - - 503 - -
Acquisition related
expense - 113 333 1,803 275
Shareholder advisement
and settlement costs - - 761 315 59
SEC and FCPA legal and
settlement costs 64 64 3,001 62 121
--- --- ---
Non-GAAP net loss $(5,819) $(5,324) $(4,932) $(5,482) $(7,409)
======= ======= ======= ======= =======
Net Loss per Diluted
Share Reconciliation:
----------------------
GAAP net loss per diluted
share $(0.25) $(0.24) $(0.37) $(0.28) $(0.32)
Stock-based compensation
expense 0.07 0.07 0.07 0.06 0.05
Amortization of
intangible assets 0.01 0.01 0.01 0.01 -
Non-cash interest expense 0.01 0.01 * - -
Restructuring and related
costs * * 0.04 - 0.03
Strategic equity
transaction costs - - 0.01 - -
Acquisition related
expense - 0.01 0.01 0.05 0.01
Shareholder advisement
and settlement costs - - 0.02 0.01 *
SEC and FCPA legal and
settlement costs * - 0.08 - *
--- --- ---
Non-GAAP net loss per
diluted share $(0.16) $(0.14) $(0.13) $(0.15) $(0.23)
====== ====== ====== ====== ======
Weighted Average Common
Shares Outstanding:
-----------------------
Basic and diluted 37,522 37,115 37,008 35,526 32,197
* Net loss effect of this
reconciling item was less than
$0.01 per share.
(1) Historical amounts have been
reclassified for all quarters of
2017 in accordance with our
adoption of ASU 2017-07 on
January 1, 2018 which requires
the non-service cost components
of income and expense related to
our defined benefit plans to be
presented in the statement of
operations separately from the
service cost component and
outside the subtotal of loss from
operations.
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SOURCE Maxwell Technologies, Inc.
