Maxwell Technologies Reports Increase in Ultracapacitor Sales for Fourth Quarter 2015

Maxwell Technologies reports fourth quarter 2015 revenue for ultracapacitors increased 17% from the third quarter, but were 9% lower compared to the same period a year ago.

Maxwell Technologies Inc. has reported operational and financial results for the three months and year ended December 31, 2015. Total revenues for the fourth quarter of 2015 were $49.8 million, compared with $45.1 million for the third quarter of 2015 and $52.9 million for the prior year quarter. Fourth quarter ultracapacitor revenue was $37.3 million, an increase of 17% from the third quarter of 2015 and a decrease of 9% from the prior year quarter. The company reported $3.9 million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the fourth quarter of 2015, compared with $3.8 million for the third quarter of 2015 and $4.6 million for the prior year quarter. Net loss for the fourth quarter of 2015 was $2.2 million, compared with $1.4 million for the third quarter of 2015 and $2.1 million for the prior year quarter. Non-GAAP net income for the fourth quarter of 2015 was $588,000, compared with $234,000 for the third quarter of 2015 and $506,000 for the prior year quarter.

"During the fourth quarter of 2015, we continued to implement changes to reduce costs, accelerate innovation and diversify our business, further positioning Maxwell for sustainable growth and value creation," says Dr. Franz Fink, Maxwell's President and Chief Executive Officer. "Our fourth quarter results demonstrate that we are taking the right steps to unlock the value of our unique technologies. We achieved revenue at the top end of our guidance, driven by strong demand in the China hybrid bus market, and we made significant progress transitioning to higher growth opportunities, as well as penetrating into other key markets. We are building on strong momentum and are more confident than ever that Maxwell is poised to deliver significant value for our customers and shareholders in the years ahead."

Discussion of Financial and Operational Results for the Quarter

Revenue and Non-GAAP Gross Margin

Total revenue for the fourth quarter of 2015 was $49.8 million, compared with $45.1 million for the third quarter of 2015, primarily due to increases in ultracapacitor and microelectronics revenue.

  • Ultracapacitor revenue for the fourth quarter of 2015 was $37.3 million, compared with $31.8 million for the third quarter of 2015, primarily driven by increased demand in the China hybrid bus market.
  • High-voltage revenue was $8.9 million for the fourth quarter of 2015, compared with $10.3 million for the third quarter of 2015, primarily driven by reduced government spending in certain markets.
  • Microelectronic revenue for the fourth quarter of 2015 was $3.6 million, compared with $3.0 million for the third quarter of 2015.

Non-GAAP gross margin for the fourth quarter of 2015 was 29.1%, a decrease when compared with the third quarter of 2015, reflecting a product mix shift toward ultracapacitors sold into the China hybrid bus market, and certain one-time charges in the quarter.

Adjusted EBITDA & Operating Expense

  • Adjusted EBITDA for the fourth quarter of 2015 was $3.9 million, compared with $3.8 million for the third quarter of 2015. The quarter-over-quarter increase was primarily driven by reductions in operating expenses due to ongoing cost reduction efforts, partially offset by lower gross margins.
  • Operating expense for the fourth quarter of 2015 was $15.8 million, compared with $14.9 million for the third quarter of 2015, primarily driven by higher legal expenses associated with previously disclosed SEC and FCPA matters and shareholder proxy advisement fees. Additionally, the third quarter of 2015 had the benefit of a one-time China VAT refund of $474,000.
  • Non-GAAP operating expense for the fourth quarter of 2015 was $13.2 million compared with $13.5 million for the third quarter of 2015 and excludes stock-based compensation, legal expenses associated with SEC and FCPA matters, and other non-standard charges not reflective of the on-going costs to run the business.
  • Operating loss for the fourth quarter of 2015 was $1.5 million, compared with an operating loss of $651,000 for the third quarter of 2015. The quarter-over-quarter increase was primarily driven by higher costs associated with SEC and FCPA matters and shareholder proxy advisement fees. Additionally, the third quarter of 2015 had the benefit of a one-time China VAT refund of $474,000.
  • Non-GAAP operating income for the fourth quarter of 2015 was $1.2 million compared with $1.0 million for the third quarter of 2015.
  • Net loss for the fourth quarter of 2015 was $2.2 million, or $(0.07) per share, compared with a net loss of $1.4 million, or $(0.05) per share, for the third quarter of 2015.
  • Non-GAAP net income for the fourth quarter of 2015 was $588,000 compared with $234,000for the third quarter of 2015.

Capital Expenditures

Capital expenditures during the fourth quarter of 2015 were $1.4 million, compared with $562,000 for the third quarter of 2015.

Business Outlook

  • Total revenue for the first quarter of 2016 is expected to be in the range of $34-$36 million.
  • Non-GAAP gross margin for the first quarter of 2016 is expected to be in the range of 30-32%.
  • Non-GAAP operating expense for the first quarter of 2016 is expected to be approximately $13.5 million.

Other Business & Operational Highlights

Maxwell ultracapacitors have been selected as a standard component of the energy-storage system used to power light-rail cars in new tramways and catenary-free light-rail lines by CAF Power & Automation.

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