Maxwell Technologies, Inc. (Nasdaq: MXWL) has reported a net loss of $4.3 million, or $0.25 per share, on revenue of $12.8 million for its second quarter ended June 30, 2006, compared with a net loss of $1.7 million or $0.11 per share, on revenue of $11.0 million for the same period in 2005.
The Q2 06 loss includes approximately $1.5 million, or $0.09 per share, related to ramping BOOSTCAP ultracapacitor production to meet rapidly growing demand, and non-cash provisions totaling $693,000, or $0.04 per share, of compensation expense for stock options and restricted stock grants.
Dr. Richard Balanson, Maxwell’s president and CEO, attributed the ultracapacitor production impacts to Maxwell’s ongoing transition from research and development to manufacturing scale-up. He noted that ultracapacitor revenue increased by 50 percent, quarter-to-quarter, from $2.8 million in Q1 to a highest-ever $4.2 million in Q2.
“Previously announced transportation and industrial applications generated increasing ultracapacitor sales in the second quarter, and high-volume deliveries for a new telecommunications power quality application should enable us to grow ultracapacitor revenue by at least another 30 percent in Q3,” Balanson said. “This ultracapacitor ramp, along with continuing solid sales for our High Voltage and Microelectronics products, are combining to produce additional top line growth in Q3, despite the three-week summer shutdown of our Swiss operations.”
“Global demand for ultracapacitor-based energy storage and power delivery solutions is accelerating, and we continue to move aggressively to exploit Maxwell’s technology leadership to play an increasingly prominent role in creating what we believe will be a multi-billion-dollar industry in the coming decade,” Balanson said. “Although commercial launch dates for ultracapacitor-based systems now in development with automakers and Tier 1 automotive suppliers are beyond our control, we expect news on some specific applications in the near future. In the meantime, it is clear that the heavy vehicle, electric rail, wind energy, telecommunications and other applications that are already in production, along with the new opportunities developing in Asia, are generating very significant market growth while we await the commercial roll-out of automotive applications.”
Ultracapacitor production-related impacts pulled overall second quarter gross margin down to 18 percent, compared with 29 percent in Q1 06. Cash and investments in marketable securities totaled $26.9 million as of June 30, compared with $31.7 million as of March 31, primarily as a result of a $3.5 million quarter-to-quarter increase in inventories, reflecting higher ultracapacitor work in process (WIP) and purchases of microelectronic components for single board computers. The company will file its Quarterly Report on Form 10-Q with the SEC, including complete financial statements, by August 9.
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