Northern Power Systems sales more than double for year

Submitted by tim on Wed, 04/01/2015 - 04:26

Northern Power Systems Corp(TSX:NPS),a next generation renewable energy technology company based in Barre and notable for its wind turbines, has announced financial results for its fourth quarter and year endedDecember 31, 2014. Revenue more than doubled to$56.5 million, a 174 percent increase over revenue of$20.6 millionreported in 2013.Net loss for fiscal year 2014 was$7.9 million,a 44 percent reduction compared toa $14.1 million loss in 2013. This is the company's first public annual financial release. Shares of Northern Power have fallen steadily over the last year, from close to $4.50 a year ago to $1.52 per share at close of business Tuesday on the Toronto Stock Exchange.

Northern Power's assembly plant in Graniteville, Vermont.

“Northern Power delivered record revenue growth during 2014 as the proven capabilities of our highly differentiated technology and products gained greater marketplace recognition and interest,” said Troy Patton, president and chief executive officer. “Further, we are very pleased with our progress in advancing our product offerings and expanding our sales capabilities globally. Distributed wind is becoming a very complementary offering alongside solar, diesel and storage in the microgrid and distributed generation movements, forming the basis of both mature and emerging market electrical supply buildout. Based upon these efforts, we are seeing strong pipeline momentum in Europe as we continue to introduce products with improved features to market, while we are also seeing opportunities in regions outside of Europe, such as Korea. Finally, WEG’s installation of utility class turbines and their 500 MW backlog of orders based on our proprietary design validate our utility class wind technology. We look forward to expanding this partnership and pursuing similar collaborative relationships in other key global regions.”

“As we enter 2015, we are building on a healthy backlog and robust pipeline. Revenue in the first half of the year is expected to be lower than the first half of last year, given that most of our Italian customers are awaiting confirmation of government regulations which are expected to drive continued strong deployment of our turbines in that region. In anticipation of these orders, we have built a larger than normal inventory position which we expect to reduce as we believe we will experience a return to growth in this region in the second half of 2015. We are using this regulatory waiting period to transition to new blade suppliers that will provide a dependable, high quality supply of blades. Production ramp time will cause a temporary supply constraint that we expect to result in a reduction of approximately $4 million to $6 million in revenue over the course of 2015. We are also addressing our net Euro exposure, which we currently expect to impact approximately one-third of our revenue, and as such we are implementing various approaches to mitigate this exposure.”

Patton continued, “We intend to pursue a disciplined growth strategy focused primarily on expanding our position in the distributed energy sector while evaluating additional growth opportunities as appropriate. We expect year-over-year growth in revenues based on the anticipated Italian regulatory confirmation and successful completion of blade transition to our new suppliers.”

Consolidated Year End Financial Metrics:

2014 revenue grew to$56.5 million, a 174 percent increase over revenue of$20.6 millionreported in the prior year period.
Order backlog at December 31, 2014 was $41 million, a 9 percent decrease compared to backlog of $45 million at December 31, 2013.
Gross margin for the year was 19.6 percent, up from gross margin of 6.0 percent in the prior year.
GAAP net loss for fiscal year 2014 was$7.9 million, representing a 44 percent reduction compared toa $14.1 million loss in 2013.
Non-GAAP adjusted EBITDA loss for 2014 was$4.8 million, representing a $6.4 million, or 57 percent improvement compared to a non-GAAP adjusted EBITDA loss of$11.2 million in the prior year. A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “About non-GAAP financial measures.”
The Company recorded cash and cash equivalents of $13.1 million, working capital of $12.7 million and no long-term debt at December 31, 2014.

Consolidated Fourth Quarter Financial Metrics:

Revenue for the fourth quarter of fiscal year 2014 grew to$14.0 million, a 56 percent increase over revenue of$9.0 millionreported in the prior year period.
Gross margin in the fourth quarter was 20.4 percent, up from gross margin of 8.4 percent in the prior year period.
GAAP net loss for the fourth quarter of fiscal year 2014 was$2.4 million, representing a 51 percent reduction compared toa $4.9 million loss in the prior year fourth quarter.
Non-GAAP adjusted EBITDA loss for the fourth quarter was$1.6 million, representing a $1.5 million improvement compared to a non-GAAP adjusted EBITDA loss of$3.1 million in the prior year fourth quarter.

A webcast slide presentationfor the quarterly results will also be available at the Company's website (http://www.ir.northernpower.com).

Northern Power specializes in providing power to remote/rugged locations, in this case in Hawaii.

About Northern Power Systems

Northern Power Systems designs, manufactures, and sells wind turbines and power technology products, and provides engineering development services and technology licenses for energy applications, into the global marketplace from its US headquarters and European offices.

Northern Power Systems has almost 40 years’ experience in technologies and products generating renewable energy.
Northern Power Systems currently manufactures the NPS™ 60 and NPS™ 100 turbines. With over 6 million run time hours across its global fleet, Northern Power wind turbines provide customers with clean, cost effective, reliable renewable energy.
Patented next generation permanent magnet direct drive (PMDD) technology uses fewer moving parts, delivers higher energy capture, and provides increased reliability due to reduced maintenance and downtime.
Northern Power Systems’ FlexPhase® power converter platform uses patented converter architecture and advanced controls technology for advanced grid support and generation applications.
Northern Power Systems offers comprehensive in‐house development services, including systems level engineering, advanced drivetrains, power electronics, PM machine design, and remote monitoring systems to the energy industry.
Some of the world’s largest manufacturers license the company’s next generation technology and IP for their utility and distributed wind products and markets.

NORTHERN POWER SYSTEMS CORP.
FORMERLY KNOWN AS WIND POWER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
(In thousands, except share and per share amounts)

	For the three months ended						For the twelve months ended
	December 31,						December 31,
	2014			2013			2014			2013
REVENUES:
Net revenue	$	13,967		$	8,998		$	56,525		$	20,598
Cost of revenues		11,116			8,246			45,441			19,358
Gross profit		2,851			752			11,084			1,240
Gross margin percentage		20.4	%		8.4	%		19.6	%		6.0	%

OPERATING EXPENSES:
Sales and marketing		1,268			933			3,936			2,977
Research and development		1,214			1,393			4,751			4,238
General and administrative		2,237			2,209			9,030			6,938
Assets held for sale loss		-			768			-			768
Restructuring charges		-			47			-			70
Total operating expenses		4,719			5,350			17,717			14,991

Loss from operations		(1,868	)		(4,598	)		(6,633	)		(13,751	)

Change in fair value of warrants		-			(1	)		-			172
Interest expense		(26	)		(284	)		(343	)		(514	)
Other (expense) income - net		(69	)		36			(23	)		-
Loss before provision for income taxes		(1,963	)		(4,847	)		(6,999	)		(14,093	)
Provision for income taxes		454			22			895			35
NET LOSS	$	(2,417	)	$	(4,869	)	$	(7,894	)	$	(14,128	)

Net loss applicable to common shareholders	$	(2,417	)	$	(4,869	)	$	(7,894	)	$	(17,815	)

Net loss per common share - basic and diluted		(0.11	)		(0.38	)		(0.40	)		(4.60	)

Weighted average number of common shares outstanding - basic and diluted		22,751,233			12,840,187			19,885,042			3,872,895

Non-GAAP adjusted EBITDA net loss	$	(1,613	)	$	(3,096	)	$	(4,823	)	$	(11,227	)

NORTHERN POWER SYSTEMS CORP.
FORMERLY KNOWN AS WIND POWER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
AS OF DECEMBER 31, 2014 AND 2013
(In thousands, except share and per share amounts)
ASSETS	2014			2013

CURRENT ASSETS:
Cash and cash equivalents	$	13,142		$	4,534
Accounts receivable - net		3,491			1,175
Unbilled revenue		2,212			786
Inventories - net		16,456			11,682
Other current assets		3,799			2,808
Total current assets		39,100			20,985
Property, plant and equipment - net		1,854			1,414
Asset held for sale		-			1,300
Intangible assets - net		474			509
Goodwill		722			722
Other assets		704			2,615
Total Assets	$	42,854		$	27,545

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Working capital revolving line of credit	$	4,000		$	-
Current portion of long-term debt		-			141
Accounts payable		4,153			2,148
Accrued expenses		7,579			4,365
Deferred revenue		4,275			4,221
Customer deposits		5,642			10,917
Other current liabilities		726			3,327
Total current liabilities		26,375			25,119
Deferred revenue, less current portion		2,041			1,163
Senior secured convertible notes		-			12,107
Other long-term liability		308			558
Total Liabilities		28,724			38,947
SHAREHOLDERS’EQUITY (DEFICIENCY):
Common stock		165,386			128
Additional paid-in capital		7,972			139,804
Accumulated deficit		(159,228	)		(151,334	)
Total Shareholders' Equity (Deficiency)		14,130			(11,402	)
Total Liabilities and Shareholders' Equity (Deficiency)	$	42,854		$	27,545
The accompanying notes are an integral part of these condensed consolidated financial statements.

NORTHERN POWER SYSTEMS CORP.
FORMERLY KNOWN AS WIND POWER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
(In thousands)
	For the three months ended						For the twelve months ended
	December 31,						December 31,
	2014			2013			2014			2013
OPERATING ACTIVITIES:
Net loss	$	(2,417	)	$	(4,869	)	$	(7,894	)	$	(14,128	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrants		-			1			-			(172	)
Provision for inventory obsolescence		194			(13	)		319			22
Provision for doubtful accounts		(73	)		174			151			152
Stock-based compensation expense		141			437			887			701
Depreciation and amortization		179			214			942			985
Noncash restructuring charges		-			47			-			70
Noncash implied license revenue		(151	)		-			(151	)		-
Deferred income taxes		4			(2	)		14			8
Assets held for sale loss		-			768			-			768
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue		220			(915	)		(3,893	)		(952	)
Inventories and deferred costs		(1,760	)		(1,083	)		(4,849	)		(5,427	)
Other current and noncurrent assets		(1,041	)		(17	)		(1,358	)		(534	)
Accounts payable		2,151			(113	)		2,005			1,549
Accrued expenses		1,234			820			3,405			1,598
Customer deposits		(1,218	)		3,741			(5,275	)		6,689
Other liabilities		(325	)		642			862			2,616
Net cash used in operating activities		(2,862	)		(168	)		(14,835	)		(6,055	)

INVESTING ACTIVITIES:
Proceeds from sale of property		-			-			1,218			-
Purchases of property and equipment		(361	)		(192	)		(1,057	)		(387	)
Net cash (used in) provided by investing activities		(361	)		(192	)		161			(387	)

FINANCING ACTIVITIES:
Proceeds private placement equity financing, net		-			-			19,623			-
Proceeds from revolving line of credit, net		-			-			4,000			-
Proceeds from exercise of stock options		47			-			100			-
Proceeds from debt issuance		-			81			-			179
Proceeds from issuance of convertible notes		-			-			-			6,525
Debt principal payments		-			(150	)		(441	)		(184	)
Net cash provided by (used in) financing activities		47			(69	)		23,282			6,520

Change in cash and cash equivalents		(3,176	)		(429	)		8,608			78
Cash and cash equivalents - Beginning of the Period		16,318			4,963			4,534			4,456
Cash and cash equivalents - End of the Period	$	13,142		$	4,534		$	13,142		$	4,534

NORTHERN POWER SYSTEMS CORP.
FORMERLY KNOWN AS WIND POWER HOLDINGS, INC.
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED EBITDA LOSS (unaudited)
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
(In thousands)
	For the three months ended						For the twelve months ended
	December 31,						December 31,
	2014			2013			2014			2013
NET LOSS	$	(2,417	)	$	(4,869	)	$	(7,894	)	$	(14,128	)
Interest expense		26			284			343			514
Provision for income taxes		454			22			895			35
Depreciation and amortization		179			214			942			985
Stock compensation expense		141			437			887			701
Change in fair value of warrants		-			1			-			(172	)
Non cash restructuring charge		-			47			-			70
Loss on asset held for sale		-			768			-			768
Asset impairment and loss on disposal		4			-			4			-
Non-GAAP adjusted EBITDA loss	$	(1,613	)	$	(3,096	)	$	(4,823	)	$	(11,227	)

About non-GAAP financial measures

To supplement Northern Power Systems’ consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP),Northern PowerSystems has used a non-GAAP financial measure, specifically non-GAAP adjusted EBITDA income (loss). Non-GAAP adjusted EBITDA income (loss) is defined as net income (loss), excluding share-based compensation expense, amortization of acquisition-related intangibles, depreciation of property, plant and equipment, interest expense, tax provision or benefit, and certain other non-cash impacts as applicable.

The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on non-GAAP adjusted EBITDA, please see the table captioned “Reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net income (loss)” included at the end of this release. The table has more details on the GAAP financial measure that is most directly comparable to non-GAAP adjusted EBITDA and the related reconciliation between these financial measures.

Northern Power Systems’ management believes that this non-GAAP financial measure provides meaningful supplemental information in assessing our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results, which could be non-cash charges or discrete cash charges that are infrequent in nature. This non-GAAP financial measure also has facilitated management’s internal comparisons to Northern Power Systems’ historical performance and our competitors’ operating results, as well as reflects measurements which are used by creditors and other third parties in assessing our performance.

To learn more about Northern Power Systems, please visitwww.northernpower.com.

Notice regarding forward-looking statements:

This release includes forward-looking statements regarding Northern Power Systems and its business, which may include, but is not limited to, product and financial performance, regulatory developments, supplier performance, anticipated opportunity and trends for growth in our customer base and our overall business, our market opportunity, expansion into new markets, and execution of the company’s growth strategy. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “is expected”, “expects”, “scheduled”, “intends”, “contemplates”, “anticipates”, “believes”, “proposes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Such statements are based on the current expectations of the management of Northern Power Systems. The forward-looking events and circumstances discussed in this release may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the wind power industry; production, performance and acceptance of the company’s products; our sales cycle; our ability to convert backlog into revenue; performance by the company’s suppliers; our ability to maintain successful relationships with our partners and to enter into new partner relationships; our performance internationally; currency fluctuations; economic factors; competition; the equity markets generally; and the other risks detailed in Northern Power Systems’ risk factors discussed in filings with the U.S. Securities and Exchange Commission (the “SEC”), including but not limited to Northern Power Systems’ Registration Statement on Form S-1 filed on January 14, 2015, as well as other documents that may be filed by Northern Power Systems from time to time with the SEC. Although Northern Power Systems has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Northern Power Systems undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

Source:BARRE, Vt.--(BUSINESS WIRE)--Northern Power Systems Corp.3.31.2015