Northern Power Systems Corp(TSX:NPS), a next generation renewable energy technology company based in Barre and known for its remote wind energy systems, today announced financial results for its first quarter endedMarch 31, 2015.Revenues for the three months ended March 31, 2015 were $8.3 million, compared to $13.8 million in the first quarter of 2014. GAAP net loss for the first quarter of 2015 was$4.1 million, compared toa net loss of $3.1 million in the prior year first quarter. Order backlog at the end of Q1 was $43 million, an increase of $2 million during the quarter.
“As expected, first quarter revenue was impacted by delayed sales in Italy pending certain policy clarifications in that region and reduced blade availability resulting from our prior blade manufacturer ceasing operations,” stated Troy Patton, president and chief executive officer of Northern Power Systems. “At the same time however, we saw an anticipated return to healthy order closure, particularly within the Italian market. Orders for our distributed turbines in the first quarter doubled as compared to the fourth quarter, a strong leading indicator of our return to growth. Furthermore, favorable regulations were formally announced in Italy in April, which are helping to drive continued demand for our turbines in this region. Our revenue can be impacted by various seasonal trends, and our year-over-year revenue decrease was the result of an exceptionally strong first quarter of 2014 combined with a temporary slowdown in sales. However, backlog has climbed, our pipeline continues to strengthen, and we remain on track to report annual growth in fiscal 2015 above 2014 levels with what we expect will be a particularly strong back half of the year.”
Patton continued, “During a slower first quarter, we initiated a transition to more dependable blade suppliers for our third-generation turbine, following our initial manufacturer’s exit from this market. This activity is progressing on schedule and it should provide a stronger and a more dependable supply of blades going forward. The wind industry is gaining more traction around the globe as an alternative energy of choice. We are encouraged and confident in our highly differentiated technology and products.”
Ciel Caldwell, chief financial officer of Northern Power Systems, stated, “Our balance sheet provides the underpinning for continued growth of the business. Inventory levels peaked in Q1 and are reducing as predicted with accelerating sales. Moreover, we recently renewed our $6 million working capital line through September 2016, providing further confidence that we will have the liquidity necessary to support the growth of the business. Currency headwinds are continuing to impact our business in Europe, as anticipated. Our backlog as we ended the first quarter was about 10 percent lower in dollars as compared to the prior year period due to the strengthening of the US dollar. We are implementing foreign currency hedging activities to help mitigate the volatility of these fluctuations. ”
Consolidated First Quarter Financial Metrics:
- Revenue for the first quarter of fiscal year 2015 was at $8.3 million, compared to $13.8 million reported in the prior year period.
- Gross margin in the first quarter was 22.2 percent, up from gross margin of 8.7 percent in the prior year period.
- GAAP net loss for the first quarter of fiscal year 2015 was$4.1 million, representing a 32 percent increase compared toa $3.1 million loss in the prior year first quarter.
- Non-GAAP adjusted EBITDA loss for the first quarter was$3.3 million, representing a $0.8 million increase compared to a non-GAAP adjusted EBITDA loss of$2.5 million in the prior year first quarter.
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 7.5 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 MONTHS ENDED MARCH 31, 2015 AND 2014 | |||||||||||||||||
| (In thousands, except share and per share amounts) | |||||||||||||||||
| For the three months ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2015 | 2014 | ||||||||||||||||
| REVENUES: | |||||||||||||||||
| Net revenue | $ | 8,299 | $ | 13,756 | |||||||||||||
| Cost of revenues | 6,458 | 12,566 | |||||||||||||||
| Gross profit | 1,841 | 1,190 | |||||||||||||||
| Gross margin percentage | 22.2 | % | 8.7 | % | |||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||
| Sales and marketing | 1,312 | 780 | |||||||||||||||
| Research and development | 1,139 | 1,139 | |||||||||||||||
| General and administrative | 3,025 | 2,176 | |||||||||||||||
| Total operating expenses | 5,476 | 4,095 | |||||||||||||||
| Loss from operations | (3,635 | ) | (2,905 | ) | |||||||||||||
| Interest income (expense) - net | (26 | ) | (240 | ) | |||||||||||||
| Other income (expense) - net | (87 | ) | 35 | ||||||||||||||
| Loss before provision for income taxes | (3,748 | ) | (3,110 | ) | |||||||||||||
| Provision for income taxes | 385 | 14 | |||||||||||||||
| NET LOSS | $ | (4,133 | ) | $ | (3,124 | ) | |||||||||||
| Net loss applicable to common shareholders | $ | (4,133 | ) | $ | (3,124 | ) | |||||||||||
| Net loss per common share - basic and diluted | (0.18 | ) | (0.24 | ) | |||||||||||||
| Weighted average number of common shares outstanding - basic and diluted | 22,765,098 | 12,840,187 | |||||||||||||||
| Non-GAAP adjusted EBITDA net loss | $ | (3,304 | ) | $ | (2,544 | ) | |||||||||||
| NORTHERN POWER SYSTEMS CORP. | |||||||||||||||||
| FORMERLY KNOWN AS WIND POWER HOLDINGS, INC. | |||||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||||||||||||
| AS OF MARCH 31, 2015 AND DECEMBER 31, 2014 | |||||||||||||||||
| (In thousands, except share and per share amounts) | |||||||||||||||||
| ASSETS | March 31, 2015 | December 31, 2014 | |||||||||||||||
| CURRENT ASSETS: | |||||||||||||||||
| Cash and cash equivalents | $ | 7,327 | $ | 13,142 | |||||||||||||
| Accounts receivable - net | 3,798 | 3,491 | |||||||||||||||
| Unbilled revenue | 1,536 | 2,212 | |||||||||||||||
| Inventories - net | 18,987 | 16,456 | |||||||||||||||
| Other current assets | 2,785 | 3,799 | |||||||||||||||
| Total current assets | 34,433 | 39,100 | |||||||||||||||
| Property, plant and equipment - net | 1,908 | 1,854 | |||||||||||||||
| Intangible assets - net | 605 | 474 | |||||||||||||||
| Goodwill | 722 | 722 | |||||||||||||||
| Other assets | 543 | 704 | |||||||||||||||
| Total Assets | $ | 38,211 | $ | 42,854 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| CURRENT LIABILITIES: | |||||||||||||||||
| Working capital revolving line of credit | $ | 4,000 | $ | 4,000 | |||||||||||||
| Accounts payable | 2,957 | 4,153 | |||||||||||||||
| Accrued expenses | 7,374 | 7,579 | |||||||||||||||
| Deferred revenue | 2,667 | 4,275 | |||||||||||||||
| Customer deposits | 7,769 | 5,642 | |||||||||||||||
| Other current liabilities | 813 | 726 | |||||||||||||||
| Total current liabilities | 25,580 | 26,375 | |||||||||||||||
| Deferred revenue, less current portion | 2,142 | 2,041 | |||||||||||||||
| Other long-term liability | 343 | 308 | |||||||||||||||
| Total Liabilities | 28,065 | 28,724 | |||||||||||||||
| SHAREHOLDERS’EQUITY: | |||||||||||||||||
| Common stock | 165,389 | 165,386 | |||||||||||||||
| Additional paid-in capital | 8,150 | 7,972 | |||||||||||||||
| Accumulated other comprehensive income | (32 | ) | - | ||||||||||||||
| Accumulated deficit | (163,361 | ) | (159,228 | ) | |||||||||||||
| Total Shareholders' Equity | 10,146 | 14,130 | |||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 38,211 | $ | 42,854 | |||||||||||||
| 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 MONTHS ENDED MARCH 31, 2015 AND 2014 | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| For the three months ended | ||||||||||||||||||
| March 31, | ||||||||||||||||||
| 2015 | 2014 | |||||||||||||||||
| OPERATING ACTIVITIES: | ||||||||||||||||||
| Net loss | $ | (4,133 | ) | $ | (3,124 | ) | ||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||
| Provision for inventory obsolescence | 30 | 93 | ||||||||||||||||
| Recovery of doubtful accounts | (100 | ) | (63 | ) | ||||||||||||||
| Stock-based compensation expense | 178 | 148 | ||||||||||||||||
| Depreciation and amortization | 190 | 178 | ||||||||||||||||
| Noncash implied license revenue | (177 | ) | - | |||||||||||||||
| Loss on disposal of asset | 50 | - | ||||||||||||||||
| Deferred income taxes | 3 | 3 | ||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||
| Accounts receivable and unbilled revenue | 469 | (3,622 | ) | |||||||||||||||
| Inventories and deferred costs | (2,561 | ) | (813 | ) | ||||||||||||||
| Other current and noncurrent assets | 1,231 | (142 | ) | |||||||||||||||
| Accounts payable | (1,196 | ) | 2,191 | |||||||||||||||
| Accrued expenses | (205 | ) | 2,090 | |||||||||||||||
| Customer deposits | 2,127 | (1,164 | ) | |||||||||||||||
| Other liabilities | (1,444 | ) | 1,941 | |||||||||||||||
| Net cash used in operating activities | (5,538 | ) | (2,284 | ) | ||||||||||||||
| INVESTING ACTIVITIES: | ||||||||||||||||||
| Purchases of property and equipment | (248 | ) | (195 | ) | ||||||||||||||
| Net cash used in investing activities | (248 | ) | (195 | ) | ||||||||||||||
| FINANCING ACTIVITIES: | ||||||||||||||||||
| Proceeds from revolving line of credit | 4,000 | - | ||||||||||||||||
| Repayments on revolving line of credit | (4,000 | ) | - | |||||||||||||||
| Proceeds from exercise of stock options | 3 | - | ||||||||||||||||
| Debt principal payments | - | (59 | ) | |||||||||||||||
| Net cash provided by (used in) financing activities | 3 | (59 | ) | |||||||||||||||
| Effect of exchange rate change on cash | (32 | ) | - | |||||||||||||||
| Change in cash and cash equivalents | (5,815 | ) | (2,538 | ) | ||||||||||||||
| Cash and cash equivalents - Beginning of the Period | 13,142 | 4,534 | ||||||||||||||||
| Cash and cash equivalents - End of the Period | $ | 7,327 | $ | 1,996 | ||||||||||||||
| 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 MONTHS ENDED MARCH 31, 2015 AND 2014 | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| For the three months ended | |||||||||||||||||
| March 31, | |||||||||||||||||
| 2015 | 2014 | ||||||||||||||||
| NET LOSS | $ | (4,133 | ) | $ | (3,124 | ) | |||||||||||
| Interest expense | 26 | 240 | |||||||||||||||
| Provision for income taxes | 385 | 14 | |||||||||||||||
| Depreciation and amortization | 190 | 178 | |||||||||||||||
| Stock compensation expense | 178 | 148 | |||||||||||||||
| Loss on disposal of asset | 50 | - | |||||||||||||||
| Non-GAAP adjusted EBITDA loss | $ | (3,304 | ) | $ | (2,544 | ) | |||||||||||
Earnings Conference Call
The Company will host a conference call and webcast today, May 12, 2015 at 5:00 p.m. (EDT) to discuss the first quarter 2015 financial results and other matters.
To participate, callers in the United States should dial +1-877-317-6789, Canada +1-866-605-3852 and in other countries +1-412-317-6789. Participants should ask to be joined to the Northern Power Systems call.
The conference call will also be available via webcast on the Investor Relations section of Northern Power's website (http://www.ir.northernpower.com). A webcast slide presentationfor the quarterly results will also be available at the Company's website.
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.
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’ Annual Report on Form 10-K filed on March 31, 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. (TSX:NPS) 5.12.2015.To learn more about Northern Power Systems, please visitwww.northernpower.com.