A Northern Power Systems installation in Hawaii. Courtesy Northern Power.
Vermont Business Magazine Northern Power Systems Corp (TSX: NPS), a next generation renewable energy technology company, today announced financial results for its third quarter endedSeptember 30, 2015. Revenue for the three months ended September 30, 2015 was $16.7 million, compared to $15.0 million in the third quarter of 2014. GAAP net loss for the third quarter of 2015 was$0.5 million, compared toa net loss of $0.3 million in the prior year third quarter.
“Revenue in our third quarter of 2015 continued to increase significantly on a sequential basis led by distributed turbine sales in our key markets,” stated Troy Patton, president and chief executive officer of Northern Power Systems. “Our year-to-date distributed turbine orders have increased twelve percent over the same period in 2014, demonstrating continued growth in our core business. Overall we continue to expect that revenue will be on par with 2014, despite impacts to our product sales in the first half of 2015. After announcing the launch of our FlexPhase power converters in the expanding battery energy storage market entering the quarter, we executed our first order in this market during the third quarter. Finally, we continue to focus on expanding the commercialization of our utility class wind technology leveraging its expanding proven track record in the Brazilian market.”
Manufacturing in Barre
“Our third quarter of 2015 represented a record revenue quarter, along with achievement of declining sequential costs for our core product,” stated Ciel Caldwell, chief financial officer of Northern Power Systems. “However the mix of our sales resulted in an overall gross margin below the same quarter in 2014. During the quarter, we continued to reduce our operating expenses in our drive for profitability, while maintaining sales and marketing investment with sustained focus on expanding our business. This level of continued focus on control of expenses and working capital management maintains our confidence in having adequate cash to grow and develop our business.”
Consolidated Third Quarter Financial Metrics:
- Revenue for the third quarter of fiscal year 2015 was $16.7 million, compared to $15.0 million reported in the prior year period and $12.5 million reported in the second quarter of 2015.
- Gross margin in the third quarter was 20.4 percent, down from gross margin of 32.2 percent in the prior year period, but above gross margin of 9.3 percent in the second quarter of 2015.
- GAAP net loss for the third quarter of fiscal year 2015 was$0.5 million, compared toa $0.3 million loss in the prior year third quarter.
- Non-GAAP adjusted EBITDA income for the third quarter was$0.3 million, compared to non-GAAP adjusted EBITDA income of$0.5 million in the prior year third quarter.
- Order backlog at September 30, 2015 was approximately $36 million, compared to $47 million at September 30, 2014.
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.
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 8.5 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.
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NORTHERN POWER SYSTEMS CORP. |
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| (In thousands, except share and per share amounts) | ||||||||||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| REVENUES: | ||||||||||||||||||||||||
| Net revenue | $ | 16,667 | $ | 15,032 | $ | 37,435 | $ | 42,558 | ||||||||||||||||
| Cost of revenues | 13,264 | 10,185 | 31,028 | 34,325 | ||||||||||||||||||||
| Gross profit | 3,403 | 4,847 | 6,407 | 8,233 | ||||||||||||||||||||
| Gross margin percentage | 20.4 | % | 32.2 | % | 17.1 | % | 19.3 | % | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||
| Sales and marketing | 947 | 990 | 3,409 | 2,668 | ||||||||||||||||||||
| Research and development | 739 | 1,321 | 2,688 | 3,537 | ||||||||||||||||||||
| General and administrative | 1,621 | 2,312 | 6,668 | 6,793 | ||||||||||||||||||||
| Total operating expenses | 3,307 | 4,623 | 12,765 | 12,998 | ||||||||||||||||||||
| Income/(loss) from operations | 96 | 224 | (6,358 | ) | (4,765 | ) | ||||||||||||||||||
| Interest income (expense) - net | (45 | ) | (40 | ) | (142 | ) | (312 | ) | ||||||||||||||||
| Other income (expense) - net | (109 | ) | (61 | ) | (221 | ) | 41 | |||||||||||||||||
| Income/(loss) before provision for income taxes | (58 | ) | 123 | (6,721 | ) | (5,036 | ) | |||||||||||||||||
| Provision for income taxes | 427 | 412 | 1,195 | 441 | ||||||||||||||||||||
| NET LOSS | $ | (485 | ) | $ | (289 | ) | $ | (7,916 | ) | $ | (5,477 | ) | ||||||||||||
| Foreign currency translation | (27 | ) | - | (41 | ) | - | ||||||||||||||||||
| COMPREHENSIVE LOSS | $ | (512 | ) | $ | (289 | ) | $ | (7,957 | ) | $ | (5,477 | ) | ||||||||||||
| Net loss applicable to common shareholders | $ | (485 | ) | $ | (289 | ) | $ | (7,916 | ) | $ | (5,477 | ) | ||||||||||||
| Net loss per common share - basic and diluted | (0.02 | ) | (0.01 | ) | (0.35 | ) | (0.29 | ) | ||||||||||||||||
| Weighted average number of common shares outstanding - basic and diluted | 22,884,202 | 22,720,090 | 22,805,519 | 18,919,146 | ||||||||||||||||||||
| Non-GAAP adjusted EBITDA net income/(loss) | $ | 323 | $ | 501 | $ | (5,862 | ) | $ | (3,210 | ) | ||||||||||||||
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NORTHERN POWER SYSTEMS CORP. |
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| (In thousands, except share and per share amounts) | ||||||||||||
| ASSETS | September 30, 2015 | December 31, 2014 | ||||||||||
| CURRENT ASSETS: | ||||||||||||
| Cash and cash equivalents | $ | 5,665 | $ | 13,142 | ||||||||
| Accounts receivable - net | 5,286 | 3,491 | ||||||||||
| Unbilled revenue | 1,782 | 2,212 | ||||||||||
| Inventories - net | 15,548 | 16,456 | ||||||||||
| Other current assets | 1,960 | 3,799 | ||||||||||
| Total current assets | 30,241 | 39,100 | ||||||||||
| Property, plant and equipment - net | 2,628 | 1,854 | ||||||||||
| Intangible assets - net | 944 | 474 | ||||||||||
| Goodwill | 722 | 722 | ||||||||||
| Other assets | 543 | 704 | ||||||||||
| Total Assets | $ | 35,078 | $ | 42,854 | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Working capital revolving line of credit | $ | 4,000 | $ | 4,000 | ||||||||
| Accounts payable | 6,121 | 4,153 | ||||||||||
| Accrued expenses | 6,534 | 7,579 | ||||||||||
| Deferred revenue | 2,554 | 4,275 | ||||||||||
| Customer deposits | 5,444 | 5,642 | ||||||||||
| Other current liabilities | 902 | 726 | ||||||||||
| Total current liabilities | 25,555 | 26,375 | ||||||||||
| Deferred revenue, less current portion | 2,386 | 2,041 | ||||||||||
| Other long-term liability | 280 | 308 | ||||||||||
| Total Liabilities | 28,221 | 28,724 | ||||||||||
| SHAREHOLDERS’EQUITY: | ||||||||||||
| Common stock | 165,568 | 165,386 | ||||||||||
| Additional paid-in capital | 8,474 | 7,972 | ||||||||||
| Accumulated other comprehensive loss | (41 | ) | - | |||||||||
| Accumulated deficit | (167,144 | ) | (159,228 | ) | ||||||||
| Total Shareholders' Equity | 6,857 | 14,130 | ||||||||||
| Total Liabilities and Shareholders' Equity | $ | 35,078 | $ | 42,854 | ||||||||
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NORTHERN POWER SYSTEMS CORP. |
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| (In thousands) | ||||||||||||
| For the nine months ended | ||||||||||||
| September 30, | ||||||||||||
| 2015 | 2014 | |||||||||||
| OPERATING ACTIVITIES: | ||||||||||||
| Net loss | $ | (7,916 | ) | $ | (5,477 | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Provision for inventory obsolescence | 151 | 125 | ||||||||||
| (Recovery of) provision for doubtful accounts | (44 | ) | 224 | |||||||||
| Stock-based compensation expense | 681 | 746 | ||||||||||
| Depreciation and amortization | 595 | 763 | ||||||||||
| Noncash implied license revenue | (609 | ) | - | |||||||||
| Loss on disposal of asset | 50 | - | ||||||||||
| Deferred income taxes | 11 | 10 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable and unbilled revenue | (1,320 | ) | (4,113 | ) | ||||||||
| Inventories and deferred costs | 745 | (3,089 | ) | |||||||||
| Other current and noncurrent assets | 2,065 | (317 | ) | |||||||||
| Accounts payable | 1,968 | (146 | ) | |||||||||
| Accrued expenses | (1,045 | ) | 2,171 | |||||||||
| Customer deposits | (198 | ) | (4,057 | ) | ||||||||
| Other liabilities | (1,293 | ) | 1,187 | |||||||||
| Net cash used in operating activities | (6,159 | ) | (11,973 | ) | ||||||||
| INVESTING ACTIVITIES: | ||||||||||||
| Proceeds from sale of property | - | 1,218 | ||||||||||
| Purchases of property and equipment | (1,280 | ) | (696 | ) | ||||||||
| Net cash (used in) provided by investing activities | (1,280 | ) | 522 | |||||||||
| FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from private placement equity financing, net | - | 19,623 | ||||||||||
| Proceeds from revolving line of credit | 4,000 | 4,000 | ||||||||||
| Repayments on revolving line of credit | (4,000 | ) | - | |||||||||
| Proceeds from exercise of stock options | 3 | 53 | ||||||||||
| Debt principal payments | - | (441 | ) | |||||||||
| Net cash provided by financing activities | 3 | 23,235 | ||||||||||
| Effect of exchange rate change on cash | (41 | ) | - | |||||||||
| Change in cash and cash equivalents | (7,477 | ) | 11,784 | |||||||||
| Cash and cash equivalents - Beginning of the Period | 13,142 | 4,534 | ||||||||||
| Cash and cash equivalents - End of the Period | $ | 5,665 | $ | 16,318 | ||||||||
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NORTHERN POWER SYSTEMS CORP. |
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| (In thousands) | ||||||||||||||||||||||||
| For the three months ended | For the nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| NET LOSS | $ | (485 | ) | $ | (289 | ) | $ | (7,916 | ) | $ | (5,477 | ) | ||||||||||||
| Interest expense | 45 | 40 | 142 | 317 | ||||||||||||||||||||
| Provision for income taxes | 427 | 412 | 1,195 | 441 | ||||||||||||||||||||
| Depreciation and amortization | 212 | 194 | 595 | 763 | ||||||||||||||||||||
| Stock compensation expense | 313 | 144 | 681 | 746 | ||||||||||||||||||||
| Non cash implied license revenue | (189 | ) | - | (609 | ) | - | ||||||||||||||||||
| Loss on disposal of asset | - | - | 50 | - | ||||||||||||||||||||
| Non-GAAP adjusted EBITDA income/(loss) | $ | 323 | $ | 501 | $ | (5,862 | ) | $ | (3,210 | ) | ||||||||||||||
BARRE, Vt.--(BUSINESS WIRE)--Northern Power Systems Corp. (http://www.ir.northernpower.com). A webcast slide presentationfor the quarterly results will also be available at the Company's website.