Second Quarter 2014 Highlights:
-- Expanded quarterly revenues to $13.8 million from $4.3 million in the
prior year period; revenue expansion driven by strong continued demand
for the Company's distributed class turbines.
-- Reduced quarterly net loss to $2.2 million from $2.8 million in the
prior year period, and quarterly non-GAAP EBITDA loss to $1.3 million
from $3.0 million in the prior year quarter; driven by sales into higher
wind regimes and production cost control.
-- Completed prototype of next generation distributed class turbine which
will offer improved performance and economic returns.
-- Concluded capital raise of $22.3 million in April, supporting strategic
plans for global expansion in sales of Northern Power's offerings.
Northern Power Systems Corp. (TSX: NPS), a next generation renewable energy
technology company, today announced financial results for its three and six
month periods ended June 30, 2014.
"Our second quarter financial results demonstrated continued strong
year-over-year revenue growth. With our next generation distributed turbine
ready for the market and our capital raise concluded, we are planning our
targeted expansion strategy to enter new regions and market sectors," said Troy
Patton, president and chief executive officer. "We also continue to be very
pleased with the scope of our strategic partnership with WEG Industries. WEG's
production and delivery of 2MW turbines leveraging our licensed technology
platform continues on pace to fill its current Brazilian orders of greater than
150 MW. The 3.3MW turbine now under development supported by Northern Power
should add to a strong portfolio of offerings for WEG's commercialization of our
permanent magnet/direct drive technology in this rapidly expanding market."
"Our significant reductions in quarterly net loss and non-GAAP EBITDA loss, at
22 percent and 58 percent year-over-year, respectively, are demonstrating our
path toward break-even," commented Ciel Caldwell, chief financial officer. "We
are optimistic in our continued progress of tracking to profitability."
Consolidated Financial Metrics:
-- Revenue for the second quarter of fiscal year 2014 grew to $13.8
million, a 220 percent increase over revenue of $4.3 million reported in
the prior year period.
-- Order backlog at June 30, 2014 was $41 million, a 21 percent increase
over backlog of $34 million at June 30, 2013.
-- Gross margin (revenue minus the cost of revenue as a percent of total
revenue) in the second quarter was 16 percent, up from a gross margin
loss of 1 percent in the prior year period.
-- GAAP net loss for the second quarter was $2.2 million, representing a 22
percent decrease compared to a $2.8 million loss in the prior year
period.
-- Non-GAAP adjusted EBITDA loss for the second quarter was $1.3 million,
representing a 58 percent decrease compared to a non-GAAP adjusted
EBITDA loss of $3.0 million, in the prior year period.
-- Cash used in operations in the second quarter was $6.9 million,
representing a 244 percent increase compared to a $2.0 million usage of
cash for operations in the prior year period.
-- Debt at June 30, 2014 was $0 as compared to $12.5 million at December
31, 2013.
Webcast and conference call reminder
In conjunction with this announcement Northern Power Systems' management will
present prepared remarks and participate in a question and answer session at
5:00 p.m. EDT on August 5, 2014. Those who wish to view the presentation should
visit the "Investors" section of the Northern Power Systems' website at
http://www.ir.northernpower.com/events-and-presentations.aspx. The live call can
be accessed domestically at +1-877-317-6789 and internationally at
+1-412-317-6789. Participants should ask to be joined to the Northern Power
Systems call.
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 Power Systems has used a non-GAAP financial measure,
specifically non-GAAP adjusted EBITDA. Non-GAAP adjusted EBITDA 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 charges, and certain other non-cash charges, 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 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
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 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 (PM/DD) technology uses
fewer moving parts, delivers higher energy capture, and provides increased
reliability due to reduced maintenance and downtime.
* 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.
To learn more about Northern Power Systems, please visit www.northernpower.com.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Northern Power
Systems Corp. and its business, which may include, but is not limited to,
anticipated use of proceeds from capital transactions, 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 Corp. 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, performance and acceptance of the company's products,
economic factors, competition, the equity markets generally and many other
factors beyond the control of Northern Power Systems Corp. Although Northern
Power Systems Corp. 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 Corp. undertakes no obligation to
publicly update or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise.
NORTHERN POWER SYSTEMS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013 - INCLUDING
RESULTS OF THE PREDECESSOR COMPANY WIND POWER HOLDINGS, INC. AS APPLICABLE
(All amounts in thousands, except share and per share amounts)
----------------------------------------------------------------------------
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
REVENUES:
Net revenue $ 13,770 $ 4,306 $ 27,526 $ 5,984
COSTS OF REVENUE AND
OPERATING EXPENSES:
Cost of revenues 11,574 4,364 24,140 6,208
Sales and marketing 898 755 1,678 1,328
Research and
development 1,077 1,006 2,216 2,011
General and
administrative 2,393 1,540 4,569 3,052
------------- ------------- ------------- -------------
Total costs of
revenue and
operating expenses 15,942 7,665 32,603 12,599
------------- ------------- ------------- -------------
Loss from operations (2,172) (3,359) (5,077) (6,615)
Change in fair value
of warrants - 724 - 661
Interest income 5 - 5 -
Interest expense (37) (111) (277) (129)
Other
income/(expense) 67 (4) 102 (25)
------------- ------------- ------------- -------------
Loss before
provision for
income taxes (2,137) (2,750) (5,247) (6,108)
Provision for income
taxes 15 3 29 29
------------- ------------- ------------- -------------
NET LOSS (2,152) (2,753) (5,276) (6,137)
Foreign currency
translation (88) - (88) -
------------- ------------- ------------- -------------
COMPREHENSIVE LOSS $ (2,064) $ (2,753) $ (5,188) $ (6,137)
============= ============= ============= =============
Net loss applicable
to common
shareholders $ (2,152) $ (3,801) $ (5,276) $ (8,708)
Net loss per common
share
Basic and diluted $ (0.10) $ (13.22) $ (0.31) $ (57.29)
Weighted average
number of common
shares outstanding
Basic and diluted 21,088,589 287,413 16,964,388 151,995
NORTHERN POWER SYSTEMS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
AS OF JUNE 30, 2014 AND DECEMBER 31, 2013 - FOR THE PREDECESSOR COMPANY WIND
POWER HOLDINGS, INC.
(All amounts in thousands)
----------------------------------------------------------------------------
June 30, December 31,
ASSETS 2014 2013
CURRENT ASSETS:
Cash and cash equivalents $ 15,394 $ 4,534
Accounts receivable 3,535 1,175
Unbilled revenue 2,724 786
Inventories - net 13,568 11,682
Other current assets 2,579 2,808
------------------ ------------------
Total current assets 37,800 20,985
Property, plant and equipment - net 1,538 1,414
Asset held for sale - 1,300
Intangible assets - net 416 509
Goodwill 722 722
Other assets 731 2,615
------------------ ------------------
Total Assets $ 41,207 $ 27,545
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES:
Current portion of long-term debt $ - $ 141
Senior secured convertible notes - 12,107
Accounts payable 3,315 2,148
Accrued expenses 5,668 4,365
Deferred revenue 6,772 4,221
Customer deposits 6,440 10,917
Other current liabilities 717 3,327
------------------ ------------------
Total current liabilities 22,912 37,226
------------------ ------------------
Deferred revenue, less current portion 1,491 1,163
Other long-term liability 289 558
------------------ ------------------
Total Liabilities 24,692 38,947
------------------ ------------------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock 165,505 128
Additional paid-in capital 7,532 139,804
Accumulated other comprehensive income 88 -
Accumulated deficit (156,610) (151,334)
------------------ ------------------
Total Stockholders' Equity
(Deficiency) 16,515 (11,402)
------------------ ------------------
Total Liabilities and Stockholders'
Equity (Deficiency) $ 41,207 $ 27,545
================== ==================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
NORTHERN POWER SYSTEMS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013 - INCLUDING
RESULTS OF THE PREDECESSOR COMPANY WIND POWER HOLDINGS, INC. AS APPLICABLE
(All amounts in thousands)
----------------------------------------------------------------------------
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
OPERATING ACTIVITIES:
Net loss $ (2,152) $ (2,753) $ (5,276) $ (6,137)
Adjustments to
reconcile net loss
to net cash used in
operating
activities:
Change in fair value
of warrants - (724) - (661)
Provision for
inventory
obsolescence - - 93 48
Provision for
doubtful accounts (25) - (88) 1
Stock-based
compensation
expense 454 57 602 179
Depreciation and
amortization 391 310 569 537
Noncash restructure
charges - (31) - 19
Deferred income
taxes - 4 3 7
Changes in operating
assets and
liabilities:
Accounts receivable
and unbilled
revenue (587) 435 (4,209) 356
Other current and
noncurrent assets 296 115 184 408
Inventories (1,136) 105 (1,979) (1,338)
Accounts payable (1,024) 53 1,167 (4)
Accrued expenses (674) 252 1,416 386
Customer deposits (3,313) (335) (4,477) 1,018
Other liabilities 880 508 2,821 (258)
Net cash used in
operating
activities (6,890) (2,004) (9,174) (5,439)
------------- ------------- ------------- -------------
INVESTING ACTIVITIES:
Proceeds from sale
of property 1,300 - 1,300 -
Purchases of
property and
equipment (405) (18) (600) (71)
------------- ------------- ------------- -------------
Net cash provided
(used) by
investing
activities 895 (18) 700 (71)
------------- ------------- ------------- -------------
FINANCING ACTIVITIES:
Proceeds equity
financing 19,662 - 19,662 -
Proceeds from
exercise of stock
options 25 - 25 -
Proceeds from
issuance of
convertible notes - 4,525 - 4,525
Proceeds from
borrowings of
short-term debt - (750) - -
Debt principal
payments (382) (32) (441) (62)
------------- ------------- ------------- -------------
Net cash provided
by financing
activities 19,305 3,743 19,246 4,463
------------- ------------- ------------- -------------
Effect of exchange
rate change on cash 88 - 88 -
Change in cash and
cash equivalents 13,398 1,721 10,860 (1,047)
Cash and cash
equivalents -
Beginning of the
Period 1,996 1,688 4,534 4,456
------------- ------------- ------------- -------------
Cash and cash
equivalents - End
of the Period $ 15,394 $ 3,409 $ 15,394 $ 3,409
============= ============= ============= =============
NORTHERN POWER SYSTEMS CORP.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDA NET LOSS
(unaudited)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013 - FOR THE
PREDECESSOR COMPANY WIND POWER HOLDINGS, INC.
(All amounts in thousands)
----------------------------------------------------------------------------
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
NET LOSS $ (2,152) $ (2,753) $ (5,276) $ (6,137)
Interest expense 37 111 277 129
Provision for income
taxes 15 3 29 29
Depreciation and
amortization 391 310 569 537
Stock compensation
expense 454 57 602 179
Fair value of
warrants classified
as liability - (724) - (661)
------------- ------------- ------------- -------------
Non-GAAP adjusted
EBITDA net loss $ (1,255) $ (2,996) $ (3,799) $ (5,924)
============= ============= ============= =============
The following files are available for download:
-- PDF
-- NPS Q2 2014 Earnings Release 8052014 Financial Tables
FOR FURTHER INFORMATION PLEASE CONTACT:
Ciel R. Caldwell
Chief Financial Officer
Northern Power Systems
1.857.209.3606
ir@northernpower.com
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