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Active Power Reports Third Quarter 2011 Results

Active Power, Inc. (NASDAQ: ACPW), manufacturer of critical backup power systems and continuous power and infrastructure solutions, reported results for its third quarter and nine months ended Sept. 30, 2011.

Third quarter 2011 revenues were $20.6 million, representing a quarterly record for the company and an increase of $2.1 million or 12% versus the same year-ago quarter. Net loss was $1.3 million or $0.02 per share in the third quarter of 2011, compared to a net income of $55,000 or $0.00 per share in the same year-ago quarter.

Management Commentary

“Our continuous power and infrastructure solutions business represented the majority of our total quarterly revenue again in the third quarter 2011,” said John Penver, chief financial officer for Active Power. “The volume of our core UPS business has performed under expectations and this along with margin pressure on our infrastructure business has contributed to the decrease in our overall gross and operating margins. Sales mix as well as gross and operating margins were consistent with last quarter.”

“As we look to finish out the year and transition into fiscal 2012, our focus will be on growing our core UPS business, improving execution in our infrastructure business, and profitability,” said Jan Lindelow, interim president and CEO for Active Power. “Entering 2012, we plan to expand our product offerings and thereby increase our addressable market while meeting the future demands of the marketplace.”

Other Financial Highlights

  • For the nine months ended Sept. 30, 2011, revenues increased $11.5 million to $57.2 million, or by 25% compared to the same period in 2010
  • $11.8 million in continuous power and infrastructure solutions revenue, representing 57% of revenue in the quarter
  • 44% increase in information technology (IT) channel revenues compared to the same year-ago quarter
  • Gross profit for the quarter was 24%, consistent with gross profit from the previous quarter, and reflecting lower UPS (uninterruptible power supply) sales and a higher proportion of lower margin infrastructure business
  • For the nine-months ended Sept. 30, 2011, net loss of $3.8 million or $0.05 per share was an 8% improvement from the net loss of $4.1 million or $0.05 per share incurred in the same period of 2010

Operational Highlights

  • Deployed UPS (uninterruptible power supply) and continuous power systems in nearly all of the company’s 13 key trading regions, including a major installation in the Netherlands
  • Built and shipped highest quarterly level of continuous infrastructure solutions to date
  • Received multiple PowerHouse order from HP to support the HP POD 240a at a datacenter facility in Texas, part of one of the most innovative and efficient datacenter and infrastructure solutions available on the market today
  • Joined Green IT Amsterdam, a consortium of public and private sector organizations with the goal of greening IT infrastructure, reducing CO 2 emissions, and developing a green economy in Amsterdam

Outlook

Active Power expects fourth quarter 2011 revenues between $18 million and $21 million and full year 2011 revenues between $75 million and $78 million. Fourth quarter earnings per share is expected to range between $(0.03) and $0.00 per share, including costs of $0.01 per share related to the departure of the former president and CEO. Changes in cash and investments are expected to be driven by changes in working capital requirements.

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