Active Power Inc. (ACPW)
Q1 2010 Earnings Call
April 23, 2010 11:00 am ET
Jim Clishem - President & CEO
John Penver - CFO
Shawn Lockman - Ardour Capital
Kenda Misrali - SSM Investment
Ben Bloch - Odyssey Partners
Eiad Asbahi - Prescience Investment
Previous Statements by ACPW
» Active Power Inc. Q4 2009 Earnings Call Transcript
» Active Power Inc. Q3 2009 Earnings Call Transcript
» Active Power Inc. Q2 2009 Earnings Call Transcript
Good morning everyone. Thank you for participating in today’s conference call to discuss Active Power’s financial results for the first quarter ended March 31, 2010. With us today is Mr. Jim Clishem, President and Chief Executive Officer of Active Power and Mr. John Penver, the company’s Chief Financial Officer. Following their remarks, we will open the call for questions.
Before I continue, I would like to take a moment to read the company’s Safe Harbor statement. The company’s management on this call may make forward-looking statements that involve risks and uncertainties including statements relating to Active Power’s current expectations of operating results for the second quarter of 2010, its future operating results and its customers intentions. Any forward-looking statements and all other statements that may be made during this call are not historical facts are subject to a number of risks and uncertainties and actual results may differ materially.
Factors that could cause the actual results to differ materially from the results predicted include among others; deferral or cancellation of sales commitment as a result of general economical conditions, uncertainty risk related to our international operations, product performance and quality issues. For more information on the risk factors that could cause actual results to differ from these forward-looking statements, please refer to Active Power’s filings with the Securities and Exchange Commission including its annual report on Form 10-K for the ended December 31, 2009 and its current reports on Form 8-K filed since then.
Active Power assumes no obligation to update any forward-looking statements or information which are at effect as of their respective dates. I would now like to remind everyone that this call will be available for replay online until May 7, 2010 via Active Power’s website at www.activepower.com. Again that’s www.activepower.com.
I would now like to turn the call over to the President and Chief Executive Officer of Active Power, Mr. Jim Clishem. Please go ahead sir.
Thank you and good morning everyone for joining us today. Earlier today, we issued a press release announcing our first quarter 2010 results. Revenue for the first quarter of 2010 totaled $11.1 million which was the same as the first quarter of 2009, seasonally down from the fourth quarter results of $14 million. A milestone accomplished this quarter was achieving cash flow positive from operations for the first time in our company’s history. This is an important step towards our next objective achieving and sustaining operating profitability.
It’s also worth mentioning here a few positive from the first quarter which includes our gross margin improved to 26% this quarter from 19% in the prior quarter. Revenues from Asia Pacific region were $3.1 million, an increase of 243% compared to the first quarter of 2009 and our repeat customer business made up 65% of the unit’s order. Our OEM channel revenues increased 137% from the fourth quarter of 2009 and our net loss was approximately the same as the previous quarter even though revenue levels were lower.
Before I go further, I would like to turn the call over to our Chief Financial Officer John Penver who will take us through the financial details for the quarter. Then I will come back to discuss some of our operational highlights from the first quarter and then talk about our outlook for the second quarter of 2010. We will then open the call to your questions. So John?
John Penver - Chief Financial Officer
Thank you, Jim. Good morning everyone and thank you for joining us today. As Jim mentioned, revenue for the first quarter was $11.1 million. This was the same as the first quarter of 2009, 21% lower than the $14 million reported in the fourth quarter, reflecting the historical seasonal downturn that we typically experienced in our first calendar quarter. Our direct sales grew by 11% compared to the first quarter of 2009. This was predominantly in our Asian market where we had multiple mobile PowerHouse sales and some large UPS transaction.
In fact our sales in Asia were up 243% compared to the first quarter of 2009. Our OEM sales were down by 39% or $1.9 million compared to the first quarter of 2009 but actually increased by $1.7 million or 137% compared to the prior quarter. Product mix did change from the previous quarter. Our PowerHouse revenues this quarter were 9% of our revenue which compared to 30% of revenue in the prior quarter.
This is due to the timing of revenue recognition on a large project and we expect this number will increase again in the second quarter as we shift the number of PowerHouse orders that were in progress.
The total number of flywheel shipment increased in the prior quarter and this helped drive high utilization and manufacturing facility and improved our gross margin. Our first quarter service revenues of $1.7 million were 21% higher than the third quarter of 2009. This was down from those $3 million in the prior quarter, reflecting significantly lower project related revenues which is a function of the timing of the individual orders especially if it continuous power systems and PowerHouse related transaction.
Looking at the revenue from our different channels, the revenues from our OEM channel were 27% of revenue this quarter. This compared to 9% of revenue in the prior quarter and 43% of revenue in the first quarter of 2009.