Active Power, Inc. (ACPW)
Q1 2012 Earnings Call
April 24, 2012 4:30 PM ET
Doug Milner – President and CEO
John Penver – VP and CFO
Walter Nasdeo – Ardour Capital Investments
Jeff Osborne – Stifel Nicolaus & Company
Carter Driscoll – Capstone Investments
Previous Statements by ACPW
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» Active Power's CEO Discusses Q1 2011 Results - Earnings Call Transcript
Good afternoon, everyone. Thank you for participating in today’s conference call to discuss Active Power’s Financial Results for the First Quarter ended March 31, 2012.
With us today is Mr. Doug Milner, President and Chief Executive Officer of Active Power and Mr. John Penver, the Company’s Chief Financial Officer. Following their remarks, we will open up 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 related to Active Power’s current expectations of operating results for the second quarter of 2012 and fiscal 2012, its future operating results, and its customers’ current intentions.
Any forward-looking statements and all other statements that may be made during this call that are not historical facts and subject to a number of risks and uncertainties may actual results may differ materially. Factors that could cause the actual results to differ materially for the results predicted include, among others; the deferral or cancellation of sales commitments as a result of general economic conditions and uncertainty, risks related to our international operations, and product performance and quality issues.
For more information on the risk factors that could cause actual results to differ from this forward-looking statements, please refer to Active’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011 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 in effect as of respective dates. I would like to remind everyone that this call will be available for replay via Active Power’s website at www.activepower.com.
I would now like to turn the call over to the President and Chief Executive Officer of Active Power, Mr. Doug Milner. Sir, please go ahead.
Thank you. Good afternoon everyone and thanks for joining us today. Earlier today, in fact just a short while ago, we issued a press release announcing our results for the first quarter of 2012.
We started off 2012 with a solid quarter generating revenues of $19.8 million. This represented a record first quarter for us and our second highest revenue quarter overall. Our gross margin improved to 27% from 20% in the previous quarter. This was due to more favorable margins in our UPS business as well as improved execution and better pricing in our solutions business. As you may recall these were two of our key priorities.
To take us through the financials, the financial details for the quarter, I’d like to turn the call over to our Chief Financial Officer, John Penver but just before I do that I’d like to express everyone how pleased I am to be with Active Power. This is a unique company, built on a foundation of highly differentiated technology and backed by a passionate group of people. From our Board of Directors to our management team and employees, everyone works together as a team to bring ingenuity and a positive whatever it takes attitude to meeting customer needs.
Active Power’s experienced tremendous growth over the last several years by sticking to a simple value proposition and by taking an entrepreneurial approach to emerging business opportunities. However, the missing piece has been consistent profitability. We believe this can a remedied by getting back to basics, improving our execution and driving productivity within the business. As my predecessor Jan Lindelow spoke openly about we need a more consistent focus on our core UPS business along with improvement in the overall execution of our infrastructure solutions business. I’ll speak about that in more detail later.
Now I’d like to turn the call over to John to take us through our first quarter financial results then I’ll come back to talk more in depth about our priorities and strategies moving ahead including our outlook for the second quarter of 2012. We’ll then open the call up to you questions. John?
Thank you, Doug. Good afternoon everyone. Thank you for joining us on our call today. Revenue for the first quarter of 2012 was $19.8 million increasing sequentially by 8% an increasing by 14% compared to the first quarter of 2011. This is the highest first quarter revenue we recorded and the first time our first quarter has sequentially increased from the prior quarter.
Revenue in the quarter included $13.6 million of PowerHouse and infrastructure solutions and services which was 68% of our revenues with our largest quarterly revenue ever from infrastructure solutions in the first quarter.
Looking at our product revenues of $16.4 million, that was split as follows, UPS systems $4.2 million, continuous power solutions $4.9 million and infrastructure solutions $7.3 million. While our UPS systems business was down by 14% from the prior quarter which reflects pass seasonal trends we have seen an increase in orders in our pipeline and believe that this will result in an increase in our UPS systems revenue as a remainder of 2012.
This quarter we shipped 70 flywheels in UPS systems compared to 69 flywheels in the previous quarter. This was up from the 131 wheels shipped in the same year ago a quarter. Now a portion of these flywheels shipped in our continuous power solutions including PowerHouse so we would report the sales of such products as continuous power solution revenues.