Active Power, Inc. (ACPW)
Q2 2012 Earnings Call
July 30, 2012 04:30 pm ET
Doug Milner – President & Chief Executive Officer
John Penver – Chief Financial Officer & Vice President, Finance
Jeff Osborne – Stifel Nicolaus
Carter Driscoll – Capstone Investments
Jim McIlree – Collins Stewart
Carter Dunlap – Dunlap Equity Management
Previous Statements by ACPW
» Active Power's CEO Discusses Q1 2012 Results - Earnings Call Transcript
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» Active Power CEO Discusses Q2 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 Q2 and the six months ended June 30, 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. Then, before the conclusion of today’s call I’ll provide the necessary cautions regarding forward-looking statements made by management during this call. I would like to remind everyone that this call will be available for replay via Active Power’s website at
. 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, Operator. Good afternoon, everyone, and thank you for joining us today. Earlier today we issued a press release announcing our results for Q2 and six months ended June 30, 2012. We’re pleased to report record revenues this quarter of $21.7 million but more importantly did we achieve these revenues profitably. Net income for the quarter was $490,000 representing the bet quarterly profit in company history. Volume increase, mix, operational improvements and favorable timing on shipments of certain customer orders drove improvements in gross margins which increased to 36% from 27% in the previous quarter and 24% in the prior year.
As we have consistently stated our key priority is to get the business profitable by focusing on returning our UPS and continuous power systems to growth. We continue to see an increase in UPS opportunities as we execute our go to market strategy and as our sales organization gains experience and traction in the market. UPS revenues were 90% higher than the prior quarter and increased 61% versus the prior year.
We are pleased with the progress that we’ve shown. These factors combined with the introduction of our new UPS product platform later in the year lead us to be optimistic about the future of this important part of our business. Now I’d like to turn the call over to John to take us through the details of our Q2 results. I’ll then come back to provide more commentary on the quarter and discuss our priorities moving forward. We’ll then open the call to your questions. John?
Thank you, Doug. Good afternoon, everyone. Thank you for joining us on the call today. Revenue for Q2 2012 was $21.7 million, increasing sequentially by 9% and increasing by 13% compared to Q2 2011. For the first six months of 2012, our revenue totaled $41.5 million, or up by 13% from $36.5 million in the first half of 2011. Revenue in the quarter included $9.4 million of infrastructure solutions and services which was 43% of our revenues.
Looking at our product revenues of $17.5 million, they were split as follows: UPS systems, $9.6 million; infrastructure solutions, $7.9 million. Based on the timing of customer demand we did not have any continuous power solution product revenue in Q2. Compared to a year ago, this quarter reflected significant changes in the composition of revenue. This reflects the inherent variability of our continuous power and infrastructure business lines where large value and low volumes of transactions can quickly cause large fluctuations in quarterly revenue. Our continuous power solutions revenues were down by $9.1 million but offset by an increase of $7.1 million from the sale of infrastructure solutions and services and an increase of $4.5 million from UPS revenues.
Now, looking at our revenues by geography, our revenues from Asia this quarter of $1.1 million were down by $500,000 in the previous quarter and were down by $3 million from Q2 2011. Revenues from Asia comprised 5% of our total revenue for the quarter compared to 22% of revenue in Q2 2011. For the first half of 2012, our revenues from Asia were 7% of total revenue compared to 12% in 2011. In absolute dollar terms, our business in Asia was $2.8 million in the first half of 2012 compared to $4.4 million in the first half of 2011.
Revenues from Europe of $5.3 million were up $600,000 or 12% from the previous quarter. Revenues from Europe increased by $900,000 or 20% compared to Q2 2011. Revenues from Europe were 25% of revenue in Q2 compared to 26% of revenue in the previous quarter and 23% in Q2 2011. For the first half of 2012, our revenues from Europe were 24% of total revenue compared to 34% in 2011; and in absolute dollar terms our revenue from Europe was $10.1 million in the first half of 2012 compared to $12.5 million in the first half of 2011.
Revenues from the Americas of $15.2 million increased by $1.8 million or 13% from the previous quarter, and were $4.6 million or 43% higher than Q2 2011 driven by higher UPS and infrastructure solutions sales. Revenues from the Americas were 70% of our revenue this quarter compared to 68% in the previous quarter and 55% a year ago. For the first half of 2012 our revenues from the Americas were 69% of total revenue compared to 54% in 2011. In dollar terms, our business in the Americas during the first half of 2012 of $28.6 million is up 45% or $8.9 million compared to the first half of 2011. In total international sales were 35% of our revenues in Q2 compared to 32% in the previous quarter and 45% in Q2 2011.