Satcon Technology Corporation. (
Q2 2011 Earnings Call
August 9, 2011 05:00 p.m. ET
Steve Rhoades – President and CEO
Aaron Gomolak – EVP and CFO
Leah Gibson – Head of Investor Relations
Dale Pfau – Cantor Fitzgerald
Joe Maxa – Dougherty & Company
Francesco Citro – Ardour Capital Investments
Pavel Molchanov – Raymond James
Sean – Piper Jaffray
Colin Rusch – ThinkEquity
Jeff Osborne – Stifel Nicolaus
Carter Driscoll – Capstone Investments
John Hardy – Gleacher & Company
Previous Statements by SATC
» Satcon Technology Corporation CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Satcon Technology CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Satcon Technology CEO Discusses Q3 2010 Results – Earnings Call Transcript
» Satcon Technology Corporation Q2 2010 Earnings Call Transcript
Good afternoon and welcome everyone to Satcon’s Second Quarter 2011 Conference Call. Today’s call is being recorded. You may listen to the webcast on Satcon’s website located at www.satcon.com. In addition, today’s news release is posted on the site for those of you who did not receive it by email.
With us today, are Satcon’s President and Chief Executive Officer, Mr. Steve Rhoades; Executive Vice President and Chief Financial Officer, Mr. Aaron Gomolak; and Head of Investor Relations, Ms. Leah Gibson.
At this time for opening remarks, I’d like to turn the call over to Ms. Gibson. Please go ahead.
Thanks Manley and welcome to the call everyone. Before we begin, please note that the comments made on this conference call today may include forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein, that are not statements of historical facts, may be deemed to be forward-looking statements and may include the words, believes, anticipates, plans, expects, intend and similar expressions, which are intended to identify forward-looking statements.
Important factors that could cause actual results to differ materially from those inferred by such forward-looking statements are set forth under the caption Risk Factors in Satcon’s Quarterly Report on Form 10-Q for the quarter ended June 30th, 2011. These factors are included there for reference. Once filed with the SEC, copies of the 10-Q will be available from Satcon upon request and will be posted to the company’s Investor Relations website at satcon.com.
In addition, today’s call is being recorded and a webcast replay will be available on the Investor Relations website. This conference call and associated recordings belong to Satcon and are prepared for the benefit of our investors.
I will now turn the call over to our President and Chief Executive Officer, Steve Rhoades. Steve?
Thanks, Leah and good afternoon everyone. I’ll begin today by providing a brief overview of our topline results before discussing our current operational efforts. Then our CFO, Aaron Gomolak will take you through the financials before we turn the call over to your questions.
As everyone on this call is already aware, ongoing policy uncertainty across Europe and Asia in the second quarter of 2011 continued to present challenges for the industry. The compounding effects of prolonged policy restructuring in two of the world’s three largest markets as well as an increase in panel supply and reduction in panel and other balance of system cost has led to an environment while project development has slowed considerably in those markets.
Project developers and investors remained on the side line awaiting the anticipated continuation of price reduction along with the finalization of local Feed-In tariff regulation. These forces have directly affected Satcon’s ability to meet our initial revenue and cost targets for the second quarter.
Despite this challenging environment, we’ve achieved a 65% increase in sales growth over the same period last year. Primarily, due to the increased growth in the utility scale PV market in the US, where we continue to be the leading inverter system provider.
Sales for Satcon in the second quarter were $45.5 million with shipments totaling 195 megawatts compared with Q2 2010 sales of $27.6 million and a 105 megawatt shipped.
Our leadership position is supported by two recently published IMS reports which recognize Satcon as both the number two utility scale inverter supplier in the world as well as the number one supplier in North America, in the 100 kilowatt and above market segment. We build upon this strength to begin in the first quarter of 2011 by attaining the number one position in North America across all power rating.
In the second quarter we continued to see our strongest performing solutions within large scale commercial and utility segments greater than 250 kilowatts. In Q2, we shipped over a 167 megawatts of our large scale commercial and utility scale inverter systems representing 86% of our total megawatt shipped during the quarter.
Gross margin for the quarter was 8%. This was inline with our preannouncement in July, but below our initial projected range as a result of lower than expected Q2 revenue and other factors including one-time charges relating to the revaluation of material due to lower component costs, excess inventory provisions, and a non-recurring expense associated with a strategic decision to accelerate the development of our utility scale medium voltage Prism platform solutions.
As we announced in July, we’ve taken a number of actions to mitigate the challenges we experienced in the first half of the year. We initiated a restructuring plan to resize the company to align to our projected revenues for the second half. This resulted in a reduction of our global workforce of approximately 15%. These measures are always difficult, and we were diligent to structure them in a way that will not impede our ability to continue to develop our product line going forward, nor our ability to strengthen our global commercial operations and support our customers in each of our core markets.