SatCon Technology Corporation (SATC)
Q4 2011 Earnings Conference Call
March 1, 2012 05:00 PM EST
Leah Gibson – Director, IR
Stephen Rhoades – President and CEO
Aaron Gomolak – CFO
Dale Pfau – Cantor Fitzgerald
Pavel Molchanov – Raymond James
Jeff Osborne – Stifel Nicolaus
Carter Driscoll – Capstone Investments
Previous Statements by SATC
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Good afternoon and welcome, everyone, to SatCon’s Fourth Quarter and Full Year 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, Steve Rhoades; Executive Vice President and Chief Financial Officer, Aaron Gomolak; and Director of Investor Relations, Leah Gibson.
At this time for opening remarks, I would like to turn the call over to Ms. Gibson. Please go ahead.
Thanks, Robin, 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 fact may be deemed to be forward-looking statements and may include the words believes, anticipates, plans, expects, intends, 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 Form 10-Q for the quarter ended December 31, 2011. These factors are included there for reference. Once filed with the SEC, copies of the 10-K 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.
Finally I’d like to remind everyone that SatCon CFO, Aaron Gomolak is presenting at the Raymond James 33rd Annual Institutional Investor Conference in Orlando on Wednesday March 7th at 7:30 AM. A live webcast will be available on our investor website and an archive recording will be available as well.
With that, I’ll turn the call over to our President and CEO, Steve Rhoades. Steve?
Thanks Leah and good afternoon everyone. Let me begin by providing an overview of our performance and then Aaron, will take you through the financials before we turn the call over to the operator for your questions.
Recapping our top line results, 2011 was growth year for SatCon, with revenues up 9% over our results in 2010. Revenue for the fourth quarter of 2011 was $36 million, which is in line with the revised assumptions we made on our business update call in early January. Shipments for 2011 grew over 16% to 800 megawatts shipped with the 250 kilowatt and above segment representing 87% or nearly 700 megawatts of those shipments.
Over the past four years SatCon have been executing a three point strategy composed of domestic and international commercial expansion, strategic solution portfolio development and the implementation of a series of supply chain and operational best practices in order to achieve sustainable profitability alongside growth. Despite the challenges of last year, the fourth quarter of 2011 saw a series of significant milestones in attaining each of these objectives. We are now in a much stronger position as a result.
Today we will walk you through the measures we’ve taking to transform our worldwide organization to enable us to successfully and properly capitalize on the significant opportunities ahead. Those of you who joining the call today are aware, in 2011 the solar industry transformed from the hyper growth market of 2010 to a hyper competitive market.
Our North America and Asia experienced the significant growth for us. The utility-scale ground-mounted European market flattened under government policy changes and uncertainty. This caused significant price pressure in what had been of highly profitable market for SatCon just a year before and continues to be challenging in the first half of 2012. The dynamics of these market changes have forced the industry including SatCon to adjust.
As we have previously announced, over the past nine months, we have implemented a series of significant measures across our organization and adjusted our go-to-market strategies to better position our commercial efforts in each of our core markets. And most importantly, we’re executing our transition to a managed third-party manufacturing model that enables a more flexible and lean global operation through a variable cost structure that can easily ramp relative to immediate market conditions.
These changes along with our industry leading solutions for the utility solar segment and world class sales, engineering and services organizations position us to take advantage of the opportunities ahead, while maintaining a size and cost position that allows us to achieve profitability.
North America continued to be our strongest performing market in 2011 with shipments nearly doubling over 2010, representing 81% of megawatt shipped during the year. As European ground mount solar declined, we saw a number Europe based inverter manufacturers entered the US market. Despite this, SatCon continues to maintain its leadership position, shipping 645 megawatts into North America in the year.
US domestic market was expected to grow over 50% in 2011 and this is evident in our pipeline activity or in the past three months alone, we have added 2.5 gigawatts to our pipeline for medium voltage solutions for projects expected to begin construction in the next 12 months. We continue to invest in our leading solution portfolio for the North American solar market and we’ll be introducing several new products and services over the coming months as we see a significant long-term opportunity to build on our leadership in North America.