Active Power's CEO Discusses Q3 2011 Results - Earnings Call Transcript

Active Power, Inc. ( ACPW)

Q3 2011 Earnings Call

October 26, 2011 4:30 Pm ET

Executives

Jan Lindelow - Interim President and CEO

John Penver - CFO

Analysts

Shawn Lockman - Piper Jaffray

Dilip Warrier - Stifel Nicolaus

Carter Driscoll - Capstone Investments

Jesse Herrick - Merriman Capital

Walter Nasdeo - Ardour Capital Investments

Henry Levy - Private Investor

Presentation

Operator

Good afternoon, everyone. Thank you for participating in today’s conference call to discuss Active Power’s financial results for the third quarter 2011 ended September 30, 2011. With us today is Jan Lindelow, Interim 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 up 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 fourth quarter of 2011 and fiscal year 2011, its future operating results, and its customers' current intentions.

Any forward-looking statements and all other statements that maybe made during this call that 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 material from the results predicted include among others, the deferral or cancellation of sales commitments as a result of the general economic conditions or uncertainties, 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 these forward-looking statements, please refer to Active Power filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year-ended December 31, 2010, 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 their respective dates.

I would now like to remind everyone that this call will be available for replay online until November 26, 2011, via Active Power’s Web site at www.activepower.com.

I would now like to turn the call over to the Interim President and Chief Executive Officer of Active Power, Mr. Jan Lindelow. Sir, please, go ahead

Jan Lindelow

Good afternoon and thank you for joining us today. My name is Jan Lindelow. I am the Interim President and CEO of Active Power. Earlier today, we issued a press release announcing our third quarter 2011 results. Before we discuss those results I would like to take a few minutes to briefly discuss why our leadership change recently made and what we are doing to find a permanent leader to take Active Power to the next level and to achieve consistent and profitability.

Active Power is in a new phase, an exciting phase and I look forward to explaining why shortly. Jim Clishem made significant contributions to the company since joining Active Power in 2005 and his appointment to President and CEO in 2006. Jim laid a successful commercialization strategy in 2005 to get the business back on a solid track. Since that time Active Power has achieved substantial growth rate. However, what the company is missing in addition to this growth is profitability.

So, Active Power is in a new phase which we believe will benefit from new leadership. The company’s board of directors has inactively involved in discussions regarding ways to grow the business and achieve profitability. These discussions and the decisions to make change at the CEO level were not made in haste and managed very deliberately. I accepted the position of the Interim President and CEO to oversee the day-to-day operations until the company appoints a permanent President and Chief Executive Officer. We are now in this process of qualifying executive candidates with this permanent position with the support of Korn Ferry International, a leading well known executive search firm. Our goal is to bring this individual on board within the next 120 days.

Having been a board member at Active Power for more than 13 years, I am excited about where we are and the inflection point we say. Active Power has substantial intellectual property and differentiated products and solutions. Our UPS products and continuous power and infrastructure solutions offer simplicity and cost efficiencies for our customers enabling them to solve real problems in there mission critical environment.

Having been in leadership role for companies that serve the IT and power markets, I am also excited to see datacenter market continue to grow at the rapid phase particular with increased use of web-based applications, software as a service and cloud computing. This will continue to drive global demand for IT infrastructure such as the products and solutions that Active Power offers.

We have a seasoned management team in place and a passionate employee base driving day-to-day strategy, growing the business and working hard to manage the operational impact on issues we face. I am excited to work with them. In sum, our goal is to achieve profitability through a deliberate and calculated approach.

Now, I would first like to turn the call over to our Chief Financial Officer, John Penver, who will take us through the financial details for the quarter. I will then come back to discuss what we see as priorities moving ahead to achieve profitability and outlook for the fourth quarter 2011 and end of year, will then open the call to your questions. John?

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