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Capstone Turbine Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 04:17PM

Capstone Turbine Corp. (CPST) filed Quarterly Report for the period ended 2011-09-30. Capstone Turbine Corp. has a market cap of $285.5 million; its shares were traded at around $1.1 with and P/S ratio of 3.5.



Highlight of Business Operations:

During the three months ended September 30, 2011, we booked total orders of $20.8 million for 152 units, or 20.5 megawatts, compared to $14.4 million for 138 units, or 14.8 megawatts, during the three months ended September 30, 2010. We shipped 172 units with an aggregate of 23.6 megawatts, generating revenue of $22.4 million compared to 174 units with an aggregate of 15.8 megawatts, generating revenue of $15.5 million during the three months ended September 30, 2010. Total backlog as of September 30, 2011 increased $30.2 million, or 36%, to $113.7 million from $83.5 million as of September 30, 2010. As of September 30, 2011, we had 675 units, or 126.8 megawatts, in total backlog compared to 667 units, or 93.4 megawatts, as of September 30, 2010. As of September 30, 2011 and September 30, 2010, all of the backlog was current and expected to be shipped within the next twelve months. The timing of shipments is subject to change based on several variables (including customer payments and changes in customer delivery schedules), many of which are not in our control and can affect our quarterly revenue and backlog. Our actual product shipments during the three months ended September 30, 2011 were: 21% for use in energy efficiency applications, 27% for use in renewable energy applications and 52% for use in oil, gas & other natural resources applications.

Revenue. Revenue for the three months ended September 30, 2011 increased $8.6 million, or 46%, to $27.5 million from $18.9 million for the three months ended September 30, 2010. The change in revenue for the three months ended September 30, 2011 compared to the three months ended September 30, 2010 included a $5.8 million increase in revenue from the European market, a $5.2 million increase in revenue from the North American market and a $0.8 million increase in revenue from the South American market, all primarily the result of our efforts to improve distribution channels. This overall increase in revenue was offset by a $1.9 million decrease in revenue from the Australian market, a $1.1 million decrease in revenue from the Asian market and a $0.2 million decrease in revenue from the African market because of lower sales volume in the regions.

Gross Margin. Cost of goods sold includes direct material costs, production and service center labor and overhead, inventory charges and provision for estimated product warranty expenses. The gross margin was $1.7 million, or 6% of revenue, for the three months ended September 30, 2011 compared to a gross margin of $0.1 million, or 1% of revenue, for the three months ended September 30, 2010. The improvement in gross margin of $1.6 million was the result of a $3.6 million benefit realized from a change in product mix, which reflects the sale of higher priced microturbine products, increased microturbine service work and parts, as well as FPP contract enrollments during the three months ended September 30, 2011. All microturbine products had better margins than in the same period last year as a result of higher average selling prices and overall lower direct material costs. The $3.6 million benefit related to product mix was offset by increases in production and service center labor and overhead expenses of $1.3 million, royalty expense of $0.4 million and warranty expense of $0.3 million. Management has implemented certain initiatives to further reduce direct material costs and other manufacturing and warranty costs as we work to achieve profitability.

Revenue. Revenue for the six months ended September 30, 2011 increased $16.9 million, or 48%, to $51.8 million from $34.9 million for the same period last year. The change in revenue for the six months ended September 30, 2011 compared to the six months ended September 30, 2010 included a $10.9 million increase in revenue from the North American market, a $8.3 million increase in revenue from the European market and a $1.6 million increase in revenue from the South American market, all primarily the result of efforts to improve distribution channels. This overall increase in revenue was offset by a $2.5 million decrease in revenue from the Asian market, a $1.3 million decrease in revenue from the Australia market and a $0.1 million decrease in revenue from the African market because of lower order volume in the regions.

Gross Margin (Loss). The gross margin was $2.2 million, or 4% of revenue, for the six months ended September 30, 2011 compared to a gross loss of $0.4 million, or -1% of revenue, for the six months ended September 30, 2010. The improvement in gross margin of $2.6 million was the result of a $7.3 million benefit realized from higher overall volume, improved average selling prices and lower direct material cost during the six months ended September 30, 2011. The C30, C65, TA100, C1000 Systems had better margins than in the same period last year as a result of higher average selling prices and all products had overall lower direct materials costs. The $7.3 million benefit was offset by an increase in production and service center labor and overhead expenses of $2.2 million, warranty expense of $1.4 million, inventory charges of $0.6 million and royalty expense of $0.5 million. Management has taken initiatives to further reduce direct material costs and other manufacturing and warranty costs as we work to achieve profitability.

Read the The complete Report



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