Maxwell Technologies Inc. has a market cap of $450.1 million; its shares were traded at around $16.21 with and P/S ratio of 3.7.
Highlight of Business Operations:In Q1 2011, revenues were $35.3 million, representing an increase of 32% compared with the same period one year ago. Considering longer term growth, revenues were $121.9 million in 2010, representing an increase of 127% compared with five years ago (2006). This revenue growth is primarily attributable to increased ultracapacitor product sales, which grew in Q1 2011 by 55% compared with Q1 2010, and have grown 271% when comparing 2010 with five years ago. Further, overall gross profit in Q1 2011 was 39% compared with 38% in Q1 2010, and was 38% in 2010 compared with 23% five years ago. The improvement in gross profit has been driven mainly by significantly improved profitability for our ultracapacitor products related to increased sales volume and reduced manufacturing costs. For the first time in the last five fiscal years, we generated positive cash flow from operations of $8.7 million in 2010, reflecting our efforts to expand revenues while better managing manufacturing costs and operating expenses. As of March 31, 2011, we had cash and cash equivalents of $33.1 million, which we believe will be sufficient to fund operations for at least the next twelve months. However, in the future, we may decide to supplement planned cash flow provided from operations by securing additional bank lines of credit, issuing debt or equity.
Gross Profit. In the first quarter of 2011, gross profit increased $3.7 million or 36% compared with the same quarter one year ago. As a percentage of revenue, gross profit increased to 39% compared with 38% in the same period one year ago. Of the increase in gross profit in absolute dollars, $3.3 million related to an increase in the volume of sales, and $566,000 was due to net reductions of product costs. Offsetting these increases was a decrease in gross profit in absolute dollars of $205,000 related to net foreign exchange losses recorded in the three months ended March 31, 2011 compared with net foreign exchange gains recorded in the same quarter one year ago. We hedge intercompany and third-party asset and liability balances denominated in currencies other than the local currency. The net foreign exchange gains or losses recognized are the transaction gains and losses incurred on the hedged assets and liabilities,
Net cash used in operating activities was $12.7 million for the first quarter of 2011. Although the Company generated net income, net of non-cash items, of $1.7 million, the usage of cash was driven by an increase in accounts receivable of $5.1 million, an increase of inventories of $3.5 million, and a decrease in other long-term liabilities of $5.6 million. The increase in accounts receivable was due to significant sales in the last two weeks of the quarter. The increase in inventories was related to anticipated product demand and planned larger quantities shipped by sea versus air to reduce freight costs. The decrease in other long-term liabilities was due to the reclassification to accrued liabilities of $5.4 million in settlement payments due to the SEC and DOJ in the first quarter of 2012 related to the Foreign Corrupt Practices Act matter, while settlement payments totaling $6.7 million were made to the SEC and DOJ during the first quarter of 2011. Net cash provided by operating activities was $2.4 million for the first quarter of 2010, which related primarily to an increase in accounts payable and accrued liabilities during the period.
Net cash provided by financing activities was $9.0 million and $250,000 for the first quarters of 2011 and 2010, respectively. Net cash provided by financing activities in the first quarter of 2011 primarily resulted from proceeds from the issuance of common stock under our stock-based compensation plans, as well as the release of $8.0 million in restricted cash upon the settlement of the remaining principal balance of our convertible debentures. Net cash provided by financing activities in the first quarter of 2010 primarily resulted from proceeds from the issuance of common stock under our stock-based compensation plans.
As of March 31, 2011, we had approximately $33.1 million in cash and cash equivalents, and working capital of $51.5 million. As of March 31, 2011 we have accrued $7.7 million for the settlement of FCPA violations, with $5.4 million and $2.3 million payable in the first quarters of 2012 and 2013, respectively.
Maxwell SA entered into a lending agreement for the acquisition of manufacturing equipment in an amount up to 1.5 million Swiss Francs (approximately $1.6 million as of March 31, 2011). After the acquisition of the equipment was completed, the agreement converted to 48 monthly payments of 34,302 Swiss Francs with an interest rate of 2.22%. As of March 31, 2011 and December 31, 2010, the balance of the obligation was $111,000 and $210,000, respectively, with final payment due in the third quarter of 2011.
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