PowerSecure International Inc. (POWR, Financial) filed Quarterly Report for the period ended 2012-03-31.
Powersecure Int has a market cap of $94.5 million; its shares were traded at around $5.1 with a P/E ratio of 100 and P/S ratio of 0.7.
Our first quarter 2012 gross margin as a percentage of revenue was 28.8% compared to 32.7% in the first quarter of 2011. On a year-over-year basis, gross margins were negatively impacted by the mild winter weather in the first quarter of 2012, which caused workloads to be reduced at certain utilities and the redeployment of those crews to other utilities and projects. Therefore, although Utility Infrastructure revenues were quite high, inefficiencies in cost of sales related to the demobilization and redeployment of crews negatively impacted first quarter 2012 gross margin results. The lower year-over-year gross margins were also due to the overall growth of Utility Infrastructure revenue in 2012, which is generally our lowest gross margin product and service category. As is always the case, variability in our quarterly gross margins is also caused by regular on-going differences in the mix of specific projects completed in each quarter.
Our consolidated revenues for the first quarter 2012 increased $9.5 million, or 40.3%, compared to the first quarter 2011 due to an increase in sales in each of our Utility and Energy Technologies segment products and services, including increases in Interactive Distributed Generation, Utility Infrastructure, and Energy Efficiency revenues.
Our Utility and Energy Technologies segment distributed generation revenues are very heavily affected by the number, size and timing of our Interactive Distributed Generation projects as well as the percentage of completion of in-process projects, and the percentage of customer-owned as opposed to PowerSecure-owned recurring revenue projects. Our Interactive Distributed Generation sales have fluctuated significantly in the past and are expected to continue to fluctuate significantly in the future. The increase in our Utility and Energy Technologies segment revenues in the first quarter 2012 over the first quarter 2011 consisted of a $5.6 million, or 73.2%, increase in revenues from Utility Infrastructure products and services, a $2.6 million, or 53.1%, increase in revenues from Energy Efficiency products, and a $1.4 million, or 12.2%, increase in revenues from Interactive Distributed Generation products and services. The increase in our Interactive Distributed Generation product sales and services reflects an increase in both our PowerSecure-owned recurring revenue systems and customer-owned project sales. During the first quarter 2012, 24.9% of our distributed generation revenues were derived from recurring revenue sales, a substantial increase over the first quarter 2011 when 16.7% of our distributed generation revenues were derived from recurring revenue sales. The increase in our Utility Infrastructure product sales and services was due to an increase in the number of utilities that we service, and an increase in those utilities spending levels on transmission and distribution system maintenance and construction. The increase in our Energy Efficiency sales and services in the first quarter 2012 compared to the first quarter 2011 reflects an increase in revenues from our portfolio of LED lighting products including existing and new products that were introduced in 2010 and 2011.
Our Utility and Energy Technologies segment gross profit increased $7.7 million, or 48.4%, in the first quarter 2012 compared to the first quarter 2011. As a percentage of revenue, our Utility and Energy Technologies segment gross profit margin in the first quarter 2012 was 28.8%, a decrease of 3.9 percentage points compared to the first quarter 2011. An important driver in the period-over-period change in our gross profit margin is the relative gross margins we generally earn in each of our Distributed Generation, Utility Infrastructure and Energy Efficiency product and service categories. Our Distributed Generation products and services generally yield gross profit margins in the 25-45% range, our Utility Infrastructure products and services generally yield gross profit margins in the 5-30% range, and our Energy Efficiency products generally yield gross margins in the 20-40% range. The gross profit margin we realize within these ranges largely correlates to the amount of value-added product and services we deliver, with highly engineered, turn-key projects realizing higher gross profit margins due to the benefits they deliver our customers and the value we deliver because we are vertically integrated. Because of these gross profit margin differences, changes in the mix of our product lines affect our consolidated gross profit margin results. Our lower gross profit margins in the first quarter 2012 compared to the first quarter 2011 were due to an increase in the growth and amount of Utility Infrastructure revenue in the first quarter 2012, which is generally our lowest gross margin product and service category. In addition, gross margins were negatively impacted by the mild winter weather in the first quarter of 2012, which caused workloads to be reduced at certain utilities and the redeployment of those crews to other utilities and projects. Therefore, although Utility Infrastructure revenues were quite high, inefficiencies in cost of sales related to the demobilization and redeployment of crews negatively impacted first quarter 2012 gross margin results. As is always the case, variability in our quarterly gross margins is also caused by regular on-going differences in the mix of specific projects completed in each quarter. In the long-term, we expect that gross profit margins for this segment will increase because of anticipated greater productivity, operations and manufacturing efficiencies, improvements in technology, and growth in our higher-margin recurring revenue projects.
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Powersecure Int has a market cap of $94.5 million; its shares were traded at around $5.1 with a P/E ratio of 100 and P/S ratio of 0.7.
Highlight of Business Operations:
Our consolidated revenues during the first quarter 2012 increased by $9.5 million, or 40.3%, compared to our consolidated revenues during the first quarter 2011. The drivers of this revenue increase were the across the board increases in revenues in each of our product and service areas, including a 73.2% increase in revenues from Utility Infrastructure products and services, a 53.1% increase in revenues from Energy Efficiency products, and a 12.2% increase in revenues from Interactive Distributed Generation products and services.Our first quarter 2012 gross margin as a percentage of revenue was 28.8% compared to 32.7% in the first quarter of 2011. On a year-over-year basis, gross margins were negatively impacted by the mild winter weather in the first quarter of 2012, which caused workloads to be reduced at certain utilities and the redeployment of those crews to other utilities and projects. Therefore, although Utility Infrastructure revenues were quite high, inefficiencies in cost of sales related to the demobilization and redeployment of crews negatively impacted first quarter 2012 gross margin results. The lower year-over-year gross margins were also due to the overall growth of Utility Infrastructure revenue in 2012, which is generally our lowest gross margin product and service category. As is always the case, variability in our quarterly gross margins is also caused by regular on-going differences in the mix of specific projects completed in each quarter.
Our consolidated revenues for the first quarter 2012 increased $9.5 million, or 40.3%, compared to the first quarter 2011 due to an increase in sales in each of our Utility and Energy Technologies segment products and services, including increases in Interactive Distributed Generation, Utility Infrastructure, and Energy Efficiency revenues.
Our Utility and Energy Technologies segment distributed generation revenues are very heavily affected by the number, size and timing of our Interactive Distributed Generation projects as well as the percentage of completion of in-process projects, and the percentage of customer-owned as opposed to PowerSecure-owned recurring revenue projects. Our Interactive Distributed Generation sales have fluctuated significantly in the past and are expected to continue to fluctuate significantly in the future. The increase in our Utility and Energy Technologies segment revenues in the first quarter 2012 over the first quarter 2011 consisted of a $5.6 million, or 73.2%, increase in revenues from Utility Infrastructure products and services, a $2.6 million, or 53.1%, increase in revenues from Energy Efficiency products, and a $1.4 million, or 12.2%, increase in revenues from Interactive Distributed Generation products and services. The increase in our Interactive Distributed Generation product sales and services reflects an increase in both our PowerSecure-owned recurring revenue systems and customer-owned project sales. During the first quarter 2012, 24.9% of our distributed generation revenues were derived from recurring revenue sales, a substantial increase over the first quarter 2011 when 16.7% of our distributed generation revenues were derived from recurring revenue sales. The increase in our Utility Infrastructure product sales and services was due to an increase in the number of utilities that we service, and an increase in those utilities spending levels on transmission and distribution system maintenance and construction. The increase in our Energy Efficiency sales and services in the first quarter 2012 compared to the first quarter 2011 reflects an increase in revenues from our portfolio of LED lighting products including existing and new products that were introduced in 2010 and 2011.
Our Utility and Energy Technologies segment gross profit increased $7.7 million, or 48.4%, in the first quarter 2012 compared to the first quarter 2011. As a percentage of revenue, our Utility and Energy Technologies segment gross profit margin in the first quarter 2012 was 28.8%, a decrease of 3.9 percentage points compared to the first quarter 2011. An important driver in the period-over-period change in our gross profit margin is the relative gross margins we generally earn in each of our Distributed Generation, Utility Infrastructure and Energy Efficiency product and service categories. Our Distributed Generation products and services generally yield gross profit margins in the 25-45% range, our Utility Infrastructure products and services generally yield gross profit margins in the 5-30% range, and our Energy Efficiency products generally yield gross margins in the 20-40% range. The gross profit margin we realize within these ranges largely correlates to the amount of value-added product and services we deliver, with highly engineered, turn-key projects realizing higher gross profit margins due to the benefits they deliver our customers and the value we deliver because we are vertically integrated. Because of these gross profit margin differences, changes in the mix of our product lines affect our consolidated gross profit margin results. Our lower gross profit margins in the first quarter 2012 compared to the first quarter 2011 were due to an increase in the growth and amount of Utility Infrastructure revenue in the first quarter 2012, which is generally our lowest gross margin product and service category. In addition, gross margins were negatively impacted by the mild winter weather in the first quarter of 2012, which caused workloads to be reduced at certain utilities and the redeployment of those crews to other utilities and projects. Therefore, although Utility Infrastructure revenues were quite high, inefficiencies in cost of sales related to the demobilization and redeployment of crews negatively impacted first quarter 2012 gross margin results. As is always the case, variability in our quarterly gross margins is also caused by regular on-going differences in the mix of specific projects completed in each quarter. In the long-term, we expect that gross profit margins for this segment will increase because of anticipated greater productivity, operations and manufacturing efficiencies, improvements in technology, and growth in our higher-margin recurring revenue projects.
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