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Maxwell Technologies Inc. Reports Operating Results (10-Q)

November 05, 2009 | About:
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10qk

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Maxwell Technologies Inc. (MXWL) filed Quarterly Report for the period ended 2009-09-30.

Maxwell Technologies Inc. is a leading developer and manufacturer of innovative cost-effective energy storage and power delivery solutions. Company's BOOSTCAP ultracapacitor cells and multi-cell modules and POWERCACHE backup power systems provide safe and reliable power solutions for applications in consumer and industrial electronics transportation and telecommunications. Our CONDIS high-voltage grading and coupling capacitors help to ensure the safety and reliability of electric utility infrastructure and other applications involving transport distribution and measurement of high-voltage electrical energy. Its radiation-mitigated microelectronic products include power modules memory modules and single board computers that incorporate powerful commercial silicon for superior performance and high reliability in aerospace applications. Maxwell Technologies Inc. has a market cap of $423.1 million; its shares were traded at around $16.29 with and P/S ratio of 5.2.

Highlight of Business Operations:

We reported revenue of $26.1 million and a net loss of $4.6 million, or $0.18 per diluted share, for the third quarter of 2009; compared with revenue of $21.4 million and a net loss of $5.7 million, or $0.27 per diluted share, for the same quarter in 2008. We reported revenue of $73.3 million and a net loss of $12.9 million, or $0.54 per diluted share, for the nine months ended September 30, 2009; compared with revenue of $57.5 million and a net loss of $16.2 million, or $0.79 per diluted share, for the nine months ended September 30, 2008.

Net loss for the third quarter of 2009 was $1.1 million lower than the same quarter one year ago. Net loss reported in the current quarter was $4.6 million, or $0.18 per share, while net loss was $5.7 million, or $0.27 per share, in the same quarter one year ago. The decrease in net loss was driven by a decrease in the loss from operations of $2.3 million and amortization of debt discount of $480,000, offset in part by an increase in the loss on embedded derivative and warrants of $1.8 million.

A substantial amount of our revenue is generated through our Swiss subsidiary. As such, reported revenue can be materially impacted by the fluctuation of the Swiss Franc to U.S. dollar, our reporting currency. However, the impact for comparing revenue for the third quarter of 2009 compared with the same quarter one year ago was less than half of one percent as the weighted-average foreign exchange rate of the U.S. dollar to the Swiss Franc was $0.9414 per Swiss Franc for the quarter ended September 30, 2009 compared with $0.9370 per Swiss Franc for the same quarter one year ago.

As sales of our ultracacitors product line have increased, the volume has reached a point where more cost effective means of shipping can be used. We are now utilizing a higher mix of ocean freight rather than air freight. As a result, freight costs during the third quarter of 2009 have decreased $552,000, or 43%, compared with the same quarter one year ago. As a percentage of ultracapacitor product revenue, freight costs have decreased to 4% in the third quarter of 2009, down from 13% in the same quarter one year ago. The increase in gross profit during the third quarter of 2009 compared with the same quarter one year ago improved by $405,000 due to favorable foreign currency exchange rates. Gross profit for the third quarter of 2009 was impacted negatively by lower license fee and service revenue of $407,000 compared with the third quarter of 2008.

We recorded an income tax provision of $33,000 for the third quarter of 2009 compared with $11,000 for the same quarter in 2008. This provision is related to our Swiss operations. Unremitted earnings of foreign subsidiaries have been included in the consolidated financial statements without giving effect to the United States taxes that may be payable as it is not anticipated such earnings will be remitted to the United States.

Net loss for the nine months ended September 30, 2009 improved $3.3 million, or 20%, compared with the same period one year ago. Net loss reported for the nine months ended September 30, 2009 was $12.9 million, or $0.54 per share, while net loss was $16.2 million, or $0.79 per share, in the same period one year ago. The improvement in net loss was impacted negatively by $5.2 million of higher losses on embedded derivatives and warrants during the nine months ended September 30, 2009 compared with the same period one year ago.

Read the The complete ReportMXWL is in the portfolios of Arnold Van Den Berg of Century Management.

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10qk
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