Active Power Announces Second Quarter Financial Results

July 26, 2006 by Jeff Shepard

Active Power, Inc. announced results for its second quarter ended June 30, 2006. Revenue for the second quarter of fiscal 2006 was $5.5 million, up 17% from the same period last year and down 2% from the previous quarter. For the six-month period ended June 30, 2006 revenues were $11.0 million compared to $8.1 million in 2005, an increase of 36%.

Net loss for the second quarter of 2006 was $6.0 million, or $0.12 per share, compared to a net loss of $5.6 million, or $0.12 per share, for the same period last year and a net loss of $6.0 million, or $0.12 per share in the previous quarter. Net loss for this quarter includes $787,000, or 2 cents per share, for stock-based compensation. Excluding the effects of stock-based compensation expense, which we began reporting in 2006, our loss for the quarter was 7% lower than the $5.6 million loss recorded in the second quarter of 2005. Cash and investments usage for the quarter was $4.0 million, as compared to $4.5 million for the same period last year and $5.0 million for the previous quarter. Cash and investments at June 30, 2006 were $33.0 million.

"In the second quarter we began to see positive results from the sales resources that we've placed in our Europe, Middle East and Africa (EMEA) sales team," said Jim Clishem, President and CEO of Active Power. "International sales were up over 100% in Q2 as compared to the previous quarter. Bookings for this region look strong for Q3 and the remainder of 2006 as the expanding global data center market continues to value the small footprint and energy efficiency of our flywheel systems."

"We are transitioning the business to place emphasis and apply resources to higher margin sales of equipment and services, while also reducing expenses that don't directly correlate to this goal. We believe that the cost reduction measures we took this week will allow us to realign our resources and better position Active Power for profitable growth in the future."