News

Chinese E-Bus Market Impacts Maxwell’s Results

August 04, 2016 by Jeff Shepard

Maxwell Technologies, Inc. reported operational and financial results for the three months ended June 30, 2016. Total revenues for the second quarter of 2016 were $34.1 million, compared with $35.2 million for the first quarter of 2016 and $37.8 million for the prior year quarter. Net income for the second quarter of 2016 was $2.2 million, compared with a net loss of $6.8 million for the first quarter of 2016 and a net loss of $9.4 million for the prior year quarter. The Company reported $(0.7) million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the second quarter of 2016, compared with $(1.3) million for the first quarter of 2016 and $0.7 million for the prior year quarter.

"Second quarter financial results came in about where we expected despite a lack of clarity around changes to China's bus subsidy policy. Our third quarter outlook reflects continued weakness from the China bus market and a new challenge presented by a sudden slowdown in wind turbine deployments in China as we believe local governments are slowing down new installations in order to address local economic issues," said Dr. Franz Fink, Maxwell's president and chief executive officer.

"The proactive steps we took last year to restructure the company will allow us to withstand these more difficult near-term challenges. As we look at our growth prospects, we are making good progress executing our strategy of diversifying our business and we are establishing important partnerships that will allow us to transition our business to a very large, future market opportunity,” Fink continued.

Total revenue for the second quarter of 2016 was $34.1 million, compared with $35.2 million for the first quarter of 2016, primarily due to a decrease in ultracapacitor revenue and the sale of the microelectronics product line. Ultracapacitor revenue for the second quarter of 2016 was $21.2 million, compared with $23.5 million for the first quarter of 2016, primarily driven by an expected decline in the China hybrid bus market. High-voltage revenue was $11.8 million for the second quarter of 2016, compared with $8.2 million for the first quarter of 2016, primarily driven by a strong market in China following the release of China's new 5-year plan at the end of the first quarter.

Microelectronic revenue for the second quarter of 2016 was $1.1 million, compared with $3.5 million for the first quarter of 2016. The microelectronics product line was sold in April 2016 and revenue for the second quarter of 2016 reflects the 27 day period during which it was owned by Maxwell, compared with a full quarter of results in the first quarter of 2016.

Gross margin for the second quarter of 2016 was 29.2% compared with 27.4% in the first quarter of 2016, primarily reflecting an increase in high-voltage revenue.

Net income for the second quarter of 2016 was $2.2 million, or $0.07 per share, compared with a net loss of $6.8 million, or $(0.22) per share, for the first quarter of 2016. Adjusted EBITDA for the second quarter of 2016 was $(0.7) million, compared with $(1.3) million for the first quarter of 2016. The quarter-over-quarter improvement was primarily driven by margin improvements from increased high-voltage product sales and reduced operating expenses. Operating loss for the second quarter of 2016 was $3.8 million, compared with an operating loss of $6.2 million for the first quarter of 2016. The quarter-over-quarter improvement was primarily driven by higher gross margins and lower operating expenses.