Maxwell Technologies, Inc. reported revenue of $43.9 million for its third quarter ended September 30, 2012, up 7 percent over the $41.1 million recorded in the same period in 2011. Third quarter ultracapacitor revenue was $28.8 million, up 15 percent from the $24.9 million recorded in Q311. Sales of high voltage capacitor and microelectronics products totaled $15.1 million in Q312, down 7 percent from the $16.2 million recorded in Q311.
On a U.S. generally accepted accounting principles (GAAP) basis, operating income for the third quarter 2012 was $5.9 million, compared with $1.2 million in Q311. GAAP net income for Q312 was $5.4 million, or $0.19 per diluted share, compared with $298,000, or $0.01 per diluted share, in Q311.
On a non-GAAP basis, the company reported operating income of $6.5 million in Q312 compared with $2.1 million in Q311. Non-GAAP net income for Q312 was $6.0 million, or $0.21 per diluted share, compared with $1.2 million, or $0.04 per diluted share in Q311. A reconciliation of GAAP to non-GAAP financial measures is included as an addendum to this release.
GAAP gross margin was 42 percent in Q312, compared with 40 percent in Q311 and 42 percent in Q212. GAAP operating expenses totaled $12.4 million, or 28 percent of revenue, in Q312 compared with $15.3 million, or 37 percent of revenue in Q311. Non-GAAP operating expenses totaled $12.0 million, or 27 percent of revenue, in Q312 compared with $14.6 million, or 36 percent of revenue, in Q311. Cash and cash equivalents totaled $20.1 million as of September 30, 2012, compared with $22.3 million as of June 30, 2012. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations will be available in the Company's Quarterly Report on Form 10-Q, which we anticipate filing next week with the Securities & Exchange Commission.
Outlook
"Lower demand in Europe and elsewhere has slowed ultracapacitor sales growth this year," said David Schramm, Maxwell's president and chief executive officer. "Looking ahead, global economic conditions and uncertainty about the direction of government policies and related funding make it difficult to forecast with any reasonable level of confidence. In this challenging environment we are focusing on identifying and developing new growth opportunities, improving efficiency and controlling expenses to optimize bottom line performance."
"Wind energy and hybrid transit bus applications continue to be primary drivers of ultracapacitor sales, and we believe that long-term growth prospects in those and other key verticals remain solid. However, we are now working with customers to resolve recently encountered hybrid bus drive system application issues that will delay previously forecasted deliveries. As a result of those delays and generally lower demand, we now expect fourth quarter revenue to be similar to that recorded in the first quarter of this year."
"Seasonal softness, primarily related to the Chinese New Year observance, is likely to push revenue sequentially lower in the coming first quarter. Despite this tempered near-term growth outlook, we are confident that our current cash and credit resources are sufficient to enable the Company to continue to advance its core technologies, develop and launch new products and expand production capacity as needed."
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures for internal evaluation and to report the results of its business. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net income (loss), and non-GAAP net income (loss) per diluted share. These measures are not in accordance with, nor an alternative to, GAAP. These measures are intended to supplement GAAP financial information, and may be computed differently from non-GAAP financial measures used by other companies. The Company believes that these measures provide useful information to its management, board of directors and investors about its operating activities and business trends related to its financial condition and results of operations. The Company believes that it is useful to provide investors with information to understand how specific line items in the statement of operations are affected by certain non-cash or non-recurring items, such as:
* Stock-based compensation expense;
* Amortization of intangible assets;
* Expense in a prior period for a legal settlement, and
* Gains or losses in prior periods on embedded derivative.
In addition, the Company's management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the Company's results of operations, as non-cash and non-recurring items have limited impact on current and future operating decisions. Additionally, the Company believes that inclusion of non-GAAP financial measures provide consistency and comparability with its past reports of financial results. However, investors should be aware that non-GAAP measures have inherent limitations and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Please refer to the accompanying tables for a detailed reconciliation of GAAP to non-GAAP gross profit, operating expenses, income (loss) from operations, net income (loss), and net income (loss) per share.
