SatCon Technology Reports First Quarter Financial Results

May 14, 2007 by Jeff Shepard

SatCon Technology Corp. announced its operating results for the quarter ended March 31, 2007. Revenues for the quarter ended March 31, 2007 were $8.3 million compared with $7.6 million in the first quarter of 2006, an increase of 9%. Revenues in stationary power systems increased by 57% to $3.6 million for the quarter compared to $2.3 million in the first quarter of 2006. Driving that growth were increases in solar inverter revenues of over 220% to $3.2 million compared to $1.0 million in 2006. In addition, technology development revenue recorded growth of over 98% to $1.8 million from $0.9 million. This revenue growth in solar inverters and power technology development reflects the results of the company’s effort to focus on products targeted at the alternative energy and distributed power markets.

This trend can be seen in the quarter-end order backlog as well. Defined as firm purchase orders from customers for future delivery, the order backlog has not only increased over 56% to over $39 million at the end of the first quarter, up from $25 million at the end of the first quarter in 2006, but it has increased across all product lines. Stationary power systems increased over 100% to $17.8 million, technology and product development orders increased over 67% to $8.5 million, and the electronics business experienced a 12% increase to over $7 million. As of the end of April 2007, the sales order backlog topped $44 million, its highest level in the company’s history, with continued strong growth in all areas but driven primarily by the solar inverter product line. Sales order bookings for April alone were over $8 million, including over $4 million for Photovoltaic Inverters.

"This is definitely a positive trend," said David Eisenhaure, President and Chief Executive Officer. "With our current sales order backlog at over $44 million at the end of April, we believe that we have the ability to achieve revenues on the order of $50 million for the year 2007, up from our actual revenue in 2006 of approximately $34 million. The majority of the increase in our revenue is expected to come from our photovoltaic inverter product line. As we achieve this increased revenue for 2007, we expect our losses from operations to decline accordingly. We will need additional working capital to fund that growth, and we expect to request a release of a negative covenant with our note holders to allow us to secure this additional working capital financing."

Commenting on the financial results, David O’Neil, Vice President of Finance continued, "Our operating losses for the 1st Quarter of 2007 were $3.0 million as compared to $3.2 million in the same period of 2006. This decrease in losses is primarily attributed to lower cost of product in our Applied Technology division partially offset by the costs associated with the wind down of the products produced in our now closed Worcester facility. We continue to increase our direct investment spending in R&D with a modest increase of $0.1 million to $0.7 million in Q1 2007, primarily to support the development of new products in our solar inverter line and to develop new products in our Electronics division. Our SG&A costs are down by $0.5 million or 19% primarily in our corporate costs of legal and other fees, and reduced payroll and overhead costs."