Maxwell Technologies' CEO Discusses Q2 2012 Results - Earnings Call Transcript
August 2, 2012 10:29 PM ET
Maxwell Technologies, Inc. (MXWL)
Q2 2012 Earnings Call
August 2, 2012 5:00 PM ET
Mike Sund – IR
David Schramm – President and CEO
Kevin Royal – SVP, CFO, Treasurer and Secretary
Ben Schuman – Pacific Crest Securities
Chris Godby – Stephens
Michael Lew – Needham
Matt Phil – Roth Capital
Josh Baribeau – Canaccord
Tom Daniels – Stifel Nicolaus
Chris Kovacs – Robert Baird
Colin Rusch – ThinkEquity
Good day and welcome to Maxwell Technology’s Second Quarter Financial Results. At this time, all participants are in a listen-only mode. Later you will have the opportunity to ask questions during the Q&A session. (Operator Instructions)
And it’s now my pleasure to turn the conference over to Mike Sund. Please go ahead.
Good afternoon. In a few moments you will hear from David Schramm, Maxwell’s President and CEO, and Kevin Royal, our Chief Financial Officer.
First, we need to advise you that the following discussion will include forward-looking statement based on our current expectations and assumptions. Such statements are subject to numerous risks and uncertainties and changes in circumstances and assumptions. Forward-looking statements in the following discussion do not purport to be predictions of future events or circumstances and may not be realized.
For further information regarding risks and uncertainties, please refer to the MD&A and Risk Factor sections of our SEC filings, including our most recent Form 10-Q and our annual report on Form 10-K.
Electronic copies of these filings may be accessed by visiting the investor section of our website, or via the SEC’s website. Printed copies may be obtained by contacting the company. We encourage all investors to read these reports and our other SEC filings.
Some of you are listening are listening via the internet and an archived replay of the call will be available online at our website. All information in today’s call is as of August 2nd, 2012. The company undertakes no duty to update our forward-looking statements to conform the statements to actual results or changes in the company’s expectation.
It’s now my pleasure to introduce Maxwell’s President and CEO, David Schramm.
Very good, Mike, and thank you. Good afternoon, everybody.
We’re pleased to report that Maxwell recorded total revenue of $40.9 million of the second quarter into June 30th, 2012. Well, that’s 12% sequentially from the first quarter and up 6% from the same quarter a year ago.
Ultracapacitor sales totaled $24.2 million, up 10% sequentially from the first quarter, but down slightly from the second quarter of 2011 due mainly to continuing soft demand in Europe. Second quarter sales of microelectronics and high voltage capacitor products came in at $16.7 million, down a bit from the unusually high sales posted in the first quarter, but up 19% from last year’s second quarter.
A particular note is that despite the challenging global economic environment, a favorable revenue mix and careful expense control enable the company to post net income of $2.7 million or $0.09 per share for the quarter. That compares with the loss of $0.04 per share in the same period last year. On a non-GAAP basis, net profit for Q2 was $3.5 million or $0.12 per share compared with $0.06 per share in Q2 last year.
Now, this was the ninth consecutive quarter the company has been profitable on a non-GAAP basis. And Kevin is going to provide you more financial details on all of this in a few minutes.
As noted in our press release, ultracap sales continue to be impacted by economic conditions in Europe and elsewhere. But that softness is being offset by growing demand in China driven mainly by ongoing infrastructure investments in both public transit and wind energy.
Wind turbine deployments in China continue to rebound from the government post slow down, we experience in the second half of last year. In fact, wind-related sales in the first quarter totaled more than the two previous quarter combined and increased further sequentially in Q2.
Looking ahead, China’s five-year plan calls for wind energy to account for 3% to 5% of the country’s total power generation by 2020. So we anticipate same demand for our products. Ultracapacitor sales for hybrid bus drive systems haven’t missed a beat as the Chinese central government and many regional and local governments continue to provide subsidies and policy support for hybridization of public transit vehicles to both improve fuel efficiency and to reduce urban air pollution.
We’re well aware that headlines predicting slower growth for the Chinese economy and the upcoming change in leadership raise questions about the sustainability of Maxwell sales into China. But there’s every indication that these infrastructure investments will continue to be a high priority. Information we received recently indicates that the subsidized transit bus privatization program for 25 major cities, has been so successful that the government intends to extend it to a number of additional cities.
And with the experience that they have gained through policies supported programs and their advantageous cost position versus competing OEMs in Asia, Europe, and North America, are Chinese wind and bus customers are beginning to win on substantial export business around the world.
There was a report a couple of months ago that one of our contract manufacturers, we selling its own branded ultracapacitor products to Maxwell customers directly. And the implication was that this was being done without our knowledge. Maxwell sells electrode to all of our contract manufacturers, and then purchases the completed cells for our own consumption.
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