Maxwell finishes 2009 with strong sales

Maxwell Technologies has reported revenue of USD28m for the quarter ending 31 December 2009, up 22 per cent over the USD22.9m recorded in the same period in 2008.

Operating loss for the fourth quarter of 2009 was USD9.7m, including a USD9.3m accrual for potential settlement of US Foreign Corrupt Practices Act violations, compared with a loss of USD1.9m in the same period last year.

Net loss for the quarter was USD10m or USD0.39 per share, compared with net income of USD1.4m, or USD0.07 per diluted share, in the fourth quarter of 2008.

The net income/loss comparison is also affected by: a one-time non-cash tax provision of USD1.7m, or USD0.06 per share, in the fourth quarter of 2009, associated with the transfer of certain intellectual property to the parent company from its Swiss subsidiary in order to maximise utilisation of US federal and state net operating-loss carry forwards; and a non-cash gain of USD1.9m, or USD0.07 per share, recorded in the fourth quarter of 2009 against a non-cash gain of USD3.2m, or USD0.14 per diluted share, recorded in the fourth quarter of 2008, based on the quarterly valuation of conversion features and warrants associated with convertible debentures issued in 2005.

As previously disclosed, the company has been conducting an inquiry into the nature of certain payments made to a former independent sales agent in China associated with sales of high-voltage capacitor products produced by Maxwell's Swiss subsidiary.

The company has been voluntarily sharing information with the Securities and Exchange Commission and the Department of Justice, and discussions with those authorities are ongoing.

For accounting purposes, under US Generally Accepted Accounting Principles (GAAP), based on the company's estimate of a potential settlement range of USD9.3m to USD20.0m, the company recorded an accrual of USD9.3m in the fourth quarter of 2009.

Boostcap ultracapacitor revenue in the fourth quarter of 2009 increased by 66 per cent to USD14.9m, compared with USD9m for the same period last year.

Sales of high-voltage capacitor and microelectronics products totalled USD13.1m for the fourth quarter of 2009, down six per cent from the USD14.0m recorded in the fourth quarter of 2008.

'Continuing strong demand for ultracapacitor-based energy-storage systems for wind turbines and hybrid transit buses were major drivers of a 52 per cent increase in ultracapacitor sales from 2008 to 2009,' said David Schramm, Maxwell's president and chief-executive officer.

'That volume increase, along with ongoing cost reductions and higher efficiency, contributed to a continuing improvement in operating results.

'Public sector policies and increasing global environmental consciousness continue to stimulate and mandate investment in renewable energy sources and more efficient, greener public transit, commercial and passenger vehicles, so we are bullish on the growth prospects for our Boostcap products.

'Reduced utility infrastructure and other outdoor-construction activity during the winter months tend to make the first quarter seasonally soft, so while sales are on pace to come in well above last year's first quarter, we expect top-line revenue to decline by approximately five to seven per cent sequentially from the fourth quarter of 2009 to the first quarter of 2010,' Schramm added.

Cash and restricted cash totalled USD37.6m as of 31 December 2009, compared with USD38.2m as of 30 September 2009.

Gross margin for the fourth quarter of 2009 was 34 per cent, compared with 39 per cent in the fourth quarter of 2008.

The gross margin comparison is affected by less favourable revenue mix in the current period and the positive impact in the fourth quarter of 2008 of several non-recurring items, including a USD0.5m forfeited deposit for the purchase of manufacturing equipment and USD500,000 of reimbursed research-and-development expense.

Excluding the USD9.3m settlement accrual, operating expenses totalled approximately USD9.8m, or 35 per cent of revenue in the fourth quarter of 2009, compared with USD11m, or 48 per cent of revenue in the fourth quarter of 2008.

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