10/31/2003 - Maxwell Technologies, Inc. (Nasdaq: MXWL) reported a net loss of $2.1 million, or $0.15 per share, on revenue of $10.9 million for its third quarter ended September 30, 2003. That compares with a net loss $23.5 million, or $1.73 per share, on revenue of $16.5 million, for the third quarter ended September 30, 2002. Cash and short-term investments totaled $5.8 million as of September 30, 2003.
Dr. Richard Balanson, Maxwell’s president and chief executive officer, said that, in line with the company’s strategy of focusing exclusively on high-reliability, high-margin product lines and eliminating non-core and low-margin products, it will divest its winding equipment business by the end of 2003. Balanson said that the company completed the previously announced divestiture of its tester business during the third quarter. Excluding charges of $.6 million, or $0.04 per share, associated with exiting the tester business, the third quarter net loss was $1.5 million.
Revenue for Maxwell’s core high-reliability products, which include ultracapacitor components and systems, high voltage capacitors and radiation-mitigated microelectronics, totaled $8.2 million for the third quarter. Balanson noted that, exclusive of tester-related charges, gross margins for high-reliability products increased by two percentage points sequentially from the second quarter to the third quarter, benefiting from continuing revenue mix improvement driven mainly by increasing ultracapacitor sales and the phase-out of low-margin, transformer based, power systems products.
“As we promised earlier in the year, Maxwell will enter 2004 with a highly focused line of core high-reliability products that will contribute gross margins above 60 percent on each dollar of incremental revenue,” Balanson said. “Significant cost reductions and efficiency improvements in each of our core businesses have reduced the company’s quarterly breakeven revenue threshold from more than $15 million at the beginning of 2003 to about $12.5 million in Q4. Further reductions are underway that should enable the company to turn profitable by the second half of next year.”
Cash used by operating activities in the third quarter was approximately $2.0 million, compared with $2.5 million in the same period in 2002.
“Our cash position is adequate for the near term, and we will net more than $5 million to augment cash reserves when we complete the sale of a vacant facility in San Diego, which is now in escrow and scheduled to close during the fourth quarter,” Balanson said.
The company will file its Form 10-Q, containing complete financial data and Management’s Discussion and Analysis of Financial Conditions and Results of Operations for the third quarter ended September 30, 2003, by November 14. That document will be available at the company’s web site via this link, or in hard copy by calling the company’s Investor Relations Department, at (858) 503-5165.
Management will conduct a conference call and simultaneous webcast to discuss third quarter financial results and the company’s future outlook and answer analysts’ questions at 11 a.m. (eastern) tomorrow, October 30, 2003. The call may be accessed by dialing toll-free, (888) 584-2147 from the U.S. and Canada, or (706) 679-7677 for international callers. The webcast and subsequent replay may be accessed at the company’s web site, via this link.
Maxwell sells reliability. We develop, manufacture and market electronic components and systems that perform reliably for the life of the applications into which they are integrated. Our BOOSTCAP® ultracapacitors and ultracapacitor-based energy storage systems uniquely address applications in transportation and consumer and industrial electronics. Our high-voltage grading and coupling capacitors are used in electric utility infrastructure and other applications involving transport, distribution and measurement of high voltage electrical energy. Our radiation-mitigated microelectronic products include power modules, memory modules and single board computers that primarily address applications in aerospace.
This news release contains financial projections and forward-looking statements that are subject to significant risks and uncertainties. These include development and acceptance of products based on new technologies, demand for original equipment manufacturers’ products reaching anticipated levels, general economic conditions in the markets served by the company’s products, cost-effective manufacturing of new products, successful assimilation of acquired businesses, completion of restructuring steps to improve operating performance and risks and uncertainties involved in foreign operations. These and other risks are detailed from time-to-time in the company’s SEC reports, including the report on Form 10-K for the year ended December 31, 2002. Actual results may differ materially from those projected. These forward-looking statements represent the company’s judgment as of the date of this news release. The company disclaims any intent or obligation to update these forward-looking statements.
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