Maxwell Technologies Reports Fourth Quarter and Year-End 2002 Results

2/28/2003 - Maxwell Technologies, Inc. (Nasdaq: MXWL) reported a net loss of $0.5 million, or $0.04 per share, on revenue from continuing operations of $15.5 million for its fourth quarter ended December 31, 2002. That compares with a net loss of $22.7 million, or $2.23 per share, on revenue from continuing operations of $15.4 million for the fourth quarter ended December 31, 2001.

Carl Eibl, Maxwell’s chief executive officer, said that despite the net loss, improved efficiency and reduced operating expenses enabled the company to generate positive cash flow from operations for the three months ended December 31, 2002. Cash and short-term investments, after a reduction of $2.8 million in long-term debt, totaled $11.1 million at year-end, compared with $8.3 million as of September 29, 2002. Long-term debt, consisting of a mortgage on a company-owned facility in San Diego, stood at $3 million. That facility has been listed for sale and, when sold, should contribute significant additional cash to the company’s balance sheet.

“The fourth quarter was the first financial reporting period reflecting the full effects of the Montena acquisition and the divestiture of non-core businesses and suspension of discontinued operations,” Eibl said. “With this go-forward profile, we believe that Maxwell is positioned to turn the corner to profitability for the full 2003 fiscal year, driven by significant ultracapacitor revenue growth.”

Eibl said that the company expects 2003 to be its first year of multimillion cell volumes for small cell BOOSTCAP® ultracapacitors. He said that large cell ultracapacitors continue to progress in the design-in and prototyping phase in the transportation and industrial markets, and that production volumes are expected to begin in 2004. Eibl said that the company expects revenue for the first quarter ending March 31, 2003, compared to the fourth quarter just ended, to be lower, primarily due to seasonally lower power systems sales and elimination of some low-margin power systems products, as well as the sale of a non-core product line at the end of the fourth quarter. However, he said that the Company expects to be cash flow positive and to benefit from a lower cost structure, particularly from more efficient factory utilization with the consolidation of manufacturing operations into two principal facilities in San Diego and Rossens, Switzerland.

For the fiscal year ended December 31, 2002, the company reported a net loss of $40.2 million, or $3.27 per share, including charges of $20.6 million for restructuring, net loss on sale of businesses, discontinued operations and fixed asset and goodwill write-downs. That compares with a net loss of $12.9 million, or $1.29 per share, including charges and credits which totaled a credit of $9.7 million for discontinued operations, a gain on the sale of a business and establishment of a tax valuation reserve, for the fiscal year ended December 31, 2001. The 2002 restructuring charges, write-off of fixed assets and write-down of goodwill related primarily to actions taken to prepare for the divestiture of the computing systems business of Maxwell’s I-Bus/Phoenix subsidiary. This disposition also resulted in the company recording a loss of $7.2 million in the third quarter ended September 29, 2002.

After the acquisition of Montena Components and the disposition of the I-Bus/Phoenix computing systems business and the TeknaSeal Division, which were completed during the third and fourth quarters of 2002, the company reorganized its ultracapacitor, high-voltage capacitor, power systems and microelectronics product lines into a new High Reliability Products segment. The Montena Components acquisition also included a business that makes precision winding equipment used to manufacture capacitors and batteries, which will be reported as a separate Winding Equipment segment.

Management will conduct a conference call and simultaneous webcast to discuss 2002 financial results and the outlook for 2003, and answer analysts’ questions at 11 a.m. (eastern) tomorrow, February 27, 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,, by clicking on “Investors” and then clicking on “Presentations”.

Maxwell sells reliability. We develop, manufacture and market electronic components and systems that perform reliably for the life of the end products into which they are integrated. Our power products address applications in transportation, telecommunications, consumer and industrial electronics, electric utility infrastructure and medical imaging. Our microelectronic products primarily address applications in aerospace. Our power product lines are comprised of ultracapacitors, high voltage capacitors, and custom power and energy storage systems. Our microelectronic product lines are comprised of radiation-shielded power modules, memory modules, and single board computers. We also design and sell automated winding equipment used to manufacture metalized film capacitors and lithium batteries.

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