5/8/2003 - Maxwell Technologies, Inc. (Nasdaq: MXWL) reported a net loss of $4.4 million, or $0.32 per share, on revenue of $10.2 million for its first quarter ended March 31, 2003. That compares with a net loss of $6.7 million, or $0.65 per share, on revenue of $12.8 million for the first quarter ended March 31, 2002. Cash and short-term investments totaled $10.2 million at the end of the first quarter.
Rich Balanson, Maxwell's president and chief executive officer, said that deferred recognition of a substantial, non-refundable, cash payment received in February as part of an ultracapacitor manufacturing and marketing alliance with Yeong-Long Technologies, Co., Ltd., resulted in lower revenue and a larger net loss than had been expected.
"Although recognition of the initial revenue from the Yeong-Long alliance is being deferred, the strategic value of this relationship is immediate," Balanson said. "It gives Maxwell access to Yeong-Long's high-volume, low-cost manufacturing capabilities in China, enhances our reach as a global supplier and provides a royalty-bearing sales outlet for our BOOSTCAP(R) ultracapacitor products in China, all of which are integral to our growth strategy for ultracapacitors."
James Baumker, Maxwell's chief financial officer, said that the revenue deferral is consistent with recent rulings of the Emerging Issues Task Force that provide guidance on the timing of revenue recognition for contractual agreements with "multiple deliverables". He said that instead of immediately recognizing an initial payment received from Yeong-Long for a technology license and other services, the company now expects to recognize it later in 2003, or in early 2004.
Balanson noted that, with the exception of ultracapacitors, which are now on a strong growth track, driven by multiple design-ins that have advanced to commercial production, sales and bookings for Maxwell's other products continue to be affected by weak global manufacturing activity.
"We are experiencing soft demand for virtually all of our other components and systems products, as are most other suppliers to the manufacturing sector," Balanson said. "Despite this challenging sales environment, we are gaining market share and doing a good job on controlling costs. With our current lean expense structure, we will have tremendous leverage when the general economy picks up and our revenue increases, but our OEM customers are proceeding very cautiously right now, and it appears that any turnaround will be gradual."
Cash used by operating activities in the current quarter was approximately $0.8 million, compared with $5.0 million in the same period in 2002.
"The balance sheet is solid, and we expect to augment our cash reserves when we complete the sale of a vacant facility in San Diego later this year," 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 first quarter ended March 31, 2003, by May 15, 2003.
That document will be available via the Internet at the company's web site, through this link, or in hard copy by calling the company's Investor Relations Department, toll-free at (888) 307-7886, extension 3320.
Management will conduct a conference call and simultaneous webcast to discuss first quarter financial results and the outlook for the balance of 2003, and answer analysts' questions at 11 a.m. (eastern) tomorrow, May 7, 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 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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