Satcon Technology Corporation (NASDAQ CM:SATC) Revenue increased
38% to $18.5 million from $13.4 million in Q2�08 Gross margin
improved to 18.9% from 11.7% in Q2�08 Backlog grew 30% over Q2�08
Company expects to achieve operating profitability in 2H 2009
Satcon Technology Corporation (NASDAQ CM:SATC), a leading provider
of utility scale distributed power solutions for the renewable
energy market, today announced its financial results for the third
quarter ended September 27, 2008. These results reflect the sale of
the company�s Electronics and Motors businesses during the quarter,
which have been classified as discontinued operations. Satcon
reported revenue for the third quarter of $18.5 million, up from
$17.4 million in the third quarter of fiscal 2007, and up from
$13.4 million in the second quarter of fiscal 2008. For the nine
months ended September 27, 2008, revenue grew 45% to $43.2 million
from $29.8 million in the first nine months of 2007. Gross margin
for the quarter was 18.9% compared with 12.4% in the third quarter
of 2007, and 11.7% in the second quarter of 2008. For the nine
months ended September 27, 2008, gross margin more than doubled to
13.6%, compared with 5.5% in the same period last year. Net loss
from continuing operations for the third quarter was approximately
$1.3 million, compared with a net loss of $2.4 million for the
third quarter of 2007. Third-quarter 2008 net loss included a
non-cash gain related to the valuation of warrant liability of $2.0
million, a loss from discontinued operations of $1.0 million,
restructuring costs of $0.5 million, and stock-based compensation
of $0.7 million. Third-quarter 2008 net loss was offset by a gain
on the sale of the company�s non-strategic businesses of $0.3
million. For the nine month period of 2008, net loss was $13.3
million, compared with a net loss of $9.8 million for the same
period in 2007. Net loss attributable to common shareholders was
$3.0 million, or ($0.06) per share, and $16.5 million, or ($0.33)
per share, for the three- and nine-month periods ending September
27, 2008, respectively. Cash and cash equivalents at September 27,
2008 were $10.5 million, compared with $9.8 million at June 28,
2008. The company reported an ending backlog on September 27, 2008
of $39 million, compared with backlog of $30 million at June 28,
2008. Comments on the Third Quarter �We are very pleased with our
third quarter results, which reflect the continued growth of our
solar PV and fuel cell inverter business,� said Steve Rhoades,
President and Chief Executive Officer of Satcon. �Sales of our
power conditioning systems increased 120% over the same period in
2007 highlighting the increasing global demand for our utility
ready solutions. In addition, we achieved gross margin of 18.9%
demonstrating the success of our strategy to improve our
operational and manufacturing efficiencies.� Business Outlook �With
the sale of our Electronics and Motors divisions, we have focused
the company on a core business model that will accelerate Satcon�s
ability to meet our financial objectives,� said Rhoades. �Looking
ahead, we continue to expect strong sales of our photovoltaic and
fuel cell solutions. We also expect to continue to improve our
margins as we remain focused on managing the overall costs of our
business. Based on our current financial momentum, we believe
Satcon will achieve operating profitability in the second half of
2009.� Conference Call Reminder The company will hold a conference
call to review its financial results and business highlights today,
November 6, 2008 at 5:00 p.m. ET. During the conference call, the
company may answer questions concerning business and financial
developments and trends, and other business and financial matters.
The company�s responses to these questions, as well as other
matters discussed during the conference call, may contain or
constitute information that has not been previously disclosed. The
conference call will be webcast live over the Internet and can be
accessed on the Investor Relations section of the company�s website
at www.Satcon.com. The conference call also can be accessed by
dialing (800) 967-7134 (U.S. and Canada) or (719) 325-2445
(International). Interested parties that are unable to listen to
the live call may access an archived version of the webcast on
Satcon�s website. About Satcon Satcon Technology Corporation is a
leading provider of utility scale distributed power solutions for
the renewable energy market, enabling the industry�s most advanced,
reliable, and proven clean energy alternatives. For over 22 years,
Satcon has designed and delivered the next generation of efficient
energy systems for solar photovoltaic, stationary fuel cells,
wind-turbines, and energy storage systems. To learn more about
Satcon, please visit www.Satcon.com. Safe Harbor Statements made in
this document that are not historical facts or which apply
prospectively are forward-looking statements that involve risks and
uncertainties. These forward-looking statements are identified by
the use of terms and phrases such as "will," "intends," "believes,"
"expects," "plans," "anticipates" and similar expressions.
Investors should not rely on forward looking statements because
they are subject to a variety of risks and uncertainties and other
factors that could cause actual results to differ materially from
the company's expectation. Additional information concerning risk
factors is contained from time to time in the company's SEC
filings, including its Annual Report on Form 10-K and other
periodic reports filed with the SEC. Forward-looking statements
contained in this press release speak only as of the date of this
release. Subsequent events or circumstances occurring after such
date may render these statements incomplete or out of date. The
company expressly disclaims any obligation to update the
information contained in this release. SATCON TECHNOLOGY
CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) � � September
27, December 31, ASSETS 2008 � 2007 Current assets: Cash and cash
equivalents $10,445,529 $12,615,566 Restricted cash and cash
equivalents 84,000 84,000 Accounts receivable, net of allowance of
$128,312 and $124,279 at September 27, 2008 and December 31, 2007,
respectively 9,517,751 8,532,141 Unbilled contract costs and fees
561,233 536,567 Inventory, net 16,287,671 13,807,201 Prepaid
expenses and other current assets 1,168,194 1,002,187 Current
assets of discontinued operations � � 5,384,412 � Total current
assets 38,064,378 41,962,074 Property and equipment, net 2,275,285
1,765,453 Goodwill, net 123,714 123,714 Intangibles, net 498,023
793,739 Other long-term assets 1,561 32,931 Non-current assets of
discontinued operations � � 1,930,766 � Total assets $40,962,961 �
$46,608,677 � LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities: Bank line of credit $3,000,000 $� Accounts
payable 8,071,237 7,631,486 Accrued payroll and payroll related
expenses 2,511,645 1,838,792 Other accrued expenses 3,286,330
3,182,157 Accrued contract losses 1,338,753 1,300,000 Accrued
restructuring 936,964 � Deferred revenue 9,034,026 7,672,451
Current liabilities of discontinued operations � � 2,266,191 Total
current liabilities $28,178,955 $23,891,077 � Warrant liability
3,494,567 3,244,316 Redeemable convertible Series B Preferred Stock
(290 and 340 shares issued and outstanding at September 27, 2008
and December 31, 2007; face value $5,000 per share; liquidation
preference$1,450,000 at September 27, 2008 and $1,700,000 at
December 31, 2007). 1,450,000 1,700,000 � Other long-term
liabilities 57,616 70,075 Non-current liabilities of discontinued
operations � � 63,825 Total liabilities $33,181,138 $28,969,293 �
Commitments and contingencies � Redeemable convertible Series C
Preferred Stock (25,000 shares issued and outstanding at September
27, 2008 and December 31, 2007, face value $1,000 per share,
liquidation preference $30,000,000 at September 27, 2008 and
December 31, 2007) 16,137,937 13,276,091 � � Stockholders' equity
(deficit): Common stock; $0.01 par value, 200,000,000 shares
authorized; 51,171,002 and 49,803,979 shares issued and outstanding
at September 27, 2008 and December 31, 2007, respectively $511,710
$498,040 � Additional paid-in capital 182,152,809 180,933,100
Accumulated deficit -190,096,204 -176,757,615 Accumulated other
comprehensive loss -924,429 � -310,232 Total stockholders' equity
(deficit) ($8,356,114) � $4,363,293 Total liabilities and
stockholders' equity (deficit) $40,962,961 � $46,608,677 � � � � �
SATCON TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) � Three Months Ended Nine Months Ended September 27,
September 29, September 27, September 29, 2008 � 2007 � 2008 � 2007
Revenue: Product revenue $17,215,392 $14,698,799 $36,947,201
$23,547,007 Funded research and development and other revenue
1,301,362 � 2,724,819 � 6,292,490 � 6,284,664 Total revenue from
continuing operations $18,516,754 � $17,423,618 � $43,239,691 �
$29,831,671 Operating costs and expenses: Cost of product revenue
13,869,078 13,267,952 32,509,593 23,528,824 Research and
development and other revenue expenses: Funded research and
development and other revenue expenses 1,145,719 1,989,552
4,828,139 4,658,398 Unfunded research and development expenses
1,642,265 � 618,690 � 3,619,615 � 1,428,800 Total research and
development and other revenue expenses $2,787,984 $2,608,242
$8,447,754 $6,087,198 Selling, general and administrative expenses
4,585,771 2,344,088 11,830,775 6,759,307 Amortization of
intangibles 78,572 78,573 235,716 235,717 Restructuring costs
512,609 � � � 1,119,216 � � Total operating costs and expenses from
continuing operations $21,834,014 � $18,298,855 � $54,143,054 �
$36,611,046 Operating loss from continuing operations ($3,317,260)
($875,237) ($10,903,363) ($6,779,375) Change in fair value of
convertible notes and warrants 2,041,697 -1,008,163 -822,501
-423,535 Other (income) expense, net 57,734 -64,370 62,047 -115,444
Interest income 56,872 56,804 197,143 179,035 Interest expense
-98,139 � -496,039 � -241,876 � -1,729,481 Net loss from continuing
operations ($1,259,096) � ($2,387,005) � ($11,708,550) �
($8,868,800) � Loss from discontinued operations, net ($990,434)
($256,854) ($1,957,837) ($896,086) Gain on sale of discontinued
operations, net 327,798 � 327,798 � � � � � � � � Net loss
($1,921,732) � ($2,643,859) � ($13,338,589) � ($9,764,886) �
Accretion on Series C Preferred Stock to redemption value (745,300)
� (2,062,300) � Dividend on Series C Preferred Stock (310,793) �
(925,546) � Deemed dividend on Series C Preferred Stock (10,000) �
(126,000) � � � � � � � � Net loss attributable to common
stockholders ($2,987,825) � ($2,643,859) � ($16,452,435) �
($9,764,886) � Net loss per weighted average share, basic and
diluted: From loss on continuing operations attributable to common
shareholders ($0.05) ($0.05) ($0.29) ($0.20) From loss on
discontinued operations ($0.02) ($0.01) ($0.04) ($0.02) From gain
on sale of discontinued operations $0.01 � � � $0.01 � � Net loss
attributable to common stockholders per weighted average share,
basic and diluted ($0.06) � ($0.06) � ($0.33) � ($0.22) � Weighted
average number of common shares, basic and diluted 51,013,182
47,841,373 50,454,300 44,035,169
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