SATC Satcon Technology Corp. (MM)

Satcon Technology Corporation (NASDAQ CM:SATC), a leading provider of utility scale distributed power solutions for the renewable energy market, today announced its results for the second quarter ended July 4, 2009.

                        (In millions, except per share data) Three Months Ended Six Months Ended July 4, 2009     June 28, 2008     % Change July 4, 2009     June 28, 2008     % Change   Revenue $ 9.2 $ 13.4 -31 % $ 24.1 $ 24.7 -3 %   Gross Margin 0.0 % 11.4 % 6.1 % 8.7 %   Operating (loss) income $ (7.0 ) $ (5.1 ) -38 % $ (12.2 ) $ (7.8 ) -55 %  

Net Loss Attributable to Common Stockholders

$ (7.1 ) $ (9.1 ) 22 % $ (19.0 ) $ (13.5 ) -41 %  

Net Loss Attributable to Common Stockholders per weighted average share, basic and diluted

$ (0.13 ) $ (0.18 ) 28 % $ (0.36 ) $ (0.27 ) -33 %

“Although the global recession and the lack of available financing for large scale solar projects made Q2 very challenging for Satcon and we missed our quarter targets, we were able to continue to execute on our overall corporate strategy,” said Steve Rhoades, President and Chief Executive Officer at Satcon. “We will accomplish this through maintaining our efforts to drive top-line growth through the introduction of high-value solutions such as Prism and Solstice, developing strategic partnerships with utilities, major system integrators and panel manufacturers, and aggressively expanding operations in EMEA and Asia, as well as reducing expenses through our move to low cost supply chain and manufacturing solutions.”

Highlights from Q2 included the company’s industry standard PowerGate line of solar PV Inverters eclipsing lifetime shipments over 340 megawatts, including over 170 megawatts delivered of the PowerGate 500kW solution.

The company also made generally available its Satcon S-Type PowerGate inverter, optimized for next-generation thin film panel technologies, and Satcon Prism™, North America’s first fully-integrated one megawatt medium voltage solution optimized for utility scale solar installations. The highly successful June launch of Prism secured nine megawatts of initial orders for the next generation solution.

Recently, Satcon signed distribution and reseller agreements with two leading vertically-integrated worldwide solar companies. Under these agreements, Satcon will provide its renewable energy solutions to large-scale commercial rooftop and utility grade projects in North America and China, further positioning itself to capitalize on the recently announced federal incentives and local feed-in tariff programs in those regions.

“We believe we are uniquely positioned with products and solutions, and as one of the global leaders in utility scale renewable energy, to take advantage of the second half recovery of the commercial and utility solar industry,” concluded Rhoades.

Conference Call Reminder

The company will hold a conference call to review its financial results and business highlights today, August 13, 2009 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 http://investor.satcon.com. The conference call also can be accessed by dialing (877) 869-3847 (U.S. and Canada) or (201) 689-8261 (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 24 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)         ASSETS

July 4,2009

December 31,2008

Current assets: Cash and cash equivalents $ 22,893,806 $ 9,957,716 Restricted cash and cash equivalents 84,000 84,000 Accounts receivable, net of allowance of $178,182 and $168,219 at July 4, 2009 and December 31, 2008, respectively

8,621,944

11,471,671

Unbilled contract costs and fees 213,730 398,707 Inventory 6,686,480 11,457,532 Prepaid expenses and other current assets   1,327,592         1,040,441     Total current assets $ 39,827,552 $ 34,410,067 Property and equipment, net 2,661,544 1,964,968 Goodwill, net 123,714 123,714 Intangibles, net   201,382         398,526     Total assets $ 42,814,192       $ 36,897,275     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Line of credit $ 3,000,000 $ 3,000,000 Accounts payable 6,998,960 8,588,313 Accrued payroll and payroll related expenses 2,282,318 2,042,786 Other accrued expenses 3,607,569 2,825,255 Accrued contract loss — 1,131,370 Accrued restructuring costs 292,318 602,782 Deferred revenue   162,352         4,214,389   Total current liabilities $ 16,343,517 $ 22,404,895   Warrant liabilities $ 2,849,528 $ 2,407,438 Deferred revenue, net of current portion 3,508,084 2,512,794 Redeemable convertible Series B preferred stock (75 and 290 shares issued and outstanding at July 4, 2009 and December 31, 2008, respectively; face value $5,000 per share; liquidation preference $375,000 and $1,450,000 at July 4, 2009 and December 31, 2008, respectively)

 

375,000

 

1,450,000

Other long-term liabilities   43,259         58,282   Total Liabilities $ 23,119,388 $ 28,833,409 Commitments and contingencies (Note H) Redeemable convertible Series C preferred stock (25,000 shares issued and outstanding at July 4, 2009 and December 31, 2008; face value $1,000 per share; liquidation preference $26,983,562 and $26,350,000 at July 4, 2009 and December 31, 2008, respectively)

 

$

 

19,665,703

 

$

 

17,248,593

  Stockholders' equity (deficit): Common stock; $0.01 par value, 200,000,000 shares authorized; 70,211,491 and 51,479,822 shares issued and outstanding at July 4, 2009 and December 31, 2008, respectively

$

702,115

$

514,798

Additional paid-in capital 219,469,087 182,222,762 Accumulated deficit (218,372,749 ) (189,962,435 ) Accumulated other comprehensive loss   (1,769,352 )       (1,959,852 ) Total stockholders' equity (deficit) $ 29,101       $ (9,184,727 ) Total liabilities and stockholders' equity (deficit) $ 42,814,192       $ 36,897,275   SATCON TECHNOLOGY CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)                

Three Months Ended

Six Months Ended

July 4,2009

   

June 28,2008

July 4,2009

   

June 28,2008

Revenue Product revenue $ 7,627,619 $ 9,555,891 $ 21,007,468 $ 19,731,809 Funded research and development and other revenue   1,563,131         3,807,450     3,044,798         4,991,128   Total revenue $ 9,190,750       $ 13,363,341   $ 24,052,266       $ 24,722,937     Cost of revenue: Cost of product revenue $ 7,935,446 $ 9,167,176 $ 20,220,484 $ 18,877,555 Cost of funded research and development and other revenue   1,251,418         2,666,547     2,368,251         3,682,420   Total cost of revenue $ 9,186,864 $ 11,833,723 $ 22,588,735 $ 22,559,975                 Gross margin $ 3,886       $ 1,529,618   $ 1,463,531       $ 2,162,962     Operating expenses: Research and development $ 2,244,162 $ 1,109,258 $ 4,115,424 $ 1,977,350 Selling, general and administrative 4,667,594 4,785,895 9,343,818 7,245,004 Restructuring charge — 606,607 — 606,607 Amortization of intangibles   78,571         78,572     157,144         157,144   Total operating expenses from continuing operations $ 6,990,327 $ 6,580,332 $ 13,616,386 $ 9,986,105                 Operating loss from continuing operations $ (6,986,441 )     $ (5,050,714 ) $ (12,152,855 )     $ (7,823,143 )   Change in fair value of warrant liabilities $ 1,776,137 $ (2,396,717 ) $ (3,594,334 ) $ (2,864,198 ) Other (loss) income, net (486,649 ) (17,570 ) (625,590 ) 241,353 Interest income 1,836 70,886 5,567 140,271 Interest expense   (137,823 )       (97,546 )   (220,184 )       (143,737 ) Net loss from continuing operations $ (5,832,940 )     $ (7,491,661 ) $ (16,587,396 )     $ (10,449,454 )   Loss from discontinued operations, net   —       $ (523,996 )   —       $ (967,403 ) Net loss $ (5,832,940 )     $ (8,015,657 ) $ (16,587,396 )     $ (11,416,857 )   Deemed dividend and accretion on Series C preferred stock and warrants

$

(887,526

)

$

(795,008

)

$

(1,709,020

)

$ (1,433,000 ) Dividend on Series C preferred stock   (387,051 )       (310,792 )   (708,089 )       (614,753 ) Net loss attributable to common stockholders $ (7,107,517 )     $ (9,121,457 ) $ (19,004,505 )     $ (13,464,610 )   Net loss per weighted average share, basic and diluted: From loss on continuing operations attributable to common stockholders

$

(0.13

)

$

(0.17

)

$

(0.36

)

$

(0.25

)

From loss on discontinued operations   —       $ (0.01 )   —       $ (0.02 ) Net loss attributable to common stockholders per weighted average share, basic and diluted

$

(0.13

)

   

$

(0.18

)

$

(0.36

)

   

$

(0.27

)

  Weighted average number of common shares, basic and diluted   54,717,764         50,414,800     53,127,814         50,174,860