Maxwell Technologies, Inc. reported results for its 2018 third quarter for the period ended September 30, 2018, including total revenue for the third quarter of 2018 of $33.7 million, compared with $29.5 million for the second quarter of 2018.
Energy storage revenue for the third quarter of 2018 was $26.5 million, compared with $22.7 million for the second quarter of 2018, driven by seasonal growth in wind and sequential growth in non-China bus. High-voltage capacitor revenue was $7.2 million for the third quarter of 2018, compared with $6.8 million for the second quarter of 2018.
Gross margin for the third quarter of 2018 was 18.9% compared with 18.4% in the second quarter of 2018, driven primarily by the slight increase in high voltage capacitor product sales, which generally have higher gross margins than the corporate average.
“Overall, our third quarter results were in line with the midpoint of our guidance range, and we continued to make progress with the build-out of our product portfolio and in establishing new business relationships. In Q3, we experienced sequential revenue growth driven by energy storage product sales in the wind and non-China bus markets, enhanced our position in the grid market with a new partnership, and our overall pipeline continues to grow," said Dr. Franz Fink, Maxwell’s President and Chief Executive Officer.
"Additionally, testing of our dry battery electrode technology is progressing to plan and we are making headway with potential partners, which should change the long-term dynamics of our business. Long-term, we remain optimistic about our competitive position and our ability to capitalize on the global opportunities ahead of us," Dr. Fink continued.
“In Q4, we expect to see typical seasonal softness in the wind market, with revenue pressure somewhat offset by sequential growth in the grid and auto markets. We are continuing to forecast relatively flat high voltage product line revenue given the uncertainty surrounding the recent U.S. tariffs on China imports, as well as an unclear U.S. tax incentive policy.
"While we expect near-term results to be impacted by global issues, we are focused on tightly managing our expenditures and generating efficiencies across our organization and throughout our global footprint, and our long-term position remains strong. Overall, momentum is building and we believe we are well positioned in large, global markets that are growing and have a need for our technology solutions," concluded Dr. Fink.
- In August, Maxwell closed a public offering of 7,590,000 shares of its common stock at a public offering price of $3.25 per share. The Company received total net proceeds of approximately $23 million from the offering, after deducting the underwriting discounts and commissions and estimated offering expenses payable by the Company.
- Maxwell announced a grid energy storage subsystem design-in with Siemens Transmission Solutions. Maxwell’s Grid Energy Storage Systems will provide economical, fast responding, long life grid voltage and frequency support as an integral design element in Siemens advanced system solution. This solution is intended to stabilize global power grids, enabling ISOs, electric utilities and transmission system operators to have better control of their grids and reduce the risk of blackouts.
- Maxwell announced that its CONDIS® branded capacitors will be the first to market with the largest 550kV DC meshed grid that includes four types of new capacitors for DC converter valve ultra high voltage circuit breakers using four lines and four substations. These products will be delivered to the major OEMs involved in a grid initiative called the ZhangBei Project, which will secure power supply to Beijing from a variety of renewable sources, including wind and solar power.
Operating Expense, Interest Expense, Net Loss & Adjusted EBITDA
- Operating expense for the third quarter of 2018 was $14.6 million, compared with $15.4 million for the second quarter of 2018. The sequential decrease was driven primarily by lower stock-based compensation expense.
- Non-GAAP operating expense was $12.7 million for both the second and third quarters of 2018 and excludes stock-based compensation, amortization of intangibles, and restructuring and related expenses.
- Net interest expense was approximately $1.3 million for the third quarter of 2018 compared with $1.0 million for the second quarter of 2018, and includes coupon interest and non-cash interest from amortization of debt issuance costs and discounts on convertible notes issued in 2017.
- Non-GAAP interest expense was approximately $0.8 million for the third quarter of 2018 compared with $0.7 million for the second quarter of 2018, and excludes the non-cash interest mentioned above.
- Net loss for the third quarter of 2018 was $9.7 million, or $(0.23) per share, compared with a net loss of $11.3 million, or $(0.30) per share, for the second quarter of 2018.
- Non-GAAP net loss for the third quarter of 2018 was $7.0 million compared with a non-GAAP net loss of $7.8 million for the second quarter of 2018.
- Adjusted EBITDA for the third quarter of 2018 was $(3.7) million, compared with $(4.6) million for the second quarter of 2018.
Capital expenditures were $1.9 million for the third quarter of 2018, compared with $3.9 million for the second quarter of 2018. Capital expenditures in the third quarter were primarily related to the Korea manufacturing facility expansion as well as ultracapacitor, lithium-ion capacitor and dry battery electrode equipment.
Fourth Quarter 2018 Business Outlook
- Total revenue is expected to be in the range of $25 million to $27 million.
- Gross margin is expected to be 17.3%, plus or minus 100 basis points.
- Non-GAAP gross margin is expected to be 19.0%, plus or minus 100 basis points.
- GAAP operating expense is expected to be in the range of $14.6 million to $15.0 million.
- Non-GAAP operating expense is expected to be in the range of $12.6 million to $13.0 million.