SatCon Technology Announces First Quarter 2000 Results
14 February 2000
SatCon Technology Announces First Quarter 2000 Results; Reorganizes and Strengthens Management for Future Growth
CAMBRIDGE, Mass.--Feb. 14, 2000--SatCon Technology Corporation(R) (Nasdaq NM:SATC), a leader in power and energy management products, today announced first quarter 2000 financial results the period ending December 31, 1999. Revenues for the first quarter were $4.6 million versus $3.7 million in the first quarter of 1999, an increase of 30%. The acquisition of Ling Electronics accounted for $800,000 of the increase in revenue. In addition, we have made changes to strengthen our management team and better position the Company for future growth.The net loss for the first quarter 2000 was $2.5 million or $0.25 per share versus a net loss of $1.3 million or $0.15 per share for the first quarter 1999. Of the $2.5 million net loss $2.4 million was operational losses and $130,000 was a recognition of investments made in Beacon. The operational loss represents a continued investment in commercializing our Power Converters for fuel cell and other alternative energy power generation systems.
David Eisenhaure, SatCon's President and Chief Executive Officer, said, "Overall, this was an exciting first quarter for SatCon. We completed the acquisition of Ling Electronics and the Northrop Grumman business unit, which we have since renamed the Electronic Power Products Division. The Ling acquisition has brought increased revenues, which we expect to continue to improve. It also brought us $7.0 million dollars of investment capital from Mechanical Technology, Inc. (MTI). Both scheduled investments of $2.5 and $4.5 million have been received from MTI and, as of this date, we have approximately $10.0 million in cash and investments."
"We have received a great deal of interest in our fuel cell Power Converter products. SatCon's progress in developing a smaller, lighter, lower-cost version of a power converter fuel cell power generation system represents a major step forward in the commercialization of this cutting edge technology. With SatCon's power conversion technology incorporated, fuel cell systems can begin to tap the tremendous residential and commercial markets. SatCon's fuel cell Power Converters convert DC power generated by the fuel cell into useable AC power. These fuel cell power generation systems operate by converting natural gas or propane into electricity, allowing homeowners and small businesses to generate their own electricity independent of the utility grid. This will prevent any power disruptions or spikes, and provides computer quality electricity that won't be subject to outages. In recent weeks, we have received orders from Northwest Power Systems and H-Power to provide Power Converters for their fuel cell systems as well. The growing use of personal computers, e-commerce, electronic trading, global and Internet communication have created a need for higher quality and higher reliability electricity. In addition, these fuel cell power generation systems also provide a needed side benefit - heat. The cost of heat in Europe is almost as persuasive a need as the need for electricity. For developing third world nations, on-site power generation is far less expensive than the cost of establishing a widespread utility grid."
"At Beacon Power, we have had continued success in testing our flywheel energy storage system field-test units. We also incorporated customer requested modifications as well as some product improvements yielded through extensive field-testing. The positive results of those trials have enabled us to build and sell production units of our flywheel storage systems. In a recent event, last Thursday, we announced that Beacon Power had received its first production order worth $1.5 million for 100 of its flywheel energy storage system from TLER Associates in Mexico. These systems are Beacon's first flywheel energy storage systems to be installed in an actual residential community to support an operational telephone system. The systems will be used to provide back-up power for the telephone system for 15,000 new homes. These homes are part of a planned 100,000 home build by TLER. The systems will be used in conjunction with TelMex and other Mexican telephone companies to provide reliable telephone service. We're very pleased that this product is gaining such international recognition as the alternative to the lead- acid battery systems currently available. In fact we have also been discussing the use of flywheels as battery alternatives with fuel cell manufacturers. Flywheels are also alternative to batteries for micro-turbine and other alternative energy power generation systems."
"Flywheels are an ideal replacement for batteries because they can operate more reliably, require less maintenance and are longer lived; they can be remotely monitored and are also more environmentally friendly. With the success of its field trial programs, refined product designs based on operational experience, competitive advantages in proprietary technology, and significant telecommunications customers, Beacon is particularly well positioned for this multi-billion dollar market that includes electric utilities, telephone and cable television service providers and on-site power generation," concluded Eisenhaure.
"In other developments: we received a significant order in December of 1999 for FMI's high speed data transmission electronics that could total $10 million over the next few years. At Magmotor, we have seen increasing interest for their machine tool motors and new companies outside the semiconductor manufacturing market are looking at the Integrated Suspension and Motor (ISAM) system for new applications. The ISAM system is a magnetic levitation and actuation technology that can rotate objects in a vibration free and contamination free environment. Our new product lines at Ling and Electronics Power Products are resulting in new customers. We are now well on our way towards becoming one of the leading manufacturers of power and energy management products."
Eisenhaure explained, "On the management side, we have made some organizational changes at SatCon that will strengthen our management team. The goal is to better position ourselves to meet future manufacturing demands for our DC to AC Power Converters for on-site power generation, telecommunications electronics and other new products introduced at our subsidiaries."
"For the last several years, following our previous COO Bill Stanton's departure to form Beacon Power, Mike Turmelle has been assuming the duties of Chief Operating Officer while performing the role of Chief Financial Officer, and has been doing a great job for us in both roles. Now, with the increasing growth of our operations and the importance of our new power converter product lines, we have promoted Mike to Chief Operating Officer so that he can concentrate his efforts full time on directing the growth of our current, and future, subsidiaries. Putting his previous manufacturing experience to work, Mike's primary objective will be on helping the divisions get product out the door. Mike was also indispensable in implementing our acquisition strategy that led to the successful acquisition of Magmotor, Film Microelectronics, HyComp, Electronic Power Products and Ling Electronics. As Chief Operating Officer and a continuing member of the Board Of Directors, Mike will also work on the further development and implementation of our acquisition strategy with the Board. Allowing Mike to concentrate more fully on SatCon's operations will better position us to quickly commercialize our new products and increase our revenues."
"As a result, we have hired Sean Moran to fill the role of Chief Financial Officer. Sean has extensive experience working within fast growing public companies, most recently with Anika Therapeutics, Inc. in Woburn, Massachusetts. His background is primarily with manufacturing companies and he has broad systems experience. We will be looking to Sean to implement company wide accounting and operating systems as we move forward in increasing our manufacturing capabilities. Sean also has experience working with the financial community having participated in public offerings and private placements, as well as working closely with institutional investors. With the exciting and challenging future we foresee over the next few years, Sean's experience and knowledge will be of great benefit to the company."
"As we announced earlier, we have renamed HyComp the Advanced Fuel Cell Power Products Division. Gary Colello, who has been General Manager at Film Microelectronics, Inc. (FMI), will now assume the General Manager position at Advanced Fuel Cell Power Products Division. Gary will be responsible for establishing our new production lines and facilities for our Power Converter product line, including power converters for fuel cell power generation systems. In order to maintain our growth profile at FMI, Gary will also continue as Chief Scientist at FMI on an interim basis. We anticipate that this personnel change will improve both the success of the Advanced Fuel Cell Products Division and provide FMI with the ongoing management stability and technical leadership to continue their growth in the future."
"We are also assigning Jim Kirtley to the role of Vice President and Chief Scientist of SatCon. In this role, he will be better able to facilitate the transition of technology from the Technology Center to the manufacturing divisions, coordinate technical interface between the divisions and expedite technical solutions for products in development. This should help us reduce lead times in product development cycles, which will provide us with a better competitive position. Jim will also remain a Member of the Board of Directors."
"As a result of Jim's new position, Ted Lesster will assume the role of General Manager of the Technology Center. Ted is uniquely qualified to replace Jim in this role. The Electronic Power Products Division in Maryland will report to the Technology Center and Ted Lesster. Ted was director of this group during his tenure at Northrop Grumman. With Ted's extensive engineering background, we expect that he will lead the Technology Center through exciting new technology developments that can be transitioned into future products."
SatCon Technology Corporation manufactures and sells power and energy management products for distributed power generation, telecommunications, silicon wafer manufacturing, factory automation, aircraft, satellites and automotive applications. SatCon has seven operating divisions: Advanced Fuel Cell Power Products manufactures and sells power conversion products for fuel cell power generation systems; Film Microelectronics, Inc. designs and manufactures microelectronic circuits and interconnect products; Magmotor manufactures servo-motors and magnetic suspension systems; Ling Electronics manufactures test equipment, power products, amplifiers and controllers; Beacon Power manufactures flywheel energy storage devices; SatCon Electronic Power Products manufactures power converters for microturbines; and the Technology Center is responsible for new technology and product development. For further information please visit the SatCon Technology Website at http://www.satcon.com.
Statements made in this document that are not historical facts or which apply prospectively are forward-looking statements that involve risks and uncertainties. It is important to note that the Company's actual circumstances could differ materially from those implied by such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's filings, including but not limited to the 10-K and 10-Q. Copies of those filings are available from the Company and the SEC.
SatCon Technology Corporation Consolidated Statement of Operations
(unaudited)
Three months ended
12/31/99 12/31/98
Revenue $4,556,407 $3,725,099
Operating Expenses $6,999,517 $4,019,956
Operating Loss ($2,443,110) ($294,857)
Net Loss ($2,543,182) ($1,338,600)
Loss per
common share ($0.25) ($0.15)
Shares Outstanding
(weighted average) 10,793,030 8,980,249