Maxwell Technologies Presentation

Maxwell Reports First Quarter 2017 Results

May 09, 2017

SAN DIEGO, May 9, 2017 /PRNewswire/ --

Provides Business Outlook for Second Quarter 2017

Note: A webcast of Maxwell's conference call will be available at 5:00 p.m. EDT today at http://investors.maxwell.com.

Maxwell Technologies, Inc. (NASDAQ: MXWL) today reported operational and financial results for the three months ended March 31, 2017. Total revenues for the first quarter of 2017 were $26.7 million, compared with $26.4 million for the fourth quarter of 2016 and $35.2 million for the prior year quarter. Net loss for the first quarter of 2016 was $10.4 million, compared with a net loss of $12.2 million for the fourth quarter of 2016 and a net loss of $6.8 million for the prior year quarter. The Company reported $(3.9) million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the first quarter of 2017, compared with $(3.9) million for the fourth quarter of 2016 and $(1.3) million for the prior year quarter. Non-GAAP net loss for the first quarter of 2017 was $7.4 million, compared with a non-GAAP net loss of $7.5 million for the fourth quarter of 2016 and $4.3 million for the prior year quarter. Non-GAAP financial measures are described and defined later in this release.

"We came in favorably on all fronts versus our previous guidance, coming in at the top end of the range for revenue and gross margin and the bottom end of the range on operating expense," said Dr. Franz Fink, Maxwell's President and Chief Executive Officer. "Additionally, we recently achieved two important milestones. We closed the acquisition of the Nesscap Energy business and our team is working diligently on the integration. We also announced the signing of a highly strategic partnership with SDIC that we believe will enable better access to key China battery companies and will significantly strengthen our balance sheet, allowing us to further invest in strategic development programs such as our revolutionary dry battery electrode technology. The Maxwell team has been working diligently to put the pieces of our strategy in place and now our focus turns to executing on that strategy to ultimately drive long-term, profitable growth and shareholder value. Looking to Q2, we are experiencing increased demand for our products, especially in the China wind market, and we are forecasting strong quarter over quarter revenue growth in the 30% range."

Strategic Business & Operational Highlights

  • Completed the acquisition of substantially all of the assets and business, including the operating entities, of Nesscap Energy, Inc. pursuant to the arrangement agreement that was announced on February 28, 2017. Maxwell issued approximately 4.1 million shares and assumed ordinary course liabilities of the business in consideration for the purchase of the Nesscap business. As a market leader in innovative small cell format ultracapacitor products and technologies, the Nesscap business includes research, development and manufacturing of energy storage and power delivery solutions with operations in Korea, Germany, and China. The key benefits of the transaction include expanded and solidified opportunities in the Wind, Automotive, and Industrials Markets that are expected to accelerate top-line growth, diversify revenue, accelerate innovation, and reduce product time to market with an expanded portfolio, improved cost competitiveness through manufacturing efficiencies, and financial results that are expected to be accretive to Maxwell's non-GAAP earnings per share in Q2 and contribute positive adjusted EBITDA in 2017.
  • Signed a strategic equity investment agreement with China's SDIC Fund Management Co., Ltd. Following the closing of the transaction, expected in the third quarter of 2017, SDIC Fund Management's ownership stake in Maxwell's common stock is anticipated to represent approximately 19.9% of Maxwell's total issued and outstanding shares of common stock on a pre-issuance basis. The investment is expected to bring approximately $46.6 million in cash to Maxwell before transaction costs. The closing of the transaction is subject to usual and customary conditions and is subject to approval by the Committee on Foreign Investment in the United States ("CFIUS") and, if required, relevant Chinese governmental authorities. The partnership is expected to enhance Maxwell's access to China's largest automotive battery companies through SDIC Fund Management's investments in two leading Chinese battery companies and to deepen Maxwell's existing China localization strategy in one of the largest and fastest growing energy storage markets for transportation and grid. Additionally, it is expected to significantly strengthen Maxwell's balance sheet, providing the opportunity for solid investment in strategic technology development programs.

 

Financial Results and Operating Metrics (1)

(Unaudited; in thousands, except for per share amounts)




Three Months Ended



March 31,
2017


December 31,
2016


March 31,
2016

Total revenue


$

26,686



$

26,400



$

35,203


Ultracapacitor revenue


$

14,234



$

12,730



$

23,520


High-Voltage revenue


$

12,452



$

13,670



$

8,177


Microelectronics revenue


$



$



$

3,506


Gross margin


23.2

%


21.6

%


27.4

%

Non-GAAP gross margin


23.9

%


22.4

%


28.4

%

Loss from operations


$

(9,032)



$

(9,895)



$

(6,240)


Non-GAAP loss from operations


$

(6,042)



$

(6,381)



$

(3,721)


Net loss


$

(10,399)



$

(12,169)



$

(6,848)


Net loss per share







Basic and diluted


$

(0.32)



$

(0.38)



$

(0.22)


Adjusted EBITDA


$

(3,894)



$

(3,926)



$

(1,259)


Non-GAAP net loss


$

(7,409)



$

(7,451)



$

(4,329)


Non-GAAP net loss per share







Basic and diluted


$

(0.23)



$

(0.23)



$

(0.14)


Net cash used in operating activities


$

(3,825)



$

(374)



$

(1,594)


Cash purchases of property and equipment


$

945



$

1,267



$

2,238


Cash, cash equivalents and restricted cash


$

20,894



$

25,359



$

21,989









(1) For a reconciliation of non-GAAP financial measures, please refer to the section entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" included at the end of this release.

Discussion of Financial and Operational Results for the Quarter

Revenue and Gross Margin

  • Total revenue for the first quarter of 2017 was $26.7 million, compared with $26.4 million for the fourth quarter of 2016, driven by higher sequential Ultracapacitor revenue, mainly in the Wind market, somewhat offset by lower High Voltage revenue. Ultracapacitor revenue for the first quarter of 2017 was $14.2 million, compared with $12.7 million for the fourth quarter of 2016. High-voltage revenue was $12.5 million for the first quarter of 2017, compared with $13.7 million for the fourth quarter of 2016.
  • Gross margin for the first quarter of 2016 was 23.2% compared with 21.6% in the fourth quarter of 2016, driven by a favorable product mix and slightly improved factory utilization.
  • Non-GAAP gross margin for the first quarter of 2016 was 23.9% compared with 22.4% in the fourth quarter of 2016.

Operating Expense, Net Loss & Adjusted EBITDA

  • Operating expense for the first quarter of 2017 was $15.2 million, compared with $15.6 million for the fourth quarter of 2016. The quarter-over-quarter decrease was driven primarily by the fixed asset impairment taken in Q4 offset by restructuring costs as well as lower acquisition related costs.
  • Non-GAAP operating expense for the first quarter of 2017 was $12.4 million compared with $12.3 million for the fourth quarter of 2016 and excludes stock-based compensation, restructuring costs, acquisition related expenses and other non-recurring legal costs.
  • Net loss for the first quarter of 2017 was $10.4 million, or $(0.32) per share, compared with a net loss of $12.2 million, or $(0.38) per share, for the fourth quarter of 2016.
  • Non-GAAP net loss for the first quarter of 2017 was $7.4 million compared with a non-GAAP net loss of $7.5 million for the fourth quarter of 2016.
  • Adjusted EBITDA for the first quarter of 2017 was $(3.9) million, which was unchanged from the fourth quarter of 2016.

Capital Expenditures

  • Capital expenditures during the first quarter of 2017 were $0.9 million, compared with $1.3 million for the fourth quarter of 2016. Capital expenditures in the first quarter were primarily related to production and test improvements as well as new technology and research and development activities.

Business Outlook

The following outlook includes Nesscap beginning May 1, 2017.

  • Total revenue for the second quarter of 2017 is expected to be in the range of $34 million to $37 million.
  • Gross margin for the second quarter of 2017 is expected to be 21.6%, plus or minus 200 basis points.
  • Non-GAAP gross margin for the second quarter of 2017 is expected to be 23%, plus or minus 200 basis points.
  • GAAP operating expense for the second quarter of 2017 is expected to be in the range of $16.6 million to $17.0 million.
  • Non-GAAP operating expense for the second quarter of 2017 is expected to be in the range of $12.6 million to $13.0 million.

The Company has reconciled expected GAAP and non-GAAP gross margin, operating expenses, adjusted EBITDA, net loss and net loss per share at the midpoint of expectations. However, the Company is not able to estimate additional potentially excluded and reconciling amounts due to the substantial uncertainties involved. The effect of these excluded items may be significant. The reconciliation of GAAP and non-GAAP second quarter outlook is as follows (in millions, except for percentages and per share data):


Projected at Midpoint
of Guidance


Projected at Midpoint
of Guidance


Three Months Ended


Three Months Ended



June 30, 2017




June 30, 2017


Gross Margin Reconciliation:




Total Operating Expenses Reconciliation:




GAAP gross margin


21.6

%


GAAP total operating expenses


$

16.8



Stock-based compensation expense


0.6

%


Stock-based compensation expense


1.9



Acquisition related expense (1)


0.8

%


Acquisition related expense (1)


1.6



Non-GAAP gross margin


23.0

%


Shareholder proxy advisement fees


0.2







Strategic equity investment expense


0.2



Net Loss Reconciliation:




Legal costs for SEC and FCPA matters


0.1



GAAP net loss


$

(10.4)



Non-GAAP total operating expenses


$

12.8



Stock-based compensation expense


2.1







Acquisition related expense (1)


1.9



Adjusted EBITDA Reconciliation:




Shareholder proxy advisement fees


0.2



GAAP net loss


$

(10.4)



Strategic equity investment expense


0.2



Interest, taxes, depreciation


3.8



Legal costs for SEC and FCPA matters


0.1



EBITDA


(6.6)



Non-GAAP net loss


$

(5.9)



Stock-based compensation expense


2.1







Acquisition related expense (1)


1.9



Net Loss per Share Reconciliation:




Shareholder proxy advisement fees


0.2



GAAP net loss per diluted share


$

(0.29)



Strategic equity investment expense


0.2



Expenses excluded from GAAP


0.12



Legal costs for SEC and FCPA matters


0.1



Non-GAAP net loss per diluted share


$

(0.17)



Adjusted EBITDA


$

(2.1)













(1)

Acquisition related expense is partially related to operating expenses and partially related to cost of revenue.

Webcast Information

As previously announced, Maxwell management will host a live webcast at approximately 5:00 p.m. EDT / 2:00 p.m. PDT today to discuss these results. Other forward-looking and material information may also be discussed during this call.

The call may be accessed by dialing toll-free, (877) 201-0168 from the U.S. or (647) 788-4901 for international callers, and entering the conference ID, MAXWELL.

More information about this event including a live webcast and other supporting materials may be accessed by visiting http://investors.maxwell.com.

A replay of the conference call will be available for a limited time by visiting http://investors.maxwell.com.

About Maxwell

Maxwell is a global leader in the development and manufacture of innovative, cost-effective energy storage and power delivery solutions. Our ultracapacitor products provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation, renewable energy and information technology. Our CONDIS® high-voltage grading and coupling capacitors help to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy. For more information, visit www.maxwell.com.

Notes Regarding Non-GAAP Financial Measures

The Company uses non-GAAP financial measures for internal evaluation and to report the results of its business. Information presented in this press release and in the attached financial tables includes financial information prepared in accordance with generally accepted accounting principles in the U.S., or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure, within the meaning of Item 10 of Regulation S-K promulgated by the Securities and Exchange Commission (SEC), is a numerical measure of a company's financial performance or cash flows that (a) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, which are included in the most directly comparable measure calculated and presented in accordance with GAAP in the condensed consolidated balance sheets, condensed consolidated statements of comprehensive income or condensed consolidated statements of cash flows; or (b) includes amounts, or is subject to adjustments that have the effect of including amounts, which are excluded from the most directly comparable measure so calculated and presented.

The Company uses the following non-GAAP financial measures in this release, in its earnings conference call and in its on-going evaluation of the business: (a) non-GAAP gross profit; (b) non-GAAP operating expense; (c) non-GAAP income (loss) from operations; (d) EBITDA; (e) adjusted EBITDA; (f) non-GAAP net income (loss); (g) non-GAAP net income (loss) per diluted share and (h) non-GAAP gross margin.

The definitions of non-GAAP financial measures used in this news release are presented below:

  • Non-GAAP gross margin and Non-GAAP gross profit exclude the effect of stock-based compensation, accelerated depreciation and acquisition related expense.
  • Non-GAAP operating expense excludes the effect of stock-based compensation, restructuring and related costs, impairment of assets, acquisition related expense, shareholder proxy advisement fees, strategic equity investment expense and legal costs for SEC and FCPA matters.
  • Non-GAAP loss from operations excludes the effect of accelerated depreciation, stock-based compensation, restructuring and related costs, impairment of assets, acquisition related expense, shareholder proxy advisement fees, strategic equity investment expense and legal costs for SEC and FCPA matters.
  • Adjusted EBITDA excludes the effect of foreign currency exchange (gain) loss, other (income) loss, stock-based compensation, restructuring and related costs, impairment of assets, acquisition related expense, shareholder proxy advisement fees, strategic equity investment expense and legal costs for SEC and FCPA matters.
  • Non-GAAP net loss and non-GAAP net loss per share exclude the effect of accelerated depreciation, stock-based compensation, restructuring and related costs, impairment of assets, acquisition related expense, shareholder proxy advisement fees, strategic equity investment expense, legal costs for SEC and FCPA matters and the tax impact of potential cash repatriation.

The Company believes that these measures provide useful information to its management, board of directors and investors about its operating activities and business trends related to its financial condition and results of operations.

In addition, the Company's management and board of directors use these non-GAAP financial measures in developing operating budgets and in reviewing the Company's results of operations, as non-cash items, non-recurring items and items unrelated to ongoing operating results have limited impact on current and future operating decisions. Additionally, the Company believes that inclusion of non-GAAP financial measures provides consistency and comparability with its past reports of financial results. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. These measures are intended to supplement GAAP financial information, and may be computed differently from non-GAAP financial measures used by other companies. However, investors should be aware that non-GAAP measures have inherent limitations and should be read in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

The Company's non-GAAP financial measures included in this news release exclude the following non-cash items, non-recurring items or items unrelated to its ongoing operating results, as applicable:

  • Stock-based compensation expense consists of non-cash charges for employee stock options, restricted stock awards, restricted stock units, employee stock purchase plan awards and bonuses expected to be settled with the Company's fully vested common stock.
  • Tax impact of potential cash repatriation consists of non-cash charges associated with a portion of the unremitted earnings of a foreign subsidiary that may be repatriated to the U.S.
  • Restructuring and related costs represent restructuring and exit costs incurred in connection with the Company's restructuring plans, disposition transaction costs consisting of legal fees and other expenses incurred in connection with the sale of the microelectronics product line and executive transition costs representing recruiting and other expenses incurred in relation to the resignation and hiring of certain executive officers.
  • Accelerated depreciation charges represent the adjustment of the remaining useful life for certain manufacturing equipment in connection with the Company's restructuring plan.
  • Impairment of assets represents impairment of the net book value of machinery no longer forecasted to be used for its remaining useful life.
  • Acquisition related expense represents costs incurred in connection with the Company's acquisition of the operating subsidiaries of Nesscap Energy, Inc. which include both operating expenses and the adjustment to fair value of acquired inventory recorded in cost of revenue.
  • Shareholder proxy advisement fees represent external advisor expenses incurred in connection with preparing for the Company's 2016 and 2017 shareholder proxy and annual meeting.
  • Strategic equity investment expense represents legal and other professional fees incurred in connection with the Company's strategic equity investment agreement with SDIC Fund Management Co., Ltd.
  • Legal costs for the FCPA and SEC matters represent external legal expenses related to the U.S. Securities and Exchange Commission's investigation of the facts and circumstances surrounding the restatement of the Company's financial statements for the fiscal years 2011 and 2012, as well as for ongoing legal matters related to previous Foreign Corrupt Practices Act (FCPA) violations.

Reconciliations of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures can be found in the section entitled "Reconciliation of GAAP to Non-GAAP Financial Measures" included toward the end of this release.

Forward-Looking Statements

Statements in this news release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and contingencies include, but are not limited to, the following:

  • Dependence upon the sale of products to a small number of customers and vertical markets, some of which are heavily dependent on government funding or government subsidy programs which could be reduced, modified or discontinued in the future;
  • Uncertainties related to the global geopolitical landscape and the recent elections in the United States;
  • Risks related to acquisitions and potential for unsuccessful integration of acquired businesses;
  • Risk that our restructuring efforts may not be successful and that we may not be able to realize the anticipated cost savings and other benefits;
  • Our ability to obtain sufficient capital to meet our operating or other needs;
  • Downward pressures on product pricing from increased competition and shifts in sales mix with respect to low margin and high margin business;
  • Our ability to manage and minimize the impact of unfavorable legal proceedings;
  • Risk that activist stockholders attempt to effect changes to our company which could adversely affect our corporate governance;
  • Risks related to our international operations including, but not limited to, our ability to adequately comply with the changing rules and regulations in countries where our business is conducted, our ability to oversee and control our foreign subsidiaries and their operations, our ability to effectively manage foreign currency exchange rate fluctuations arising from our international operations, and our ability to continue to comply with the U.S. Foreign Corrupt Practices Act as well as the anti-bribery laws of foreign jurisdictions;
  • Dependence upon the sale of products into Asia and Europe, where macroeconomic factors outside our control may adversely affect our sales;
  • Our ability to remain competitive and stimulate customer demand through successful introduction of new products, and to educate our prospective customers on the products we offer;
  • Successful acquisition, development and retention of key personnel;
  • Our ability to effectively manage our reliance upon certain suppliers of key component parts, specialty equipment and logistical services;
  • Our ability to manage product quality problems;
  • Our ability to protect our intellectual property rights and to defend claims against us;
  • Our ability to effectively identify, enter into, manage and benefit from strategic alliances;
  • Occurrence of a catastrophic event at any of our facilities;
  • Occurrence of a technology systems failure, network disruption, or breach in data security; and
  • Our ability to match production volume to actual customer demand.

For further information regarding risks and uncertainties associated with Maxwell's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of our SEC filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these documents may be obtained by contacting Maxwell's investor relations department at (858) 503-3368, or at our investor relations website: investors.maxwell.com. All information in this release is as of May 9, 2017. The Company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the Company's expectations.

Investor Contact:  Soohwan Kim, CFA, The Blueshirt Group, +1 (858) 503-3368, ir@maxwell.com

Media Contact:  Sylvie Tse, Metis Communications, +1 (617) 236-0500, maxwell@metiscomm.com

MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)




Three Months Ended



March 31,
2017


December 31,
2016


March 31,
2016

Revenue


$

26,686



$

26,400



$

35,203


Cost of revenue


20,495



20,692



25,550


Gross profit


6,191



5,708



9,653


Operating expenses:







Selling, general and administrative


9,540



9,586



10,098


Research and development


4,686



4,783



5,607


Restructuring and exit costs


997





188


Impairment of assets




1,234




Total operating expenses


15,223



15,603



15,893


Loss from operations


(9,032)



(9,895)



(6,240)


Interest expense, net


63



69



70


Other (income) expense


(1)



3



(84)


Foreign currency exchange (gain) loss, net


97



(36)



139


Loss before income taxes


(9,191)



(9,931)



(6,365)


Income tax provision


1,208



2,238



483


Net loss


$

(10,399)



$

(12,169)



$

(6,848)


Net loss per common share:







Basic and diluted


$

(0.32)



$

(0.38)



$

(0.22)


Weighted average common shares outstanding:







Basic and diluted


32,197



31,995



31,650


 

MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(Unaudited)




March 31,
2017


December 31,
2016

ASSETS





Current assets:





Cash and cash equivalents


$

20,894



$

25,359


Trade and other accounts receivable, net


24,053



20,441


Inventories, net


30,416



32,248


Prepaid expenses and other current assets


4,876



4,407


Total current assets


80,239



82,455


Property and equipment, net


24,721



26,120


Goodwill


23,170



22,799


Pension asset


9,154



8,887


Other non-current assets


617



613


Total assets


$

137,901



$

140,874







LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities:





Accounts payable and accrued liabilities


$

20,633



$

19,181


Accrued employee compensation


6,173



6,152


Deferred revenue and customer deposits


6,489



3,967


Short-term borrowings and current portion of long-term debt


41



40


Total current liabilities


33,336



29,340


Deferred tax liability, long-term


8,448



8,580


Long-term debt, excluding current portion


34



43


Other long-term liabilities


2,008



2,089


Total liabilities


43,826



40,052


Stockholders' equity:





Common stock, $0.10 par value per share, 80,000 shares authorized at March 31, 2017 and December 31, 2016; 32,541 and 32,135 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively


3,251



3,210


Additional paid-in capital


298,586



296,316


Accumulated deficit


(214,503)



(204,104)


Accumulated other comprehensive income


6,741



5,400


Total stockholders' equity


94,075



100,822


Total liabilities and stockholders' equity


$

137,901



$

140,874


 

MAXWELL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except per share data)

(Unaudited)




Three Months Ended



March 31,
2017


December 31,
2016


March 31,
2016

OPERATING ACTIVITIES:







Net loss


$

(10,399)



$

(12,169)



$

(6,848)















Adjustments to reconcile net loss to net cash used in operating activities:







Depreciation


2,148



2,455



2,587


Pension cost


86



156



157


Stock-based compensation expense


1,538



1,605



1,203


Gain on sale of property and equipment






(84)


Impairment of property and equipment




1,234




Unrealized loss on foreign currency exchange rates


26



18



57


Provision for (release of) allowance on accounts receivable




(162)



51


Provision for (recovery of) losses on inventory


17



171



(10)


Provision for (release of) warranties


189



(61)



139


Changes in operating assets and liabilities:







Trade and other accounts receivable


(3,432)



(66)



13,076


Inventories


1,922



2,253



(1,376)


Prepaid expenses and other assets


(453)



916



132


Pension asset


(155)



(143)



(139)


Accounts payable and accrued liabilities


1,571



1,820



(10,563)


Deferred revenue and customer deposits


2,626



619



304


Accrued employee compensation


785



(516)



(192)


Deferred tax liability


(209)



1,844



81


Other long-term liabilities


(85)



(348)



(169)


Net cash used in operating activities


(3,825)



(374)



(1,594)


INVESTING ACTIVITIES:







Purchases of property and equipment


(945)



(1,267)



(2,238)


Proceeds from sale of property and equipment






84


Net cash used in investing activities


(945)



(1,267)



(2,154)


FINANCING ACTIVITIES:







Principal payments on long-term debt and short-term borrowings


(10)



(12)



(11)












Proceeds from issuance of common stock under equity compensation plans




223



346


Net cash provided by (used in) financing activities


(10)



211



335












Effect of exchange rate changes on cash, cash equivalents and restricted cash


315



(1,113)



620


Decrease in cash, cash equivalents and restricted cash


(4,465)



(2,543)



(2,793)


Cash, cash equivalents and restricted cash, beginning of period


25,359



27,902



24,782


Cash, cash equivalents and restricted cash, end of period


$

20,894



$

25,359



$

21,989


 

MAXWELL TECHNOLOGIES, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share data) (Unaudited)




Three Months Ended



March 31,
2017


December 31,
2016


March 31,
2016

Gross Margin Reconciliation:







GAAP gross margin


23.2

%


21.6

%


27.4

%

Stock-based compensation expense


0.7

%


0.8

%


0.7

%

Accelerated depreciation


%


%


0.3

%

Non-GAAP gross margin


23.9

%


22.4

%


28.4

%

Gross Profit Reconciliation:







GAAP gross profit


$

6,191



$

5,708



$

9,653


Stock-based compensation expense


193



211



235


Accelerated depreciation






125


Non-GAAP gross profit


$

6,384



$

5,919



$

10,013


Total Operating Expenses Reconciliation:







GAAP total operating expenses


$

15,223



$

15,603



$

15,893


Stock-based compensation expense


(1,345)



(1,394)



(968)


Restructuring and related costs


(997)





(574)


Impairment of assets




(1,234)




Acquisition related expense


(275)



(675)




Shareholder proxy advisement fees


(59)





(314)


Legal costs for SEC and FCPA matters


(121)





(303)


Non-GAAP operating expenses


$

12,426



$

12,300



$

13,734


Loss from Operations Reconciliation:







GAAP loss from operations


$

(9,032)



$

(9,895)



$

(6,240)


Stock-based compensation expense


1,538



1,605



1,203


Restructuring and related costs


997





574


Accelerated depreciation






125


Impairment of assets




1,234




Acquisition related expense


275



675




Shareholder proxy advisement fees


59





314


Legal costs for SEC and FCPA matters


121





303


Non-GAAP loss from operations


$

(6,042)



$

(6,381)



$

(3,721)


Adjusted EBITDA Reconciliation:







GAAP net loss


$

(10,399)



$

(12,169)



$

(6,848)


Interest expense, net


63



69



70


Income tax provision


1,208



2,238



483


Depreciation


2,148



2,455



2,587


EBITDA


(6,980)



(7,407)



(3,708)


Foreign currency exchange (gain) loss, net


97



(36)



139


Other (income) loss


(1)



3



(84)


Stock-based compensation expense


1,538



1,605



1,203


Restructuring and related costs


997





574


Impairment of assets




1,234




Acquisition related expense


275



675




Shareholder proxy advisement fees


59





314


Legal costs for SEC and FCPA matters


121





303


Adjusted EBITDA


$

(3,894)



$

(3,926)



$

(1,259)










Three Months Ended



March 31,
2017


December 31,
2016


March 31,
2016

Net Loss Reconciliation:







GAAP net loss


$

(10,399)



$

(12,169)



$

(6,848)


Stock-based compensation expense


1,538



1,605



1,203


Tax impact of potential cash repatriation




1,204




Restructuring and related costs


997





574


Accelerated depreciation






125


Impairment of assets




1,234




Acquisition related expense


275



675




Shareholder proxy advisement fees


59





314


Legal costs for SEC and FCPA matters


121





303


Non-GAAP net loss


$

(7,409)



$

(7,451)



$

(4,329)


Net Loss per Diluted Share Reconciliation:







GAAP net loss per diluted share


$

(0.32)



$

(0.38)



$

(0.22)


Stock-based compensation expense


0.05



0.05



0.04


Tax impact of potential cash repatriation




0.04




Restructuring and related costs


0.03





0.02


Accelerated depreciation






*


Impairment of assets




0.04




Acquisition related expense


0.01



0.02




Shareholder proxy advisement fees


*





0.01


Legal costs for SEC and FCPA matters


*





0.01


Non-GAAP net loss per diluted share


$

(0.23)



$

(0.23)



$

(0.14)


Weighted Average Diluted Common Shares Outstanding used for:







GAAP net loss


32,197



31,995



31,650


Non-GAAP net loss


32,197



31,995



31,650




*

Net income (loss) effect of this reconciling item was less than $0.01 per share.

 

Enabling Energy's Future. (PRNewsFoto/Maxwell Technologies, Inc.)

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/maxwell-reports-first-quarter-2017-results-300454572.html

SOURCE Maxwell Technologies, Inc.