WALTHAM, Mass., May 15, 2012 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium iron phosphate batteries and systems, today announced financial results for the first quarter ended March 31, 2012.
"Our first quarter results were consistent with our revised expectations as reported last week. Revenue for the first quarter was impacted by our campaign to replace prismatic products in the field that may be defective and the temporary shutdown of our facility in Livonia, Mich," stated David Vieau, CEO of A123 Systems. "Since announcing the field campaign, we believe we have identified and corrected the root cause of the defective cells. We are gradually restarting production in a controlled manner consistent with our commitment to improve our manufacturing processes and quality, and have started shipping replacement products to impacted customers. Our customers have been generally supportive during this process, and we continue to work with them during this challenging period."
"We intend to provide customers affected by the campaign with replacement products as quickly as possible. With our systematic approach to ramping production volumes and anticipated customer demand, we expect to be capacity constrained over the next several quarters," Vieau added. "Due to the limitations with respect to our manufacturing ramp, we anticipate that revenue in 2012 will be below our prior expectations and consistent with those communicated last week. Our customer pipeline continues to be strong in all our target markets."
Financial Highlights
Revenue: Total revenue for the first quarter of 2012 was $10.9 million, a decrease of 40% from $18.1 million in the first quarter of 2011. Within total revenue, product revenue was $7.3 million, a 53% decrease from $15.5 million in the first quarter of 2011, and services revenue was $3.6 million, compared to $2.6 million in the first quarter of 2011.
Gross Profit/(Loss): Gross loss was ($90.8) million in the first quarter of 2012, compared to a gross loss of ($15.5) million in the first quarter of 2011.
Net Income/(Loss): Net loss was ($125.0) million, or ($0.87) per common share, based on 143.4 million weighted average common shares outstanding in the first quarter of 2012. This compared to a net loss of ($53.6) million in the first quarter of 2011, or ($0.51) per common share, based on 105.5 million weighted average common shares outstanding.
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, was a loss of ($120.0) million in the first quarter of 2012, compared to ($45.4) million in the first quarter of 2011.
A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included at the end of this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
Cash: A123 Systems had cash and cash equivalents of $113.1 million as of March 31, 2012. This balance does not reflect proceeds expected from our private offering of convertible notes and warrants announced on May 11, 2012. Cash and cash equivalents were $186.9 million as of December 31, 2011.
Other First Quarter and Recent Business Highlights
Product Revenue Mix: During the first quarter of 2012, transportation revenue was $4.5 million and commercial revenue was $2.8 million. This compares to transportation revenue of $12.3 million and commercial revenue of $3.1 million in the first quarter of 2011. Grid revenue was not material, as anticipated, in the first quarter of 2012 or the first quarter of 2011.
Product Shipments: During the first quarter of 2012, product shipments were 10.0 million watt hours compared to 14.3 million watt hours in the first quarter of 2011.
Financial and Business Metric Summary
| ($ millions, except margins) | 1Q11 | 1Q12 | ||
| Revenue: | $18.1 | $10.9 | ||
| Gross Profit/(Loss): | ($15.5) | ($90.8) | ||
| Gross Margin: | -85.5% | -834% | ||
| Net Income/(Loss): | ($53.6) | ($125.0) | ||
| Adjusted EBITDA: | ($45.4) | ($120.0) | ||
| Cash and Equivalents: | $136.8 | $113.1 | ||
| Product Revenue Mix: | ||||
| Transportation | $12.3 | $4.5 | ||
| Grid | NM | NM | ||
| Commercial | $3.1 | $2.8 | ||
| Product shipments: | 14.3 MWh | 10.0 MWh | ||
Non-GAAP Financial Measures
This press release contains a non-GAAP financial measure under the rules of the U.S. Securities and Exchange Commission for adjusted EBITDA. This non-GAAP information supplements and is not intended to represent a measure of performance in accordance with disclosures required by generally accepted accounting principles. Non-GAAP financial measures are used internally to manage the business, such as in establishing an annual operating budget. Non-GAAP financial measures are used by A123 Systems management in its operating and financial decision-making because management believes these measures reflect ongoing business in a manner that allows meaningful period-to-period comparisons. Accordingly, A123 Systems believes it is useful for investors and others to review both GAAP and non-GAAP measures in order to (a) understand and evaluate current operating performance and future prospects in the same manner as management does and (b) compare in a consistent manner the company's current financial results with past financial results. The primary limitations associated with the use of non-GAAP financial measures are that these measures may not be directly comparable to the amounts reported by other companies and they do not include all items of income and expense that affect operations. A123 Systems management compensates for these limitations by considering the company's financial results and outlook as determined in accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.
A123 Systems defines "Adjusted EBITDA" as operating loss plus depreciation and amortization of tangible and intangible assets, which includes impairment charges, and stock-based compensation expense.
Conference Call Information
| What: | A123 Systems' first quarter 2012 financial results conference call | |
| When: | Tuesday, May 15, 2012 | |
| Time: | 8:00 a.m. ET | |
| Webcast: | http://ir.a123systems.com (live and replay) | |
| Live Call: | (877) 266-0479, domestic | |
| (678) 894-3048, international | ||
| Replay: | (855) 859-2056, domestic | |
| (404) 537-3406, international | ||
| Live and replay conference ID code: 74371132 | ||
About A123 Systems
A123 Systems, Inc. (Nasdaq:AONE) is a leading developer and manufacturer of advanced lithium-ion batteries and energy storage systems for transportation, electric grid and commercial applications. The company's proprietary Nanophosphate® technology is built on novel nanoscale materials initially developed at the Massachusetts Institute of Technology and is designed to deliver high power and energy density, increased safety and extended life. A123 leverages breakthrough technology, high-quality manufacturing and expert systems integration capabilities to deliver innovative solutions that enable customers to bring next-generation products to market. For additional information please visit www.a123systems.com.
The A123 Systems, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6600
Safe Harbor Disclosure
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks, uncertainties and other factors, including statements with respect to the Company's belief that it has identified the root cause of its defective cells, statements regarding the Company's improved manufacturing procedures, efficiency and production ramp, statements with respect to the timing of expected revenue, statements with respect to the Company's field campaign and completing commitments, and statements with respect to the Company's 2012 updated revenue guidance. Among the factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: delays in the development of A123's products, delays in the scale-up, revalidation and increased efficiency of A123's manufacturing capacity, delays in A123's manufacturing ramp, the potential for manufacturing defects, the possibility that the known defect could take longer and/or be more expensive to correct than anticipated, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which A123 and its customers operate, and other risks detailed in A123 Systems' 10-K for the year ended December 31, 2011 and other publicly-available filings with the Securities and Exchange Commission. All forward-looking statements reflect A123's expectations only as of the date of this release and should not be relied upon as reflecting A123's views, expectations or beliefs at any date subsequent to the date of this release.
| A123 Systems, Inc. | ||
| Unaudited, Consolidated Statements of Operations | ||
| ($ in thousands, except per share data) | ||
|
Three Months Ended March 31, |
||
| 2011 | 2012 | |
| Revenue: | ||
| Product | $ 15,458 | $ 7,300 |
| Services | 2,639 | 3,589 |
| Total revenue | 18,097 | 10,889 |
| Cost of revenue: | ||
| Product | 31,096 | 97,064 |
| Services | 2,478 | 4,643 |
| Total cost of revenue | 33,574 | 101,707 |
| Gross loss | (15,477) | (90,818) |
| Operating expenses: | ||
| Research, development and engineering | 20,359 | 23,581 |
| Sales and marketing | 4,082 | 4,420 |
| General and administrative | 9,111 | 11,864 |
| Production start-up | 4,621 | -- |
| Total operating expenses | 38,173 | 39,865 |
| Operating loss | (53,650) | (130,683) |
| Other income (expense): | ||
| Interest expense, net | (641) | (2,191) |
| Gain on foreign exchange | 2 | 100 |
| Gain on change in fair value of warrant derivative liability | -- | 8,555 |
| Other (expense) income, net | 1,026 | (457) |
| Total other expense, net | 387 | 6,007 |
| Loss from operations, before tax | (53,263) | (124,676) |
| Provision for income taxes | 410 | 362 |
| Net loss | (53,673) | (125,038) |
| Less: net loss attributable to the noncontrolling interest | 27 | -- |
| Net loss attributable to A123 Systems, Inc. | $ (53,646) | $ (125,038) |
| Net loss per share attributable to A123 Systems, Inc. - basic and diluted: | $ (0.51) | $ (0.87) |
| Weighted average number of common shares outstanding - basic and diluted | 105,515 | 143,422 |
| A123 Systems, Inc. | ||
| Unaudited, Condensed, Consolidated Balance Sheets | ||
| ($ in thousands) | ||
|
December 31, 2011 |
March 31, 2012 |
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 186,893 | $ 113,082 |
| Restricted cash and cash equivalents | 668 | 3,151 |
| Accounts receivable, net | 47,200 | 17,186 |
| Inventory | 103,394 | 99,590 |
| Deferred cost | 6,256 | 1,967 |
| Prepaid expenses and other current assets | 8,011 | 7,931 |
| Total current assets | 352,422 | 242,907 |
| Property, plant and equipment, net | 145,203 | 142,567 |
| Goodwill | 9,581 | 9,581 |
| Long-term grants receivable | 101,054 | 101,304 |
| Deposits and other assets | 5,745 | 5,872 |
| Investments | 11,897 | 11,430 |
| Total assets | $ 625,902 | $ 513,661 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Revolving credit lines | $ 38,094 | $ -- |
| Current portion of long-term debt | 2,069 | 1,028 |
| Current portion of capital lease obligations | 1,740 | 1,646 |
| Accounts payable | 27,220 | 21,633 |
| Accrued expenses | 31,910 | 71,176 |
| Other current liabilities | 8,329 | 9,441 |
| Deferred revenue | 9,577 | 9,114 |
| Deferred rent | 181 | 181 |
| Total current liabilities | 119,120 | 114,219 |
| Long-term debt, net of current portion | 142,755 | 143,010 |
| Capital lease obligations, net of current portion | 17,336 | 16,965 |
| Deferred revenue, net of current portion | 35,303 | 34,777 |
| Deferred rent, net of current portion | 1,203 | 1,158 |
| Warrant derivative liability | -- | 3,346 |
| Other long-term liabilities | 13,820 | 13,673 |
| Total liabilities | 329,537 | 327,148 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Common Stock | 134 | 147 |
| Additional paid-in capital | 946,506 | 961,679 |
| Accumulated deficit | (648,958) | (773,996) |
| Accumulated other comprehensive loss | (1,317) | (1,317) |
| Total A123 Systems, Inc. stockholders' equity | 296,365 | 186,513 |
| Noncontrolling interest | -- | -- |
| Total stockholders' equity | 296,365 | 186,513 |
| Total liabilities and stockholders' equity | $ 625,902 | $ 513,661 |
| A123 Systems, Inc. | ||
| Unaudited Earnings Before Interest, Tax, Depreciation, Amortization and Stock-Based Compensation | ||
| ("Adjusted EBITDA") | ||
| ($ in thousands) | ||
|
Three Months Ended March 31, |
||
| 2011 | 2012 | |
| Operating loss | $ (53,650) | $ (130,683) |
| EBITDA adjustments | ||
| Stock-based compensation | 3,299 | 3,710 |
| Depreciation and amortization | 4,923 | 6,999 |
| Adjusted EBITDA | $ (45,428) | $ (119,974) |