WALTHAM, Mass., March 8, 2012 (GLOBE NEWSWIRE) -- A123 Systems (Nasdaq:AONE), a developer and manufacturer of advanced Nanophosphate® lithium ion batteries and systems, today announced financial results for the fourth quarter and full year ended December 31, 2011, consistent with preliminary results as announced on March 1, 2012.
"We believe our customer momentum and recent actions taken across our business will position A123 for strong revenue growth and improving profitability margins during 2012," said David Vieau, CEO of A123 Systems. "Our growing success in grid and commercial markets is expected to be a meaningful driver of our revenue growth in 2012, and it also has the potential to dramatically increase the diversification of our overall revenue base. At the same time, our pipeline of business in the transportation sector was at a record level as we began the new fiscal year, which provides us with optimism regarding A123's long-term revenue growth opportunity."
"We believe that A123 is well positioned to make progressive improvements in margins during 2012. While we faced challenges with manufacturing yields during 2011, we are pleased to see that our Michigan plant has recently produced prismatic cells within our targeted yield range. In addition, with more than 60 production programs across our targeted vertical markets, we expect to see a significant increase in capacity utilization by mid-2012, providing additional cost benefits," Vieau added. "In addition, our strengthened balance sheet provides us with resources to continue executing our growth strategy, and we will continue to seek additional opportunities to further expand our available resources."
Financial Highlights
Revenue: Total revenue for the fourth quarter of 2011 was $40.4 million, an increase of 68% from $24.0 million in the fourth quarter of 2010. Within total revenue, product revenue was $34.5 million, a 76% increase from $19.5 million in the fourth quarter of 2010, and services revenue was $5.9 million, compared to $4.5 million the fourth quarter of 2010.
For the year ended December 31, 2011, total revenue was $159.1 million, an increase of 64% compared to revenue of $97.3 million in the same period in 2010. Product revenue for the year ended 2011 was $139.1 million, compared to $73.8 million in the same period of 2010, and services revenue was $20.1 million, compared to $23.5 million in the same period of 2010.
Gross Profit/(Loss): Gross loss was ($37.5) million in the fourth quarter of 2011, compared to a gross loss of ($9.4) million in the fourth quarter of 2010. For the year ended December 31, 2011, gross loss was ($90.0) million, compared to ($17.4) million in the same period of 2010.
Net Income/(Loss): Net loss was ($85.0) million, or ($0.65) per common share, based on 129.9 million weighted average common shares outstanding in the fourth quarter of 2011. This compared to a net loss of ($45.7) million in the fourth quarter of 2010, or ($0.43) per common share, based on 105.0 million weighted average common shares outstanding.
For the year ended December 31, 2011, net loss was ($257.7) million, or ($2.12) per common share, based on 121.6 million weighted average common shares outstanding. This compares to a net loss of ($152.6) million, or ($1.46) per common share based on 104.4 million weighted average common shares outstanding.
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, was a loss of ($58.6) million in the fourth quarter of 2011, compared to ($35.2) million in the fourth quarter of 2010. For the year ended December 31, 2011, Adjusted EBITDA was ($194.5) million, compared to ($119.8) million for the full year 2010.
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 $186.9 million as of December 31, 2011, compared to $225.8 million as of September 30, 2011.
Other Fourth Quarter and Recent Business Highlights
Product Revenue Mix: During the fourth quarter of 2011, transportation revenue was $13.1 million, grid revenue was $16.9 million and commercial revenue was $4.5 million. This compares to transportation revenue of $13.4 million, $2.3 million grid revenue and $3.8 million in commercial revenue in the fourth quarter of 2010.
For the full year 2011, transportation revenue was $84.3 million, an increase of 93% from 2010, electric grid revenue was $37.4 million, an increase of 176% from 2010, and commercial revenue was $17.4 million, an increase of 5% from 2010.
Product Shipments: During the fourth quarter of 2011, product shipments were 21.7 million watt hours, an increase of 21% compared to 18.0 million watt hours in the fourth quarter of 2010. For the full year 2011, A123 Systems recorded product shipments equivalent to 146.4 million watt hours, an increase of 133% compared to 2010.
Financial and Business Metric Summary
| ($ millions, except margins) | 4Q10 | 3Q11 | 4Q11 |
| Revenue: | $24.0 | $64.3 | $40.4 |
| Gross Profit/(Loss): | ($9.4) | ($19.6) | ($37.5) |
| Gross Margin: | -39.0% | -30.4% | -92.8% |
| Net Income/(Loss): | ($45.7) | ($63.7) | ($85.0) |
| Adjusted EBITDA: | ($35.2) | ($49.4) | ($58.6) |
| Cash and Equivalents: | $216.8 | $225.8 | $186.9 |
| Product Revenue Mix: | |||
| Transportation | $13.4 | $34.5 | $13.1 |
| Grid | $2.3 | $20.5 | $16.9 |
| Commercial | $3.8 | $4.6 | $4.5 |
| Product shipments: | 18.0 MWh | 67.7 MWh | 21.7 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' fourth quarter 2011 financial results conference call |
| When: | Thursday, March 8, 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: 45529995 | |
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
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to the Company's expectations regarding strong revenue growth and improving profitability margins during 2012, the Company's expectations regarding drivers of revenue growth in 2012, diversification of revenue and long-term revenue growth opportunities and the Company's expectations regarding increases in capacity utilization in 2012 and related cost benefits.
These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond A123 Systems' control.
A123 Systems' actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, the timing and terms of the Company's U.S. government funding, delays in customer and market demand for and adoption of the Company's products in the transportation, electric grid and other target markets, the Company's ability to expand its U.S. manufacturing capacity and ramp production to address anticipated market demand, delays in the development of the Company's new products, the Company's ability to attract new customers and retain existing customers, continued delays in volume production by the Company's customers, increases in production start-up expenses, interruption in the supply of key materials, adverse economic conditions in general and adverse economic conditions specifically affecting the markets in which the Company operates, failure to negotiate acceptable contract terms with new customers or early termination of the Company's agreements with key customers, and other risks detailed in A123 Systems' other publicly available filings with the Securities and Exchange Commission.
Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent A123 Systems' views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change. A123 Systems undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing A123 Systems' views as of any date subsequent to the date of this press release.
| A123 Systems, Inc. | ||
| Unaudited, Condensed, Consolidated Balance Sheets | ||
| (in thousands) | ||
| December 31, | December 31, | |
| 2010 | 2011 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 216,841 | $ 186,893 |
| Restricted cash and cash equivalents | 9,367 | 668 |
| Accounts receivable, net | 28,106 | 47,200 |
| Inventory | 47,765 | 103,394 |
| Deferred cost | 1,022 | 6,256 |
| Prepaid expenses and other current assets | 8,006 | 8,011 |
| Total current assets | 311,107 | 352,422 |
| Property, plant and equipment, net | 143,998 | 145,203 |
| Goodwill | 9,581 | 9,581 |
| Intangible assets, net | 413 | -- |
| Long-term grants receivable | 75,790 | 101,054 |
| Deposits and other assets | 11,768 | 5,745 |
| Restricted cash and cash equivalents, net of current portion | 1,993 | -- |
| Investments | 21,508 | 11,897 |
| Total assets | $ 576,158 | $ 625,902 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Revolving credit lines | $ 8,000 | $ 38,094 |
| Current portion of long-term debt | 5,379 | 2,069 |
| Current portion of capital lease obligations | 1,571 | 1,740 |
| Accounts payable | 43,523 | 27,220 |
| Accrued expenses | 48,179 | 31,910 |
| Other current liabilities | 7,550 | 8,329 |
| Deferred revenue | 4,881 | 9,577 |
| Deferred rent | 132 | 181 |
| Total current liabilities | 119,215 | 119,120 |
| Long-term debt, net of current portion | 4,603 | 142,755 |
| Capital lease obligations, net of current portion | 18,655 | 17,336 |
| Deferred revenue, net of current portion | 29,836 | 35,303 |
| Deferred rent, net of current portion | 1,452 | 1,203 |
| Other long-term liabilities | 3,865 | 13,820 |
| Total liabilities | 177,626 | 329,537 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Common stock | 105 | 134 |
| Additional paid-in capital | 790,256 | 946,506 |
| Accumulated deficit | (391,228) | (648,958) |
| Accumulated other comprehensive loss | (935) | (1,317) |
| Total A123 Systems, Inc. stockholders' equity | 398,198 | 296,365 |
| Noncontrolling interest | 334 | -- |
| Total stockholders' equity | 398,532 | 296,365 |
| Total liabilities and stockholders' equity | $ 576,158 | $ 625,902 |
| A123 Systems, Inc. | ||||
| Unaudited, Consolidated Statements of Operations | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2010 | 2011 | 2010 | 2011 | |
| Revenue: | ||||
| Product | $ 19,529 | $ 34,455 | $ 73,826 | $ 139,080 |
| Services | 4,489 | 5,923 | 23,486 | 20,067 |
| Total revenue | 24,018 | 40,378 | 97,312 | 159,147 |
| Cost of revenue: | ||||
| Product | 29,191 | 74,164 | 94,277 | 232,092 |
| Services | 4,201 | 3,681 | 20,474 | 17,103 |
| Total cost of revenue | 33,392 | 77,845 | 114,751 | 249,195 |
| Gross loss | (9,374) | (37,467) | (17,439) | (90,048) |
| Operating expenses: | ||||
| Research, development and engineering | 16,756 | 19,951 | 60,723 | 76,925 |
| Sales and marketing | 4,439 | 3,141 | 14,111 | 16,808 |
| General and administrative | 9,149 | 10,333 | 36,053 | 45,132 |
| Production start-up | 3,896 | 6 | 21,064 | 9,221 |
| Total operating expenses | 34,240 | 33,431 | 131,951 | 148,086 |
| Operating loss | (43,614) | (70,898) | (149,390) | (238,134) |
| Other income (expense): | ||||
| Interest income | 30 | 4 | 135 | 19 |
| Interest expense | (536) | (2,369) | (1,430) | (7,357) |
| Gain (loss) on foreign exchange | (292) | 22 | (560) | 3 |
| Impairment of long-term investment | -- | (11,612) | -- | (11,612) |
| Other (expense) income, net | (936) | 161 | (849) | 691 |
| Other expense, net | (1,734) | (13,794) | (2,704) | (18,256) |
| Loss from operations, before tax | (45,348) | (84,692) | (152,094) | (256,390) |
| Provision for income taxes | 465 | 285 | 843 | 1,367 |
| Net loss | (45,813) | (84,977) | (152,937) | (257,757) |
| Less: Net loss attributable to the noncontrolling interest | 152 | -- | 377 | 27 |
| Net loss attributable to A123 Systems, Inc. | $ (45,661) | $ (84,977) | $ (152,560) | $ (257,730) |
| Net loss per share attributable to common stockholders - basic and diluted: | $ (0.43) | $ (0.65) | $ (1.46) | $ (2.12) |
| Weighted average number of common shares outstanding - basic and diluted | 105,046 | 129,940 | 104,364 | 121,583 |
| A123 Systems, Inc. | ||||
| Unaudited Earnings Before Interest, Tax, Depreciation, Amortization and Stock-Based Compensation ("Adjusted EBITDA") | ||||
| (in thousands) | ||||
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | |||
| 2010 | 2011 | 2010 | 2011 | |
| Operating loss | $ (43,614) | $ (70,898) | $ (149,390) | $ (238,134) |
| EBITDA adjustments | ||||
| Stock-based compensation | 3,380 | 3,674 | 11,762 | 14,085 |
| Depreciation and amortization (1) | 5,030 | 8,674 | 17,794 | 29,549 |
| Adjusted EBITDA | $ (35,204) | $ (58,550) | $ (119,834) | $ (194,500) |
| (1) Depreciation and amortization includes impairment charges recorded during the period | ||||