A123 Systems Q3 2011
Results: Revenue Doubles - Loss Wider than Expected - Guides Down
December 9, 2011
A123
Systems, a developer and manufacturer of advanced Nanophosphate lithium
ion batteries and systems, reported financial results for the third
quarter ended September 30, 2011.
The company lost $63.7 million, or 51
cents per share, compared with a loss of $43.7 million, or 42 cents per
share, for Q3 2010. Wall Street was looking for 38 cents per share loss.
Revenue ran up to $64.3 million from $26.2 million, which was $500K more
than Wall Street expected. Product revenue tripled to $59.6 million.
A123 Systems now predicts full-year revenue of $165 million to $180
million, down from a previous range of $210 million to $225 million, for
2011. The reduced guidance was caused by Fisker Automotive cutting its order
for battery packs.
"The ramp in production volumes that began during the second quarter
continued into the third quarter, resulting in record quarterly revenue
of $64.3 million and record quarterly shipments of 67.7MWh," said David
Vieau, CEO of A123 Systems. "Last week, we revised our 2011 revenue
guidance based on a reduction in fourth-quarter orders from Fisker
Automotive as it balances inventory levels from all suppliers for the
Karma plug-in hybrid electric vehicle. We have taken actions to address
the near-term challenges associated with this reduction in volume, and
remain optimistic about Fisker and our long-term growth across each of
our target markets."
Vieau added, "During the third quarter, we were sourced for production
on a new transportation program, made significant progress in our grid
business, and continued to see growing demand for our commercial
solutions. In addition, we believe the recent expansion of our
partnership with IHI Corporation establishes a strong conduit for
delivering A123's battery system technology to the Japanese market. The
IHI agreements provide for proceeds of $32.5 million, which will further
increases our available resources when combined with our recent $40
million asset-based lending facility that we put in place in September."
"Looking ahead, we remain confident in our ability to scale A123's
business over the next several years based on the growing level of
stated demand from our diverse portfolio of customers across each of our
target markets," said Vieau. "We are making progress on our cell-cost
reduction strategy, and we expect to reduce our cash burn. We believe
the company will be well-positioned to achieve break-even quarterly
gross margins within 2012, followed by break-even adjusted EBITDA in
2013."
Financial Highlights
Revenue:
Total revenue for the third quarter of 2011 was $64.3 million, an
increase of 145% from $26.2 million in the third quarter of 2010, and an
increase of 77% from $36.4 million in the second quarter of 2011. Within
total revenue, product revenue was $59.6 million, a 214% increase from
$19.0 million in the third quarter of 2010, and a 102% increase from
$29.6 million in the second quarter of 2011. Services revenue was $4.7
million, compared to $7.3 million the third quarter of 2010, and $6.8
million in the second quarter of 2011.
Gross Profit/(Loss): Gross loss was ($19.6) million in the third quarter
of 2011, compared to a gross loss of ($3.1) million in the third quarter
of 2010, and a gross loss of ($17.5) million in the second quarter of
2011. Gross margin improved to negative (30.4%) in the third quarter of
2011 from negative (48.2%) in the second quarter of 2011.
Net Income/(Loss): Net loss was ($63.7) million, or ($0.51) per common
share, based on 126 million weighted average common shares outstanding
in the third quarter of 2011. This compared to a net loss of ($43.7)
million in the third quarter of 2010, or ($0.42) per common share, based
on 104.7 million weighted average common shares outstanding, and to a
net loss of ($55.4) million in the second quarter of 2011, or ($0.44)
per common share, based on 124.5 million weighted average common shares
outstanding.
Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, was a
loss of ($49.4) million in the third quarter of 2011, compared to
($36.5) million in the third quarter of 2010, and ($41.1) million in the
second quarter of 2011.
Cash: A123 Systems had cash and cash equivalents of $225.8 million as of
September 30, 2011, compared to $294.9 million as of June 30, 2011.
Other Third Quarter and Recent Business Highlights
Product Revenue Mix: During the third quarter of 2011, transportation
revenue was $34.5 million, grid revenue was $20.5 million and commercial
revenue was $4.6 million. This compares transportation revenue of $9.5
million, $6.0 million grid revenue and $3.5 million in commercial
revenue in the third quarter of 2010, and to transportation revenue of
$24.4 million, no grid revenue and commercial revenue of $5.2 million in
the second quarter of 2011.
For the nine months ended September 30, 2011, transportation revenue was
$71.2 million, up from $30.2 million in the first nine months of 2010.
Electric grid revenue was $20.6 million, up from $11.2 million in the
first nine months of 2010. Commercial revenue was $12.9 million, up from
$12.8 million in the first nine months of 2010.
Product Shipments: During the third quarter of 2011, product shipments
were 67.7 million watt hours, an increase of 328% compared to 15.8
million watt hours in the third quarter of 2010 and 59% compared to 42.6
million watt hours in the second quarter of 2011. On a year to date
basis, product shipments were 124.6 million watt hours, an increase of
182% compared to 44.2 million watt hours for the first nine months of
2010.
Lawsuit Settlement Reached: A123 entered into a settlement agreement
with Hydro-Quebec and the University of Texas resolving all patent
disputes regarding lithium metal phosphate technologies between the
involved parties. The agreement also provides for the cross-licensing of
patents that all parties believe will further drive adoption of the
phosphate-based lithium ion technology.
A123
Systems, a developer and manufacturer of advanced Nanophosphate lithium
ion batteries and systems, reported financial results for the third
quarter ended September 30, 2011.