UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
July 26, 2011

Active Power, Inc.
(Exact name of registrant as specified in its charter)

Delaware	 	000-30939	 	74-2961657	
(State or other jurisdiction of incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	

2128 W. Braker Lane, BK12
Austin, Texas 78758
(Address of principal executive offices, including zip code)

(512) 836-6464
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

 
 
Item 2.02.	Results of Operations and Financial Condition.	
 
On July 26, 2011, Active Power, Inc. issued a press release reporting its preliminary results of operations for its fiscal quarter ended June 30, 2011. A copy of the press release is furnished herewith as Exhibit 99.1.
 
The information furnished in this Current Report, including under this Item 2.02 and the exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.	Financial Statements and Exhibits.	

(d) Exhibits
 
99.1	Press Release of Active Power, Inc. dated July 26, 2011.	

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	 	ACTIVE POWER, INC.	

Date:  July 26, 2011	By:	/s/ John Penver	 	
 	 	John Penver	
 	 	Chief Financial Officer	

 

 
 
EXHIBIT INDEX

Exhibit No.	Description	
99.1	Press Release of Active Power, Inc. dated July 26, 2011.	

Exhibit 99.1

 
Active Power Reports Second Quarter 2011 Results

YTD Revenues Up 35%
 
AUSTIN, Texas (July 26, 2011) –Active Power, Inc. (NASDAQ: ACPW), manufacturer of critical backup power systems and continuous power and infrastructure solutions, reported results for its second quarter ended June 30, 2011.

Financial Highlights
 
 	·	Q2 2011 revenues increased $3.2 million, or 20%, to $19.2 million versus the same year-ago quarter. For the six months ended June 30, 2011, revenues increased $9.4 million to $36.5 million, or 35%, compared to the same period in 2010.	
 
 	·	$11.9 million in revenue from continuous power and infrastructure solutions, representing 62% of revenue in the quarter.	

 	·	125% increase in IT channel revenues compared to the same year-ago quarter.	

 	·	Reduced net loss by 9% to $1.4 million or $0.02 per share in the quarter compared to the same year-ago quarter. On a year to date basis, reduced net loss by 40% to $2.5 million.	

Operational Highlights
 
 	·	Opened new 19,000 square foot operations and demonstration facility in United Kingdom to support growing critical power solutions business in local market, enabling company to design, build, and commission a greater number of continuous power and infrastructure solutions.	

 	·	Announced the deployment of critical power infrastructure equipment to Capgemini Merlin datacenter facility in Swindon, United Kingdom, helping customer achieve industry-leading energy efficiencies and full tier 3 certification from Uptime Institute.	

 	·	Increased sales revenue in Asia Pacific region, particularly in Japan and delivered two PowerHouse systems to a large China based utility company.	

 

 
 
 	·	Received multiple new orders for continuous power systems and UPS (uninterruptible power supply) systems, including two multimillion dollar PowerHouse projects made in conjunction with strategic IT partner.	

 	·	Joined the Russell 3000 Index, Russell Global, and Russell Microcap Indexes.	

Q2 2011 Financial Results
 
Revenues for the second quarter of 2011 were $19.2 million, an increase of 20% from the same year-ago quarter and an increase of 11% from the first quarter of 2011. For the six months ended June 30, 2011, total revenues of $36.5 million increased 35% from $27.2 million in the same period in 2010.

Gross profit margin for the quarter decreased to 24%, compared to 27% in the same year-ago quarter and 27% in the previous quarter due to changes in sales mix.

Net loss for the quarter was $1.4 million, or $(0.02) per share. This compares to a net loss of $1.5 million or $(0.02) per share in the same year-ago quarter and a net loss of $1.1 million or $(0.01) per share in the previous quarter. For the six months ended June 30, 2011, net loss was $2.5 million or $(0.03) per share compared to a net loss of $4.1 million or $(0.05) per share in the same year-ago period.

Management Commentary
 
“As the second highest revenue quarter in company history, the second quarter of 2011 demonstrated the performance and economic benefits of our products and solutions – from industry-leading energy and space efficiencies to high reliability – continue to resonate with datacenter and technology centric customers worldwide,” said Jim Clishem, president and CEO of Active Power.

“We realized a greater proportion of infrastructure solutions sales globally this quarter, including a number of large transactions in Asia. This change in product mix and some larger support costs for certain continuous power system deployments resulted in lower gross and operating margins. We see strong growth in our UPS and solutions business in the second half of 2011 and expect our margins to improve to enable us to reach profitability.”

“At the end of June, we had a number of large orders in progress and scheduled for second half delivery, which in turn resulted in a large increase in inventory and payables. We also made certain investments in research and development and added personnel to meet the increased demand in our sales pipeline. While these factors impacted the quarter’s profitability, we believe these investments will enable us to continue to grow the business and meet our financial and strategic objectives.”

 

 
 
Outlook
 
Active Power expects third quarter 2011 revenues to be between $18 million and $21 million. Third quarter earnings per share is expected to range between $(0.02) and $0.02 cents per share. Changes in cash and investments are expected to be driven by changes in working capital requirements.
 
Conference Call and Webcast
 
Active Power will host a conference call today (Tuesday, July 26, 2011) at 4:30 p.m. (ET) to discuss its second quarter 2011 results. Interested parties can dial into the call at the time of the event at (877) 641-0093. For callers outside the U.S. and in Canada, please dial (904) 520-5773.

To listen to the live Webcast, please click here. A replay of the Webcast will be available through Aug. 9, 2011, via Active Power’s Web site at  www.activepower.com .
 
About Active Power
Founded in 1992, Active Power (NASDAQ: ACPW) designs and manufactures continuous power solutions and critical backup power systems that enable datacenters and other mission critical operations to remain ‘on’ 24 hours a day, seven days a week. Active Power solutions are intelligently efficient, inherently reliable and economically green, providing environmental benefits and energy and space efficiencies to customers’ financial benefit. The company’s products and solutions are built with pride in Austin, Texas, at a state-of-the-art, ISO 9001:2008 registered manufacturing and test facility. Global customers are served via Austin and four regional operations centers located in the United Kingdom, Germany, Japan and China, supporting the deployment of systems in more than 40 countries. For more information, visit www.activepower.com .

Cautionary Note Regarding Forward-Looking Statements:
This release may contain forward-looking statements that involve risks and uncertainties, including statements relating to Active Power’s current expectations of operating results for the second quarter of 2011, its future operating results and customers’ current intentions. Any forward-looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Factors that could cause the actual results to differ materially from the results predicted include, among others, the deferral or cancellation of sales commitments as a result of general economic conditions or uncertainty, risks related to our international operations, and product performance and quality issues. For more information on the risk factors that could cause actual results to differ from these forward looking statements, please refer to Active Power filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2010, its Quarterly Reports on Form 10-Q for the quarter ended March 31, 2011, and its Current Reports on Form 8-K filed since such year ended. Active Power assumes no obligation to update any forward-looking statements or information which are in effect as of their respective dates.

Active Power, CleanSource and CoolAir are registered trademarks of Active Power, Inc. The Active Power logo, PowerHouse and PowerCentre are trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.
 
Investor Contact:  	Media Contact:	
Ron Both  	Lee Higgins	
Liolios Group, Inc. 	Public Relations Manager	
949-574-3860  	512-744-9488	
info@liolios.com  	lhiggins@activepower.com	

 

 

ACTIVE POWER, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Thousands, except per share amounts)
(unaudited)
 
 	 	Three Months Ended June 30,	 	 	Six Months Ended June 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	
Product revenue	 	$	16,156	 	 	$	13,307	 	 	$	30,894	 	 	$	22,693	 	
Service and other revenue	 	 	3,059	 	 	 	2,740	 	 	 	5,650	 	 	 	4,471	 	
Total revenue	 	 	19,215	 	 	 	16,047	 	 	 	36,544	 	 	 	27,164	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of product revenue	 	 	11,991	 	 	 	10,171	 	 	 	22,513	 	 	 	17,036	 	
Cost of service and other revenue	 	 	2,591	 	 	 	1,514	 	 	 	4,688	 	 	 	2,915	 	
Total cost of goods sold	 	 	14,582	 	 	 	11,685	 	 	 	27,201	 	 	 	19,951	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	4,633	 	 	 	4,362	 	 	 	9,343	 	 	 	7,213	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	1,086	 	 	 	849	 	 	 	2,007	 	 	 	1,684	 	
Selling and marketing	 	 	3,400	 	 	 	3,526	 	 	 	6,870	 	 	 	6,784	 	
General & administrative	 	 	1,435	 	 	 	1,433	 	 	 	2,803	 	 	 	2,750	 	
Total operating expenses	 	 	5,921	 	 	 	5,808	 	 	 	11,680	 	 	 	11,218	 	
Operating loss	 	 	(1,288	)	 	 	(1,446	)	 	 	(2,337	) 	 	 	(4,005	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	(48	)	 	 	(26	)	 	 	(81	) 	 	 	(52	)	
Other expense, net	 	 	(58	)	 	 	(64	)	 	 	(42	) 	 	 	(68	)	
Net loss	 	$	(1,394	)	 	$	(1,536	)	 	$	(2,460	)	 	$	(4,125	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss per share, basic & diluted	 	$	(0.02	)	 	$	(0.02	)	 	$	(0.03	)	 	$	(0.05	)	
Shares used in computing net loss per share, basic & diluted	 	 	80,045	 	 	 	79,656	 	 	 	79,934	 	 	 	75,540	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net loss	 	$	(1,394	)	 	$	(1,536	)	 	$	(2,460	)	 	$	(4,125	)	
Translation gain (loss) on subsidiaries in foreign currencies	 	 	299	 	 	 	(98	)	 	 	609	 	 	 	(259	)	
Comprehensive loss	 	$	(1,095	)	 	$	(1,634	)	 	$	(1,851	)	 	$	(4,384	)	

 

 
 
ACTIVE POWER, INC.
CONDENSED BALANCE SHEETS
(In thousands)

 	 	June 30	 	 	December 31	 	
 	 	2011	 	 	2010	 	
Assets	 	(unaudited)	 	 	 	 	
 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
Cash and cash equivalents	 	$	10,953	 	 	$	15,416	 	
Short-term investments in marketable securities	 	 	145	 	 	 	134	 	
Accounts receivable, net	 	 	17,805	 	 	 	14,708	 	
Inventories	 	 	12,051	 	 	 	6,430	 	
Prepaid expenses and other	 	 	 405	 	 	 	 511	 	
Total current assets	 	 	41,359	 	 	 	37,199	 	
Property and equipment, net	 	 	2,589	 	 	 	2,005	 	
Deposits and other	 	 	404	 	 	 	314	 	
Total assets	 	$	44,352	 	 	$	39,518	 	
 	 	 	 	 	 	 	 	 	
Liabilities and stockholders' equity	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	10,995	 	 	$	6,022	 	
Accrued expenses	 	 	4,874	 	 	 	7,068	 	
Deferred revenue	 	 	2,299	 	 	 	2,492	 	
Revolving line of credit	 	 	5,535	 	 	 	2,535	 	
Total current liabilities	 	 	23,703	 	 	 	18,117	 	
 	 	 	 	 	 	 	 	 	
Long-term liabilities	 	 	712	 	 	 	579	 	
Stockholders' equity:	 	 	 	 	 	 	 	 	
Common stock	 	 	80	 	 	 	80	 	
Treasury stock	 	 	(115	)	 	 	(103	)	
Additional paid-in capital	 	 	275,787	 	 	 	274,807	 	
Accumulated deficit	 	 	(256,261	)	 	 	(253,801	)	
Other accumulated comprehensive loss	 	 	446	 	 	 	(161	)	
Total stockholders’ equity	 	 	19,937	 	 	 	20,822	 	
Total liabilities and stockholders’ equity	 	$	44,352	 	 	$	39,518	 	

 

 

ACTIVE POWER, INC.
SUPPLEMENTAL FINANCIAL DATA

 	 	Three Months Ended
June 30,	 	 	Six Months Ended
June 30,	 	
$'000	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 
Product Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
UPS products	 	$	5,458	 	 	$	6,643	 	 	$	14,773	 	 	$	14,853	 	
Continuous Power Solutions	 	 	8,399	 	 	 	4,509	 	 	 	13,071	 	 	 	5,087	 	
Infrastructure Solutions	 	 	2,299	 	 	 	2,155	 	 	 	3,050	 	 	 	2,753	 	
 	 	$	16,156	 	 	$	13,307	 	 	$	30,894	 	 	$	22,693	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
MW of critical Power delivered	 	23.4MW	 	 	24.3MW	 	 	54.7MW	 	 	47.9MW	 	
Revenue per MW of Critical Power ($'000)	 	$	660	 	 	$	491	 	 	$	557	 	 	$	453	 	

 
Selected Balance Sheet Data: ($'000)	 	 	 	 	 	 	 	 	 	June 30,
2011	 	 	Dec. 31,
2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Raw material	 	 	 	 	 	 	 	 	 	$	6,655	 	 	$	5,243	 	
Work in progress	 	 	 	 	 	 	 	 	 	 	5,461	 	 	 	2,382	 	
Finished goods	 	 	 	 	 	 	 	 	 	 	1,750	 	 	 	1,148	 	
Less reserves for obsolescence	 	 	 	 	 	 	 	 	 	 	(1,815	)	 	 	(2,343	)	
 	 	 	 	 	 	 	 	 	 	$	12,051	 	 	$	6,430	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Receivables:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	 	 	 	 	 	 	 	 	$	10,132	 	 	$	10,681	 	
EMEA	 	 	 	 	 	 	 	 	 	 	4,866	 	 	 	4,020	 	
Asia	 	 	 	 	 	 	 	 	 	 	2,807	 	 	 	7	 	
 	 	 	 	 	 	 	 	 	 	$	17,805	 	 	$	14,708