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)
October 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 October 26, 2011, Active Power, Inc. issued a press release reporting its preliminary results of operations for its fiscal quarter ended September 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 October 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:  October 26, 2011	By:	     /s/John K. Penver	 	
 	 	John Penver
Chief Financial Officer	

 

 

EXHIBIT INDEX

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

Exhibit 99.1

Active Power Reports Third Quarter 2011 Results

Revenues up 12% versus Same Year-ago Quarter

AUSTIN, Texas (Oct. 26, 2011) – Active Power, Inc. (NASDAQ: ACPW), manufacturer of critical backup power systems and continuous power and infrastructure solutions, reported results for its third quarter and nine months ended Sept. 30, 2011.

Third quarter 2011 revenues were $20.6 million, representing a quarterly record for the company, and an increase of $2.2 million, or 12%, versus the same year-ago quarter. Net loss was $1.3 million or $0.02 per share in the third quarter of 2011, compared to net income of $55,000 or $0.00 per share in the same year-ago quarter.

Management Commentary

“Our continuous power and infrastructure solutions business represented the majority of our total quarterly revenue again in the third quarter 2011,” said John Penver, chief financial officer for Active Power. “The volume of our core UPS business has performed under expectations and this along with margin pressure on our infrastructure business has contributed to the decrease in our overall gross and operating margins.  Sales mix as well as gross and operating margins were consistent with last quarter.”

“As we look to finish out the year and transition into fiscal 2012, our focus will be on growing our core UPS business, improving execution in our infrastructure business and profitability,” said Jan Lindelow, interim president and CEO for Active Power. “Entering 2012, we plan to expand our product offerings, and thereby increase our addressable market while meeting the future demands of the marketplace.”
 
Other Financial Highlights
 
 	·	For the nine months ended Sept. 30, 2011, revenues increased $11.5 million to $57.2 million, or by 25% compared to the same period in 2010	

 	·	$11.8 million in continuous power and infrastructure solutions revenue, representing 57% of revenue in the quarter	

 	·	44% increase in information technology (IT) channel revenues compared to the same year-ago quarter	

 
 
 	·	Gross profit for the quarter was 24%, consistent with gross profit from the previous quarter, and reflecting lower UPS sales and a higher proportion of lower margin infrastructure business	

 	·	For the nine-months ended Sept. 30, 2011, net loss of $3.8 million or $0.05 per share was an 8% improvement from the net loss of $4.1 million or $0.05 per share incurred in the same period of 2010.	
 
Operational Highlights
 
 	·	Deployed UPS (uninterruptible power supply) and continuous power systems in nearly all of the company’s 13 key trading regions, including a major installation in the Netherlands	
 
 	·	Built and shipped highest quarterly level of continuous infrastructure solutions to date	

 	·	Received multiple PowerHouse order from HP to support the HP POD 240a at a datacenter facility in Texas, part of one of the most innovative and efficient datacenter and infrastructure solutions available on the market today	

 	·	Joined Green IT Amsterdam, a consortium of public and private sector organizations with the goal of greening IT infrastructure, reducing CO 2  emissions, and developing a green economy in Amsterdam	

Outlook
 
Active Power expects fourth quarter 2011 revenues between $18 million and $21 million and full year 2011 revenues between $75 million and $78 million. Fourth quarter earnings per share is expected to range between $(0.03) and $0.00 per share including costs of $0.01 per share related to the departure of the former president and CEO. 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 (Wednesday, Oct. 26, 2011) at 4:30 p.m. (ET) to discuss its third 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 Nov. 26, 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 third 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 quarters ended March 31, 2011 and June 30, 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
Sept. 30,	 	 	Nine
Months Ended
Sept. 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Product revenue	 	$	16,996	 	 	$	16,663	 	 	$	47,890	 	 	$	39,356	 	
Service and other revenue	 	 	3,612	 	 	 	1,793	 	 	 	9,262	 	 	 	6,264	 	
Total revenue	 	 	20,608	 	 	 	18,456	 	 	 	57,152	 	 	 	45,620	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of product revenue	 	 	13,112	 	 	 	11,287	 	 	 	35,625	 	 	 	28,323	 	
Cost of service and other revenue	 	 	2,649	 	 	 	1,691	 	 	 	7,337	 	 	 	4,606	 	
Total cost of goods sold	 	 	15,761	 	 	 	12,978	 	 	 	42,962	 	 	 	32,929	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	4,847	 	 	 	5,478	 	 	 	14,190	 	 	 	12,691	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	1,272	 	 	 	833	 	 	 	3,279	 	 	 	2,517	 	
Selling and marketing	 	 	3,527	 	 	 	3,539	 	 	 	10,397	 	 	 	10,323	 	
General & administrative	 	 	1,280	 	 	 	1,075	 	 	 	4,083	 	 	 	3,825	 	
Total operating expenses	 	 	6,079	 	 	 	5,447	 	 	 	17,759	 	 	 	16,665	 	
Operating profit (loss)	 	 	(1,232	)	 	 	31	 	 	 	(3,569	)	 	 	(3,974	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	(68	)	 	 	(30	)	 	 	(149	)	 	 	(82	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other expense, net	 	 	8	 	 	 	13	 	 	 	(34	)	 	 	(55	)	
Income (loss) before income taxes	 	 	(1,292	)	 	 	14	 	 	 	(3,752	)	 	 	(4,111	)	
Income tax benefit	 	 	-	 	 	 	41	 	 	 	-	 	 	 	41	 	
Net income (loss)	 	$	(1,292	)	 	$	55	 	 	$	(3,752	)	 	$	(4,070	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic net income (loss) per share	 	$	(0.02	)	 	 	0.00	 	 	$	(0.05	)	 	$	(0.05	)	
Diluted net income (loss) per share	 	$	(0.02	)	 	 	0.00	 	 	$	(0.05	)	 	$	(0.05	)	
Shares used in computing basic net income (loss) per share	 	 	80,119	 	 	 	79,674	 	 	 	79,990	 	 	 	76,982	 	
Shares used in computing diluted net income (loss) per share	 	 	80,119	 	 	 	80,366	 	 	 	79,990	 	 	 	76,982	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	$	(1,292	)	 	$	55	 	 	$	(3,752	)	 	$	(4,070	)	
Translation gain (loss) on subsidiaries in foreign currencies	 	 	(193	)	 	 	247	 	 	 	416	 	 	 	(12	)	
Comprehensive income (loss)	 	$	(1,485	)	 	$	302	 	 	$	(3,336	)	 	$	(4,082	)	

 

 

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

 	 	Sept. 30	 	 	December 31	 	
 	 	2011	 	 	2010	 	
Assets	 	(unaudited)	 	 	 	 	
 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
Cash and cash equivalents	 	$	9,455	 	 	$	15,416	 	
Short-term investments in marketable securities	 	 	-	 	 	 	134	 	
Restricted cash	 	 	403	 	 	 	-	 	
Accounts receivable, net	 	 	16,725	 	 	 	14,708	 	
Inventories	 	 	10,731	 	 	 	6,430	 	
Prepaid expenses and other	 	 	 501	 	 	 	 511	 	
Total current assets	 	 	37,815	 	 	 	37,199	 	
Property and equipment, net	 	 	3,007	 	 	 	2,005	 	
Deposits and other	 	 	404	 	 	 	314	 	
Total assets	 	$	41,226	 	 	$	39,518	 	
 	 	 	 	 	 	 	 	 	
Liabilities and stockholders' equity	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	6,035	 	 	$	6,022	 	
Accrued expenses	 	 	5,379	 	 	 	7,068	 	
Deferred revenue	 	 	4,566	 	 	 	2,492	 	
Revolving line of credit	 	 	5,535	 	 	 	2,535	 	
Total current liabilities	 	 	21,515	 	 	 	18,117	 	
 	 	 	 	 	 	 	 	 	
Long-term liabilities	 	 	811	 	 	 	579	 	
Stockholders' equity:	 	 	 	 	 	 	 	 	
Common stock	 	 	80	 	 	 	80	 	
Treasury stock	 	 	(115	)	 	 	(103	)	
Additional paid-in capital	 	 	276,233	 	 	 	274,807	 	
Accumulated deficit	 	 	(257,553	)	 	 	(253,801	)	
Other accumulated comprehensive loss	 	 	255	 	 	 	(161	)	
Total stockholders’ equity	 	 	18,900	 	 	 	20,822	 	
Total liabilities and stockholders’ equity	 	$	41,226	 	 	$	39,518	 	

 

 

ACTIVE POWER, INC.
SUPPLEMENTAL FINANCIAL DATA
 
 	 	Three Months Ended
Sept. 30,	 	 	Nine Months Ended
Sept. 30,	 	
$’000	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Product Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	
UPS products	 	$	5,991	 	 	$	8,358	 	 	$	20,764	 	 	$	23,210	 	
Continuous Power Solutions	 	 	7,034	 	 	 	1,210	 	 	 	20,105	 	 	 	6,298	 	
Infrastructure Solutions	 	 	3,971	 	 	 	7,095	 	 	 	7,021	 	 	 	9,848	 	
 	 	$	16,996	 	 	$	16,663	 	 	$	47,890	 	 	$	39,356	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
MW of critical Power delivered	 	22.2MW	 	 	23.9MW	 	 	76.9MW	 	 	71.8MW	 	
Revenue per MW of Critical Power ($’000)	 	$	585	 	 	$	420	 	 	$	565	 	 	$	442	 	

 
 
Selected Balance Sheet Data: ($’000)	 	 	 	 	Sept. 30, 2011	 	 	June 30, 2011	 	 	Dec. 31, 2010	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Raw materials	 	 	 	 	 	$	6,859	 	 	$	6,655	 	 	$	5,243	 	
Work in progress	 	 	 	 	 	 	3,452	 	 	 	5,461	 	 	 	2,382	 	
Finished goods	 	 	 	 	 	 	2,246	 	 	 	1,750	 	 	 	1,148	 	
Less reserves for obsolescence	 	 	 	 	 	 	(1,826	)	 	 	(1,815	)	 	 	(2,343	)	
 	 	 	 	 	 	$	10,731	 	 	$	12,051	 	 	$	6,430	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Receivables:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	 	 	 	 	$	11,511	 	 	$	10,132	 	 	$	10,681	 	
EMEA	 	 	 	 	 	 	1,947	 	 	 	4,866	 	 	 	4,020	 	
Asia	 	 	 	 	 	 	3,267	 	 	 	2,807	 	 	 	7	 	
 	 	 	 	 	 	$	16,725	 	 	$	17,805	 	 	$	14,708