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)
November 18, 2013

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 November 18, 2013, Active Power, Inc. issued a press release reporting its results of operations for its fiscal quarter ended September 30, 2013. 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 November 18, 2013.	

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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: November 18, 2013	By:	/s/ Steven R. Fife	 	
 	 	Steven R. Fife
Chief Financial Officer	

-3-

EXHIBIT INDEX
Exhibit No.	 	
 	 	
99.1	Press Release of Active Power, Inc. dated November 18, 2013.	

-4-

Exhibit 99.1

DRAFT – NOT FOR RELEASE

Active Power Reports Third Quarter 2013 Results

AUSTIN, Texas (Nov. 18, 2013) – Active Power (NASDAQ: ACPW), manufacturer of uninterruptible power supply (UPS) systems and modular infrastructure solutions (MIS), reported results for the third quarter ended Sept. 30, 2013.

Q3 2013 Highlights
 
 	·	UPS sales increased $3.7 million to $6.5 million compared to the previous quarter, but decreased $8.3 million compared to the third quarter of 2012.	

 	·	Service revenue increased $321,000 to $5.1 million compared to the previous quarter and increased $2.2 million or 73% compared to the third quarter of 2012.	

 	·	Gross margin decreased to 30.0% compared to 34.3% in the previous quarter, but improved compared to 28.6% in the third quarter of 2012.	

 	·	Deployed second set of two PowerHouse™ systems to support expansion of two modular data centers for global manufacturer of oil and gas drilling products, now totaling nearly three megawatts of power infrastructure installed onsite.	

 	·	Shipped multiple CleanSource® UPS systems totaling more than three megawatts of total rated UPS capacity to one of the largest pharmaceutical companies in the world to support their new drug manufacturing facility in the eastern U.S.	

 	·	Appointed Mark A. Ascolese as company’s new president and CEO, bringing to the company extensive experience serving a variety of mission critical markets including the energy storage and data center markets.	

Restatement
On November 4, 2013, the audit committee of the board of directors of Active Power concluded, in consultation with management and after discussion with the company’s independent registered public accounting firm, that the company would restate its quarterly interim financial statements for the periods ending March 31, 2013, and June 30, 2013. For information regarding the restatement, please refer to the company’s Form 8-K filed on November 7, 2013, and the company’s amended quarterly reports  on Form 10-Q/As for the periods ending March 31, 2013, and June 30, 2013, filed on November 18, 2013, with the Securities and Exchange Commission.

Financial Results
Revenue in the third quarter of 2013 was $13.2 million compared to $20.2 million in the previous quarter and $19.6 million in the third quarter of 2012. The sequential decrease was due primarily to lower MIS revenue while the decrease from the year-ago quarter was primarily attributed to a decrease in UPS revenue. For the first nine months ended Sept. 30, 2013, revenue totaled $47.8 million compared to $61.1 million in the same period in 2012.

Gross margin in the third quarter of 2013 was 30.0% compared to 34.3% in the previous quarter and 28.6% in the third quarter of 2012. The sequential decrease in gross margin was due to higher margin shipments of MIS products in the second quarter of 2013. The increase in gross margin from the year-ago quarter was primarily due to higher service sales in the third quarter of 2013 compared to the third quarter of 2012. For the nine months ended Sept. 30, 2013, gross margin was 31.9% compared to 30.6% in the same period in 2012.

Net loss in the third quarter of 2013 was $3.1 million or $(0.16) per share, compared to a net income of $0.3 million or $0.02 per share in the previous quarter and net loss of $0.8 million or $(0.04) per share in the third quarter of 2012. The change from net income to net loss from the previous quarter and the increase in net loss from the third quarter of 2012 was primarily due to the impact of lower revenue in the quarter compared to the two comparable quarters. For the nine months ended Sept. 30, 2013, net loss was $4.2 million or $(0.22) per share, compared to a net loss of $1.5 million or $(0.08) per share in the same period in 2012.
 
Adjusted EBITDA for the third quarter of 2013 was a negative $2.3 million compared to a positive $1.1 million in the previous quarter and a negative $0.1 million in the third quarter of 2012. For the nine months ended Sept. 30, 2013, adjusted EBITDA was a negative $2.1 million compared to a positive $0.9 million in the same period in 2012. The adjusted EBITDA decrease in the periods is primarily due to lower revenue and higher depreciation expense. See “About Presentation of Adjusted EBITDA” below for the definition of adjusted EBITDA, a non-GAAP financial metric, and an important discussion about the use of this metric and its reconciliation to GAAP net income, the most directly comparable GAAP financial measure.

Cash and cash equivalents were $14.3 million at Sept. 30, 2013, compared to $14.5 million in the previous quarter and $13.5 million at Dec. 31, 2012.

Management Commentary
“The third quarter was challenging with overall product revenues down compared to the third quarter of 2012,” said Mark A. Ascolese, president and CEO of Active Power. “However, our service business continued to grow and improved 73 percent or by $2.2 million compared to the same period in 2012.”

“As we exit the year and enter 2014, we will focus on driving more consistent performance and predictability throughout the business through the addition of our CSHD product line and sales performance management. We will also leverage and enhance the unique flywheel technology we have in place to grow product revenue and expand into new and relevant markets where our products can immediately solve customers’ problems.”

Change to Guidance Practice
Active Power does not plan to provide quarterly or annual guidance due to continued variability in the business. However, the company plans to continue to provide commentary on industry trends that affect its business and impact its growth prospects.

Conference Call and Webcast
Active Power will host a conference call today, Monday, Nov. 18, 2013, at 5:00 p.m. (ET) to discuss its third quarter 2013 results. Interested parties can dial into the conference call at the time of the event at (888) 427-9411. For callers outside the U.S. and Canada, please dial (719) 325-2429.

To listen to the live webcast, click here. A replay of the webcast will be available via Active Power’s investor relations website at http://ir.activepower.com.

About Active Power
Founded in 1992, Active Power (NASDAQ: ACPW) designs and manufactures uninterruptible power supply (UPS) systems and modular infrastructure solutions that enable data centers and other mission critical operations to remain 'on' 24 hours a day, seven days a week. The combined benefits of its products' power density, reliability, and total cost of ownership are unmatched in the market and enable the world's leading companies to achieve their most forward thinking data center designs. 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 three regional operations centers located in the United Kingdom, Germany, and China, that support the deployment of systems in more than 50 countries. For more information, visit www.activepower.com.

Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements that involve risks and uncertainties, including statements relating to focus on driving more consistent performance and predictability throughout the business; and plans to leverage and enhance the unique flywheel technology we have in place to grow product revenue and expand into new and relevant markets.

Such 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, our dependence on our relationships with Hewlett Packard, Caterpillar, other original equipment manufacturers (OEM), other strategic IT partners, and on our distributors; our increased emphasis on larger and more complex system solutions; the success of our product development efforts and our ability to manufacture and deliver products in a timely manner; the level of acceptance of our current and future products in the market; 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, 2012, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K filed since then. Active Power assumes no obligation to update any forward-looking statements or information which are in effect as of their respective dates.

Media Contact:
Lee Higgins
Senior Public Relations Manager
512-656-9435
lhiggins@activepower.com

Investor Contact:
Ron Both
Liolios Group, Inc.
949-574-3860
acpw@liolios.com

Active Power, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except per share amounts; unaudited)
 	 	Three Months Ended
September 30,	 	 	Nine Months Ended
September 30,	 	
 	 	2013	 	 	2012	 	 	2013	 	 	2012	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	
Product revenue	 	$	8,023	 	 	$	16,647	 	 	$	34,858	 	 	$	50,534	 	
Service and other revenue	 	 	5,131	 	 	$	2,964	 	 	 	12,915	 	 	 	10,534	 	
Total revenue	 	 	13,154	 	 	 	19,611	 	 	 	47,773	 	 	 	61,068	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of goods sold:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of product revenue	 	 	6,784	 	 	 	12,254	 	 	 	25,373	 	 	 	35,608	 	
Cost of service and other revenue	 	 	2,426	 	 	 	1,742	 	 	 	7,180	 	 	 	6,766	 	
Total cost of goods sold	 	 	9,210	 	 	 	13,996	 	 	 	32,553	 	 	 	42,374	 	
Gross profit	 	 	3,944	 	 	 	5,615	 	 	 	15,220	 	 	 	18,694	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	2,149	 	 	 	1,325	 	 	 	5,580	 	 	 	4,045	 	
Selling and marketing	 	 	2,714	 	 	 	3,447	 	 	 	8,684	 	 	 	10,891	 	
General and administrative	 	 	2,046	 	 	 	1,691	 	 	 	4,759	 	 	 	5,175	 	
Total operating expenses	 	 	6,909	 	 	 	6,463	 	 	 	19,023	 	 	 	20,111	 	
Income (Loss) from Operations	 	 	(2,965	)	 	 	(848	)	 	 	(3,803	)	 	 	(1,417	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense, net	 	 	(118	)	 	 	(80	)	 	 	(282	)	 	 	(246	)	
Other income (expense), net	 	 	(52	)	 	 	81	 	 	 	(139	)	 	 	159	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income (Loss)	 	$	(3,135	)	 	$	(847	)	 	$	(4,224	)	 	$	(1,504	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) per share, basic	 	$	(0.16	)	 	$	(0.04	)	 	$	(0.22	)	 	$	(0.08	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Shares used in computing net loss per share, basic	 	 	19,337	 	 	 	19,115	 	 	 	19,188	 	 	 	18,399	 	

Active Power, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
 	 	Three Months Ended	 	
 
 	 	September 30,
2013	 	 	December 31,
2012	 	
 	 	 	 	 	 	 	
ASSETS	 	 	 	 	 	 	
 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	
Cash and cash equivalents	 	$	14,252	 	 	$	13,524	 	
Restricted cash	 	 	511	 	 	 	-	 	
Accounts receivable, net of allowance for doubtful accounts of  $838 and $488 at September 30, 2013 and December 31, 2012, respectively	 	 	8,713	 	 	 	17,862	 	
Inventories, net	 	 	13,244	 	 	 	11,079	 	
Prepaid expenses and other	 	 	2,390	 	 	 	567	 	
Total current assets	 	$	39,110	 	 	 	43,032	 	
Property and equipment, net	 	 	2,859	 	 	 	2,458	 	
Deposits and other	 	 	294	 	 	 	309	 	
Total assets	 	$	42,263	 	 	$	45,799	 	
 	 	 	 	 	 	 	 	 	
LIABILITIES AND STOCKHOLDERS' EQUITY	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	4,461	 	 	$	4,036	 	
Accrued expenses	 	 	5,134	 	 	 	4,948	 	
Deferred revenue	 	 	3,064	 	 	 	4,568	 	
Revolving line of credit	 	 	5,535	 	 	 	5,535	 	
Total current liabilities	 	$	18,194	 	 	 	19,087	 	
Long-term liabilities	 	 	737	 	 	 	713	 	
Stockholders' equity	 	 	 	 	 	 	 	 	
Preferred stock - $0.001 par value; 2,000 shares authorized	 	 	-	 	 	 	-	 	
Common stock - $0.001 par value; 30,000 shares authorized; 19,421 and 19,171 issued and 19,362 and 19,125 outstanding at September 30, 2013 and December 31, 2012, respectively	 	 	19	 	 	 	19	 	
Treasury stock	 	 	(200	)	 	 	(144	)	
Additional paid-in capital	 	 	290,193	 	 	 	288,619	 	
Accumulated deficit	 	 	(267,041	)	 	 	(262,817	)	
Other accumulated comprehensive income	 	 	361	 	 	 	322	 	
Total stockholders' equity	 	 	23,332	 	 	 	25,999	 	
Total liabilities and stockholders' equity	 	$	42,263	 	 	$	45,799	 	

Active Power, Inc.
Supplemental Information

Revenue by Product	 	3 Months Ended	 	 	9 Months Ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2013	 	 	% of total	 	 	2012	 	 	% of total	 	 	2013	 	 	% of total	 	 	2012	 	 	% of total	 	
UPS	 	$	6,495	 	 	 	49	%	 	$	14,783	 	 	 	75	%	 	$	16,731	 	 	 	35	%	 	$	28,551	 	 	 	47	%	
MIS	 	 	1,528	 	 	 	12	%	 	 	1,864	 	 	 	10	%	 	 	18,127	 	 	 	38	%	 	 	21,983	 	 	 	36	%	
Total Product Revenue	 	 	8,023	 	 	 	61	%	 	 	16,647	 	 	 	85	%	 	 	34,858	 	 	 	73	%	 	 	50,534	 	 	 	83	%	
Service	 	 	5,131	 	 	 	39	%	 	 	2,964	 	 	 	15	%	 	 	12,915	 	 	 	27	%	 	 	10,534	 	 	 	17	%	
Total Revenue	 	$	13,154	 	 	 	100	%	 	$	19,611	 	 	 	100	%	 	$	47,773	 	 	 	100	%	 	$	61,068	 	 	 	100	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue by Geography	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Americas	 	$	8,522	 	 	 	65	%	 	$	7,973	 	 	 	41	%	 	$	39,087	 	 	 	82	%	 	$	36,557	 	 	 	60	%	
Asia	 	 	2,914	 	 	 	22	%	 	 	2,177	 	 	 	11	%	 	 	3,193	 	 	 	7	%	 	 	4,931	 	 	 	8	%	
EMEA	 	 	1,718	 	 	 	13	%	 	 	9,461	 	 	 	48	%	 	 	5,493	 	 	 	11	%	 	 	19,580	 	 	 	32	%	
Total Revenue	 	$	13,154	 	 	 	100	%	 	$	19,611	 	 	 	100	%	 	$	47,773	 	 	 	100	%	 	$	61,068	 	 	 	100	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Adjusted EBITDA   	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	(Thousands)   	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Three	 	 	 	 	 	 	Nine   	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Months Ended	 	 	 	 	 	 	Months Ended    	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	September 30,	 	 	 	 	 	 	September 30,    	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	2013	 	 	 	2012	 	 	 	 	 	 	 	2013	 	 	 	2012	 	 	 	 	 	 	 	 	 	
Net Income (Loss)	 	 	 	 	 	$	(3,135	)	 	$	(847	)	 	 	 	 	 	$ 	(4,224	)	 	$ 	(1,504	)	 	 	 	 	 	 	 	 	
Interest Expense	 	 	 	 	 	 	118	 	 	 	80	 	 	 	 	 	 	 	282	 	 	 	246	 	 	 	 	 	 	 	 	 	
Depreciation Expense	 	 	 	 	 	 	245	 	 	 	308	 	 	 	 	 	 	 	804	 	 	 	955	 	 	 	 	 	 	 	 	 	
Stock Based Compensation	 	 	 	 	 	 	388	 	 	 	358	 	 	 	 	 	 	 	916	 	 	 	1,131	 	 	 	 	 	 	 	 	 	
Impairment of Long-Lived Assets	 	 	 	 	 	 	132	 	 	 	4	 	 	 	 	 	 	 	102	 	 	 	31	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	 	 	 	$	(2,252	)	 	$	(97	)	 	 	 	 	 	$	(2,120	)	 	$	859	 	 	 	 	 	 	 	 	 	
 
About Presentation of Adjusted EBITDA
Beginning with the reporting of results for the fourth quarter of 2012, the company began to report the measure of adjusted EBITDA. Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of liquidity. The company defines adjusted EBITDA as net loss before impairment of long-lived assets, depreciation, interest, and non-cash stock based compensation. Other companies (including competitors) may define adjusted EBITDA differently. The company presents adjusted EBITDA because management believes it is to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Active Power Inc. nor is it intended to be predictive of potential future results. Investors should not consider adjusted EBITDA in isolation or as a substitute for analysis of the company’s results as reported under GAAP.