Capstone reports revenue growth, significant orders in Q1 results

By Katie Fletcher | August 10, 2015

Capstone Turbine Corp. recently released its quarter one financial results, reporting a total revenue increase of 16 percent to $27 million, compared with $23.3 million for the same period in the prior year.

The company reported that revenue benefited from strong contributions from the North American, Asian and South American markets this quarter. Capstone also reported product revenue increased 15 percent to $20.2 million and accessories, parts and service revenue increased 19 percent to $6.8 million over the comparable period in 2014. Net loss decreased $800,000 from quarter one of last year to $6.8 million for quarter one 2015. This is even despite a $600,000 one-time charge to operating expenses for severance and other termination benefits in the first quarter of fiscal 2016. Research and development expenses for the first quarter were $2.4 million, up slightly from the $2.3 million reported for the first quarter of the prior year. Expenses attributed to selling, general and administrative purposes were $8.1 million in comparison to $7.8 million for quarter one 2014.

Gross profit margin increased more than 200 basis points to 17 percent from 15 percent in the first quarter of last year. The increase in gross profit margin was primarily the result of a shift in product mix of $1.1 million, as Capstone sold a higher number of its C1000 Series systems.

During its financial earnings call, Capstone highlighted that the combined-heat-and-power market remained strong and the oil and gas market improved. A few significant orders Capstone shared in its report were two orders for C1000 microturbines for energy efficiency projects in New York City—one at a New York University research and learning facility and the second at River Park Towers residential complex in the Bronx. Another C1000 microturbine for a power generation facility owned by Canadian energy service company Kineticor Resource Corp. for flare gas utilization was also ordered. A fourth C1000 was sold to update an established solid waste treatment plant in Finland, as reported in Capstone’s fourth quarter financial results. The microturbine will be fueled by landfill biogas collected from two on-site stations. The C1000 will be installed in a CHP application along with a 1400 kW exhaust heat exchanger, booster and automation and gas treatment system. Altogether, the company reported $15 million in new orders.

“We are off to a great start for the fiscal year, with revenue rebounding as we recorded our second-best level of quarter one revenue in our company’s 20-year history,” said Darren Jamison, president and CEO of Capstone. “We continued to experience strong revenue from our aftermarket service business and benefitted from strength in our combined-heat-and-power business as the energy efficiency market remained robust.”

One of Capstone’s initiatives it shared on the call is its goal to grow the CHP market and expand its business in South America, Asia, Africa and the Middle East. In addition to the C1000 sales for CHP projects in NYC, groundbreaking was announced with a C600 order in the Midwest for a new Open Access Technology International data center and CHP in an office facility, as well as new orders in Puerto Rico, Portugal, Lithuania and Finland.