Stock Alert for Beacon Power Corp. (BCON)(D*)
Beacon Power Corp. (Nasdaq: BCON)(D*)
* Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.
Beacon Power Corp. (BCON) is a development stage company. The Company along with its subsidiaries, designs, manufactures and operates flywheel-based energy storage systems. The focus of its research and development has been to establish flywheel-based energy storage technologies that can provide energy solutions for the worldwide electricity grid.
Beacon Power Corp. was founded in 1997 and is headquartered in Tyngsboro, Massachusetts.
| Share Statistics (11-Jun-10) | FY
2007 |
FY
2008 |
%
Chg |
Q4 2008 | Q4 2009 | %
Chg |
||
| Symbol | BCON | Revenue, $Mn | 1.39M | 0.07M | 95.0% | 0.02M | 0.30M | 1400% |
| Current price | $0.31 | Gross marg. | 10.2% | 22.1% | 116.7% | -100.0% | -236.7% | 136.7% |
| 52wk Range: | $1.09-0.28 | Oper. margin | -980.5% | -35057% | 3475% | -35950% | -1533% | 95.7% |
| Avg Vol (3m): | 1,412,780 | Net margin | -929.5% | -33671% | 3522% | -36150% | -1553% | 95.7% |
| Market Cap. | 57.40M | |||||||
| Dil. Shares Outst. | 183.2M | EPS, $ | -0.18 | -0.26 | 44.4% | -0.07 | -0.03 | 57.1% |
Source: Reuters.com, SEC Filings.
Financial Summary
For the first quarter of 2010, BCON reported revenue of $235,000 and a net loss of $5.5 million, or ($0.03) per share, compared to revenue of $111,000 and a net loss of $5.5 million, or ($0.05) per share, in the first quarter of 2009. Gross profit for the first quarter of 2010 was $52,000, as compared to a gross loss of $61,000 during the first quarter of 2009.
During the first quarters of 2010 and 2009, the Company earned revenue primarily from frequency regulation service provided through an ISO New England pilot program begun in November 2008, as well as from the Company’s research and development contracts. BCON had 3 MW of frequency regulation capacity in service during the first quarter of 2010, as compared to 1 MW in the first quarter of 2009. The Company’s frequency regulation revenue increased by approximately $79,000, or 123%, over the first quarter of 2009. The increase in revenue was limited due to lower average clearing prices from ISO-NE for frequency regulation during the first quarter of 2010, as well as the fact that ISO-NE currently does not include so-called “opportunity cost” in its calculation of its regular clearing price. Inclusion of that factor is expected to increase future revenues received by BCON from ISO-NE by approximately one-third. Several other ISOs already include this factor in their pricing structure.
BCON’s average gross margin on frequency regulation services during the first quarter of 2010 was 27%, as opposed to a negative gross margin of 103% for the first quarter of 2009. This significant improvement was primarily driven by a change in the ISO-NE settlement structure that enabled the Company to net its energy consumption and pay the wholesale rate for net energy usage. However, because the pilot units are connected to the New England grid through a distribution line rather than a transmission line, the Company continues to incur retail transmission and distribution (T&D) charges. These charges represented approximately $75,000, or 72%, of the Company’s total cost of energy during the first quarter of 2010. Pro forma gross margin for frequency regulation services for the first quarter of 2010, calculated without T&D charges, would have been approximately 80%. The Company will connect to the grid at transmission level in Stephentown, NY, and therefore will not incur T&D charges.
For the first quarter ended March 31, 2010, operations and maintenance expenses increased by $190,000, or 24%, compared to the equivalent period in 2009. The increase was due primarily to occupancy expenses related to building maintenance. Research and development expenses decreased by $120,000, or 5%, in comparison to the equivalent period in 2009, due primarily to decreased spending on R&D material.
Selling, general and administrative expenses were essentially flat at $1.9 million for the first quarter of 2010 and 2009, respectively. Depreciation expense in the first quarter of 2010 increased by $105,000 compared to the first quarter of 2009. This increase is primarily from the capitalization of flywheel and related equipment that were placed into service in the third and fourth quarters of 2009, as well as machinery and equipment purchased in the fourth quarter of 2009.
At March 31, 2010, the Company had $17.5 million in cash and cash equivalents as compared to $5.3 million at March 31, 2009, and working capital of $13.9 million at March 31, 2010, as compared to $1.7 million at March 31, 2009. Approximately $12 million of the cash on hand is expected to be contributed to the Stephentown project upon closing the DOE loan and is not expected to be available for general corporate operating purposes.
| Financial Strength (11-Jun-2010) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 3.78 | 0.18 | 1.29 | 0.81 |
| Current Ratio (MRQ) | 3.78 | 0.25 | 1.58 | 0.96 |
| Long-Term Debt to Equity (MRQ) | 9.16 | 4.16 | 58.09 | 133.49 |
| Total Debt to Equity (MRQ) | 10.77 | 8.42 | 80.80 | 199.16 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
| Buy | Outperform | Hold | Underperform | Sell | No Opinion |
This is the consensus forecast amongst one polled investment analysts. Against the Beacon Power Corp company.
| Analyst Detail | Buy | Outperform | Hold | Underperform | Sell | No Opinion |
| Latest | 1 | 0 | 0 | 0 | 0 | 1 |
| 4 weeks ago | 1 | 0 | 0 | 0 | 0 | 1 |
| 2 months ago | 1 | 0 | 0 | 0 | 0 | 1 |
| 3 months ago | 0 | 0 | 0 | 0 | 0 | 1 |
| Last year | 0 | 0 | 2 | 0 | 0 | 0 |
The one analyst offering a 12-month price target expects BCON share price to rise to 1.10 in the next year from the last price of 0.3152.
Source: www.ft.com
Consensus Estimates Analysis
| # of Estimates | Mean | High | Low | 1 Year Ago | |
| SALES (in millions) | |||||
| Quarter Ending Jun-10 | 1 | 0.50 | 0.50 | 0.50 | – |
| Quarter Ending Sep-10 | 1 | 0.50 | 0.50 | 0.50 | – |
| Year Ending Dec-10 | 1 | 2.60 | 2.60 | 2.60 | 11.24 |
| Year Ending Dec-11 | 1 | 70.80 | 70.80 | 70.80 | – |
| EARNINGS (per share) | |||||
| Quarter Ending Jun-10 | 1 | -0.03 | -0.03 | -0.03 | – |
| Quarter Ending Sep-10 | 1 | -0.03 | -0.03 | -0.03 | – |
| Year Ending Dec-10 | 1 | -0.11 | -0.11 | -0.11 | -0.13 |
| Year Ending Dec-11 | 1 | -0.03 | -0.03 | -0.03 | – |
Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=BCON.W
Investment Highlights
BCON recently announced that it has signed a $2 million contract with the New York State Energy Research and Development Authority (NYSERDA).
NYSERDA will provide partial funding for critical grid infrastructure elements at BCON’s 20 MW frequency regulation plant in Stephentown, New York, including interconnection components to allow the plant to interface with the New York power grid. NYSERDA will also fund certain other project aspects, including a visitor information center to be built at the Stephentown site.
BCON first demonstrated how its flywheel technology could respond to grid frequency regulation control signals in New York with a small-scale energy storage project in Amsterdam that was partially funded by NYSERDA in 2006. The Company broke ground at the Stephentown site in November 2009 after the project won approvals by the New York State Public Service Commission, the New York Independent System Operator (NYISO) and the local planning board.
Flywheel Energy Storage and Frequency Regulation
Frequency regulation is an essential grid service that is performed by maintaining a tight balance between electricity supply and demand. BCON’s 20 MW plant has been designed to provide frequency regulation services by absorbing electricity from the grid when there is too much, and storing it as kinetic energy in a matrix of flywheel systems. When there is not enough power to meet demand, the flywheels inject energy back into the grid, thus helping to maintain proper electricity frequency (60 cycles/second).
Thanks to the Company’s ability to recycle electricity efficiently and act as “shock absorbers” to the grid, BCON’s flywheel plants will also help support the integration of greater amounts of renewable (but intermittent) wind and solar power resources. Unlike conventional fossil fuel-powered generators that provide frequency regulation, flywheel plants will not consume any fuel, nor will they directly produce CO2 greenhouse gas emissions or other air pollutants, such as NOX or SO2.
About NYSERDA
New York State Energy Research and Development Authority (NYSERDA) offers technical and financial support to help make New York State energy customers more energy efficient, and to help New York businesses develop clean energy solutions, increase energy efficiency, protect the environment and save money.
As previously disclosed in a Form 8-K filed on June 11, 2009, BCON was selected by the NYSERDA for a project award valued at $2 million, subject to negotiations. On May 24, 2010, the Company announced that it has entered into an agreement with NYSERDA, pursuant to which NYSERDA has agreed to provide partial funding for critical grid infrastructure elements at the Company’s 20 MW frequency regulation plant in Stephentown, New York, including interconnection components to allow the plant to interface with the New York power grid. NYSERDA will also fund certain other project aspects, including a visitor information center to be built at the Stephentown site.
Under the arrangement, the Company will be required to install, test and demonstrate the performance of a 20 MW, 5 MWhr flywheel energy storage plant in response to a New York Independent System Operator signal for grid regulation service. The Company anticipates a staged deployment of the facility at 2 MW at a time.
The aggregate maximum amount payable by NYSERDA to the Company is $2 million. The award will be provided in stages upon completion of certain milestones. This award is in addition to the conditional commitment from the U.S. Department of Energy for a loan guarantee of approximately $43 million for the construction and operation of the Stephentown plant.
Source: http://www.beaconpower.com/
Technical Analysis
Source: http://stockcharts.com
BCON is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.
BCON’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, BCON is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
The MACD for BCON currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of zero, which implies that the underlying moving averages are trending lower.
Comparative Analysis
| Company Name | Ticker | Price per | Mrkt. Cap. | P/E | P/S | ||
| June-11-2010 | symbol | Share, $ | $ Mn | 2010 | 2011 | 2010 | 2011 |
| American Electric Technologies Inc. | AETI | 2.07 | 16.06M | n/a | n/a | 0.31 | n/a |
| SatCon Technology Corp. | SATC | 2.49 | 177.58M | n/a | n/a | 3.05 | n/a |
| Capstone Turbine Corp. | CPST | 1.11 | 218.29M | n/a | n/a | 4.88 | n/a |
| Electric Utilities Median | 137.31M | n/a | n/a | 2.74 | n/a | ||
| Beacon Power Corp. | BCON | 0.32 | 57.40M | n/a | n/a | 66.57 | n/a |
Source: Thomson Financial
Insider Trading Activity
| NET SHARES PURCHASE ACTIVITY
Inside Purchases – Last 6 Months |
||
| Shares | Transaction | |
| Purchases | n/a | 0 |
| Sales | n/a | 0 |
| Net Shares Purchased (Sold) | n/a | 0 |
| Total Insider Shares Held | 16.47M | n/a |
| % Net Shares Purchased (Sold) | 0.0% | n/a |
| Net Institutional Purchases — Prior Qtr to Latest Qtr | |
| Shares | |
| Net Shares Purchased (Sold) | (13,183,500) |
| % Change in Institutional Shares Held | (161.0%) |
Source: Yahoo Finance
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