Stock Alert for Capstone Turbine Corp. (CPST)
  • Stock Alert for Capstone Turbine Corp. (CPST)
  • Stock Alert for Capstone Turbine Corp. (CPST)(D*)
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    Stock Alert for Capstone Turbine Corp. (CPST)(D*)

    * Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.

    Capstone Turbine Corp. (CPST) develops, manufactures, markets and services microturbine technology solutions for use in stationary distributed power generation applications, including cogeneration (combined heat and power (CHP), integrated combined heat and power (ICHP), and combined cooling, heat and power (CCHP)), resource recovery and secure power. In addition, its microturbines can be used as battery charging generators for hybrid electric vehicle applications. Microturbines allow customers to produce power on-site in parallel with the electric grid or stand alone when no utility grid is available. There are several technologies that are used to provide on-site power generation (also called distributed generation), such as reciprocating engines, solar power, wind powered systems and fuel cells. On February 1, 2010, the Company acquired the 100 kilowatt (TA100) microturbine product line from Calnetix Power Solutions Inc.

    Founded in 1998, the Company is headquartered in the Los Angeles area with sales and/or service centers in the New York metro area, Mexico City, Nottingham, Shanghai, Singapore and Tokyo.

    Share Statistics (19-Oct-10) FY

    2009

    FY

    2010

    %

    Chg

    Q1

    FY2010

    Q1

    FY2011

    %

    Chg

    Symbol CPST Revenue, $Mn 43.95 61.55 40.0% 13.72 16.05 17.0%
    Current price $0.77 Gross marg. -12.1% -13.7% 13.2% -20.7% -3.2% -84.5%
    52wk Range: $0.62-$1.50 Oper. margin -71.1% -52.8%
    Avg Vol (3m): 1,921,160 Net margin -94.9% -109.2% 16.1% -111.2% 2.5% -102.2%
    Market Cap. 188.38M
    Shares Outstanding 245.48M EPS, $ -0.25 -0.34 36.0% -0.08 0.00

    Source: Reuters.com, SEC Filings.

    Financial Summary

    For the first quarter of fiscal 2011, CPST reported revenue of $16.1 million, an increase of 18% from the first quarter of fiscal 2010. The Company shipped 98 units in the first quarter of fiscal 2011, compared to 80 units in the same period last year. Average revenue per unit increased for the first quarter of fiscal 2011 to approximately $130,000 compared to approximately $128,000 per unit for the first quarter of fiscal 2010 and approximately $85,000 per unit for the fourth quarter of fiscal 2010.

    As of June 30, 2010, the Company’s backlog was $84.6 million, an increase of 43% from June 30, 2009.

    The gross loss for the first quarter of fiscal 2011 was $0.5 million, or 3% of revenue, compared to $2.8 million, or 21% of revenue, during the first quarter of fiscal 2010. The improved gross loss was the result of $2.2 million related to higher sales of C200 and C1000 Series systems during the first quarter of fiscal 2011. The C200 and C1000 series systems have a higher margin compared to the same period last year, when these products had low introductory pricing and higher than planned product cost. In addition, the $2.3 million improvement included reduced inventory charges, offset by higher warranty expense versus the same period last year.

    Research and development expenses were $1.5 million for the first quarter of fiscal 2011, an increase of $0.7 million from the first quarter of fiscal 2010. R&D expenses are reported net of benefits from cost-sharing programs. There were approximately $0.2 million of such benefits this quarter and $1.3 million of such benefits for the same period last year. The overall increase in R&D expenses was the result of reduced benefits from cost-sharing programs of $1.1 million, offset by decreased spending for consulting fees and labor costs.

    Selling, general and administrative expenses were $6.4 million for the first quarter of fiscal 2011, an increase of $0.2 million, or 3%, from the first quarter of fiscal 2010. The net increase in SG&A expenses was comprised primarily of higher travel, marketing and facilities expenses.

    CPST’s net income was $0.4 million, or $0.00 per share, for the first quarter of fiscal 2011, compared to a net loss of $15.3 million, or $0.08 per share, reported for the first quarter of fiscal 2010. The improvement in net loss was primarily the result of the adoption of Accounting Standards Codification 815 “Derivatives and Hedging” which affects the Company’s accounting for warrants with certain anti-dilution provisions. The Company recorded a non-cash benefit of $9.2 million to change in fair value of warrant liability during the first quarter of fiscal 2011.

    CPST’s net loss for the first quarter of fiscal 2011 before considering the non-cash warrant liability benefit would have been $8.8 million (calculated by adding back the $9.2 million warrant liability benefit from the $0.4 million reported net income), or $0.04 loss per share (calculated by adding a $0.04 loss per share attributable to the warrant liability benefit from $0.00 per share reported). The Company recorded a non-cash charge of $5.2 million to change in fair value of warrant liability during the first quarter of Fiscal 2010. CPST’s net loss for the first quarter of fiscal 2010 before considering the non-cash warrant liability charge would have been $10.1 million (calculated by adding back the $5.2 million warrant liability charge from the $15.3 million reported net loss), or $0.05 loss per share (calculated by adding a $0.03 loss per share attributable to the warrant liability charge from $0.08 loss per share reported). CPST’s loss from operations for the first quarter of fiscal 2011 was $8.5 million, or 13% lower than the $9.8 million loss from operations for the first quarter of fiscal 2010.

    Cash and cash equivalents, including restricted cash, for the first quarter of fiscal 2011 were $31.8 million, a decrease of $15.5 million from March 31, 2010. Cash of $5.0 million was classified as restricted cash during the quarter as a condition of the amended Agreements with Wells Fargo for additional security for the Credit Facility.

    Source: Capstone Turbine Corp.

    Financial Strength (19-Oct-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.16 0.28 1.12 0.82
    Current Ratio (MRQ) 1.60 0.35 1.38 0.99
    LT Debt to Equity (MRQ) 0.24 6.12 53.89 125.09
    Total Debt to Equity (MRQ) 13.06 8.33 73.58 178.18
    Interest Coverage (TTM) -8.25 0.01 0.39 31.89

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among four polled investment analysts. Against the Capstone Turbine Corp company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 3 0 1 0 0 0
    4 weeks ago 3 0 1 0 0 0
    2 months ago 3 0 1 0 0 0
    3 months ago 3 1 0 0 0 0
    Last year 2 0 1 0 0 1

    The three analysts offering 12-month price targets for CPST have a median target of 1.35, with a high estimate of 3.00 and a low estimate of 1.00. The median estimate represents a 68.77% increase from the last price of 0.7999.

    Source: markets.ft.com

    Consensus Estimates Analysis

    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Dec-10 4 23.64 25.60 21.77 28.25
    Quarter Ending Mar-11 4 27.86 30.40 26.00 30.25
    Year Ending Mar-10 4 62.84 63.70 61.50
    Year Ending Mar-11 4 86.79 93.00 82.77 107.00
    Year Ending Mar-12 4 121.87 130.00 113.48 147.80
    EARNINGS (per share)
    Quarter Ending Dec-10 4 -0.03 -0.02 -0.04 -0.00
    Quarter Ending Mar-11 4 -0.03 -0.01 -0.04 0.00
    Year Ending Mar-10 3 -0.28 -0.20 -0.33
    Year Ending Mar-11 4 -0.12 -0.09 -0.15 -0.04
    Year Ending Mar-12 4 -0.06 -0.01 -0.14 0.05
    LT Growth Rate (%) 2 32.50 40.00 25.00 40.00

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=CPST.W


    Investment Highlights

    CPST offers microturbines designed for commercial, industrial and utility users from 30 kilowatts (kW) up to 1 megawatt in electric power output. Its 30 kW (C30) microturbine can produce enough electricity to power a small convenience store. The 60 kW and 65 kW (C60 Series) microturbine can produce enough heat to provide hot water to a 100-room hotel while also providing about one-third of its electrical requirements. Its  200 kW (C200) microturbine is well suited for larger hotels, office buildings, and wastewater treatment plants, among others. By packaging the C200 microturbine power modules into an International Organization for Standardization (ISO) sized container, CPST has created a family of microturbine offerings from 600 kW up to one megawatt in a compact footprint. Its 1000 kW (C1000 Series) microturbines are well suited for utility substations, larger commercial and industrial facilities and remote oil and gas applications.

    CPST’s microturbines combine patented air-bearing technology, advanced combustion technology and sophisticated power electronics to form efficient and ultra low emission electricity and cooling and heat production systems. Because of its air-bearing technology, its microturbines do not require liquid lubricants. This means they do not require routine maintenance to change and dispose of oil or other liquid lubricants, as do the most common competing products. CPST microturbines can be fueled by various sources, including natural gas, propane, sour gas, renewable fuels such as landfill or digester gas, kerosene, diesel and biodiesel. The C60 Series and C200 microturbines are available with integrated heat exchangers, making them easy to engineer and install in applications where hot water is used.

    The Company’s products produce exceptionally clean power. Its C60 Series was certified by the California Air Resources Board (CARB) as meeting its stringent 2007 emissions requirements—the same emissions standard used to certify fuel cells and the same emissions levels as a state-of-the-art central power plant. Its C65 Landfill and Digester Gas systems were certified in January 2008 by CARB as meeting 2008 waste gas emissions requirements for landfill and digester gas applications.

    Recent News

    Earlier this month, CPST announced that certain assets of Calnetix Power Solutions, a subsidiary of Calnetix Inc., have been acquired by GE (NYSE: GE). Included in GE’s purchase of assets from Calnetix Power Solutions is the CPS 125kW Cleancycle. CPST has the exclusive right to distribute and integrate the Cleancycleproduct for microturbine applications, and pursuant to that agreement, GE will continue to supply CPST.

    CPST secured two separate orders in September for its low-emission microturbine systems.

    The Company announced early in September an order for a C1000 Power Package from an independent oil and natural gas company exploring in the Piceance Basin in the United States. When commissioned in the coming months, the C1000 low-emission turbine will provide one megawatt of prime power to an unmanned natural gas compressor station along a pipeline in remote northwestern Colorado.

    On September 16, the Company announced it has received an order for a C1000 Power Package for a carbon-neutral data center in Melbourne, Australia.  CPST distributor Aquatec-Maxcon secured the order from a data center that provides highly reliable and secure services for mission-critical applications — all while striving to be a carbon-neutral company.  When commissioned by Aquatec-Maxcon in the coming months, the low-emission, natural-gas fueled C1000 turbine will provide one megawatt of prime power to the 19,700 square foot (6,000 square meter) data center. Electricity produced by the clean-and-green microturbine will provide all power to the data center.

    Source: reuters.com;  http://www.capstoneturbine.com/

    Technical Analysis

    Source: http://stockcharts.com

    CPST is trading below its 13-day moving average. However, this moving average is trending higher which suggests that there has been buying interest in this stock.

    CPST 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 CPST currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Oct19-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Caterpillar Inc. CAT 78.55 49,520 21.17 15.05 1.25 1.09
    Cummins Inc CMI 90.17 17,660 18.18 14.05 1.44 1.13
    Ingersoll-Rand PLC IR 37.99 12,260 16.30 12.83 0.88 0.83
    Plug Power Inc. PLUG 0.42 55.23 n/a n/a 3.61 1.95
    Industrial Electrical Equipment Median 17.17 n/a 0.93 n/a
    Capstone Turbine Corp. CPST 0.77 188.38 n/a n/a 2.17 1.55

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases 118,000 5
    Sales 57,901 2
    Net Shares Purchased (Sold) 60,099 7
    Total Insider Shares Held 1.39M n/a
    % Net Shares Purchased (Sold) 4.5% n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) 6,667,090
    % Change in Institutional Shares Held 6.05%

    Source: Yahoo Finance

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