(NASDAQ:MXWL) reported operational and financial results for the three and nine months ended September 30, 2015. Total revenues for the third quarter of 2015 were $45.1 million, an increase of 19.3% from the second quarter of 2015 and an increase of 8.4% from the prior year quarter. Ultracapacitor revenue increased to $31.8 million, an increase of 35.6% from the second quarter of 2015 and an increase of 10.4% from the prior year quarter. The Company reported $3.8 million of adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the third quarter of 2015, compared with $711,000 in the second quarter of 2015 and $1.6 millionfor the prior year quarter. Net loss for the third quarter of 2015 was $1.4 million, compared with $9.4 million in the second quarter of 2015 and $3.3 million in the prior year quarter.

“During the third quarter, we made meaningful progress transitioning our business to higher growth opportunities and executing on our restructuring plan, which is already yielding positive results,” said Dr. Franz Fink, Maxwell’s president and chief executive officer. “We achieved better than expected revenue, primarily driven by upside demand in the China hybrid bus market. We expect this strength to continue into the fourth quarter. While we expect the new China hybrid bus policy to put pressure on our top-line revenue early in 2016, we believe there is a long-term baseline business for ultracapacitors in that market.”

“As our business evolves and diversifies, our continued focus on costs and operational efficiencies should position us for sustainable profitability over the long term. Maxwell’s opportunity is large and growing, with our current served available market of nearly $600 million expected to grow to more than $1.4 billion by 2020 and further beyond that. Our five-year plan for revenue growth will build upon a solid revenue base today to more mid- and long-term opportunities as we diversify further in auto, rail and grid energy storage. Looking ahead, we are excited about the significant prospects for our company, and we are confident that we are taking the right steps to grow our business and enhance shareholder returns,” concluded Fink.

Financial Results and Operating Metrics (1)
(Unaudited; in millions, except for per share amounts)
Three Months Ended Nine Months Ended
September 30, 2015 June

30, 2015

September 30, 2014 September 30, 2015 September 30, 2014
Total revenue $ 45,076 $ 37,796 $ 41,593 $ 117,542 $ 133,668
Ultracapacitor revenue $ 31,801 $ 23,449 $ 28,809 $ 77,194 $ 94,719
High-Voltage revenue $ 10,275 $ 11,892 $ 10,428 $ 32,818 $ 30,514
Microelectronics revenue $ 3,000 $ 2,455 $ 2,356 $ 7,530 $ 8,435
Non-GAAP gross margin 32.3 % 33.0 % 37.6 % 32.0 % 37.8 %
Operating loss $ (651) $ (6,259) $ (2,282) $ (15,482) $ (1,569)
Non-GAAP operating income (loss) $ 1,032 $ (2,158) $ (1,271) $ (8,858) $ 1,365
Adjusted EBITDA $ 3,765 $ 711 $ 1,605 $ (381) $ 9,785
Net loss $ (1,449) $ (9,376) $ (3,292) $ (20,166) $ (4,154)
Non-GAAP net income (loss) $ 234 $ (3,190) $ (2,281) $ (11,457) $ (1,220)
Non-GAAP net income (loss) per share
Basic and diluted $ 0.01 $ (0.11) $ (0.08) $ (0.38) $ (0.04)
Net cash provided by operating activities $ 7,406 $ 1,901 $ 6,878 $ 8,530 $ 6,251
Cash purchases of property and equipment $ 562 $ 942 $ 2,319 $ 2,779 $ 5,195
Cash, cash equivalents and restricted cash $ 25,213 $ 25,031 $ 30,798 $ 25,213 $ 30,798
(1) For a reconciliation of non-GAAP financial measures, please refer to the section entitled “Reconciliation of GAAP to Non-GAAP Financial Measures” included at the end of this release

Discussion of Financial and Operational Results for the Quarter
Revenue and Non-GAAP Gross Margin

  • Total revenue for the third quarter of 2015 was $45.1 million, compared with $37.8 million in the second quarter of 2015, primarily due to increases in ultracapacitor and microelectronics revenue.
    • Ultracapacitor revenue for the third quarter of 2015 was $31.8 million, compared with $23.4 million in the second quarter of 2015, primarily driven by increased demand in the China hybrid bus market.
    • High-voltage revenue was $10.3 million for the third quarter of 2015, compared with $11.9 million in the second quarter of 2015.
    • Microelectronic revenue for the third quarter of 2015 was $3.0 million, compared with $2.5 million in the second quarter of 2015.
  • Non-GAAP gross margin in the third quarter of 2015 was 32.3%, a slight decrease when compared with the second quarter of 2015, reflecting increased demand in the ultracapacitor business.

Adjusted EBITDA & Operating Expense

  • Adjusted EBITDA for the third quarter of 2015 was $3.8 million, compared with $711,000 in the second quarter of 2015. The quarter-over-quarter increase was primarily driven by higher revenues due to increased demand for our ultracapacitor products and a reduction in our operating expenses as a result of our restructuring and cost reduction efforts.
  • Operating expense in the third quarter of 2015 was $14.9 million, compared with $18.4 millionin the second quarter of 2015, primarily driven by lower restructuring related charges and cost reduction efforts.
  • Non-GAAP operating expense for the third quarter of 2015 was $13.5 million and excludes adjustments for stock-based compensation, restructuring related and various other non-standard charges.
  • Third quarter 2015 operating loss was $651,000, compared with an operating loss of $6.3 million in the second quarter of 2015. The quarter-over-quarter reduction in operating loss was primarily driven by lower restructuring related charges, increased demand for our ultracapacitor products and reduction in our operating expenses as a result of our restructuring and cost reduction efforts.
  • Non-GAAP operating income for the third quarter of 2015 was $1.0 million.
  • Net loss for the third quarter of 2015 was $1.4 million, or $(0.05) per share, compared with a net loss of $9.4 million, or $(0.31) per share, in the second quarter of 2015.
  • Non-GAAP net income for the third quarter of 2015 was $234,000.

Capital Expenditures

  • Capital expenditures during the third quarter of 2015 were $562,000, compared with$942,000 in the second quarter of 2015.

Business Outlook

  • Total revenue for the fourth quarter of 2015 is expected to be between $46 million and $50 million, a 6 percent increase at the midpoint of guidance.
  • Non-GAAP gross margin for the fourth quarter of 2015 is expected to be between 31% and 33%.
  • Non-GAAP operating expense for the fourth quarter of 2015 is expected to be approximately$13.5 million.

Other Business & Operational Highlights

  • Secured $25 million revolving credit facility with East West Bank.
  • Selected as the exclusive capacitive energy storage supplier by China’s largest rail company,China Railway Rolling Stock Corporation.
  • Announced the availability of Maxwell’s Engine Start Module (ESM) as a factory-installed option on select new Peterbilt trucks.
  • Announced that Continental Automotive System’s Maxwell-powered voltage stabilization system (VSS) will be a standard feature on 2016 Cadillac ATS and CTS sedans and ATS coupes (excludes the ATS-V, CTS-V and CT6 models). Production rollout began in July.. (Original Source)

Shares of Maxwell Technologies are up 2.95% to $5.94 in after-hours trading. MXWL has a 1-year high of $12.03 and a 1-year low of $4.06. The stock’s 50-day moving average is $5.71 and its 200-day moving average is $5.56.

On the ratings front, Maxwell has been the subject of a number of recent research reports. In a report issued on September 25, Canaccord Genuity analyst Jonathan Dorsheimer maintained a Hold rating on MXWL, with a price target of $6, which represents a slight upside potential from current levels. Separately, on September 15, Cowen’s Jeff Osborne reiterated a Buy rating on the stock and has a price target of $7.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jonathan Dorsheimer and Jeff Osborne have a total average return of -4.7% and -10.6% respectively. Dorsheimer has a success rate of 37.9% and is ranked #3552 out of 3808 analysts, while Osborne has a success rate of 41.5% and is ranked #3654.

Maxwell Technologies Inc develops, manufactures and markets energy storage and power delivery products for transportation, industrial, information technology and other applications and microelectronic products for space and satellite applications.