Satcon Technology Corporation® (NASDAQ CM:SATC), a leading provider of utility scale power conversion solutions for the renewable energy market, has announced its results for the second quarter ended June 30, 2012.
Revenue for the second quarter of 2012 was $23.7 million, compared with revenue of $24.3 million in the first quarter of 2012. During the quarter, the company shipped 91 MWs of its industry-leading PowerGate® Plus, Prism® Platform, and Equinox® solutions. North America continued to be the company’s strongest performing region in Q2, representing 85% of total revenue during the quarter.
Gross margin for the quarter was 20%, compared with 1% in the first quarter of 2012. The company’s gross margin increased substantially due to continued material cost reductions, the closure of its Canadian manufacturing facility and favorable product mix, including some sales of previously reserved inventory.
During Q2 of 2012, the company elected to defer $2.6 million of product shipments to a customer due to past payment history. Without this revenue deferral, total revenue would have been $26.3 million and gross margin would have been 22%. The company received payment for this shipment in early August, and will recognize this revenue during its third quarter ending September 30, 2012.
Bookings for the second quarter were approximately $25.1 million. In addition, the company received award letters for an incremental $15.0 million, which are not reflected in this bookings number.
“We made significant progress on our operating model during the second quarter,” said Steve Rhoades, Satcon’s President and Chief Executive Officer. “We significantly improved our gross margins by reducing the cost of our central inverter and MV platform product lines, successfully transitioning to a variable, contract manufacturing model with the completion of our Canada facility closure and reducing our operating expenses by over 17% from the first quarter of 2012.”
“We further reduced our working capital, while paying down a significant portion of our short- and long-term debt,” continued Rhoades. “We continued to be the number one inverter supplier in North America’s commercial and utility segments in 2011 according to IMS Research, and will capitalize on this leadership position throughout the remainder of the year. For the third quarter of 2012, we expect revenue to be between $25 million and $30 million, and gross margin to be in the mid- to high-teens.”
In addition to the progress on its operating model described above, Satcon has retained Lazard Frères & Co. LLC as its financial advisor to assist in the consideration of strategic alternatives.