R & A Case Study: Captone Turbine Corporation
Capstone Turbine Corporation
Capstone Turbine announced the results for its third quarter (ended 31st December 2015) of fiscal 2016 on 3rd February. The company’s revenue has increased 20 % sequentially from $ 17.9 million in the second quarter to $ 21.5 million in the third quarter. The company was also able to improve its gross margin sequentially from 11 % to 19 % and reduce the net loss from $ 7.9 million to $ 6.0 million, an improvement of 24 %. A more representative metric than the net income or loss is the income or loss from operations. For Capstone, the loss from operations was $ 1.7 million less than the preceding quarter.
The company had a lot of positives to highlight in its third quarter earnings conference call. First, it has …show more content…
This is expected to bring down the R&D expense from about $ 10 million a year to just over $ 6 million.
New orders:
The company’s geographical diversification efforts have started to bear fruits as several significant new orders flowed in toward the end of the December quarter. New orders came in from Horizon, E-Finity, Vergent, and Regatta in the U.S., DTC in Mexico, E-Quad in Germany, Regale Energy in Hungary, and SINO Petroleum in China, just to mention a few. Further, orders from Australia based Optimal generated $ 10 million in Australia alone over the last four quarters. The total orders would indicate $ 12 million of future revenue.
Diversification:
Overall, the geographical diversification of Capstone’s business caused a drop in product revenue from the US while an increase in the same from other parts of the world. The contribution of U.S. was 54 % of Capstone’s product revenue over the last nine months ending December 31. From outside the US, the contribution of Europe was 16 %, Australia was 11 %, Mexico 9 %, Asia 6 %, South America 3 % and Africa was …show more content…
The company has shifted a lot of its business from oil and gas to energy efficiency. While the weightage of product revenue from oil and gas dropped from 52 % to 37 %, that from energy efficiency business increased from 42 % to 55 % over the first 9 month period of fiscal 2015 to fiscal 2016. The renewable energy and other applications increased slightly by 2 percentage points. Capstone’s technology:
With oil prices nearing their lowest levels in more than a decade, oil and gas customers need more energy efficient installations that could keep their energy bills in line with their cost reduction targets. And Capstone’s microturbine solutions are an apt answer to that challenge. With its recent energy reform legislation and greater focus on energy efficiency, Capstone's technology has become an even more attractive option to reduce their own energy consumption at a lower cost than their local electric utility.
The new Signature C1000 series product has an improved air flow, improved 2-stage filtration, lower ambient noise levels, improved overall enclosure design, higher inlet fuel temperatures and is capable of 82 % total system efficiency.
Capstone Turbine announced the results for its third quarter (ended 31st December 2015) of fiscal 2016 on 3rd February. The company’s revenue has increased 20 % sequentially from $ 17.9 million in the second quarter to $ 21.5 million in the third quarter. The company was also able to improve its gross margin sequentially from 11 % to 19 % and reduce the net loss from $ 7.9 million to $ 6.0 million, an improvement of 24 %. A more representative metric than the net income or loss is the income or loss from operations. For Capstone, the loss from operations was $ 1.7 million less than the preceding quarter.
The company had a lot of positives to highlight in its third quarter earnings conference call. First, it has …show more content…
This is expected to bring down the R&D expense from about $ 10 million a year to just over $ 6 million.
New orders:
The company’s geographical diversification efforts have started to bear fruits as several significant new orders flowed in toward the end of the December quarter. New orders came in from Horizon, E-Finity, Vergent, and Regatta in the U.S., DTC in Mexico, E-Quad in Germany, Regale Energy in Hungary, and SINO Petroleum in China, just to mention a few. Further, orders from Australia based Optimal generated $ 10 million in Australia alone over the last four quarters. The total orders would indicate $ 12 million of future revenue.
Diversification:
Overall, the geographical diversification of Capstone’s business caused a drop in product revenue from the US while an increase in the same from other parts of the world. The contribution of U.S. was 54 % of Capstone’s product revenue over the last nine months ending December 31. From outside the US, the contribution of Europe was 16 %, Australia was 11 %, Mexico 9 %, Asia 6 %, South America 3 % and Africa was …show more content…
The company has shifted a lot of its business from oil and gas to energy efficiency. While the weightage of product revenue from oil and gas dropped from 52 % to 37 %, that from energy efficiency business increased from 42 % to 55 % over the first 9 month period of fiscal 2015 to fiscal 2016. The renewable energy and other applications increased slightly by 2 percentage points. Capstone’s technology:
With oil prices nearing their lowest levels in more than a decade, oil and gas customers need more energy efficient installations that could keep their energy bills in line with their cost reduction targets. And Capstone’s microturbine solutions are an apt answer to that challenge. With its recent energy reform legislation and greater focus on energy efficiency, Capstone's technology has become an even more attractive option to reduce their own energy consumption at a lower cost than their local electric utility.
The new Signature C1000 series product has an improved air flow, improved 2-stage filtration, lower ambient noise levels, improved overall enclosure design, higher inlet fuel temperatures and is capable of 82 % total system efficiency.