Maxwell Technologies Reports 3rd Quarter Financial Results

SAN DIEGO, Nov. 3 /PRNewswire-FirstCall/ -- Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported revenue of $26.1 million for its third quarter ended September 30, 2009, up 22 percent over the $21.4 million recorded in the same period in 2008. Operating loss for the third quarter 2009 was $1.7 million, compared with $4.0 million in the same period last year. Net loss for Q309 was $4.6 million, or $0.18 per share, including a non-cash charge of $2.8 million, or $0.11 per share, reflecting a quarterly "mark-to-market" valuation of conversion features and warrants associated with convertible debentures issued in 2005. That compares with a net loss of $5.7 million, or $0.27 per share, including a non-cash charge of $1.0 million, or $0.05 per share for the conversion feature valuation in Q308.

Third quarter BOOSTCAP® ultracapacitor sales increased by 38 percent to $10.5 million, compared with $7.6 million for the same period last year. Sales of high voltage capacitor and microelectronics products also continued to grow, combining for Q309 revenue of $15.6 million, up 13 percent from the $13.8 million recorded in Q308.

"Continuing shipments to fulfill purchase orders totaling $13.5 million that we received in April from three leading Chinese bus producers for 48-volt ultracapacitor modules to support braking energy recuperation and torque assist systems in diesel-electric hybrid transit buses helped to drive another strong quarter for ultracapacitor sales," said David Schramm, Maxwell's president and chief executive officer. "That sales volume, along with significant ongoing manufacturing cost reductions for ultracapacitor products, enabled the company to generate positive cash flow from operations for the second consecutive quarter."

"Primary markets for our products, such as public transportation, renewable energy, electric utility infrastructure and aerospace continue to be stable," Schramm added. "Sales are up more than 27 percent and operating results have shown significant improvement compared with the first three quarters of 2008. We expect sequential sales growth and additional operating results improvement in the fourth quarter, capping a year of solid progress."

Other significant recent developments include:

• Selection of Maxwell's BOOSTCAP ultracapacitors by Continental AG, one of the world's leading automotive electronics and mechatronics suppliers, as the energy storage element of a voltage stabilization and stop-start fuel efficiency system that Continental has developed for automobiles.
• Introduction of an enhanced version of Maxwell's PC-10 ultracapacitor product, incorporating proprietary electrode to ensure the reliability of backup power in enterprise storage, power wireless transmitters in smart utility meters and support other industrial applications.
  

Q309 gross margin was 38 percent, compared with 29 percent in Q308. Operating expenses totaled approximately $11.6 million, or 45 percent of revenue in Q309, compared with $10.1 million, or 47 percent of revenue in Q308. Cash, cash equivalents and restricted cash totaled $38.2 million as of September 30, 2009, compared with $39.5 million as of June 30, 2009. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations will be available with the filing of the company's Quarterly Report on Form 10-Q with the Securities & Exchange Commission.

As reported previously, the company is conducting an internal review of payments made to an independent sales agent in China in connection with sales of high voltage capacitor products produced by Maxwell's Swiss subsidiary. The company believes that the amount of the payments was immaterial in all periods involved. However, because the company's international operations make it subject to the U.S. Foreign Corrupt Practices Act (FCPA), management is conducting further review to determine how these payments should be treated for FCPA purposes. The internal review has not been completed, and the company is voluntarily sharing information related to the review with the Securities and Exchange Commission and Department of Justice and has provided documents as requested by the SEC in connection with its review of this matter.

Management will conduct a conference call and simultaneous webcast to discuss third quarter financial results and the future outlook at 5 p.m. (EST) today. The call may be accessed by dialing toll-free, (800) 862-9098 from the U.S. and Canada, or (785) 424-1051 for international callers. The live webcast may be accessed via the following link: http://www.maxwell.com and will be archived for subsequent Internet replay at http://www.maxwell.com.

Maxwell is a leading developer and manufacturer of innovative, cost-effective energy storage and power delivery solutions. Our BOOSTCAP® ultracapacitor cells and multi-cell modules provide safe and reliable power solutions for applications in consumer and industrial electronics, transportation and telecommunications. Our CONDIS® high-voltage grading and coupling capacitors help to ensure the safety and reliability of electric utility infrastructure and other applications involving transport, distribution and measurement of high-voltage electrical energy. Our radiation-mitigated microelectronic products include power modules, memory modules and single board computers that incorporate powerful commercial silicon for superior performance and high reliability in aerospace applications.

Forward-Looking Statements - Statements in this news release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

• the company's history of losses and uncertainty about its ability to achieve or maintain profitability;
• disruption of global financial markets and reduced credit availability;
• general economic conditions in the markets served by our products;
• demand for original equipment manufacturers' products reaching anticipated
• levels;
• cost-effective manufacturing and the success of outsourced product assembly;
• the impact of competitive products and pricing;
• risks and uncertainties involved in foreign operations, including the impact of currency fluctuations;
• product liability or warranty claims in excess of reserves.
  

For further information regarding risks and uncertainties associated with Maxwell's business, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of our SEC filings, including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q. Copies of these filings may be obtained by contacting Maxwell's investor relations department at (858) 503-3434 or at our investor relations website: http://www.maxwell.com. All information in this release is as of November 3, 2009. The company undertakes no duty to update any forward-looking statement to reflect actual results or changes in the company's expectations.

               MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                  (in thousands, except per share data)
                               (Unaudited)

                                           September 30,  December 31,
                                               2009          2008
                                               ----          ----
    ASSETS
    Current assets:
      Cash and cash equivalents               $30,233       $12,576
      Restricted cash                               -         8,000
      Trade and other accounts
       receivable, net                         20,634        14,107
      Inventories, net                         19,050        18,502
      Prepaid expenses and other
       current assets                           1,612         1,645
                                                -----         -----
        Total current assets                   71,529        54,830
    Property and equipment, net                17,341        17,355
    Intangible assets, net                      3,084         3,755
    Goodwill                                   22,783        22,408
    Prepaid pension asset                       2,760         2,592
    Restricted cash                             8,000             -
    Other non-current assets                    1,282         1,373
                                                -----         -----
        Total assets                         $126,779      $102,313
                                             ========      ========

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued
       liabilities                            $15,227       $12,592
      Accrued warranty                            840           905
      Accrued employee compensation             5,564         4,353
      Short-term borrowings and
       current portion of long-term
       debt                                    10,768        18,888
      Deferred tax liability                      456           456
                                                  ---           ---
        Total current liabilities              32,855        37,194
    Convertible debenture and long-
     term debt, excluding current
     portion                                    9,812           582
    Stock warrants                              3,769           318
    Other long-term liabilities                   609           972
                                                  ---           ---
        Total liabilities                      47,045        39,066
                                               ------        ------
    Commitments and contingencies
    Stockholders' equity:
      Common stock, $0.10 par value
       per share, 40,000 shares
       authorized;  25,886 and 22,521
       shares issued and outstanding at
       September 30, 2009 and December
       31, 2008, respectively                   2,615         2,253
      Additional paid-in capital              220,298       192,228
      Accumulated deficit                    (147,839)     (134,902)
      Accumulated other comprehensive
       income                                   4,660         3,668
                                                -----         -----
        Total stockholders' equity             79,734        63,247
                                               ------        ------
        Total liabilities and
         stockholders' equity                $126,779      $102,313
                                             ========      ========



                   MAXWELL TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (Unaudited)

                                       Three Months Ended  Nine Months Ended
                                          September 30,      September 30,
                                        ----------------   -----------------
                                          2009     2008      2009      2008
                                          ----     ----      ----      ----

    Revenues:
      Sales                             $26,101  $20,973   $73,314   $56,035
      License fee and service revenue         -      407         -     1,469
                                            ---      ---       ---     -----
        Total revenues                   26,101   21,380    73,314    57,504
    Cost of sales                        16,164   15,239    47,409    41,427
                                         ------   ------    ------    ------
    Gross profit                          9,937    6,141    25,905    16,077
    Operating expenses:
      Selling, general and
       administrative                     7,288    6,044    17,962    16,448
      Research and development            4,274    4,003    12,066    10,796
      Amortization of intangibles            86       94       267       270
                                             --       --       ---       ---
        Total operating expenses         11,648   10,141    30,295    27,514
                                         ------   ------    ------    ------
    Loss from operations                 (1,711)  (4,000)   (4,390)  (11,437)
    Interest expense, net                   (59)    (132)     (202)     (399)
    Amortization of debt discount and
     prepaid debt costs                     (73)    (553)     (695)   (1,922)
    Loss on embedded derivatives and
     warrants                            (2,761)  (1,011)   (7,175)   (1,971)
                                         ------   ------    ------    ------
    Loss from continuing operations
     before income taxes                 (4,604)  (5,696)  (12,462)  (15,729)
    Income tax provision                     33       11       475       512
                                             --       --       ---       ---
        Net loss                        $(4,637) $(5,707) $(12,937) $(16,241)
                                        =======  =======  ========  ========


    Basic and diluted net loss per
     common share                        $(0.18)  $(0.27)   $(0.54)   $(0.79)
                                         ======   ======    ======    ======

    Weighted average shares used in
     computing basic and diluted net
     loss per common share               25,673   20,992    23,974    20,560
                                         ======   ======    ======    ======