Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
All in all a good report. I think DJ was upfront about the warranties continuing to be a drag and tied that in nicely with the development of the C250; He has alluded to the fact previously that rushing the C200 to the market was an expensive mistake. The increased backlog is good as are most of the Y/Y numbers. The Analysts who called in seemed a bit more engaged this CC than on the last.
I do have two slight concerns, but as the saying goes...it is what it is.
1. Had last quarter not had 2 million in inventory sitting on the dock the Q1 would have met the expectations. I am assuming that that same 2 million is what enabled us to press up just enough to hit the expectations for this quarter in revenue and earnings per share, especially considering the reported Q/Q product revenue was flat. Of course comments are welcome and expected although I do realize that more goes into the equation than what I just mentioned. Actually, the fact that 2 million rolled over into this quarter may have been a blessing.
2. This one for the Capt'n since he's toured the plant--on slide 10 of the presentation, "Q213 Gross Margin Analysis, Operating Overhead" the Comment was Freight and Utilities. The Freight is easy to understand. My question pertains to the Utilities aspect. Does Capstone practice what they preach, i.e. does the production facility use Capstone generated electricity?
The last minute push was good to see. Let's hope for some follow-through tomorrow and a good report on the 8th
Well...it is looking like yesterday was a shorter-Fools day. This isn't pretty. Drive it up and hammer it down.
Foolish effect or what I'll take a 4% gain. Just hope it holds. Whisper numbers? Dreaded shorters before the call?
Thanks to Riderpark over at IV
From the Fool
Will These Numbers from Capstone Turbine Be Good Enough for You?
Traditional backup gensets just sit there as idle assets most of the time, and then don’t always start when you do need them. The new paradigm is to operate Capstone MicroTurbines as continuous power supplies – saving money in CHP, CCHP, or Resource Recovery applications most of the time, and quickly transitioning to standby power when you need it. We call this “Dual Mode” operation. It’s a reliable standby power source that pays for itself.
Capstone offers a Dual Mode Controller to facilitate protection of critical loads. Acting like an automatic transfer switch, the Dual Mode Controller monitors incoming power and tells the Capstone Microturbines connected to it to switch to stand alone operation when the grid fails. Protected loads see less than 10 seconds of outage while the microturbines transition from grid-parallel to stand alone operation.
Great response.
My comments about using a Capstone Microturbine as a pure emergency power back-up system was tied to the air bearing shelf life phenomena. I certainly wouldn't recommend using Capstone Microturbines in that configuration although I think it could be done. A continuously running system, base loaded to the grid 24/7 in a CHP or CCHP application, with the Dual Mode Controller makes a whole lot more sense from an economic point of view as well as a critical power supply standpoint. This is especially true considering that the domestic price of natural gas is likely to remain low for years to come.
Revised...You beat me by about a minute and a half Gene.
Capstone Turbines Power through Hurricane Sandy
Now we need Cramer to mention it on CNBC today. Better yet, it would be great if the evening news anchors homed in on "why are the lights on in just that one building" and so forth.
Analyst Opinion on Capstone Turbine Corp. and ABB Ltd -- Contracts and Innovations Driving Industrial Electrical Equipment Industry 11/02 08:00 AM
LONDON -- (MARKETWIRE) -- 11/02/12 -- The continued uncertainty surrounding the macroeconomic climate has had a detrimental effect on numerous companies and industries, as businesses and individuals alike remain hesitant about overextending themselves through large purchases. Businesses are instead focusing on cost-cutting measures as a way to grow. And those offering cost-cutting solutions have been seeing strong demand. This trend has helped drive sales and profits for a number of companies in the industrial electrical equipment industry, which features players such as Capstone Turbine Corp. (CPST:$1.00,00
Source--www.WallStreetActive.com
air bearings and shelf life DJ mentions this in the Annual Shareholder meeting 2012 webcast at 00:46:25.
Okay Hero of Gotham, I'll bite. Yes, there are steam turbines, wind turbines, gas turbines, water turbines, etc. In most applications they are the prime mover, be it for a propulsion system, an electrical generator, or a compressor...I think you get the drift. They certainly can be used in a stand-by mode with a near instantaneous startup.
I think the man of steel could be the prime mover over in The Big Apple to get that bent crane down and could also hoist some Capstone Turbines (gen-sets)in place to provide power in critical applications that are now without power.
BTW, did you happen to be exposed to Kryptonite recently?
DJ referred to this topic in a not to distant Q&A session. He mentioned that Air Bearings have a poor shelf life or something to that effect. I suppose he was speaking about the air bearing taking a "set" if left idle too long. I'll post a link to the comment when I find it.
I see no reason that this issue would preclude a Capstone Turbine being used as a back-up power supply as long as the customer adheres to a strict testing program. A good preventative maintenance plan would include a provision that the stand-by emergency power system be started and run under load at least once a week or whatever period Capstone recommends for maintaining the integrity of the air bearings.
While there may be some question about running the stand-by system under load, by switching off the grid (especially in a hospital or other power critical environment) I'm confident hat this situation could be addressed by simply paralleling the Capstone in an base loaded configuration and then slowly transferring a portion of the grid load to it. The grid would still handle any variations in load. This of course could all be automated. In a sudden power failure there would be a short lag time prior to the Cappy starting up and taking care of the electrical load, unless the customer opted in for a 24/7 CHP system or out of prudence transferred the load to the emergency before hand.
One situation in lower Manhattan that I noted was the power supply to the NYSE trading floor. They had a diesel gen-set and some quantity of diesel fuel stored on-site. Supply trucks were bringing in and pumping up the on-site storage tank. One thing that many building engineers may fail to note is that bacteria love diesel, especially that stored for a long time. If careful attention is not paid to the preservation of the stored diesel fuel microbial growth and bio-degradation of diesel will occur and the operators will quickly find out that the DG sets fail due to clogged filters and injectors.
Again, back to Hurricane Sandy...I've read that the natural gas supply infrastructure remained intact. Perfect storm for a Capstone CHP system or emergency back-up power system.
Good find by Terakauriimu at IV. Thanks for passing it on Capt.
here's the link. Thanks Capt. for passing it on
Thanks for the well written and reasoned reply. Those numbers are a continual reminder of how important it is to convert "sales" to delivery and revenue. As you say "this quarter may be telling," and I couldn't agree more.
don't know why we are going in the wrong direction
Anticipation of not so good Q2 numbers?
Greenvironment AR'?
Motley Fools?
Green fading to black--Election uncertainty...EPA, Green Energy
VFC's Stock House--but until profitability is reached, investors may have their doubts
Kick the can down the road again during Q2 CC?
Shares exchanged during minute 15:56 was 321,322 (includes sell of 145,000 shares @ 15:56:58) Panic?
Sell of 32,298 shares at 16:00:02 @ .95 used as closing trade which dropped pps a penny. What's a micro-second to a flash trading computer algorithm?
Shorter's having a another picnic? Wild_Bill will have the answer to that one.
Ether?
Fear of the "D" word during the CC?
Time to buy under a buck? Might be a good entry point for a flip.
Risk off and flight to cash on stagnant economy, poor quarterly results and projections being reported across the board?
All of the above? Could be, but who knows?
Actually, I think VFC hit the nail on the head, i.e. lack of profitability.
Several pennies a day whittles my investment away--and your's too. I feel your pain and share your frustration.
Interesting question, especially since CNOOC bought the land and oil and gas rights in the Eagle Ford Play from Chesapeake Energy.
Cheniere's entire output for the first 4 trains has already been sold forward and the Chinese are not in that queue, but that doesn't mean that they aren't in the game. CNOOC has invested 1/2 billion dollars in the Sabine Pass facility.
Cheniere's first long term deal (20 years) with British Gas (BG) sheds some light on how exported gas may be priced in the future although the article is a year old. The following excerpt will shed some light on it:
Herring, whose firm called the deal a "game-changer" earlier this week, explained that the SPA's purchase terms are telling. Under the agreement, Cheniere will be paid $2.25 per thousand British thermal units (MMBtu) sold and will sell the LNG to BG for 115 percent of the Henry Hub natural gas benchmark price. Herring points out the SPA clarifies something that until last week had confounded players in the global LNG market: the price of U.S.-sourced LNG. As this table shows, the daily Henry Hub spot price has remained in the $3.40 to $4.00 range for much of the past two months. On the day of BG and Cheniere's announcement, it was $3.65. Using that price from October 26 as an example, one can easily determine that the price of LNG from the U.S. is $6.45/MMBtu free-on-board (pre-shipping).
"The SPA's purchase terms of [1.15% HH + $2.25] reveal insight into the capital cost and the direct cost of energy, which are the core intrinsic costs—directly relating to the plant and its operations," Herring said. He added that other costs in the LNG trade include the cost of gas—very transparent in the U.S. market—and the cost of shipping, which corresponds to distance to market.
Using the Henry Hub pricing basis or structure for U.S. LNG export pricing also marks a new direction for the LNG sector.
There are incredible arbitrage opportunities between LNG and oil. One point to remember is that the daily charter rate of the current crop of LNG Carriers (LNGC) 120-150 thousand cubic meters is running about $140,000 per day down from $170,000 several months ago.
Good to come down from them there hills and see a great order announced. No squabbles about this one at all.
You have to remember CPST is not a mature company that already has established itself, and now, for some difficulty, is finding itself failing.
Would you mind elaborating on the underlined portion of that sentence? It seems out of context with the next paragraph, i.e.
CPST is an emerging company and has made significant and undeniable major improvements in bottom numbers for many quarters now. Margins are getting ever closer towards profitability. Profitability may not come on yours or my immediate demands, but it is coming, and sooner than later, imo.
Out cruising about the Smokey Mountains and didn't find any ether until I returned to camp and fired up the lap-top. $0.9734 had the desired effect although this is a great entry point as Capstone has been known to hit a buck fifty and once 2 bucks after trading around and below a buck as several financial analysis keep reminding us. Looking at the charts the 2 dollar pop happened after bouncing around 75 cents in March and April 2011 (was that when the Prez mentioned the company?) $1.68 came along in July of 2011 and the buck 50 pop was in February 2012. Since August 2012 the pps has been fairly flat trading in the 97 to 1.05 range.
Some here at the Hub say that they make money on the swings; now looks like a prime opportunity should they believe the pps won't fall further, unless they are shorter's in disguise. Unless we see some significant sales announcements or DJ pulls a rabbit out of the hat next month I see 90 cents coming our way again.
JMHO again
I think there are tons of information floating around in the ether. I don't know how you missed them. Perhaps the following from the Urban Dictionary will help:
1. ether
It makes you behave like the village drunkard in some early irish novel ... total loss of all basic motor skills: blurred vision, no balance, numb tongue---severance of all connection. between the body and the brain. Which is interesting, because the brain continues to function more or less normally ... You can actually watch your self behaving in this terrible way, but you can't control it. A total body drug. The mind recoils horror, unable to communicate with the spinal column.
I am NOT a happy camper. As far as camping goes...the colors are peaking right now in the Great Smokey Mountains where I'm happily camping. I do check in the Hub each day to get my daily dose of ether though. Capstone ether hasn't displaced the healing effects of untainted mother nature at work. I suppose there isn't "tons" of it up here yet so I can cruise the back roads safely, prior to my daily fix of flat lined Capstone.
The 123 battery co. filed bankruptcy. Bidding war for bankrupt A123 looming as Wanxiang Group of China continues its pursuit. Interesting observation from Neil Young concerning this turn of events... He really doesn't care who makes the batteries, his main concern is that he hopes he will still be able to obtain them, even if they are made in China; Harbor Freight?. The Lincvolt had a Cappy installed when it was totally destroyed by a fire. The micro-turbine wasn't the cause of the fire, over charging the A123 batteries were, but in the latest build Neil and his team of engineers decided that a Ford Atkinson 4 cylinder motor was preferred over the micro-turbine--I have no clue as to why.
My apoligies Capt. The correction was post 13811
I am just pointing out that I don't think unsubstantiated exaggerations in stock discussions are a good thing.
Well, I mostly agree with that although we all hopefully learn a thing or two with the dialog. Not getting snippy at all about this BTW. That being said why did my follow-up correction of my comment "I doubt that the data on the margins is rather tightly held" go missing? Easy to put me on the spot on that one wasn't it?
Okay--I suppose I should have said the net margin which is the ratio of net profits to revenues. So, to flip it back to you... what is the net margin per C30 sold in the Australian deal? I have no clue but perhaps you do.
Since Capstone doesn't usually name the Company that their sales force sold to I doubt that the data on the margins is rather tightly held.
My mistake--I meant to say "Since Capstone doesn't usually name the Company that their sales force sold to, I doubt that the financial data on the margin, on any particular order, is available for public consumption in any case.
What are the margins?
That I don't know, but DJ has mentioned over and over that the key to profits is selling the higher margin C800s and C1000s. I would think that the smallest unit of Capstone's product line-up (except for the iPad APP) would also carry the smallest margin.
When the math was done on the Australian order (using your numbers) I believe it was quite obvious that the announcement of "44 C30s and the possibility of hundreds more in the next 5 years" wasn't that big of an order, as far as revenues were concerned (the PPS seems to have been reflected on that news also--flat lined.) Had that been 44 C1000s we would be rock'n.
Since Capstone doesn't usually name the Company that their sales force sold to I doubt that the data on the margins is rather tightly held. Also, there are too many variables involved to give an accurate answer even if we had the price to build and ship.
Perhaps you can fill in the rest for me with a "funny" story.
I personally think that unless Capstone can sale tens of thousands of C30s that the margins are too small to a make a significant difference in the bottom line.
It sounds good that an Australian company ordered 44 C30s and that a second order for possibly hundreds of C30s over a 5 year period might be ordered in the future. It is great to get the exposure but selling C30s isn't going to pay the nut unless some new manufacturing process and material costs reductions can be realized.
The recent Mexican order is a great example of a high margin mix that we need to see more of. This particular order highlights the fact that Capstone Micro-turbines can be customized to meet different application needs using fuels other than the much mentioned NatGas, sour-gas, bio-mass generated gas, etc.
Of course I don't speak for VFC, but I imagine he doesn't want to project any specific outcome of the 2Q Report before hand that might mislead his followers. He can also see the very pivotal nature of this particular quarter report, imo.
I have absolutely no clue, nor can I imagine what or why the subject author posts what he does other than assumming that there are folks who would rather have someone else help them with the due diligence when investing. My comment pertained to the fact that the tone of VFC seems to have changed to a bit more conservative aspect of those in the past. A simple observation and opinion, nothing more, nothing less.
As to the latter...I would hope that "he" does realize the very pivotal nature of this upcoming quarterly report. Like I've mentioned lately, I sure hope that a whole lot of the much touted backlog was shipped and paid for during Q2. The only folks who know the upcoming numbers are DJ, the Board of Directors and Capstone's new accounting firm. You are spot on that this report will be pivotal.
The facts at this point in time, from Capstone's sweet spot, the oil and gas industry, have changed recently due to many reasons, several of which are: The domestic spot price of Henry Hub continues to be too low for the drillers to turn a profit and a sluggish world economy.
Decentralization of power distribution is not an issue. I agree that it is not in this country but it may work in post nuclear Japan.
VFC, in my opinion, usually trots out a more positive article than this last one. It is the first that I've seen that is less positive than the last. This whole mime of "time to buy around the buck" is less positive and VFC seems to be taking a longer view, as in "a long time hold" than prior posts that I've seen.
No big deal anyway as the only thing that I can see moving this company forward is more sales in the C800 to C1000 category which carry a larger margin. We need to hit the mother of all orders to ramp this company up into profitability.
Of course, as always, I could be wrong, and am just posting an opinion the same as you.
The pioneer of this transformation is a manufacturer of micro turbines that could completely change the way we energize our lives. The question is whether this small-cap company will go out of business before it can revolutionize the way we produce energy.
Therein lies the risk. I seriously doubt we'll be seeing a decentralization of power distribution in this country anytime soon so I'll scratch that whole thesis in the "Cripple the Utilities." category.
It also looks as if our leading pumper VFC's Stock Watch is starting to step back a bit and taking a longer term view--"a move based on conviction has not materialized since last year's push to two bucks" and "making it an intriguing trade as well as a long term hold." Yes, it has been an intriguing trade of late and we do need some significant news for it to move out of the one buck narrow channel it's been navigating lately. I'm just hoping the long term hold ends up in greener pastures before this thing ends up on the back 40.
Bill,
Thanks for the research. I really don't know what difference it makes at this point but both Gene and I saw the sudden spike or dip, what have you, which resulted in a momentary trapped in a falling elevator feeling. Just a strange trade in any case.
Good to see the prices are higher than 2008. Like I said..."every bit helps if it adds to the bottom line." At least the C30s are not included in the UTC Royalty program.
Thanks
My platform shows volume of 2,976,154 for October 4.
In 2008 the company bought 110 C30s for an aggregate value of 4.7 million. This works out to $42,727/unit. Assuming all things equal the total value of the additional 44 units would be $1.88 million, although I believe Capstone has raised their prices per unit since '08. It is good that the field units have been performing well and a follow-on order has been placed as a result.
I was wondering why the pps wasn't moving to much with this announcement and would assume that although the quantity was significant the total revenue to the company will be a drop in the bucket. "Hundreds over the next 5 years sounds good, especially if Capstone can get the cost to build them down.)
While not intending to belittle the order (any order is good if it adds to the bottom line) this is a perfect example of why DJ hopes the C800s and C1000s take off, i.e. larger margins.
What I saw was a huge spike of 1 million shares at around 1544 or 1545. I seem to recall that the minute ended up around 2 cents after dipping to .98 during the sudden surge. The daily volume prior to that event was around 2 million shares. The daily volume jumped to some 3 million or so during the the trading time we mentioned. It certainly caught my attention. Sorry I don't have anymore details for your excellent sleuthing talents.
Thanks for the link.
The procedure may lead to either the reorganization or the liquidation of an insolvent enterprise
It would appear that the options are similar to our Chapter 11 and 7 respectively.
here's an example.."millions in bad debt brought ... to "the idea of" sense logically continue: Capstone is a creditor who had to approve the bankruptcy so that the debtor Greenvironment was the same place as the debtor of Capstone, expect not that there are "millions" gets and as "bad debt"
Thanks. I saw that site in my Google results but by then my eyes were crossed, and I didn't translate it--just as well I suppose. It is still hard to comprehend how fast Greenvironment derailed considering the "pipe line" was filling up nicely. Not surprised shareholders want some of the scraps, but as we know any restricted stock holders, if any, will get first dibs.I think Google needs a new translator although it does translate to "bankruptcy." Don't have an idea as to how many shareholders there are/were but I'm sure they get the drift.
Gene--I was looking at my charts at the time you mentioned and saw the 1 million block you refer to. It was also reflected immediately in the daily Volume. I was going to respond earlier, but since your question was directed at Bill I didn't chime in. I have no clue whatsoever as to what if anything it indicated but it sure got my attention.
Thanks for the info Gene--
Greenvironment is an ideal target?.. Well, they apparently had a For Sale sign out according to slide 16 that I linked in my previous post. As far as the status of the Company at this time your guess is as good as mine. I don't know if they have similar Bankrupty Chapters like we do here in the States, i.e. 7, 11, and 13.
DJ did refer to them as a "Key Distributor" in Europe, hence my concern. Their business model seemed to be working well as far as we knew. Checking their PPS today it was 0.022 EUR-- down 27.67% from yesterday.
As far as Sharedeals.de I find this translated statement concerning Greenvironment placing 3rd in the Top 100 for the most innovative and successful medium-sized companies in Germany. At the bottom of the article is this seemingly out of context translation: Should the company have failed to these risks, it is, in particular for its shareholders, most unfortunate. But it is part of the risk, the nature of innovation inherent and especially for small and young companies usually bound to lead to insolvency. In this context it should, however, have given false information targeted by the management, we see ourselves as victims and assume that compamedia considering further legal action against Greenvironment.
We will review the case, and we reserve in the event of legal action deception. Should there still be questions from your side, you can contact me at any time.
All very confusing to say the least. What speaks the loudest is that Greenvironment is no longer listed as one of our distributors on the Capstone site.
Thanks for the links
There seems to be a fundamental shift in sentiment (my opinion formed by what I read and see) going on that begs several questions; questions that can't be answered by past Q/Q Conference Calls, the last Annual Report to Stockholders, nor forward looking statements, projections, or pie charts. I suppose we'll hear the answers in early November.
What effect will Greenvironment's September 1 filing of insolvency have on Capstone's bottom line, i.e. Accounts Receivable? Are we hanging out to dry with our own CHP units? The aftershocks, considering the market they did business with, will be significant in my opinion.
Quote from Greenvironment's Feb 28, 2011 Report of the directors "The directors have prepared cash flow forecasts for the next 36 months and are confident that the company can deliver on its extensive pipeline of future projects and remain within the company’s liquidity limits without further funding." Just a tad short it seems. In the same report, several paragraphs down under the heading Events after reporting date I note this sentence "After the reporting date the company has been able to raise equity of €3.2M to further strengthen its financial position." The directors go on to say that they had just signed the largest deal in the history of the company with Russia, so we can cut them some slack on that one.
Greenvironment's February 28, 2011 report also states that they predict profitability in February of 2013. Too bad they couldn't make it through 2012. All of the above is starting to sound erringly familiar.
On slide 16 of the Annual General Meeting Presentation The header states "Greenvironment is an ideal target for any big energy company." Despite the rosy picture painted, one of our prime customers failed and no White Knight road up to rescue them. Why? I sure don't know. Let's hope that Greenvironment's Creditor's Payment Policy which states that "It is the Group’s policy to ensure that all of its suppliers are paid promptly and in accordance with contractual obligations" came through before they went under.
What's with the noticeable slowdown of order announcements? Lack of sales seems a logical choice. Are potential customers selecting different technologies? Is "clean" coal the new green? The last sales announcement was on September 25th for 5MW (the only order announced since the Annual Stockholders meeting on 08/28.) Prior to that the last announcement was on August 3rd. If we aren't packing the back-end of the much heretofore touted back-log, and customers aren't requesting delivery of those existing orders, we are in deep bio-mass--IMHO of course.
The only other recent announcements concerned an iPad App and the hiring of Paul Campbell as Senior VP of Customer Service. Did we have a VP of Customer Service prior to Mr. Campbell's arrival? Campbell gets options to purchase 250,000 shares in the next 4 years (pro-rated) at the September 24 closing price of $1.005. He also negotiated a grant of 62,5000 restricted stock units (trumps us retail folks in a meltdown) that vest 25% per year during his first 4 years.
The upcoming Q2 CC is crucial. Hopefully the trends that we have seen in the past will continue, and we don't take a major hit from Greenvironment. A major announcement or two between now and then couldn't hurt either.
This looks like a good time to roll out the Wrightspeed Route--
California Gas Stations Begin to Shut on Record-High Prices
As the Fool article points out drilling rates are down and likely to remain so because of the glut of domestic NatGas with no market. Chesapeake Energy is selling off some of its prized acreage in the Eagle Ford play and one of the biggest buyers is CNOOC the Chinese Sovereign wealth fund. It doesn't take a genus to figure out where the gas under those lease hold acres will wind up. Its only a matter of time.
The Chinese and the government of Singapore have each invested half a billion dollars in Cheniere Energy's Sabine Pass liquefaction and export facility which has broke ground and expected to lift its first cargo in 2015. The entire production for the first two trains is already sold forward to buyers in Spain, Britain, India and South Korea. Cheniere also wants to build another plant in Corpus Christi which is very close to the Eagle Ford area.
Since granting the approval to Cheniere's Sabine Pass lobbying pressure has resulted in the Department of Energy placing a hold on any additional export facilities until a full report of what such action would have on the price of domestic gas. There are at least 11 applications pending.
As I mentioned long ago this is a double edged sword for Capstone. If more export terminals are built the price of natgas will rise, IMHO, and more wells will be drilled which would be good for Capstone. On the other hand the higher gas prices go the less attractive Capstone becomes as the cost spread narrows between Natgas and other fuels (this may be mitigated due flaring regulations.) Nevertheless, if Natgas prices rise the use of Capstones will be less attractive in other areas not related to drilling, i.e., hotels, swimming pools, data centers, and transportation.
All of that being said the price of Henry Hub continues to inch up as wells are shut down and storage facilities are filled. The drillers or gas producers need $5 spot gas to make it economical to sink new wells and build infrastructure.
Granted, all of the above only applies to domestic NatGas. Wells are still being drilled for heavies (oil and gas liquids) and there is some associated gas that needs to be consumed whether it be flared or used on site for power production. Our overseas customers become more crucial to the success of Capstone, unless of course we are bought out.