This is a good example of how we all learn more about Capstone and I thank you for breaking down the last 4 1/2 years of stock offerings and Warrants. Again, I'll go back and study the last Annual Report to gain a better insight into what happened when with the Warrants. I am in this game for the same reasons as the IHs, and private investors--to make money (and yes, as with any security there are risk involved, especially with penny stocks.)
Pie charts depicting the total market opportunity, for a particular product, and the potential capture rate of that market are really just a prospective guesses on the capture side. I've seen it all before, and it looks great on a slide show. What we are seeing with Capstone is that they are refocusing on the vertical areas that are currently viable--"In the markets we are focusing on, which are energy efficiency, renewable energy, natural resources, critical power supply and mobile products, we have identified specific targeted vertical market segments" see page 27 of the 2012 Annual Report for specifics. We are seeing a rapid consolidation or outright rejection of greener energy due the world financial mess. The landscape can change and change in a hurry. Heck, Henry Hub Nat Gas spot was about 13 bucks 3 years ago, who would have thought North America would have the cheapest Nat Gas in the world then? Who knows what the election will bring or take away?
One of the main concerns with Capstone becoming a viable and accepted technology is enumerated in their Annual Report "Although the market for fuel cells is still developing, a number of companies are focused on markets similar to ours, including FuelCell Energy Inc., UTC Power Corporation (‘‘UTCP’’), Bloom Energy Corporation, Plug Power Inc. and Ballard Power Systems Inc. Fuel cells have lower levels of NOx, CO, VOCs and other criteria pollutant emissions than our microturbines. Fuel cells, like solar and wind powered systems, have received higher levels of incentives for the same type of applications as microturbines. Management believes that, absent these higher government incentives, microturbines provide a better value to end users in most applications. However, over the medium-to-long term, fuel cell technologies that compete more directly with our products may be introduced." No matter the bashing of Fuel Cell technology this power source is grabbing huge markets that Capstone once "owned" so to speak. Its out there, its real, and its a concern. The whelms of potential prospects can be changed quickly by sales at any cost as DJ pointed out in the Annual Report CC.
I do also understand the back-log is not linear, i.e. first in isn't necessarily first out. The 2012 Annual Report states that Capstone anticipates shipping the entire back-log as of March 31, 2012 and 2011 (?) of 158.8 Megawatts within the next twelve months. If this assumption holds true we should be in good shape for the Y/Y, but not necessarily Q/Q which would break that 20 quarters of increased revenue. What concerns me about back-log at the moment is that we need to keep adding new orders to it. This quarter seems a bit lean to me as I've pointed out previously.
Finally, I think it was 2 million in inventory on the dock that missed shipment prior to the end of Q1. I seem to recall DJ making reference to it around 47 minutes into the CC. Of course I could be wrong.
