2Q22 Results: Revenue Growth Rebounds +15.4%; Shift Towards Distributed Energy and Microgrids; Management Presents Key Growth Drivers
|52 Week Range||$3.80-$15.28|
|Avg. Daily Vol. (30 day)||142,143|
|Shares Out (MM)||15.23|
|Market Cap (MM)||$82.385|
|Enterprise Value ($MM)||$87.73|
|Debt to Equity||345.42|
|Revenue TTM (MM)||$71.81|
|Fiscal Year End||March|
- On November 10, 2021, Capstone Green Energy announced 2Q22 earnings results. Despite the persistent negative impacts from COVID-19, new gross orders and shipments continue to rebound. Total revenue came in at $17.2 million up by 15% y/y from $14.9 million in the second quarter last year.
- The company is poised to capitalize on the microgrid market, the size of which exceeded $6 billion in 2020 and is anticipated to grow at 27% CAGR between 2021-2027. Other revenue growth drivers are expertise of direct sales team, improving build quality to attract and retain customers, target pricing strategy, exploring new geograhies, and widening the distributors network. One of the key strategic goals is to continue building rental fleets which offer the highest margins vis-a-vis other options.
- The Book-to-Bill Ratio continued to remain positive at 1.3:1 with gross new product orders of $10.8 million versus $8.2 million in the last quarter. Gross margin fell 100 bps y/y, primarily because of an increase in direct material costs margin, lower inventory charges, increase in production and service center labor, and overhead expenses.
- Similarly, adjusted EBITDA and net income fell by $0.8 million and $1.8 million y/y, respectively. The y/y declines were mainly driven by an increase in operating expenses (up by $1.9M) compared to the same quarter in the prior year. Additionally, there was a non-recurring employment-related legal settlement of $0.8 million.
- Over the last four quarters, the company has not been able to surpass consensus EPS estimates. EPS decreased $0.02 y/y to $0.40 per diluted share.
- As of September 30, 2021, cash on hand stood at $38.3 million and debt outstanding was $57.9 million. The cash was mainly utilized to manage working capital changes and building on the rental fleet in order to fulfill future demands. Management expects operating expenses to be range bound in coming quarters with no significant capex planned.
- Our prior content on CGRN can be accessed HERE.
On November 10, 2021, Capstone Green Energy announced 2Q22 earnings results. Despite the persistent negative impacts from COVID-19, new gross orders and shipments continue to rebound. Total revenue came in at $17.2 million up by 15% y/y from $14.9 million in the second quarter last year.
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