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Capstone Turbine Corporation engages in developing, manufacturing, marketing, and servicing microturbine technology solutions.
Darren R. JamisonGreat. It's my closing remarks. December 17 will be my 5-year anniversary at Capstone, and in today's world of daily headlines and quarterly earnings calls and what-have-you-done-for-me-latelys, sometimes it's nice to kind of step back and have a unique opportunity to kind of reflect over the last 5 years. So when I joined Capstone 5 years ago, the industry told me the company was dead and forgot to lie down. A lot of folks were saying that I was crazy; the company will be bankrupt within a year; the product was too small and too expensive to compete with the likes of GE and Caterpillar; the morale of the company was terrible; distribution channels in shambles; and people say the company never had a positive gross margin and never will. Some folks in the industry went so far as to even call the company Crapstone. When I reflect back in the last 5 years, it's definitely not the easiest road I've ever gone down, not achieved every goal we've set or kept every promise the team's made, but the global economy has been brutal and financial markets have been unkind. But if you think about it, the hard work and the combination of solid planning and dogged determination is starting to pay off.Five years ago, they said you couldn't sell Caterpillar against Cap, you couldn't sell Capstone against Caterpillar and GE. Our revenues have fallen to $21 million from $24 million in the prior year. Fast-forward 5 years and today we're announcing quarterly revenue of $27.5 million, more than what we did in an annual basis back then, and the trailing 12 months if you add it up is $99 million to $100 million in revenue. So an incredible growth from the last 5 years for the product that people said would struggle to compete. If you look at -- they said the morale was terrible, the distribution channel was in shambles. Today, we've posted our 18th consecutive quarter of year-over-year revenue on a quarterly basis. Great employee turnover is down to 4%. I mentioned in our distributor meeting, we have 95 distributors today; we had 20 distributors 5 years ago. Virtually all of them are seeing their businesses grow. They're reinvesting into Capstone. We probably had 100 folks representing the product worldwide outside of Capstone 5 years ago; that number is probably closer to 900 today. If you look at our pipeline that we see in the market continues to grow every quarter, and we've got a lot of very talented and entrepreneurial folks that are representing the product.Five years ago, they said the products were too small to compete in the megawatt world, and yet today, 75% of our $114 million backlog is our 200-kilowatt-based product. I think we've done a great job in marketing it as a C1000 and putting it into a single box, having it act like a single machine. We are definitely playing in the megawatt space, and as Shawn had said, your 250 is only going to make you more competitive in that space and the 370 even further. Five years ago, they said we'd be unable to build the product to a positive gross margin, but today, we've posted our fourth positive gross margin in the last 5 quarters. So it wasn't that long ago around these calls talking about can we even get a positive gross margin? Now we're talking about how do we get to 35% positive margin? So what a difference 5 years makes. Five years ago, they said you couldn't survive another year. Yet today, Capstone not only survived the last 5 years, but I'd argue we're thriving in a world where more mature companies and established companies are struggling.We're growing while other companies are shrinking. We are increasing prices while others are slashing prices. We're hiring while others are laying off. We're developing new products, whether it's a 250 to 370 or the C1000 hybrid UPS, while other folks are slashing their R&D budgets and stopping producing new products. We're working with the DOE. We're embracing political leaders, whether it's from the House or the Senate or here locally in California, and we're pushing for new policies while others are turning away from government and are frustrated with the government. Simply put, Capstone is thriving while the customers are just trying to survive. And I think I'm very proud of the progress of the company. I'm proud of the progress of our leadership team. I'm proud of our board and all of our Capstone employees that have made this incredible turnaround for the last 5 years. But I'm more proud of the future of our company and with the next several years we're going to bring as we hit our next set of goals, which include positive cash flow, profitability. I'm excited for the launch of our next round of new products, new innovative technologies, new markets, new distributors, new partners. If you've heard us [ph] talk about during the quarter, we went from a Wells Fargo $10 million bank line to a $15 million bank line. Well, Wells Fargo obviously believes in our product, in our company, our people, our leadership team to increase the size of that line. GE, agreeing to an extension of our relationship on the ORC product for another 3 years. Obviously GE agrees and understands that our technology, I think is very valuable and is happy with what we're doing with it. So I think overall, I look forward to the next several years, getting even more traction in this market. If you look at the overall market drivers, whether it's reduced emission bubbles, higher energy efficiency, more total efficiency of products, distributed generation, SmartGrids, for the most part, everything is going our way. I know the overall market conditions on a day-to-day are lumpy. It can be a little bit frightening. But in general, we see all of our markets, all of our efforts improving. The automotive market, with our truck suppliers, both Peterbilt and Kenworth is very exciting. We also look a lot from the transit side. We see more out of the DesignLine, more out of Trolsa [ph] Bus and some other bus manufacturers we have around the world. So I think all 5 of our market areas are growing, all 95 of our distributors are growing, and we'll just keep working our plan to reduce the costs and improve our warranty expenses and improve our average selling prices and get the company stronger and more profitable for the next several years.So with that, thanks everybody for listening and taking the time today and look forward to talking to everybody at the next earnings call. Thank you.
What about the PART WHERE HE MYSTERIOUSLY QUIT OR LEFT . CPST isn't elaborating on this departure, most likely he was doing something wrong if you are to specualte for his untimely departure. CPST was making strides? or was it all lies? The PPS decline is ongoing.Facts have changed? We don't even know them, according to the last CC it was fluffed off in 3 sentences.A bit un-nerving when your CEO just gets up and leaves.
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