Active Power Announces First Quarter 2009 Results

Active Power, Inc. (NASDAQ: ACPW) announced results for its first quarter ended March 31, 2009. Revenue for the quarter was $11.1 million, a 48 percent increase compared to the first quarter of 2008.

For the quarter, net loss was $2.4 million, or 4 cents per share. This compares to a net loss of $4.5 million, or 7 cents per share, in the first quarter of 2008 and a loss of $431,000 or 1 cent per share in the immediately prior quarter.

The gross profit margin in the first quarter of 2009 was 29 percent. This compares to a gross profit margin of 10 percent in the first quarter of 2008 and a 32 percent margin achieved in the fourth quarter of 2008 on higher product volumes.

Cash and investments declined $0.7 million during the quarter compared to a decrease of $5.1 million in the first quarter of 2008 and a decrease of $0.6 million in the fourth quarter of 2008. Cash and investments at March 31, 2008, were $10.5 million.

"In a challenging global market, we are pleased to achieve significant year-over-year growth in revenues and overall improvements in our financial results,” said Jim Clishem, president and CEO, Active Power. "Our sales pipeline of new global opportunities continues to grow, although we are witnessing a longer sales cycle as the impact of economic uncertainty and credit availability is being felt by some customers. We believe that strong interest continues in our products. Our space and energy efficient UPS systems reduce electricity costs, while also delivering a greener solution with improved reliability. These inherent product benefits should enable us to continue increasing market share throughout 2009. We remain focused on increasing sales and margins; preserving cash; building brand; bundling compelling power solutions; and improving our own internal efficiencies towards operating profitability.”

Business Highlights for the First Quarter 2009

• Increased product revenues by 55 percent compared to the first quarter of 2008
• Received and shipped orders to 13 countries and the 119 flywheels shipped was the second highest volume ever shipped
• Reduced quarterly net loss by 47 percent to $2.4 million from the $4.5 million loss in the first quarter of 2008
• Announced an order from a blue chip manufacturer for nearly two megawatts of CleanSource® UPS (uninterruptible power supply) systems
• Annual service revenues up 11 percent compared to the first quarter of 2008, which continue to reflect valuable annuity revenues and benefit of having a direct sales model in place
• Announced membership into HP Data Center Solution Builders Program, where Active Power’s PowerHouse solution will provide containerized power and cooling architecture for HP’s Performance Optimized Data Center (POD)
• Incurred an EBITDA loss of $1.9 million or 3 cents per share for the quarter. Adjusted EBITDA was a loss of $1.6 million, or 3 cents per share for the quarter, a reduction of 59 percent from a loss of $3.8 million in the first quarter of 2008. A reconciliation of EBITDA and Adjusted EBITDA to net income (loss), which is their most directly comparable GAAP measures, is provided below in a table immediately following the Condensed Statement of Operations. A reconciliation of EBITDA per share and Adjusted EBITDA per share to earnings per share, which is their most directly comparable GAAP measures, is provided below in a table immediately following the Condensed Statement of Operations.

Outlook

Active Power expects second quarter 2009 revenues to be between $8 and $12 million. Active Power expects its cash and investments balance as of the end of the second quarter to decrease by up to $1 million.

Conference Call Details

Active Power will host a conference call today, Friday, Apr. 24, 2009, at 11:00 a.m. (ET), to further review first quarter 2009 results. Interested parties can listen via Web cast by clicking here. A replay of the Web cast will be available until May 8, 2009. Investors may access the live broadcast and replay via Active Power’s Web site at www.activepower.com.

About Active Power

Active Power (NASDAQ: ACPW) provides efficient, reliable and green critical power solutions and uninterruptible power supply (UPS) systems to enable business continuity in the event of power disturbances. Founded in 1992, Active Power’s flywheel-based UPS systems protect critical operations in data centers, healthcare facilities, manufacturing plants, broadcast stations and governmental agencies in more than 40 countries. With expert power system engineers and worldwide services and support, Active Power ensures organizations have the power to perform. For more information, please visit www.activepower.com.

Cautionary Note Regarding Forward-Looking Statements

This release may contain forward-looking statements that involve risks and uncertainties. Any forward-looking statements and all other statements that may be made in this news release that are not historical facts are subject to a number of risks and uncertainties, and actual results may differ materially. Specific risks include delays in new product development, product performance and quality issues and the acceptance of our current and new products by the power quality market. Please refer to Active Power filings with the Securities and Exchange Commission for more information on the risk factors that could cause actual results to differ.

Active Power, CleanSource and CoolAir are registered trademarks of Active Power, Inc. The Active Power logo, PowerHouse and PowerCentre are trademarks of Active Power, Inc. All other trademarks are the properties of their respective companies.

Non-GAAP Financial Measures

In addition to disclosing financial information prepared on a GAAP basis, this release and the accompanying tables include non-GAAP measures of EBITDA, Adjusted EBITDA, EBITDA per share and Adjusted EBITDA per share. EBITDA represents our GAAP based net income (loss) adjusted to exclude the impact of interest, taxes and depreciation expense. Adjusted EBITDA represents our GAAP based net income (loss) adjusted to exclude the impact of interest, taxes and depreciation expense, as well as stock-based compensation expense and any other one-time non-cash charges. We believe these adjustments provide meaningful supplemental information regarding our performance to our investors and enhance the overall understanding of our past financial performance. These non-GAAP measures are an indication of our baseline performance that are considered by management for purposes of making operational decisions. In addition these non-GAAP measures are the primary indicators management uses as a basis for our planning and forecasting for future periods. The presentation of this additional information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of our non-GAAP financial measures to the GAAP basis results is provided below in a table immediately following the Condensed Consolidated Statement of Operations.

(a) Stock-based compensation expense:

Excluded amount represents stock-based compensation expense. Stock-based compensation is a non-cash expense accounted for in accordance with the intrinsic value method under Accounting Principles Board No. 25 through December 31, 2005, and with the fair value recognition provisions of Statement of Financial Accounting Standards No. 123(R) effective January 1, 2006. While a large component of our expense, we believe investors want to exclude the effects of stock-based compensation expense in order to compare our financial performance with that of other companies and between time periods.