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CPST (NASDAQ) 1.37 | down0.02 | Jul 29 2014 | 16:00 ET

Ask Management

Welcome to the "Ask Management" section of our site. "Ask Management" is your opportunity to submit a question to Capstone Turbine Corporation's management team.

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NOTICE: All information submitted through this form is subject to editorial review and may or may not be responded to in the Ask Management section of our website.

This section of our web site contains "forward-looking statements," as that term is used in the federal securities laws, regarding future events or financial performance of the Company within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "objective," "intend," "targeted," "plan" and similar phrases. These forward-looking statements are subject to numerous assumptions, risks and uncertainties described in Capstone's filings with the Securities and Exchange Commission that may cause Capstone's actual results to be materially different from any future results expressed or implied in such statements. We refer you to the Company's Form 10-K, Form 10-Q and other recent filings with the Securities and Exchange Commission for a description of these risk factors. Capstone cautions readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Capstone undertakes no obligation, and specifically disclaims any obligation, to release any revisions to any forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.



July 17, 2014

Question:

In regards to the newest round of sanctions, it appears that they will have a minimal impact. It remains something to watch, especially now that it has started to touch the energy sector. The way I read it is the sanctions do not impact the ability of any US company doing business in Russia. Also minimal impact for Capstone as you sell through a distribution channel. Curious as to what Capstone Turbine’s managements thoughts are on this matter?


Answer from Capstone Management:

The recent news on US sanctions in Russia is not expected to have any impact on Capstone or Capstone’s Russian distributor, BPC at this time. The new sanctions target two specific banks (Gazprom Bank which supports Russia's gas exports and VEB, a state owned development lender that provided much of the financing for Sochi Olympics construction), two energy companies (gas company Novotek and oil giant OAO Rosneft), Ukraine separatists and defense companies.   

The US is trying to impact Russian interests without placing any undue harm on US companies. Europe agreed to expand their sanctions, and that decision is expected at the end of July and will most likely be similar to those of the US sanctions.

Capstone's management is closely monitoring the developing situation and expects no imminent changes or impact at this time related to the company's business in Russia.

 

 

April 30, 2014

Question:

According to your most recent annual report one of your Russian Distributors account for 11% of your 2013 revenue. What impact do you expect from the recent sanctions against Russia?


Answer from Capstone Management:

To date, the sanctions have had no impact on Capstone’s Russian distributor or the company. The current EU and US sanctions are directed at particular Russian citizens. Additional sanctions are directed at dual use items and have not directly affected Capstone, as microturbines are not dual use items (meaning an item that could also be used for defense purposes).

November 27, 2013

Question:

FlexEnergy reportedly just secured a $400 million dollar order from DGC in Russia. Did Capstone quote DGC and how does this order affect the Capstone business model since it is right in the sweet spot of our market segment? 


Answer from Capstone Management:

Capstone engaged in commercial negotiations with Avicon-UK, who represents DGC, and DGC directly for several months but was unable to come to terms on a long-term agreement that was acceptable to Capstone and beneficial to Capstone shareholders. We had significant concerns about dilution to our shareholders and transaction execution risk.

The Capstone business model remains unchanged, and we will continue to work with our approximately 95 qualified distributors who meet our standard conditions of sale and have the demonstrated ability to execute from both a technical and commercial standpoint.  

November 13, 2013

Question:

I read an interesting article in the WSJ, “GERMANY REINVENTS THE ENERGY CRISIS”. And I wondered how much business Capstone has in Germany?


Answer from Capstone Management:

Capstone’s revenue in Germany over the trailing four quarters was approximately $5 million USD. E-Quad Power Systems GmbH is our authorized Capstone distributor in Germany. Capstone has a dedicated project team that is developing product improvements across our product family to meet new stringent German utility regulations for low and medium voltage decentralized power generation installations. 

These product improvements will give German customers increased functionality by providing reactive power or an adjustable power factor back to the grid for improved economics and grid support. This new functionality positions our products well for future regulatory changes in not only Germany but other countries in Europe and eventually North America.    

November 11, 2013

Question:

One metric indicated each quarter is MW shipped in the quarter. I did not see it indicated, would you please let us know how many megawatts were shipped in the recent quarter?


Answer from Capstone Management:

Capstone shipped 30.1 MW in the quarter ended September 30, 2013 compared to 24.0 MW in the quarter ended September 30, 2012. Please refer to page 21 of our second quarter FY2014 Quarterly Report on Form 10-Q/A for additional details.