Capstone Secures Large 4 MW Oil and Gas Order Under New Bundled Solutions Program
VAN NUYS, Calif., April 30, 2018 (GLOBE NEWSWIRE) -- Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST), the world's leading clean technology manufacturer of microturbine energy systems, announced today a new 4 megawatt (MW) purchase order for a clean and green portable power oil and gas project in the United States. The new project, which is scheduled to ship during the first quarter of fiscal 2019, was secured utilizing the company’s recently announced new bundled solutions sales program.
The order consists of four natural gas-fueled C1000 Signature Series systems that will provide power to critical equipment at the wellhead to ensure continuous operation of the oilfield. Any loss of power at an oilfield significantly impacts the operator’s business by halting the oil extraction process. This results in substantial financial losses for the operator.
As part of Capstone’s new bundled solutions program, these four microturbines come with a long-term Factory Protection Plan (FPP) that covers all scheduled and unscheduled maintenance, providing fixed operating costs and peace of mind to the end-user. Under the terms of the new program, the equipment and long-term FPP service contract must be prepaid at the time of order thus improving the company’s working capital and cash flow.
“This order is significant as it is our largest order to date under our new bundled solutions program which is designed to improve customer project economics and shorten customer payback periods. Historically the oil and gas industry has been challenging for our aftermarket service business, but we believe our new bundling strategy will help to improve our success in the sector as demonstrated by this notable order,” said Darren Jamison, President and Chief Executive Officer of Capstone. “The program was specifically created to provide customers with a comprehensive product package, while positively impacting Capstone’s revenue growth rates as well as improve working capital and cash flow. This is an excellent momentum producer for the current quarter and the new fiscal year,” added Mr. Jamison.
The company recently announced that it generated cash of $0.2 million in the fourth quarter of fiscal 2018, excluding net proceeds from equity transactions and the change in the line of credit, compared to cash usage of $2.8 million for the same period last year.
The microturbines will operate on the associated gas that occurs as a natural byproduct of the oil extraction process. This gas is usually vented, or flared, into the atmosphere, and not monetized as a commodity. Capstone microturbines have a wide range of fuel flexibility and tolerance and can use the associated gas as a fuel source. This improves the site’s efficiency while also significantly reducing the impact on the surrounding environment.
“The flaring of associated gas is an out-of-date practice that contributes significantly to global warming. Typically, it is both economically and environmentally shrewder to capture and utilize the associated gas in a low emission technology like microturbines,” said Jim Crouse, Executive Vice President of Sales and Marketing of Capstone.
Capstone microturbines are recognized in the oil and gas industry for their performance and reliability, ensuring there is no loss of power at the oilfield. Along with their rugged reputation, the microturbines require minimal maintenance. Based on air bearing technology, the microturbines use no coolants or lubricants, reducing downtime during maintenance periods. Low maintenance equates to lower operating expenses, saving the energy customer money in conservative economic environments. Additionally, the microturbines have industry leading low emissions, ensuring the impact to the surrounding environment is minimal.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:CPST) is the world's leading producer of low-emission microturbine systems and was the first to market commercially viable microturbine energy products. Capstone has shipped over 9,000 Capstone Microturbine systems to customers worldwide. These award-winning systems have logged millions of documented runtime operating hours. Capstone is a member of the U.S. Environmental Protection Agency's Combined Heat and Power Partnership, which is committed to improving the efficiency of the nation's energy infrastructure and reducing emissions of pollutants and greenhouse gases. A DQS-Certified ISO 9001:2015 and ISO 14001:2015 certified company, Capstone is headquartered in the Los Angeles area with sales and/or service centers in the United States, Latin America, Europe, Middle East and Asia.
This press release contains "forward-looking statements," as that term is used in the federal securities laws. 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. 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.
"Capstone" and "Capstone Microturbine" are registered trademarks of Capstone Turbine Corporation. All other trademarks mentioned are the property of their respective owners.
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Released April 30, 2018