Fri, Jun 27, 10:03 AM (17 days ago)
### Summary of Financial Performance **Revenue:** - **Fiscal 2025:** $85.6 million - **Fiscal 2024:** $91.2 million - **Decrease:** 6% **Gross Profit:** - **Fiscal 2025:** $23.3 million (27% of revenue) - **Fiscal 2024:** $14.3 million (16% of revenue) - **Increase:** 63% **Net Income (Loss):** - **Fiscal 2025:** $(7.2) million - **Fiscal 2024:** $7.4 million - **Decrease:** 197% **Earnings per Share (EPS):** - **Fiscal 2025:** $(0.38) - **Fiscal 2024:** $0.39 ### Strategic Overview **Market Position and Changes:** - **Energy Efficiency Market:** Leading market segment, accounting for 51% of product revenue. - **Natural Resources Market:** Driven by reliability, emissions profile, and ease of installation. - **Renewable Energy Market:** Focus on landfill gas, biodiesel, and biogas. - **Microgrid Market:** Continued development and success in various installations. - **Transportation Market:** Potential in EV charging solutions. **Product and Service Offerings:** - **Microturbine Products:** C65, C200, C600, C800, and C1000S Series. - **Energy-as-a-Service (EaaS):** Build, Own, Operate, and Maintain (BOOM) and energy rental solutions. - **Factory Protection Plans (FPP):** Comprehensive service contracts. - **Hydrogen Energy Solutions:** Commercially available hydrogen-based CHP product. ### Future Outlook **Research and Development (R&D):** - **Hydrogen Product Line:** Testing a 100% hydrogen gas combustion system. - **Direct Current (DC) Output Power Solutions:** Broadening applications in EV charging. - **Autonomous Power Solutions:** Anticipating overload conditions and supplementing grid resources. - **Onboard Remote Monitoring Systems:** Ensuring reliable power service and asset telemetry. **Cost and Core Competencies:** - **Core Competencies:** Recuperator design, air bearing technology, advanced combustion technology, and sophisticated power electronics. - **Cost Reduction:** Sourcing from the best value supply chain option and continuous improvements in manufacturing processes. ### Risk Factors **Financial Condition:** - **Working Capital Deficit:** $16.5 million as of March 31, 2025. - **Cash Position:** $8.7 million as of March 31, 2025. - **Debt Obligations:** $32.2 million in borrowings outstanding under the Notes, including accrued and unpaid interest, net of debt issuance costs. **Market Position Changes:** - **Competition:** Highly competitive market with several well-known companies. - **Governmental and Regulatory Impact:** Subject to federal, state, local, and foreign laws and regulations. - **Pending Litigation:** Various legal proceedings that could have a material adverse effect on the business, financial condition, or results of operations. ### Financial Condition **Liquidity and Capital Resources:** - **Cash Requirements:** Depend on the execution of the business strategy and plan. - **Cash Balance:** Increased $6.6 million during Fiscal 2025. - **Operating Activities:** Net cash provided by operating activities was $7.7 million. - **Investing Activities:** Net cash used in investing activities was $0.9 million. - **Financing Activities:** Net cash provided (used) by financing activities was $(0.2) million. **Debt:** - **Exit Note Purchase Agreement:** $28.1 million in borrowings, including $21.1 million Exit Roll Up Notes and $7.0 million Exit New Money Notes. - **Interest Expense:** $3.9 million for Fiscal 2025. **Lease Commitments:** - **Lessor:** Rents microturbine equipment to customers for terms ranging from a couple of months to up to ninety-six months. - **Lessee:** Leases facilities and equipment under various non-cancelable operating and finance leases expiring at various times through Fiscal 2037. ### Market Position Changes **Competition:** - **Market for Products:** Highly competitive, with several well-known companies having substantially greater resources. - **Competing Technologies:** Solar-powered systems, wind-powered systems, battery storage systems, fuel cells, linear generators, and other microturbines. **Governmental and Regulatory Impact:** - **Regulatory Requirements:** Subject to federal, state, local, and foreign laws and regulations. - **Utility Companies:** May place barriers on the installation of products or the interconnection of products with the electric grid. **Pending Litigation:** - **SEC Investigation:** Closed with no action taken against the Company. - **Cal Microturbine Arbitration:** Ongoing settlement discussions. - **Spitzer v. Flexon, Jamison, Juric, Robinson, and Hencken:** Final settlement hearing date set for November 13, 2025. - **Mark Estrada and Ricardo Montalvo, vs. Capstone Green Energy LLC and Erick Kim:** No liability recorded as of March 31, 2025. - **DV Energy, LLC vs Capstone Green Energy Holdings, Inc, Capstone Turbine Corporation, Capstone Green Energy Corporation, and Capstone Green Energy, LLC:** Value of the DV Energy deposit recorded in the Company’s financial statements as a current liability as of March 31, 2025. ### Conclusion Capstone Green Energy Holdings, Inc. (CGEH) has shown a mixed financial performance with a decrease in revenue but an increase in gross profit. The company is focusing on various strategic initiatives, including expanding its market presence in energy efficiency, natural resources, and renewable energy markets. The future outlook includes continued development in hydrogen energy solutions and cost reduction efforts. However, the company faces significant risks related to its financial condition, competition, regulatory impact, and pending litigation. The market position changes highlight the competitive nature of the industry and the potential impact of governmental regulations and pending legal proceedings. Overall, the company's strategic overview and future outlook are promising, but the risks and financial condition pose challenges that need to be addressed.