San Diego, California-based Maxwell Technologies, Inc. (NASDAQ:MXWL) added another feather to its distribution network. On Monday, July 13, it signed a global distribution agreement with Texas-based privately held electronic component distributor, Mouser Electronics, Inc. Mouser will distribute Maxwell's ultracapacitors ranging from 2.5V to 125V.
The deal is mutually beneficial for both the companies. By adding Mouser's global distribution network, Maxwell would greatly augment sales of its BOOSTCAP ultracapacitor products. Mouser's global network through print and online catalogs caters to more than 270,000 customers spread over 170 countries.
On the other hand, by adding Maxwell's ultracapacitors to its kitty, Mouser will be able to increase the head count of renewable energy application users in its customer base. Maxwell's BOOSTCAP technology enabled ultracapacitors are ideal for renewable energy application, which necessitates superior energy storage devices.
Maxwell's ultracapacitors are energy efficient, with a long operating life and requires little maintenance. The Maxwell BOOSTCAP ultracapacitors cater to a diverse base of customers ranging from requiring higher energy with longer discharge applications to higher power with faster discharge applications.
Maxwell develops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications. The company's future performance will improve mainly through strong ultracapacitor sales growth.
Though margins are improving, the company has yet to achieve profitability. Also, the expected boost in ultracapacitor sales through production ramp from automotive coupled with steady demand from heavy transportation, wind, braking recuperation and automotive programs will fuel topline growth.
However, the rate of penetration of ultracapacitor technology into broader markets, higher cost structure for ultracapacitor production and earnings dilutive issuances present downside potential for the near-term. With a neutral outlook, we maintain our HOLD coverage of Maxwell.