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Active Power, Inc. (NASDAQ:ACPW)

Q1 2011 Earnings Call Transcript

April 26, 2011 10:00 am ET

Executives

Jim Clishem – CEO & President

John Penver – CEO & Vice President, Finance

Analysts

Dilip Warrier – Stifel Nicolaus

Matthew Crews – Noble Financial

Walter Nasdeo [ph]

Chris McDougall [ph]

Operator

Good morning, everyone. Thank you for participating in today’s conference call to discuss Active Power’s financial results for the first quarter ended March 31, 2011. With us today is Mr. Jim Clishem, President and Chief Executive Officer of Active Power; and Mr. John Penver, the company’s Chief Financial Officer. Following their remarks, we will open the call for questions.

Before I continue, I would like to take a moment to read the company’s Safe Harbor statement. The company’s management on this call may make forward-looking statements that involve risks and uncertainties, including statements relating to Active Power’s current expectations of operating results for the second quarter of 2011 and fiscal 2011, its future operating results, and its customers current intentions.

Any forward-looking statements and all other statements that maybe made during this call that are not historical facts are subject to a number of risks and uncertainties and actual results may differ materially.

Factors that could cause the actual results to differ material from the results predicted include among others, the deferral or cancellation of sales commitments as a result of the general economic conditions or uncertainties, risks related to our international operations, and product performance and quality issues.

For more information on the risk factors that could cause actual results to differ from these forward-looking statements, please refer to Active Power filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year-ended December 31, 2010, and its current reports on Form 8-K filed since then.

Active Power assumes no obligation to update any forward-looking statements or information which are in effect as of their respective dates.

I would now like to remind everyone that this call will be available for replay online until May 10, 2011 via Active Power’s Web site at www.activepower.com.

I would now like to turn the call over to the President and Chief Executive Officer of Active Power, Mr. Jim Clishem. Sir, please go ahead.

Jim Clishem

Thank you. Good morning and thank you everyone for joining us today. Earlier today, we issued a press release announcing our first quarter 2011 results. We started off 2011 with the highest level of revenue for the first quarter ever.

Our revenues of $17.3 million or 56% higher than our first quarter a year ago, although lower by

10% from the prior quarter as expected reflecting the traditional seasonality of the UPS business.

The strong revenue increase compared to the previous year drove improvements in gross operating and net margins and resulting in a 59% reduction and net loss compared to the prior year.

Our results did swing back to an operating loss of a $0.01 per share this quarter, again reflecting the seasonality of our business; however we remain confident we will achieve profitability on an annualized basis for 2011.

We have experienced strong order flows so far this year from all of our major markets. Demand for our continuous power solution products in particular appears to be increasing and the size of some potential orders also appears to be growing.

During the quarter we start to work on a number of projects for second quarter delivery. Increases and changes in working capital resulted in a net $1.6 million reduction in our cash and investments compared to year-end. I’m comfortable that we’ve sufficient liquidity to continue growing our business throughout the year.

To provide additional perspective, I would like to share a few other highlights from the quarter.

Our business in EMEA was up substantially from the prior year with 547% revenue growth. In fact, our revenues from EMEA in the first quarter were equal to 62% of the total 2010 annual revenue from EMEA driven by some substantial orders in the UK market.

Our sales channels all showed growth compared to the prior year with OEM sales growing by 94% compared to the same year ago quarter and our IT channel business increasing by 76%. Our direct sales increased by 36%.

Also strategic solutions selling generated $6.2 million in revenues from PowerHouse and continuous infrastructure solutions which was up 279% compared to 2010.

And finally, our service and other revenues increased by 50% compared to the same year ago quarter.

Now, I’d like to turn the call over to our Chief Financial Officer, John Penver, who will take us through the financial details for the quarter. I will then come back to discuss our optimism about

2011 trends related to key products and market that support this optimism and a few significant points from our business strategy moving ahead. We’ll then open the calls to your questions. John?

John Penver

Thank you, Jim. Good morning, everyone, and thank you for joining us on the call today. As Jim mentioned, our revenue for the first quarter of 2011 was $17.3 million decreasing sequentially due to seasonality by 10%, and increasing by 56% compared to the first quarter of 2010. This is our highest first quarter revenues we have had and a strong start to 2011.

Revenue in this quarter included $6.2 million for PowerHouse and continuous infrastructure solutions, demonstrating continuing acceptance of our solutions and technologies in the critical power and infrastructure markets.

If you look at the breakdown of our product revenues, they were split as follows; UPS systems $9.3 million, continuous power solutions $4.7 million and continuous infrastructure solutions $0.8 million.

The split of product revenue between these categories will fluctuate on a quarterly basis due to the size and timing of our actual orders. These orders particularly for continuous power solutions such as PowerHouse can be large and therefore cause significant fluctuations in the quarterly sales mix and revenues.

We shipped 131 flywheels and UPS systems this quarter, which was a record volume of UPS products for us. Combined with that PowerHouse products this meant that we delivered a total of 31.2 megawatt of critical power solutions to customers this quarter.

The average revenue we generated per megawatt of critical power delivered was $480,000. This compares to 23.6 megawatts of critical power delivered in the first quarter of 2010 for which we generated revenue of $414,000 per megawatt delivered. This metric and the changes in it will reflect how successful we are at delivering solutions to our customers rather than just delivering products, such as UPS products.

I would anticipate this to fluctuate based on the size and timing of PowerHouse and infrastructure solutions orders in future periods. For example, if we have more UPS systems revenues than total solutions delivered then the dollars per megawatt delivered number would naturally decrease.

Total UPS systems revenues were up by 13% compared to the same quarter a year ago. So the real growth in our business compared to a year ago was from the sale of continuous power solutions including our PowerHouse products, where revenues were up by 707% or $4.1 million compared to the first quarter of 2010.

In particular, we had several large continuous power system sales in the UK market that we delivered this quarter which drive this increase. This resulted in our revenues from EMEA to the 46% on the total revenues for the quarter. This compared to 11% of revenue in the same year ago quarter and 24% of revenue in the fourth quarter of 2010.

Revenues from the Americas were 52% of our revenue this quarter compared to 74% in the prior quarter and 61% in the same year ago quarter. In absolute dollar terms, our sales from the Americas were up by 34% from a year ago but dropped by relative increase in sales from EMEA.

Our revenues from Asia are still relatively small and fluctuate significantly based on the timing of individual orders. We did not ship any significant orders into Asia this quarter although we did receive a number of large orders in the period. Then for our revenues from Asia were 1% of revenue this quarter compared to 2% in the prior quarter and 28% of revenue in the same year ago quarter.

Looking at revenue by sales channel, we have seen year-over-year growth across all our channels. Our IT channel revenues increased by 76% or $1 million compared to the same year ago quarter. IT channel revenues were 12% of our total revenues in the quarter compared to 30% in the prior quarter and a 11% in the same year ago quarter.

Direct sales, which include sales made by Active Power directly or through its network of manufacturers representatives and distributors represented 55% of our revenue this quarter. This compares to 51% of total revenue in the previous quarter and 63% of revenue in the same quarter a year ago.

Sales from our OEM business including sales to Caterpillar increased to 33% of our revenue in the quarter from 19% in the previous quarter and compared to 27% in the same quarter a year ago. This level fluctuates substantially quarterly based on the size and timing of orders from this channel.

We have seen a smaller number of orders that it should create a magnitude and the period show some large sales in Europe through our OEM partner. Their efforts to sell solutions appear to be helping them selling to large accounts, which drives UPS revenue and product revenue for us. And we anticipate this channel will continue to grow in 2011 as our partner continues to broaden its marketing activities in Europe and Asia.

Service and other revenues this quarter improved by 50% or $0.9 million compared to the same year ago quarter reflecting professional services associated with the high level of PowerHouse and continuous power system sales we have generated.

Service revenues associated with these large projects will fluctuate going with the level of product revenues and can cause our quarterly level of service and other revenue to fluctuate significantly.

In total, service revenues were 15% of revenue this quarter compared to 16% of revenue in the same year ago quarter. Our total international sales were 51% of our revenues in the first quarter of 2011, 34% in the previous quarter and 39% in the first quarter of 2010.

Gross margins this quarter was 27%. This compares to 28% in the prior quarter, 26% in the same year ago quarter. The high number of UPS systems manufactured allowed us our manufacturing facility quite efficiently this period. The change in margin from the prior quarter was due to a change in sales mix on slightly lower revenue.

Research and development expenses for the quarter were approximately 920,000, which was 10% higher than the first quarter of 2010 and 3% higher than the previous quarter. The increase in spending reflects higher development activities on containerized infrastructure solutions and our development efforts on our next-generation UPS product. We anticipate some further increases in R&D expenses, as we had head count and increase product development efforts in the remainder of this year.

Our selling and marketing expenses at $3.5 million or 7% higher than same year ago quarter on substantially higher sales volumes, which were 56% higher. Compared to the previous quarter, our selling and marketing expenses increased by $704,000 or 25%. This reflects seasonally higher marketing-related expenses as our first quarter is traditionally a higher spending on marketing-related activities, higher sales compensation, expenses as well as additional headcount expenses.

Our general and administrative expenses of $1.4 million decreased by 8% from the prior quarter and with 4% higher than the same year ago quarter. The increase from the prior year is primarily from higher professional fees, performance-based compensation expense.

Our operating loss for the period was $1 million or $0.01 per share. This is a 59% reduction compared to an operating loss of $2.6 million or $0.04 per share that we had in the first quarter of 2010. In a prior quarter, we have an operating profit of 170,000.

Our net loss for the period was $1.1 million or $0.01 per share, which compares to a net loss of 2.6 million or $0.04 per share in the same year ago quarter.

Overall, our net working capital was constant like prior year, prior quarter and with their operating plan. There are a number of changes in some of the asset liability accounts, which is due to the timing of individual customer orders and where we’re in the fulfillment of those orders. For example, our inventory increased by $1.6 million from prior quarter, of which $900,000 was in Asia, and work-in progress with PowerHouse sales that we will deliver in the second quarter.

Our receivables increased marginally due to the timing of the shipments and we pay out 2010 performance based compensation during this quarter. The usage of funds were offset by high trade payables, high deferred revenue and custom deposits and from drawing down a $1 million against our revolving credit facility.

The increasing size of a number of our sales orders particularly at the continuous parent infrastructure solutions has increased the potential volatility, the changes in our levels of receivables, inventory and payable.

Managing this and our overall working capital continues to be an ongoing challenge and our outstanding balances for these balance sheet items can change materially very quickly and not materially change our net liquidity position.

Credit management and obtaining deposit and interim payments from our customers negotiating better payment terms with vendors are how we are managing the situation. We do believe we got adequate liquidities for much higher quarterly revenue and not liquidity to see out the next 12 months or more of revenue growth.

Our capital expenditures were not significant during the quarter. That said we can substantially increase production levels without needing to make any material capital investments. As a result, the capital expenditures will primarily support expansion of the trials and service capabilities, as well as our marketing and promotional efforts. For example these expenditures could include items, such as rental and demonstration equipment and PowerHouse systems.

This completes the financial portion of the presentation. So I will now turn the call back over to Jim for further comments about the quarter. Thanks, Jim.

Jim Clishem

Okay, thank you, John. We’re pleased with our first quarter results, as we continue to experience strong interest in order activity for both the UPS products and continuous power solutions, and the fact that many of these opportunities are increasing in size. We believe the key drivers behind much of the uptick are the market trends we mentioned during our last call and these include customer requirements for energy and space efficient solutions.

Secondly, increased demand for power to support high density data center environments. Third, significant use of web-based applications. And finally, the continued interest in modular data center infrastructure

I’d like to touch on a few more macroeconomic trends working in Active Power’s favor that aligned well with the performance in economic benefits of our products and solutions offer to customers. We continue to see growth in data center market as evidenced by recent claims from Microsoft regarding annual global spend on new data center construction. The company states annual spends sits at $50 billion today, and is anticipated to reach $78 billion by 2020.

In the U.S. current spending is at $15 billion annually and likely to grow to approximately $18 billion by 2020. Much of this construction will be comprised of smarter innovative data center designs to support cloud services.

Gartner echoed these same sentiments in a recent report published on March 15th of this year. The report mentions smaller physical designs are one of the four main drivers impacting the building or refurbishing of data centers. These trends bode extremely well for our continuous power solutions like PowerHouse. These fully contained utility infrastructure systems offer the customers more convenience, lower total cost of ownership and less risk versus the conventional build.

PowerHouse’s modular and design which dramatically reduces times to deployment, as these systems are made up of factory build components which are pre-tested prior to shipment. In fact, in a recent Wall Street Journal article, HP forecasted that 50% of all new data centers would utilize a modular versus custom design.

Organizations also have to manage their rapidly evolving business in IT demands, which plays a heavy burden on their computing environments. Data center capacities reaching its limits in terms of both power and cooling. It’s no surprise that more than 63% of readers of data center knowledge and online data center new source have plans to expand their current facility or build a new data center in 2011.

So why are we optimistic about the rest of 2011? What are whole direct power? The marketplace is shifting towards turnkey solutions and modular infrastructure. Our OEM is strategic, IT partner channels are beginning to generate more opportunities in Europe and Asia, and the composition of these opportunities are increasing in size.

Our sales numbers reflect this trend, as John shared earlier, with our OEM and IT channel sales increasing by a 94% and 76% respectively compared to the same year ago quarter.

The 700% increase in continuous power solutions sales, particularly, in the U.K. is a positive sign that our solutions are resonating with datacenter and technology centered clients. This also demonstrates the market traction we are generating in the U.K.

We believe customers select solutions like PowerHouse for its flexibility. PowerHouse can support any type of application, our conventional build, our modular arrangement or deployment of IT and infrastructure containers. Moreover, systems can be deployed in a fraction of the time and with less capital outlay for the client versus the conventional build.

We have seen more leading edge datacenter providers turn to Active Power for our innovative approach to datacenter infrastructure design, such as Capgemini and Terremark Worldwide. Just last week we announced the deployment of our PowerHouse System to Capgemini’s Merlin Datacenter in the UK, one of the most sustainable facilities in the world. Merlin was just recently praised by the Uptime Institute for its datacenter design earning the 2011 Green Enterprise IT Award. The ingenuity we put behind our solutions enable these providers to realize our innovative datacenter infrastructure design. As a result, we’re hoping these blue chip customers achieve their efficiency and sustainability goals.

Our UPS and continuous power infrastructure solutions are setting new standards and sustainability and energy efficiencies, as we’re able to lower our capital expenditure and total cost of ownership for our customers. We believe the strong focus on our solution infrastructure business will enable us to reach our goal of sustainable revenue growth and annual profitability.

In summary, we anticipate quoting an order activity to continue to build momentum throughout the year.

Now, looking at the second quarter expectations, for our guidance, we usually provide a range of expected revenues, as unforeseen customer events can impact the timing and the amount of revenue recognized for a particular quarter.

Based on orders we have on hand and our current forecast, we are providing revenue guidance of $17 million to $20 million for the second quarter of 2011. This would represent an increase between 6% and 25% as compared to the same year ago quarter.

Second quarter earnings per share is expected to range between a loss of $0.01 and a profit of $0.02 per share. Changes in cash and investment are expected to be minimal and driven largely by changes in working capital requirements.

Operating expenses excluding variable selling expenses should be fairly consistent with those in the first quarter. Cash dues and our operations were largely again be driven by our working capital requirements during the quarter, which will be affected by the timing and size of orders that we fulfill. We plan to utilize our bank facility and manage customer and vendor cash flows appropriately in order to mitigate these cash requirements wherever possible.

Thank you again for being on the call this morning. And on behalf of the entire senior management team and all employees of Active Power and our board, I’d like to express our appreciation again for your interest and support to Active Power.

Now at this time, John and I’d be happy to open the call up for any questions. Operator?

Question-and-Answer Session

Operator

Thank you. (Operator instructions) And sir, I have Dilip Warrier. Dilip Warrier, your line is now open.

Dilip Warrier – Stifel Nicolaus

Good morning. I was wondering if you could comment a little bit about the gross margins in the 27%, 28% range. I think, in the last quarter, we talked about sort of targeting a range of 30% to 35% in 2011, lower end of the range in the beginning of the year, perhaps higher end of the range later? I just wanted to see what the levels are to bring the gross margin number up over the next few quarters?

John Penver

Sure. Hi, Dilip, it’s John. I think that the main driver is volume. So a number of our costs are relatively fixed, certainly on the UPS product side at the manufacturing facility, because it’s fairly big. And what we’re balancing right now is building the infrastructure necessary to develop and deliver the continuous power solutions in the infrastructure products. So making sure, we’ve got adequate infrastructure to be able to build that product, but not putting it so far ahead of earning the revenues that depresses the margin. And we have to balance out that, we do believe that repeatability of design and delivering some of the solutions for our customers is kind of give some opportunity to improve the margins on the product level, and slightly higher volume, we still think that we talked about 30% to 35% range over the course of 2011 is that sustainable.

Jim Clishem

Yes, and just to add to that, Dilip, you saw also in this quarter, there was a good percentage growth in the OEM side of the business for the quarter. And from a gross margin perspective those tend to be a little bit lower than, for example, on the gross margins you would get in the direct business. So as that mix also in channel delivery fluctuates quarter-to-quarter you’ll see some movement also on that.

Dilip Warrier – Stifel Nicolaus

Got it. And then, new orders book during the quarter, do you have an update there?

Jim Clishem

Yes, during the quarter and to-date its north of $22 million, Dilip.

Dilip Warrier – Stifel Nicolaus

Okay. One last question here for John. What was cash flow from operations, CapEx and depreciation this quarter?

John Penver

You will see when we did the 10-Q filing today or tomorrow that cash used in operations was $2.6 million predominantly in receivables and inventory. The net cash change was $1.6 million, capital expenditures about 350,000.

Dilip Warrier – Stifel Nicolaus

Thank you.

John Penver

And sorry, depreciation runs about 350,000 in the quarter.

Dilip Warrier – Stifel Nicolaus

Thank you very much.

John Penver

Okay, thank you.

Operator

The next question comes from Matthew Crews. Matthew Crews, your line is now open.

Matthew Crews – Noble Financial

Yes, good morning everyone. A question, could you give the details on the product mix breakdown for Q1 2010?

John Penver

Matthew, I don’t have it in front of me, but what I’ll commit to do is we’ll actually put up the chart and we’ll get up today on the Investor Relations side on the Web site. And we’ll provide you that products with for each of the quarters last year and this year and I will also put up there the comparable metrics of the revenue per megawatt delivered a product, hence that was a new metric for us as well. So, I’ll get up there on the website after the call.

Matthew Crews – Noble Financial

Okay. So but it looks like on your UPS product revenue that was sequentially up?

John Penver

Yes, it was up 13% from the prior year.

Matthew Crews – Noble Financial

Okay, and from the fourth quarter?

John Penver

Yes, it was up nicely from the fourth quarter as well.

Matthew Crews – Noble Financial

Okay, and is that I mean the revenue in there is that just CleanSource revenue or is there other thing that you’re including in that?

John Penver

Yes, it typically CleanSource and then it’s somebody purchased option against that module and things of that nature. And frankly a large portion of the revenue that comes through that channel also comes through OEM channel. The activity of OEM business being up sized substantially compared to a year ago, if that’s why we expect that number to go up.

Matthew Crews – Noble Financial

Okay. Just trying to balance just the growth in the market versus seasonalities, it looks like there was some definitely growing nicely. In terms of selling a broad obviously, we’ve got over 52, EMEA looks light this quarter, but how are you being impacted by the dollar where you are finding yourself in a more competitive position is that something noticeable?

John Penver

I’d say especially not that noticeable yet. Part of the reasons why is that international sales tend to be more solution-based rather than just the UPS systems, not always but certainly the vast majority of those revenues and where we are delivering solutions in Asia and Europe, we tend to source a significant portion of the components locally and so the dollar denominated value of components in that solutions is not that significant. So fluctuations in the dollar therefore tend not to have that much of an impact in those markets. Someone is just buying the UPS products from us, for example, our OEM partners that there are certainly some advantage because of the deterioration of the dollar, but it really hasn’t been a significant factor today.

Matthew Crews – Noble Financial

Okay, just lastly with all that’s going on in Japan, is there any impact with you in sales there or potential sales for the rest of the year?

John Penver

What I was going to suggest was in the short-term, I don’t think you will see a significant change for us. I think in the longer term there is an increased opportunity just because of the disruptions with the power distribution system particularly with the nuclear facility, and we have reached out to some business partners over there to see how and in the long-term we can address that because there is going to be a lot more interruption to grid power for industry in particular. So it really does look like, unfortunately it’s a horrible situation, but there probably will be a business opportunity for us. But what’s they have, Jim?

Jim Clishem

I was going to say pretty much that and just to add, I think that because of that in that situation it has raised the level of awareness globally for the need of protected power systems really across the globe. So no one likes to see any individual business or country go through the sort of disaster of business continuity disruption, but I can tell you it’s definitely increase the awareness of companies like Active Power, its importance to make sure that we’ve always got a continuous non-interrupted infrastructure for (inaudible) critical company. So I think from that perspective it’s actually increased great deal of awareness for us.

Matthew Crews – Noble Financial

Okay, thanks, I’ll jump back in the queue.

John Penver

Thanks, Matthew.

Operator

The next question comes from Walter Nasdeo [ph]. Walter Nasdeo, your line is now open.

Walter Nasdeo

Thank you. Good morning, guys.

John Penver

Hi, Walter.

Walter Nasdeo

Hi, my question is a little bit more kind of on the macro level. As you are going around kind of globally pitch in [ph] business, what is the climate credit right now? Are you seeing any loosening? Is it still tight? Are you finding that perspective clients or customers of yours are having any difficulty meeting the requirements that you’re seeking from them?

Jim Clishem

I think Walter, there is that sort of tenuous concern about access to capital especially for data center buildouts and certainly new data centers, which were more expensive than even retrofitting. But I think you’re finding lots of strategies for people to go forward with that. For example, we know there are a lot of a large data centers typically do not commit capital unless they’ve got a large portion of what they plan to build pre-sold and so it tends to help mitigate the risk to lenders

We also know that there have been other elements of this, for example, Terremark recently been purchased by Verizon and a large advantage of that of course is the access to capital, there are certainly synergistic reasons for the acquisition, but the access to capital there. I think the smaller people are probably a little more tenuous, the cost of capital for them and getting that is a little tougher. But nonetheless, I think the way they are mitigating those risk again is preselling activity.

And the final way I would explain this to you is, one of the nice things about the Active Power and companies like us is that if it’s not the in customer building out their data centers, they often times will opt to outsourcing to people that do it for living whether it’s Terremark or Equinix. So the need is still there. It just depends on which bucket it ends up going into.

So we’ve seen nothing but continued discussions about expanding especially for the larger data

center operations globally, and I think the numbers that we quoted to you too the macro numbers that came from the Wall Street Journal and the Microsoft and so forth have certainly supports that, the data center expansion continues throughout 2011 and expected on a pretty good compound annual growth rate through 2020. But your question was more about access to capital. I think people are mitigating those risks as best as possible. But we’ll see if the markets tighten up any further from here.

Walter Nasdeo

Okay. And then just briefly, did any expected revenue fallout of this quarter, I know you mentioned earlier in the call that sometimes it’s hard to predict?

John Penver

Yes.

Walter Nasdeo

Did anything fallout of this quarter that you are originally expecting?

John Penver

Yes, there were some and but there were some that sort of got pulled in from Q2 and Q1 as

well. So we saw it flow both ways, to be honest with you.

Walter Nasdeo

Okay, thank you very much.

John Penver

Thanks, Walter.

Operator

The next question comes from Chris McDougall [ph]. Chris McDougall, your line is now open.

Chris McDougall

Thanks a lot, guys. Actually I think Walter just took care of my question. So I appreciate. I guess only thing is, you had talked about the seasonality on the quarter and I did look back on your seasonality historically and validate that that was the case. How about the order flow? Would you say this was a better quarter than fourth quarter for order flow or how did that compare?

John Penver

If you look at it from a seasonality perspective compared to a year ago our order flow was up significantly and the seasonality often been driven around slowdowns in orders towards the end of the calendar year or the beginning of the New Year. So the order flow, Jim just mentioned since the beginning of the year we’ve had about $22 million in orders. I think the comparable number in the prior quarter was about $24 million. So it’s down slightly, but if it’s up, up very significantly, it’s probably more than double from the same quarter a year ago.

Chris McDougall

Okay, great. And then how are things looking on in the first few weeks here in the second quarter?

John Penver

I would say they are inside at the activity in the sales funnel in particular but it’s as robust as its been. The points that we try to make on the call was that the size of some of the opportunities, the geographic spread of some of the opportunities continues to improve. And it’s coming from our partners as well. Jim might have a few comments.

Jim Clishem

No, the only I’m going to say I think with the guidance that we just gave is the highest guidance that we’ve ever given as a company, I think that sort of just supported both our not just the optimism but the order flow intake that we’re seeing for delivery in the quarter as well. So I think that probably helps to answer that one for you, I would think as well.

Chris McDougall

Great, thanks. And lastly, I like the new metric on megawatts and dollars per megawatt. Just for a continuity, what was the ASP on a kind of per flywheel basis this year?

John Penver

Yes, the old yield metric was around 80,000. We’re just slightly under 79 unchanged. But it’s been rounded up to 80,000 for real for the quarter.

Chris McDougall

All right, thanks a lot guys.

John Penver

You’re welcome.

Operator

At this time, I have no other questions in queue.

Jim Clishem

All right. One quick time before we do end the call here is that the company’s Annual Shareholder Meeting will be held on 12th of May at 1:00 P.M. So if you haven’t received your proxies, we hope that you’ll take the time to fill that in. And if you’re able, you’ll be able to attend our Annual Shareholders Meeting.

John Penver

Yes, and again, thanks everybody for joining the call today and we do appreciate your continued support. We look forward to speaking with your again next quarter. Thanks, everyone.

Jim Clishem

Thank you

Operator

That concludes today’s conference. Thank you for your participation. You may now disconnect.

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