Ideal Power Inc. reported results for the three and six months ended June 30, 2016.
Key Second Quarter 2016 and Subsequent Highlights:
- Introduced new SunDial™ solar photovoltaic (PV) string inverter -- Recognized as a Top 20 Energy Storage Disruptor by PV-Tech.
- Signed first licensing agreement for SunDial™ with a Fortune Global 500 Company.
- Alliance partner Sonnen launched a commercial system offering utilizing Ideal Power's 30kW products.
- 30kW Grid-Resilient Multi-Port Power Conversion System (PCS) approved by Hawaiian Electric Company for the customer grid-supply and self-supply distributed resource programs.
- Successfully tested Bi-Directional Bi-Polar Junction TRANsistor (B-TRAN™) silicon dies with semiconductor fabricator.
- Completed state-of-the-art microgrid project with Aquion Energy utilizing their AHI™ batteries with Ideal Power's Grid-Resilient 30kW Multi-Port PCS.
- Order backlog of $4.7 million at June 30, 2016.
Strengthened patent estate; currently have 55 issued patents, including 19 issued patents for B-TRAN™ and over 100 patent applications pending.
"While revenues were impacted during the first half of the year by delays in California's Self Generation Incentive Program (SGIP), several recent developments in the energy storage market from an integrator and funding perspective give us confidence that growth will resume in the second half of 2016," stated Dan Brdar, Chairman and CEO. "More specifically, our leading market for stand-alone storage, California, resolved the delay with incentive funding under the state's SGIP. This now enables approximately $70 million of new energy storage projects submitted in February 2016 to proceed; many of which we expect will incorporate our power conversion systems."
Continued Mr. Brdar: "During the second quarter, we introduced our new SunDial™ solar PV string inverter, the first commercial PV string inverter with an optional third port for the direct integration of solar and storage during installation or any time in the future. The SunDial™ will enable us to diversify our revenue base as it is targeting the mature $6.9 billion solar inverter market, offering a storage option that we believe is unique in that market. Subsequent to the SunDial™ release in May, we signed our first licensing agreement for our PPSA-based technology with a Fortune Global 500 company for this product.
"We are also pleased that both of our semiconductor fabricators are on track to have prototype B-TRAN™ devices later this year. Successful testing of silicon dies with one of our semiconductor fabricators in April validated key characteristics of the semiconductor power switch and we look forward to entering the well-established, $17 billion-dollar power semiconductor market. We believe the B-TRAN™ may be able to address a significant portion of this market."
Second Quarter 2016 Financial Results
- Q2 2016 product revenue totaled $0.3 million versus $1.2 million in Q2 2015.
- Q2 2016 gross margins were 7.2% compared to 11.9% gross margins in Q2 2015 and 0.4% gross margins in Q1 2016. Quarter over quarter margins improved 682 basis points, despite lower revenue, as Q1 2016 margins were negatively impacted by the late 2015 introduction and initial small volume build of our 125 kW PCS.
- Q2 2016 net loss was $2.5 million compared to Q2 2015 net loss of $2.3 million on a modest decline in gross profit. Operating expenses remained relatively stable, increasing 2.3% versus Q2 2015.
- Q2 2016 research and development expenses increased 9% to $1.2 million versus $1.1 million in Q2 2015. Due entirely to the timing of development activities and related spending, research and development expenses were lower as compared to the previous three quarters.
Cash and cash equivalents totaled $9.6 million as of June 30, 2016 with no long-term debt outstanding.
"Second quarter revenue was impacted by the SGIP delays in California, but we are encouraged by the recent resolution and believe SGIP funding will drive revenue growth later this year and beyond," said Tim Burns, Chief Financial Officer. "We also anticipate initial revenues from our SunDial™ product to contribute in the fourth quarter of 2016, with licensing revenues starting in 2017."