Beacon Power: Q1 2009 Results

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Beacon Power Corporation, a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, announced its financial results for the first quarter ended March 31, 2009.

For the first quarter of 2009, Beacon Power reported revenue of $111,000 and a net loss of $5,540,000, or ($0.05) per share, compared to revenue of $20,000 and a net loss of $5,287,000, or ($0.06) per share, in the first quarter of 2008. During the first quarter of 2009, Beacon earned revenue from frequency regulation service provided through an ISO-New England (ISO-NE) pilot program that began in November 2008, and from its research and development contracts. Revenue earned during the equivalent period of 2008 was derived from the sale of solar inverters and related products. Cost of goods sold increased from approximately $0 in the first three months of 2008 to approximately $172,000 during the equivalent period of 2009.

During the first quarter of 2009, cost of goods sold includes approximately $130,000 for the cost of energy associated with the provision of frequency regulation services under the pilot program. The cost of energy during this period exceeded revenue from frequency regulation service because of the manner in which the Company was connected to the grid for the pilot program. This resulted in Beacon being paid at wholesale rates for the energy the Company provided to the grid, but being charged at retail rates for the energy used. As of late April 2009, ISO-New England and the local utility have implemented a change to net metering through the ISO, which will reduce the cost of energy for the Company going forward by billing for net (rather than gross) usage at wholesale rates.

During the first quarter of 2009, Beacon began to classify as “Operations and Maintenance” on its income statement expenses related to the manufacturing, materials handling and procurement functions, Smart Energy Matrix™ operations, and expensed non-fungible costs associated with its flywheel installations. Prior to 2009, such expenses were included under “Research and Development.” On a combined basis, Operations and Maintenance and Research and Development costs for the quarter ended March 31, 2009, were $2,968,000, compared to $3,032,000 in the first quarter of 2008, a reduction of $64,000, or 2%. The reduction in costs was attributable to lower stock-based compensation expense, greater absorption of overhead and lower legal and occupancy costs, partially offset by higher costs in certain areas. Selling, General and Administrative expense was $1,897,000 during the first quarter of 2009, compared to $2,176,000 in the first quarter of 2008, a decrease of $279,000, or approximately 13%. This decrease is due primarily to lower stock-based compensation and legal costs. Depreciation expense increased by $144,000 compared to the first quarter of 2008. This increase is primarily related to our new facility in Tyngsboro, Massachusetts.

At March 31, 2009, the Company had $5.3 million in cash and cash equivalents, with working capital of $2.2 million.

About Beacon Power

Beacon Power Corporation designs, develops and is taking steps to commercialize advanced products and services to support stable, reliable and efficient electricity grid operation. The Company’s primary business strategy is to commercialize its patented flywheel energy storage technology to perform frequency regulation services on the grid. Beacon’s Smart Energy Matrix, which is now in production, is a non-polluting, megawatt-level, utility-grade flywheel-based solution to provide sustainable frequency regulation services. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com.

Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995:

This Material contained in this press release may include statements that are not historical facts and are considered “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation’s current views about future events and financial performances. These “forward-looking” statements are identified by the use of terms and phrases such as “believe,” “expect,” “plan,” “anticipate,” and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon Power Corporation’s expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; a need to raise additional capital combined with a questionable ability to do so; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be successful in obtaining DOE loan guarantee support for our New York facility; conditions in target markets, including the fact that some ISOs have been slow to comply with the FERC’s requirement to update market rules to include new technology such as the Company’s; our ability to obtain site interconnection or other zoning and construction approvals in a timely manner; no experience manufacturing any product or supplying frequency regulation services on a commercial basis; limited commercial contracts for sales to date; the dependence of sales on the achievement of product optimization, manufacturing and commercialization milestones; the uncertainty of the political and economic climate, and the different electrical grid characteristics and requirements of any foreign countries into which we hope to sell or operate, including the uncertainty of enforcing contracts, the different market structures, and the potential substantial fluctuation in currency exchange rates in those countries; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property, including the effect of the patent litigation recently initiated against us; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power Corporation’s filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements.
BEACON POWER CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


                    Three months ended March 31,
                          2009               2008

Revenue         $     110,935         $     20,203
Cost of goods sold               172,033               57
Gross profit               (61,098)               20,146
Operating expenses:                 
    Operations and maintenance             777,137             --
    Research and development             2,191,054             3,032,342
    Selling, general and administrative             1,897,462             2,175,661
    Loss on sales and contract commitments             132,500             --
    Depreciation and amortization             423,888             279,741
            Total operating expenses               5,422,041               5,487,744
Loss from operations             (5,483,139)             (5,467,598)
Other income (expense), net               (56,780)               180,262
Loss to common shareholders         $     (5,539,919)         $     (5,287,336)

Loss per share, basic and diluted         $     (0.05)         $     (0.06)
Weighted-average common shares outstanding               109,003,136               88,668,383
BEACON POWER CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS


                March 31,         December 31,
                      2009               2008
                (Unaudited)         (Audited)
Assets                 
Current assets:                 
    Cash and cash equivalents         $     5,323,098         $     14,357,475
    Accounts receivable, trade             19,931             11,840
    Unbilled costs on government contracts             58,690             16,804
    Prepaid expenses and other current assets               1,122,155               976,762
        Total current assets               6,523,874               15,362,881

Property and equipment, net             23,661,104             23,027,909
Restricted cash               205,041               205,020
Total assets         $     30,390,019         $     38,595,810

Liabilities and Stockholders' Equity                 
Current liabilities:                 
    Accounts payable         $     812,332         $     3,825,520
    Accrued compensation and benefits             1,013,374             1,410,038
    Other accrued expenses             1,842,296             3,253,407
    Advance billings on contracts             13,858             10,811
    Accrued contract loss             257,362             132,526
    Deferred rent - current             119,245             112,808
    Current portion of long term debt             282,732             117,023
        Total current liabilities               4,341,199               8,862,133
Long term liabilities:                 
    Lease liability - long term             852,046             885,076
    Long term debt, net of discount               3,081,389               3,237,061
        Total long term liabilities               3,933,435               4,122,137
Stockholders' equity:                 
    Common stock             1,129,998             1,074,332
    Additional paid-in-capital             214,133,352             212,145,254
    Deficit accumulated during the development stage             (192,435,126)             (186,895,207)
    Less: treasury stock, at cost               (712,839)               (712,839)
        Total stockholders' equity               22,115,385               25,611,540

Total liabilities and stockholders' equity         $     30,390,019         $     38,595,810

Contact:
Beacon Power Corporation
James Spiezio, 978-694-9121
[email protected]

Source: Beacon Power Corporation



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