Maxwell Technologies Posts Higher Sales for 4th Quarter and FY09

Net loss for Q409 was $10.0 million or $0.39 per share, compared with net income of $1.4 million, or $0.07 per diluted share, in Q408. The net income/loss comparison also is affected by:

* A one-time non-cash tax provision of $1.7 million, or $0.06 per share, in Q409, associated with the transfer of certain intellectual property to the parent company from its Swiss subsidiary in order to maximize utilization of U.S. federal and state net operating loss carryforwards, and
* A non-cash gain of $1.9 million, or $0.07 per share, recorded in Q409 vs. a non-cash gain of $3.2 million, or $0.14 per diluted share, recorded in Q408, based on the quarterly valuation of conversion features and warrants associated with convertible debentures issued in 2005.

As previously disclosed, the Company has been conducting an inquiry into the nature of certain payments made to a former independent sales agent in China associated with sales of high voltage capacitor products produced by Maxwell's Swiss subsidiary. The Company has been voluntarily sharing information with the Securities and Exchange Commission and the Department of Justice, and discussions with those authorities are ongoing. For accounting purposes, under U.S. Generally Accepted Accounting Principles (GAAP), based on the Company's estimate of a potential settlement range of $9.3 million to $20.0 million, the company recorded an accrual of $9.3 million in Q409.

Q409 BOOSTCAP® ultracapacitor revenue increased by 66 percent to $14.9 million, compared with $9.0 million for the same period last year. Sales of high voltage capacitor and microelectronics products totaled $13.1 million for Q409, down six percent from the $14.0 million recorded in Q408.

Continuing strong demand for ultracapacitor-based energy storage systems for wind turbines and hybrid transit buses were major drivers of a 52 percent increase in ultracapacitor sales from 2008 to 2009, said David Schramm, Maxwell's president and chief executive officer. That volume increase, along with ongoing cost reductions and higher efficiency, contributed to continuing improvement in operating results.

Public sector policies and increasing global environmental consciousness continue to stimulate and mandate investment in renewable energy sources and more efficient, greener public transit, commercial and passenger vehicles, so we are bullish on the growth prospects for our BOOSTCAP products, Schramm added. Reduced utility infrastructure and other outdoor construction activity during the winter months tend to make Q1 seasonally soft, so while sales are on pace to come in well above last year's first quarter, we expect top line revenue to decline by approximately five to seven percent sequentially from Q409 to Q110.

Cash and restricted cash totaled $37.6 million as of December 31, 2009, compared with $38.2 million as of September 30, 2009. Q409 gross margin was 34 percent, compared with 39 percent in Q408. The gross margin comparison is affected by less favorable revenue mix in the current period and the positive impact in Q408 of several non-recurring items, including a $500,000 forfeited deposit for the purchase of manufacturing equipment and $500,000 of reimbursed research and development expense. Excluding the $9.3 million settlement accrual, operating expenses totaled approximately $9.8 million, or 35 percent of revenue in Q409, compared with $11.0 million, or 48 percent of revenue in Q408. Complete financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations will be available with the filing of the company's Annual Report on Form 10-K with the Securities & Exchange Commission.