Capstone Turbine Corporation (NASDAQ:CPST), the maker of low-emission, clean-energy energy systems, is continuing on its growth path as it announced Wednesday a new long-term service contract in Europe.
BMTec, one of its EMEA (Europe, Middle East and Africa) distributors, has recently inked what it called a "large" factory protection plan (FPP) long-term service contract covering 4 megawatts (MW) of Capstone microturbines.
The California-based firm said the four C1000’s are installed at a shopping center, offsetting high utility prices and the seven-year deal will provide complete service coverage, including scheduled and unscheduled maintenance.
"Continued awards for energy efficiency long-term service contracts are the bedrock for sustained growth of our profitable aftermarket business model," noted Jeff Foster, the group's senior vice president of customer service and product development.
"When coupled with our recent large Oil & Gas FPP service contracts, our newly improved FPP service offering has become the solution of choice for global microturbine customers, enabling predictable lifecycle costs for up to 20 years,” he added.
Meanwhile, Darren Jamison, Capstone’s president and chief executive, highlighted that Capstone now had 250 MW of its eligible global fleet covered under these long-term service FPP agreements.
This compares to 256 MW covered under the traditional time and materials approach of the group's engine-based competitors, he noted.
"We anticipate that this ratio will continue to shift in a positive way in the very near future, and expect for the very first time in company history we will have more MW’s covered under FPP than not. Reaching this milestone has the capability to provide the company with stable, recurring cash-flow to fund operations moving forward and profitable, predictable revenue streams for many years."
Yesterday, the group told investors it was “executing effectively” on its strategic business initiatives and reiterated its goal to achieve positive adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the quarter ending June 30, 2020.
Capstone now expects it can lower its average quarterly operating expenses to a range of $5.2 million to $5.7 million, including in the upcoming quarter ending June 30, 2020, which could potentially generate a positive adjusted EBITDA during the quarter.
Capstone produces a range of innovative microturbines that generate clean, green electricity for anything from heating and chilling water for hot showers and air conditioning to powering new generation green skyscrapers.
Contact the author at [email protected]