Bad Power Grids = Good Business Opportunities for Active Power; CEO Sees Strong Growth Continuing
Submitted by EnergyTechStocks.com
The U.S. power grid is getting stressed “beyond its capability,” which is bad news for America but good news for Active Power Inc., whose flywheel-based backup power solutions business will keep growing at a brisk pace, Jim Clishem, president and chief executive, told EnergyTechStocks.com.
In an interview, Clishem indicated that opportunities abound not just in the U.S., where big new data centers requiring 100%-reliable backup power systems continue to be built. New opportunities abroad, especially in Asia, should help keep Active Power’s revenue growing sharply, maybe putting annual corporate revenue “north of $100 million” within three to five years, Clishem said.
The Austin, TX-based company most recently reported first quarter revenue of $7.5 million, up 26% over the prior-year period, and a loss of $4.5 million vs. a loss of $6.4 million a year earlier. The company said it expects second quarter revenue of $6 to $9 million and “anticipates new sales orders to be much higher than this range.”
Clishem said that Active Power is succeeding in transforming itself from a simple backup power provider competing with battery companies into a full-service power solutions business, providing value-added energy efficiency solutions that are environmentally friendly for increasingly cost-conscious customers. Noting that electricity is now the biggest single cost of a new data center, Clishem said Active Power is maturing its business model, becoming a “high efficiency, mission critical” solutions provider.
As bad the U.S. power grid is becoming, Clishem said he’s seeing a lot worse in places like North Africa, and thus Active Power is gaining traction in developing countries where manufacturers know the dangers of relying on grid-supplied power. Within three to five years, about one third of total corporate revenue will come from Asia, compared with just 5% today, Clishem said.
Active Power also is adding what Clishem called “value manufacturing” customers, describing them as needing to keep computers on continuously to handle such operations as mixing food and pharmaceuticals.
In the future, he added, Active Power will be known as “the high efficiency green power company.”
