VAN NUYS, Calif., Nov. 12, 2018 (GLOBE NEWSWIRE) -- Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq: CPST), the world's leading clean technology manufacturer of microturbine energy systems, announced today that its distribution partner E-Finity Distributed Generation recently signed three separate long-term Factory Protection Plan (FPP) multi-year service contracts representing 3.1 Megawatts (MW).
E-Finity Distributed Generation, Capstone's distributor for the Mid-Atlantic and Southeastern U.S., secured the significant follow-on service contracts for multiple C65s and C1000 microturbines currently powering properties in multiple locations in the region. The new contracts are for up to 15 years of scheduled and unscheduled maintenance coverage. With these three new contracts, E-Finity now has a total of over 302 microturbines representing over 40 MW under long-term Capstone FPP contracts.
Capstone’s FPP is a comprehensive maintenance program designed to give financial peace of mind to customers by setting the cost at a fixed rate for both scheduled and unscheduled maintenance for the life of the microturbine product. The FPP contract enables customers to have predictable and stable maintenance costs over the life of the equipment and protects the users from unscheduled maintenance expenditures.
“At the end of last quarter, we had approximately $74 million in long-term FPP service contract backlog with another approximately $25 million in large pending FPP service contracts we expected to close in the back half of the fiscal year. These three contracts represent the first of the $25 million pending contracts to close as anticipated,” said Darren Jamison, Capstone’s President and Chief Executive Officer. “The revenue growth in our aftermarket business is key to Capstone reaching our profitability goals. To provide some perspective on this, last year the aftermarket business accounted for 39% of our total revenue, but made up 81% of our gross margin,” added Mr. Jamison.
In addition, E-Finity recently expanded its service operations by opening a new warehouse and service center in Clarksburg, West Virginia as well as a remote service hub in Beckley, West Virginia. In addition E-Finity has hired an Operations Supervisor to better service customers in the Marcellus Shale Play. E-Finity now has locations in Pennsylvania, Washington DC, Florida, and West Virginia.
“Because of the proven ability of Capstone microturbines to provide both economic savings, carbon savings and effectively power through severe weather events like hurricanes, customers are adopting our industry-leading FPPs to guarantee both high availability, and if required, quick repairs of these critical onsite power generation assets,” said Jeff Foster, Capstone’s Senior Vice President of Customer Service.
“These types of long-term service contracts underpin our stated goal of achieving full absorption of all corporate operating costs from the gross margin from our predictable aftermarket future revenue stream,” said Mr. Jamison. “As we approach and eventually eclipse this inflection point, this will open up many competitive options for Capstone moving forward for increasingly strong growth of our behind the meter energy solution business,” added Mr. Jamison.