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Northern Power Reports 'Break Even' 2017

Wednesday, April 11, 2018   (0 Comments)
Posted by: Jeff Couture

Northern Power Systems Corp (TSX:NPS), a next generation renewable energy and energy storage technology company based in Barre, announced financial results for its fourth quarter and year ended December 31, 2017. Northern Power reported that in 2017 it had its first break-even year with approximately $40 million in revenue and non-GAAP adjusted EBITDA of $0.8 million, including WEG related royalties.

However, wind turbine manufacturing is expected to be suspended and with it furloughs are expected in Vermont. How many workers will be furloughed is not clear at this point. Northern Power reported to VBM that it has 75 employees globally, of which 50 work at the plant in Barre.

Northern Power President and COO Ciel Caldwell told VBM that most of the furloughs will be in the manufacturing part of the business. She said the furlough means the worker remains an employee of the company, though not paid, and retains health insurance; the furloughed employee is able to collect state unemployment benefits. She said she hopes to bring all the workers back. In a previous furlough, most of the workers returned, Caldwell said.

Caldwell wants to take advantage of positive congressional action that will give distributed wind energy a "level playing field" with solar and make these smaller wind turbines competitive with the massive offshore wind turbines just starting to be deployed in the US.

She expects wind turbine manufacturing to resume this summer. While the wind business still accounts for 90 percent of revenues, Caldwell is also excited with the energy storage part of the business. They don't make the batteries, but design the systems. NP is, she said, a "polite competitor" of South Burlington's Dynapower. Dynapower has become a major player in the growing energy storage business. It also operates a Northern Power wind turbine, which has become a landmark near Interstate 89.

Northern Power's year-end results include approximately $5.5 million in recurring revenues from its services business and the remainder of revenues were from sales of its distributed wind turbines. Wind turbine sales were driven primarily by strong sales in the Italian market in advance of an expiring Italian feed-in-tariff. As a result of regulatory and political inaction, the Italian feed-in-tariff for distributed wind that drove sales in 2017 expired on June 30, 2017 without extension.

Caldwell told VBM: “We are proud to employ 50+ people in central Vermont including engineering, manufacturing and service team members. Because sales in a core market to which we have been exporting our proven distributed wind turbines, Italy, significantly slowed due to policy and regulatory uncertainty, we implemented a temporary furlough of certain employees as we work to expand our business in other regions and await the expected return of the Italian market. We anticipate resuming distributed wind turbine production within the third quarter of this year.”

Source: Vermont Business Magazine

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