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Article Excerpt
OPERATOR: Good day, everyone. Thank you for holding, and welcome to the fourth-quarter 2008 earnings release conference call with your host, John Penver. Today's conference will begin with a presentation followed by a question-and-answer session. Instructions on that feature will follow later in the program.
I would now like to turn the call over to Mr. Penver. Please go ahead, sir.
JOHN PENVER, CFO, ACTIVE POWER: Good morning, and welcome to Active Power's fourth-quarter and fiscal 2008 conference call. I am John Penver, the Chief Financial Officer of Active Power. We issued a press release this morning announcing our fourth quarter and our calendar 2008 results. If you don't have a copy of the release, it can be found on our web site at www.ActivePower.com.
Jim Clishem, the President and Chief Executive Officer of Active Power, will lead today's call. After Jim's presentation, I will briefly discuss some financial details, after which point we'll be happy to answer your questions in the Q&A section of our call.
Before we begin, let me remind everybody that any forward-looking statements that we may make on this call are based on our current views and expectations. Although we believe our expectations and views are based on reasonable assumptions, we can give no assurance they will be attained. Factors and risks that could cause our actual results to differ materially from these expectations include, but are not limited to the inability to actively predict revenue and budget for expenses for future periods; fluctuations in revenue and operating results; dependent on our relationships with Caterpillar; an inability to successfully manage and integrate new direct sales efforts for channel partners; competition; overall economic and market performance; and the other risks set forth in our most recent SEC filing. Jim?
JIM CLISHEM, PRESIDENT, CEO, ACTIVE POWER: Thanks, John, and good morning, everyone. I will first detail some of the business highlights from the quarter and from 2008. After I conclude, John will discuss financial results.
Revenue for the quarter was a record $16.2 million, up 30% from the third quarter of this year, and 59% increase over the fourth quarter of 2007. For the year, we reported revenues of $43 million, a 28% increase from the $33.6 million in 2007. It is also worth noting revenue for the second half of 2008 was $28.7 million, a 100% increase over revenue of $14.3 million in the first six months of 2008.
Our gross margin this quarter was another record at 32%, which was up substantially from 9% in the prior quarter and minus 2% in the fourth quarter of '07. The exceptional margin performance was realized from higher product volumes, an increase in service revenues, and from a cost reduction programs implemented.
We are extremely pleased to have achieved four significant financial milestones. First, we are reporting our highest-ever quarterly revenue; second, our highest ever annual revenue; third, our highest ever quarterly gross margin. And fourth, we also take pride in announcing today that we have, for the first time in the Company's history, reported positive quarterly adjusted EBITDA of $374,000, or $0.01 per share.
These results truly validate the commercialization strategy we set into motion back in 2006. Our results demonstrate Active Power has the capability to be a viable, profitable business for the long run. We remain focused on building brand, building sales and distribution, building for less, and building innovation to serve client needs in the mission critical power systems marketplace.
Active Power continues to gain market share by growing at least -- or nearly, rather, 28% compound annual growth rate over the last several years compared to an industry growing only at 9 to 12%. Our solutions are differentiated and compelling, focused on saving clients money through exemplary power and space efficiencies and improved reliability delivered through our patented flywheel-based UPS technologies. All of these benefits are appealing to those receptive of an economically green solution, timely certainly in this day and age.
We have previously announced the shipment of our 2000th flywheel in the third quarter, representing at that time more than 500 megawatts of power delivered to customers, further validating market acceptance for our solutions. This quarter, we shipped an additional 142 flywheels, totaling 363 for the year, both Company records. Our average selling price per flywheel also increased to $81,000 for the quarter and $80,000 for the year.
As we have indicated in the past two investors, flywheel shipments and...
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