Maxwell, Digi-Key in Supply Deal

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Maxwell Technologies Inc. (MXWL) has entered into an agreement with Digi-Key Corporation for the global distribution of Maxwell’s products, mainly the ultra capacitors. Digi-Key Corporation is a global electronic components distributor that has been certified to have the industry's largest selection of electronic components available for immediate shipment.

Being a market leader, Maxwell is committed to providing energy storage and power delivery solutions that are lucrative, energy-efficient and environment-friendly. The company is well positioned to provide service to the most demanding applications.

Ultracapacitors are energy storage devices featuring high power density with long operational life. These have the ability to charge and discharge very rapidly even at extreme temperatures. Maxwell’s power delivery solutions are used for applications in almost all kinds of industries including automotive, heavy transportation, renewable energy, backup power, wireless communications, and consumer and industrial electronics.

Recently, the company reported its first quarter 2012 results with Ultracapacitor revenue of $22 million, up 3% year over year. During the quarter, the company had witnessed steady demand for ultracapacitor based energy storage systems to power hybrid electric transit buses, backup power applications and stop-start idle elimination systems in micro hybrid autos.

Industry trends indicate that Maxwell Technologies continues to be the market leader in the budding ultracapacitor market. Going forward, we expect top-line growth to be fueled by the increase in ultracapacitor sales through a production ramp-up for automotives. The company’s focus on improving its cost structure and the steady demand from heavy transportation, wind, braking recuperation and automotive programs would also drive growth.

In the near term, however, downside risks include the rate of penetration for ultracapacitor technology into broader markets, a higher cost structure for ultracapacitor production, R&D overheads and earnings dilutive equity issuances.

The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Maxwell Technologies develops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications. The company competes with Panasonic Corporation (PC).

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