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Maxwell is revolutionizing electrical systems designs in automobiles, digital cameras and other electronic devices with their ultracapacitor technology
Eibl joined Maxwell as president and chief executive officer in December 1999, after
serving as an independent member of the companys board of directors since 1998.
From February 1999 until he joined Maxwell, he was president and a director of
Stratagene Corporation, a privately held developer and supplier of laboratory instruments
and biological tools to the life science industry. Previously, he was president and
chief executive of Mycogen Corporation, a publicly held agricultural biotechnology company
that was acquired by Dow Chemical in November 1998.
measuring 2 x 2 x 6 are linked together to form power packs of up to 500
cells to power initial acceleration, operate electrical subsystems and recapture energy
from braking for cleaner, more fuel-efficient hybrid electric/internal combustion buses,
trucks and automobiles.
CEOCFOinterviews: What are your two core businesses?
Mr. Eibl: The two core businesses are a components group which make the ultracapacitors and other electronic components, and another group which is a systems integration group that builds computing platforms and power systems to go into broader networks.
CEOCFOinterviews: What are the names of each group?
Mr. Eibl: One group is Maxwell Technologies Components and the other is I-Bus/Phoenix, which is a combination of a computing company and a power systems company two companies that we put together to leverage our technology.
CEOCFOinterviews: What products are you offering at Maxwell?
Mr. Eibl: Our Maxwell Technology Components Group has two
product lines, one is a microelectronics product line that goes into commercial and
military satellites and other military electronics. We make components, power modules,
integrated circuits and single board computers that are shielded from radiation
encountered in space or potential nuclear weapons radiation effects that battlefield
vehicles, aircraft and naval vessels must be able to withstand. We deliver highly reliable
computing and power modules that are shielded from radiation.
CEOCFOinterviews: Is there a global market for the ultracapacitor technology?
Mr. Eibl: Yes, ultracapacitors are being designed into buses, truck and autos and consumer and industrial electronic devices by OEMs in North America, Asia and Europe. The production ramp has just begun; we are now shipping the initial quantities into those global markets. It provides improved functionality for everything from a hand-held device to something as large as a vehicle.
CEOCFOinterviews: How are you bringing your product to the marketplace?
Mr. Eibl: Our products are integrated into larger devices or systems made by OEMs.
CEOCFOinterviews: What products do you market with the I-Bus/Phoenix Group?
Mr. Eibl: Our I-Bus/Phoenix power and computing systems group makes highly reliable
computing systems for the telecommunications, broadcast computer telephony, and industrial
markets. We design and build very high-end servers for applications that require near-zero
downtime reliability. We commercialize those systems in the US, Europe and Asia directly
CEOCFOinterviews: Which presents the biggest growth area?
Mr. Eibl: The part of our platform that has explosive growth potential is the ultracapacitor technology; these are very elegant devices that store electrical energy and then deliver that electricity in rapid bursts or gradually, depending on the application. Nothing invented previously offers this kind of functionality in a solid-state device.
It is analogous to memory cash in your computer; imagine if you had a computer with no memory and someone came by with a device in hand and said here you can now balance high speed and low speed memory operating inside your P.C., and that device never existed before. We are bringing a device that never existed before, which does that with electrical energy to applications that can benefit from these characteristics and the type of functionality that ultracapacitors now permit. Moreover, it is really just beginning. Ultracapacitor technology is changing ways of thinking about designing electrical systems, whether its in a digital camera or power steering in an automobile; this device is providing new engineering techniques to address a variety of these.
CEOCFOinterviews: Do you have competitors or are you the lone wolf?
Mr. Eibl: As it stands now, we have a technological
leadership position; we are identified globally as being the leader in ultracapacitor technology. The
other company that is in this marketplace is Panasonic, and we have said before that we
need Panasonic to be successful. When we talk about providing these types of components to
the automotive industry or the consumer electronic industry; these industries do not deal
with one supplier; they need to have a second source.
CEOCFOinterviews: Was your product pipeline built through acquisitions or R&D?
Mr. Eibl: It was all built through R&D. We took raw technology that existed in the defense business. In the last two-and-a-half years, we have been developing commercial products with commercial R&D groups to bring this technology into commercial markets. In the old defense-oriented Maxwell, you had technology developed but you didnt have it designed in products that could be sold into the commercial market in a robust way.
CEOCFOinterviews: How strong is your patent protection?
Mr. Eibl: Our products are a very heavily intellectually property protected.
CEOCFOinterviews: As it stands now, where are you in the marketplace?
Mr. Eibl: We have been designed into subsystems that will go
into hybrid internal combustion/electric vehicles. These vehicles recapture braking energy
by converting kinetic energy from slowing the vehicle into electric energy that is stored
in a bank of ultracapacitors. That energy can be harvested to run on-board electronics or to
be put back into the drive train to assist acceleration. These are systems that every
automotive company has announced that they will be bringing forward in the next three
years into their high-end SUV, pick-up lines or vans, where the pressure for improved fuel
economy and emissions profiles is quite strong.
CEOCFOinterviews: Have you been designed into any platforms?
Mr. Eibl: We have been acknowledged and designed into platforms that General Motors has. That is a product of not only GM evaluating our ultracapacitor technology and components, but their purchasing and manufacturing groups coming and looking at our factory to assure themselves that these guys can scale. That is where the rubber meets the road -- the ability to produce the component volume. We have designed the component so that we can assemble it with slightly modified equipment that originally was designed to wind batteries.
CEOCFOinterviews: When can we expect to see a ramp on ultracapacitors?
Mr. Eibl: I think what people are going to see is the beginning of the ramp on ultracapacitors here in 2002; there are other industrial and consumer electronic applications that have begun already. It will be incremental but there will be quarter over quarter improvement. I think 2003 will be the beginning of a substantial growth ramp; clearly, with the type of opportunities just in the transportation market, we will anticipate having very rapid growth as we get to the back-end of 2003.
CEOCFOinterviews: Can you give us a picture of your revenues?
Mr. Eibl: Last year, 2001, Maxwells revenues were
approximately 68 million; you had those revenues balanced pretty much on an assemblage of
some build-to-print legacy products, plus a sprinkling of new, proprietary
technology-driven products. We started in Q4, and continued in Q1, moving proprietary
products in and moving out of some of the lower margin build-to-print products.
CEOCFOinterviews: Do you have the cash and/or credit to go forward?
Mr. Eibl: One of the things that we have done while focusing on these two platforms is improve non-core businesses in Maxwell and sell them at attractive values. At the end of the March 2002 quarter we had about $21 million of cash on the balance sheet; given the model that we have, and the expected ramping in this challenging environment that the marketplace presents right now; we think the cash is adequate to go forward.
CEOCFOinterviews: What is your management approach for each group?
Mr. Eibl:Each division has a management team that focuses on the components and systems level of products. The business model and the way you reach the markets at a component level vs. a systems level, is quite different. I am very involved with both teams, making sure that the strategy, product introduction time lines and the focus on the marketing and sales, is happening within a time frame and with the sense of urgency that is needed. In re-inventing a company and bringing new products out, it is about half brains and half brawn; you really have to punch into those markets and you have a time frame to do that. We are about two quarters into the process of bringing these products to the marketplace. It requires a lot of focus and attention internally to make sure that everything is being done competently.
CEOCFOinterviews: Where would you like to see the company in a year or so from now?
Mr. Eibl: I think that the companys internal competencies are gong to coincide with macro forces that are driving a lot of need for power technology. The whole power technology arena is something that has not had much focus in terms of product development or attention from the financial markets. When you understand the power requirements and the need for innovative power technologies, I think this is going to be a sector that is going to draw a lot of attention because need for improved functionality is so ripe to bring to the marketplace. For example, in your car, you have a hydraulic system where you are turning your wheels with a mechanical assembly whose operation consumes fuel.
There is absolutely no reason why you shouldnt have the power steering on your car be totally governed by an electrical system, to have a drive by wire electrical system that moves your wheels. If you move to an electrical system, you not only save fuel, but you also have a more responsive, dynamic and serviceable system. However, new steering technology hasnt made it into large-scale production cars because the power technology to support it didnt exist. What you are seeing now, out of Maxwell and other companies is the ability to put together different sub-systems to provide a very different type of functionality that comes from the ability to bring power technology together to deliver a solution.
CEOCFOinterviews: So you think the automobile market is your future.
Mr. Eibl: I would say that is one of the very strong legs.
CEOCFOinterviews: Could the ultracapacitors technology lower the cost of manufacturing an automobile?
Mr. Eibl: It could, because you dont have to size the motor to drive all the electronics on the car; you can have a separate electrical system that uses the battery and recaptures energy from braking to provide that system with electric power to run a lot of the subsystems on the vehicle. You dont have to have that steep drain on the automobile that takes horsepower away from moving the car to do these other things. You can size the engine and figure the engine in a different way now that you can power the complete electronic needs of the car in a different way.
CEOCFOinterviews: Are systems built around your ultracapacitor technology very durable?
Mr. Eibl: The automakers believe that the durability of all-electric systems will be better that what exists now. Mechanical and hydraulic systems degrade very fast. Systems based on ultracapacitors technology allow for greater longevity, better reliability, and the ability to easily swap out components if they do go bad.
CEOCFOinterviews: What would you like to say to current shareholders and future investors?
Mr. Eibl: I think in this marketplace, people are looking for the beginning of the progress in terms of revenues; I think that in this market place, people are moving away from story lines and looking for real financial performance. People want to see the beginning of confirmation that there is integrity in the story by seeing it beginning to be reflected in revenue growth. I suggest that investors watch Maxwell over the next few quarters and watch the beginning of the growth and understand the size of the markets that we are targeting. They will be able to extrapolate and see where this technology and the company are going. Just like any company has to start with getting its products introduced; a company has to start gaining the confidence of the investment community by beginning to show growth on the revenue line. For Maxwell, it will begin right here in Q-2 2002.
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