Capstone (CPST) To Receive $5 Million in Settlement With Former Supplier
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Capstone Turbine Corporation (www.capstoneturbine.com) (NASDAQ: CPST), the world's leading manufacturer of clean technology microturbine energy systems, announced today that it has reached a financial settlement in the amount of five million dollars arising out of claims pursued in confidential arbitration with a former strategic parts supplier. Capstone obtained this settlement following a multi-year arbitration process with the former parts supplier. The settlement proceeds will provide Capstone with additional resources to continue to improve customer system reliability and performance of some of its fielded C200/C1000 products.
"This settlement is a positive result for Capstone, and we are proud of the team effort involved in reaching this resolution in an otherwise highly technical and expert-driven case," stated Darren Jamison, President and Chief Executive Officer of Capstone Turbine Corporation. "Having this case settled not only lets us increase our focus on our core business but also provides the required financial resources necessary to put the issue fully behind us. Resolution of this long-running arbitration process is a critical element in support of our stated goal of reaching positive adjusted EBITDA, through both the already realized lower warranty costs since we transitioned from this supplier in 2019 and future improved service margins for Capstone's innovative Factory Protection Plan offering," added Mr. Jamison.
Capstone's innovative Factory Protection Plan, or FPP, is a comprehensive maintenance program designed to give Capstone customers financial peace of mind by providing product life cycle costs at a fixed rate for both scheduled and unscheduled maintenance of the life of the microturbine system. Additionally, the recently updated FPP protects microturbine customers from potentially dramatic future increases in life cycle costs associated with changes in replacement spare parts pricing, commodity price increases, import tariffs, and interest rate changes.
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