IN FOCUS: CASPTONE TURBINE CORP., JENNIFER DERSTINE DISCUSSES “MANAGING A GLOBAL DISTRIBUTION NETWORK AND MARKETING STRATEGIES DURING A GLOBAL PANDEMIC”The alphaDIRECT Insight
As is the case with numerous companies in the ClimateTech sector, Capstone has been and continues to face a variety of obstacles associated with the COVID-19 pandemic. One of the key considerations that now needs to be addressed is how companies will manage their businesses on the other side of this disruption. Considerations such as rehiring of employees, new safeguards, supply chain challenges, etc. In this Management Series, we address how this is impacting the marketing side of the business in addition to the effect it is having on Capstones distributions network, which are both critical to the company’s business model. We also review some of the key policy drivers that the company expects to benefit from including biogas and renewable fuels and how they can help customers achieve sustainability goals when used in combination with Capstone’s microturbine power systems.
Shawn Severson: First, I would like to thank you, Jen, for taking the time to speak with the alphaDIRECT network today. Last time we spoke with the Company, we discussed Capstone Turbine and its evolving operation model and cost-cutting. Today, our focus will be on Capstone’s recent business updates and the effects of the COVID-19 pandemic. However, before we get started, could you start by introducing yourself, what brought you to Capstone and your position within the company?
Jennifer Derstine: Sure. Thanks for having me. I started at Capstone in 2012 after getting to know the company through my work in international trade policy at the U.S. Department of Commerce. I was part of the team at the International Trade Administration focused on enabling market access for U.S. exporters in the renewable energy and energy efficiency sectors. Capstone drew my interest as a unique, clean tech manufacturer with innovative technology that had global market appeal across a variety of customer segments and market verticals. When I first started, my main focus was on creating positive policy and market conditions and improving awareness of the company and our technology. This later expanded to include market strategy and distributor development and now marketing as well.
Shawn Severson: Thank you, Jen. Given the current environment and the COVID-19 pandemic, we would like to start with a tough question. What has been the biggest hurdle for Capstone during the last couple of months in light of the pandemic?
Jennifer Derstine: The first hurdle was developing a Business Continuity Plan designed to keep employees safe, align with government guidelines, continue to support critical Aftermarket Factory Protection Plan (FPP) long-term service contracts and spare parts deliveries to Essential Critical Infrastructure Customers, such as Energy, Health Care, Wastewater Treatment, Food Manufacturing, etc., as well as to sustain two key business goals: cash flow and liquidity and reaching Adjusted EBITDA positive in the upcoming June quarter.
The biggest hurdle for the Capstone sales team has been managing the different timelines for market shutdowns and movement restrictions in all of our global markets. We have microturbines installed in over 70 countries across every continent. In many of our markets, our distribution network partners are still able to provide service to installed microturbines as essential service businesses and maintain contact with customers through all the great digital communication tools every business is using today.
Some installation and commissioning plans have been delayed due to stay-at-home orders and limitations on travel across borders. This can result in project delays. However, others are moving forward on schedule. We saw the initial impacts on our business in Europe and North America – which are our largest markets. There was a slowdown at the end of our most recent quarter, but these markets are now starting to re-open, and we are shipping microturbines again. We really focused on maintaining contact with our distributors and customers to keep them informed of our continued operations and ability to support fast delivery times. And we are very thankful that our workforce has remained COVID-free throughout.