Hoku posts another
profitable quarter

Alternative energy company Hoku Scientific Inc., recording its second consecutive profitable quarter, said yesterday it posted a profit in its first earnings report as a publicly traded company.

The fuel-cell technology developer, which last month moved its headquarters to Kapolei from Kalihi, had net income in the quarter ended June 30 of $341,000, or 3 cents a share, compared with a loss of $679,000, or 14 cents a share, in the same quarter a year earlier. The earnings were released a day earlier than scheduled.

Revenue jumped to $1.1 million from $100,000 a year earlier due to the recognition of deferred revenue from the company's contracts with Nissan Motor Co.

As of June 30, Hoku had $3.1 million in deferred revenue compared with $4.2 million at the end of the preceding quarter.

"We remain very positive about our long-term business prospects and the general direction of the fuel-cell industry," said Dustin Shindo, chairman and chief executive of the company.

Hoku, which went public on Aug. 5 at an offer price of $6, closed yesterday off 30 cents at $6.30. The company also said its underwriters, Piper Jaffray & Co., SG Cowen & Co. and Thomas Weisel Partners LLC, partly exercised their option to purchase an additional 183,200 shares at the IPO price of $6, excluding underwriting discounts. The underwriters' purchases brought the total gross amount raised by Hoku in its IPO to about $22.1 million. The company earlier raised $21 million for the 3.5 million shares it issued in its public offering.

However, the reluctance of the underwriters to purchase the full 525,000 shares that were available reflected how difficult it was for the underwriters to drum up interest for the stock in the IPO. The shares, listed under the ticker symbol HOKU on the Nasdaq Stock Market, initially had been expected to fetch $11 to $13. The underwriters later reduced the range to $8 to $9 and then to the eventual offering price of $6.

The company, which is the first Hawaii company to go public in six years, said it expects to recognize about $1.3 million in revenue during the current quarter, primarily from its contracts with Nissan.

Hoku said it expects deferred revenue in the quarter ending Sept. 30 to be $2.7 million. Part of that revenue will come from a contract on a Navy fuel-cell demonstration project.

The 4-year-old company, co-founded by Shindo and Karl Taft, is negotiating to sublease all of its leased space in Kalihi where the company previously was headquartered. Shindo and Taft, the company's chief technology officer, were high school classmates at Waiakea High School on the Big Island.

Hoku also said it is preparing to ship membrane electrode assemblies to IdaTech LLC for integration into a prototype fuel-cell system.