Capstone Turbine Corporation's (NASDAQ:CPST) Mexico-based distributor DTC Ecoenergia has signed a nine-year Capstone Factory Protection Plan long-term service contract with an industrial customer to cover 1.6 megawatts worth of microturbines.
The deal provides comprehensive service coverage to the customer of Capstone microturbine energy systems. With this contract signed, the customer now has all of its 3.8 megawatts of microturbines covered under Factory Protection Plan (FPP) agreements.
The turbines, commissioned in 2018, are used for 24/7 electrical and thermal generation in an industrial direct drying application.
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Capstone's FPP is a complete maintenance program designed to offer financial peace of mind to microturbine customers by providing product life cycle costs at a fixed rate, the company said.
"Our entire aftermarket business, including long-term FPP service contracts, as well as new long-term microturbine rentals and [time and material] spare parts and service support continues to grow," Capstone CEO Darren Jamison said in a statement.
"While all offerings from our aftermarket business are important both from a customer satisfaction and corporate profitability perspective, it is the FPP with its stable, predictable, long-term revenue and positive cash flow that really underpins both our near-term positive Adjusted EBITDA plans and our long-term sustainability and profitability outlook."
Capstone, based in Van Nuys, California, offers a product line-up of microturbines that can produce anywhere from 30 kilowatts to 10 megawatts of power, operating on a variety of gaseous or liquid fuels.
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