Maxwell Technologies, Inc. (MXWL)
Interview with:
Richard D. Balanson, Ph.D., President and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
power product lines that merge the unique high power characteristics of ultracapacitors with proprietary electronic architectures to provide extremely long device lifetimes.

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Maxwell Technologies is the world’s leading producer of ultracapacitors, a high-performance energy storage component that augments batteries, fuel cells and other lower-performance energy storage devices for a wide range of applications in the automotive, industrial and consumer electronics industries

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Maxwell Technologies, Inc.

9244 Balboa Avenue
San Diego, CA  92123
Phone: 858-503-3300

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Richard D. Balanson, Ph.D.
President and
Chief Executive Officer

Interview conducted by:
Lynn Fosse
Senior Editor
July 2003

Bio: Richard D. Balanson, Ph.D.

Rich Balanson was appointed President and Chief Executive Officer of Maxwell Technologies in April 2003.  He joined Maxwell in 1999 as corporate vice president and president of the Advanced Energy Products unit, assuming primary responsibility for development of the company’s embryonic ultracapacitor product line, and was promoted to the newly created position of president and chief operating officer in May 2002.  Immediately prior to joining Maxwell, he was president and chief operating officer of 3D Systems, a California-based manufacturer of rapid prototyping equipment.  Previously, he was general manager and executive vice president of Maxtor Corp., a Colorado-based disk drive manufacturer, and before that was president and chief operating officer of Applied Magnetics Corp., a California-based maker of magnetic recording components.  Earlier in his career, he spent 17 years with IBM in a series of management positions.  He holds a Bachelor of Science degree in chemistry from UCLA and Masters and Doctorate degrees in chemistry from Harvard University.

Company Profile:

Maxwell Technologies, Inc. (MXWL-NASD) develops, manufactures and markets electronic components and systems that are guaranteed to perform reliably for the life of the end products into which they are integrated. Their power products address applications in transportation, telecommunications, consumer and industrial electronics, and electric utility infrastructure. The company’s microelectronic products primarily address applications in aerospace where system failure is unacceptable. Maxwell’s power product lines merge the unique high power characteristics of ultracapacitors with proprietary electronic architectures to provide extremely long device lifetimes.    Maxwell’s microelectronic product lines are comprised of radiation-shielded power modules, memory modules, and ultra high-speed single board computers with performance lifetimes calculated to exceed 12,000 years. 

The Company engineers and manufactures solid-state energy storage systems incorporating its BOOSTCAP ultracapacitors to replace batteries for short-term back-up power in uninterruptible power supply (UPS) systems.  Unlike batteries, ultracapacitors require no maintenance and recharge in seconds. Ultracapacitors also provide more reliable back-up power in the event of multiple power interruptions over a short period, such as hours or within a day.

Maxwell designs, manufactures and markets radiation-shielded microelectronics, including power modules, memory modules and single-board computers, for the aerospace and military markets. The Company designs customized microelectronics together with highly adaptable, proprietary, packaging and shielding and other radiation-mitigation techniques to allow OEMs to use low-cost, commercial, off-the-shelf components protected with the level of radiation shielding required for reliable performance in the environment in which they are to be deployed.

CEOCFOinterviews: What is Maxwell Technologies’ focus and where do you see yourselves as you move forward?

Mr. Balanson: “Maxwell Technologies is focused on the creation and expansion of ultracapacitors as a key standard energy storage option with exceptionally high performance and a “life of the application” guarantee.  Our goal is to be the worldwide supplier of choice in this new and emerging technology."

CEOCFOinterviews: What are ultracapacitors?

Mr. Balanson: “An ultracapacitor is a unique cross between a battery and a capacitor. Batteries have a lot of energy and capacitors have a lot of power. A capacitor can be charged and discharged very quickly but it does not store very much energy, whereas a battery has a lot of energy but it cannot move the power in and out very quickly. An ultracapacitor is a hybrid. It is particularly well suited for applications where repeated bursts of power are needed, such as in a digital camera or a hybrid-electric automobile that uses electric energy to reduce fuel consumption and emissions. Ultracapacitors allow you to boost the energy flow between the energy storage system and the device consuming the electrical energy.  As a non-chemical-based component, they last a very long time without degradation”

CEOCFOinterviews: Where are your products being sold now, and where will you be focusing?

Mr. Balanson: “Maxwell Technologies is focused in three main application areas, all of which require significant amounts of electrical power:  burst mode consumer electronic devices, industrial power systems, and transportation, including electric rail systems and motor vehicles. For example, ultracapacitors are now found in digital cameras.  By balancing the demand of power and energy within the camera system, they significantly extend the life of the batteries while enhance the functionality of the camera.   For industrial applications, ultracapacitors provide short-term backup power in UPS (uninterruptible power supply) systems. Instead of having large banks of batteries that require constant monitoring and maintenance, ultracapacitor-based solid-state energy storage systems require no maintenance or monitoring. They also last the life of the application and require zero maintenance. In transportation, hybrid-electric cars which have a gas engine and an electric motor to power the car are more efficient than conventional autos, in part, because they recycle energy generated from braking back into the electric motor.    New advanced batteries are also being used to do this, but they are very expensive, and they don’t last the life of the car, so you will eventually have a very expensive replacement bill. An ultra-capacitor is a more efficient device. With more than 50 million automobiles manufactured worldwide each year and a requirement in excess of 20 ultracapacitors per car, the transportation market opportunity is very large. In other words, where the reliability of electrical power is critical, ultracapacitors provide a unique and long-lived solution."

CEOCFOinterviews: How do you reach customers in the various industries?

Mr. Balanson: “Since our products are integrated into the fabric of the product design, Maxwell sells directly to OEMs.  Our marketing and design engineers focus on companies that need better energy storage and power delivery solutions for the devices and systems that they sell to the end-users. For example, there are approximately 50 automobile companies in the world and we have strong relationships with the locomotion design teams at 90% of them. Our relationships are with the teams that  are designing more efficient electrical systems and power trains for cars. For consumer electronics, we get involved with the design team early in the development process to understand a device’s energy storage and power requirements. We have spent a lot of time educating design engineers on the advantages of incorporating ultracapacitors as permanent solid-state device within their product.”

CEOCFOinterviews: As I look at your website, I see that your products are the world’s leading high-performance ultracapacitors. What makes you the leader and what sets you apart?

Mr. Balanson: “The key measurement of an ultracapacitor is how efficient it is in moving energy into and out of the energy storage system. Low-performance capacitors have been around for a long time. For example, they are used as the energy backup for the clocks in VCRs, but this is not a demanding, high-duty application. We make devices that are very robust and durable so that they can stand up to high-stress applications, such as in cars. To penetrate markets such as automotive, we have to deliver not only high performance, but also low-cost. To open up or “enable” those markets we have to be able to sell high-performance devices at commodity prices.”

CEOCFOinterviews: What is involved in developing products that are so are functional and cost effective?

Mr. Balanson: “Our development teams combine a heterogeneous set of engineering and scientific disciplines. For us, product development is a systems project, meaning that you have to look at the trade-off between how to achieve high performance and low cost at the very inception of the project. We use processes that can be scaled to high volume, yet yield very highly refined and controlled products. We have a lot of scientific talent in the company, but the teams are not large, typically groups of about ten engineers and scientists. Our engineers have a mantra:  there are five key elements of our designs.  The first   is cost, the second is cost, the third is cost, the fourth is technology and the fifth is quality. The focus is on designing high performance devices at intrinsically low-cost. The teams do that by designing products that have very few parts and highly integrated assemblies.”

CEOCFOinterviews: What steps do you need to take as a company to narrow your focus?

Mr. Balanson: “About five years ago Maxwell had a number of businesses; we were actually fourteen small companies that were related in only a minor fashion.  So we looked for a common thread was that would add value to the business. We chose to focus on that we call ‘high reliability’ markets and applications where the customer really cares about extremely high reliability – components and systems that would last the  ’life of the application’. Markets and products that depend on that kind of reliability are willing to pay for it. For example, we have had medical implant projects where failure is simply not an option.  Pacemaker components, for example, must work every time, period.  Satellite components have a similar requirement since there is no way to repair a device once it is launched into orbit.  We have our products on over 100 satellites as well as the recently launched rovers on their way to Mars.  Every component aboard such a system is designed to be perfect. The same requirement applies to the transportation sector. If you have a car with a hybrid-electric power train that uses ultracapacitors, you are not going to tolerate it if the car breaks down. In those applications, the end customer is willing to put value on perfect reliability. Using ’high reliability’ as our mantra, we have divested several businesses that did not fit this model and have acquired other businesses that do fit. We are focused on developing and manufacturing products that last for the life of the application.”

CEOCFOinterviews: Is there much competition in your industry and why are people choosing Maxwell?

Mr. Balanson: “This is like any new business. Initially, the ultracapacitor business was focused with small R&D companies all over the world.  That was about seven years ago. Today there are three major players and perhaps one or two minor ones.  We have the largest worldwide market share, followed by Panasonic and a company in Germany. In the future there are likely to be only two large players and maybe one or two small ones.  For the very large volume applications, the customer will need access to a second source, so there is not likely ever to be a single, dominant supplier.    So in our future we see ourselves and one other large supplier."

CEOCFOinterviews: Do you need to go out and explain to people why they should be using an ultracapacitor?

Mr. Balanson: “Ultracapacitors are a novel energy storage technology.  Three to five years ago, if we went to a battery conference and wanted to talk about the value of ultracapacitors, we would have been the lone voice. Today, ultracapacitors are becoming a standard energy storage option; in fact, numbers of manufacturers are designing them into their applications and there are now worldwide ultracapacitor conferences. Increasingly over the past six to twelve months, companies are coming to us and saying, ‘we now understand the value these devices provide for energy storage applications, and we want to see how we can incorporate them into our system. It has changed from an evangelistic mode of telling them what the technology is to the beginnings of supplying a standard, proven, technology product.”

CEOCFOinterviews: Will you tell us about the financial position of the company today?

Mr. Balanson: “Maxwell has gone through a large number of divestitures and a series of losses. The company has finished ‘cleaning itself up’ by divesting the businesses that did not belong in our portfolio and focusing on the businesses that fit our high-reliability strategy. The company has a reasonable amount of cash, and we are investing that cash where it has value, in ultracapacitors.  That investment still has a while to go, but sales are ramping and we expect in the next few years for Maxwell Technologies to be a very profitable business. The company is not cash-rich but cash-sufficient. We are in the process of growing a business and we see the future as quite bright.”

CEOCFOinterviews: Are there any other products or technologies that might compete with the ultracapacitor and thereby throw a wrench into your plans?

Mr. Balanson: “There are many energy-rich technologies that are competing with each other but all of them are ’power-poor’. For example, you hear a lot about fuel cells, which are perceived as a replacement for internal combustion engines. However, fuel cells have limited dynamic range, they are power poor. So, ultracapacitors actually go hand-in-hand with many fuel cell applications, providing the power characteristics fuel cells lack to make them suitable for highly power variable applications. There are other applications that use traditional lead acid batteries, and we are also hand-in-hand with those devices to add power. We tend not to see direct competitors; we tend to see people needing peripheral help with power, which ultracapacitors can provide. We do not see this as a displacement technology; we see it as an augmentation technology.”

CEOCFOinterviews: Do you carry much inventory or do you make your products to order?

Mr. Balanson: “The ultracapacitor is a standard product family with five to ten form factors, but they are not customized to a specific application. We put together a “fast factory”, one that can produce large quantities of product very quickly. We do not have to or need to carry inventory because we can build to order.”

CEOCFOinterviews: What should potential investors be interested in and what should they know that perhaps they don’t realize when they look at the company?

Mr. Balanson: “Maxwell’s future is in the ultracapacitor business. If ultracapacitors were used to boost power for hybrid-electric cars, which require approximately twenty cells in each automobile, and they cost about twenty-five dollars per part, that would mean about $500 per vehicle. If the automobile industry introduces a limited model, they typically produce about a hundred thousand units in a year.  A hundred thousand times twenty is about two million ultracapacitors. For a mainstream car, they might produce a million a year. A million cars would be twenty million ultracapacitors. The global automobile industry produces sixty million cars a year; you can do the math, and the ultracapacitor sales potential is quite large. We can see the ultracapacitor business over the next decade becoming well over a billion-dollar industry. That is an exciting prospect. We’re also looking at other applications for our small cells that could consume as many as ten to twenty million units a year at price points in the $2 range. We see very large volume opportunity for this technology over the next five to ten years.”

CEOCFOinterviews: Can you deal with high volume if it comes your way?

Mr. Balanson: “Maxwell currently has two manufacturing locations, one in San Diego, California, and the other in Rossens, Switzerland.  Neither is a high volume plant. If you are going to do high volume, you have to go to China. We announced in February a partnership with a Taiwanese company that has large-scale manufacturing operations in China. They make different kinds of capacitors, not the kind that we make, but similar in physical dimension. We can make 25,000 to 50,000 small cell ultracapacitors a day, whereas they make about a million-and-a-half units of their capacitor products a day. In addition to being an extremely high volume manufacturer, they are very low-cost producers, so it will actually be more cost-effective to shift virtually all of our production there as volumes ramp.”

CEOCFOinterviews: You personally purchased stock in Maxwell recently; will you tell us about that?

Mr. Balanson: “When one is in the business of running a company, you have to have your heart and soul in it. I am very committed to this company and I wanted to make it clear that I not only have a job, I have a personal commitment. -   The statement is that I and my team are in this completely – emotionally, physically, and financially.”

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SAN DIEGO, Calif. -- Maxwell Technologies, Inc. (Nasdaq: MXWL) today reported a net loss of $585,000, or $0.04 per share, on revenue of $10.5 million for its first quarter ended March 31, 2004. That compares with a net loss of $4.4 million, or $0.32 per share, on revenue of $10.2 million for the same period in 2003. Cash and short-term investments totaled $10.9 million as of March 31, 2004.

Posted: 5/12/04 -

(in thousands, except per share information)

Posted: 5/12/04 -



Fuel-Efficient, Low-Emission, Hybrid Gasoline-Electric Drive System Uses Ultracapacitors
To Capture, Reuse Energy Generated by Braking

            SAN DIEGO, Calif. -- Maxwell Technologies, Inc. (Nasdaq: MXWL) announced today that it has been selected to supply BOOSTCAP® ultracapacitors for 27 40-foot hybrid gasoline-electric transit buses that are being built by New Flyer Industries and ISE Research for Long Beach Transit, Long Beach, Calif.

Posted: 2/11/04 -



  Ultracapacitors Are Centerpiece of High-Reliability, High Margin, Product Strategy; 
Executive Team Ties Compensation to Financial Performance Improvement

SAN DIEGO, Calif. – Maxwell Technologies, Inc. (Nasdaq: MXWL) announced today that it has completed several steps to reduce operating expenses, improve efficiency and sharpen its focus on its core high-reliability, high-margin product lines to position the company for growth and profitability in 2004.

Posted: 1/12/04 -
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