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CPST: Its Recent Developments Within the Aftermarket Service Business


The alphaDIRECT Insight

Capstone offers an industry leading factory protection plan (FPP) that is unique in the small-scale distributed generation marketplace. In our opinion, this product is a critical factor in helping Capstone achieve its short-term and long-term financial goals. By offering aftermarket services, Capstone is able to generate a longer and more predictable revenue stream and cash flow from the service offering. We believe the current overall attachment rate is 37%, but certain markets are better suited than others. Specifically, the energy efficiency market has presented an exceptional opportunity for aftermarket services and has become a key segment for Capstone. Attachment rates in this segment are currently greater than 50%. Geographic expansion has also presented new opportunities, and this is especially true in emerging markets.

Shawn Severson: First, I would like to thank you, Jeff, for taking time to speak with us today. Today our focus will be on recent developments within your aftermarket service business. However, before we get started can you start by giving us a quick introduction of yourself?

Jeff Foster: Sure, I started at Capstone just over five years ago, in early 2013. I originally came in to run the Program Management Office (PMO).  In that role, the achievement I am most proud of was the successful launch of our new Signature Series product line, which not only repackaged our microturbines into a modern, aesthetically pleasing, quieter and more robust enclosure, but also completely updated our C200 microturbine engine, improving both the performance and the reliability to meet the growing combined heat and power vertical.

Prior to coming to Capstone, I spent 24 years in the defense industry with the last seven years in an executive position running a business area with full P&L responsibility. During that phase of my career, I worked in Operations, Engineering, Aftermarket, and PMO. Additionally, I served customers both domestically and in several international markets. Lastly, I am proud to say I am a military veteran, a six-sigma black belt and a Program Management Professional with an MBA from the University of Washington, in Seattle.

I assumed my current role leading our Aftermarket Service business in late 2015, just as we were launching the new Signature Series, with the charter to both lead the update of our legacy microturbines, with the improvements developed during the Signature Series product development program, improving customer satisfaction with our products, and to continue to grow both the top and bottom line of our Service Business.