Press Release
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LAKE FOREST, Calif.--(BUSINESS WIRE)--May 11, 2005--Liquidmetal(R) Technologies Inc. (Pink Sheets:LQMT) today announced financial results for the three months ended March 31, 2005.
Revenue for the first quarter was $2.8 million compared to $6.3 million a year ago, a decrease of $3.5 million. The decrease is primarily attributable to the discontinuation of equipment business which is no longer part of the company operation and effect of restating our 2003 financial statements. On a sequential quarterly basis, revenue increased $0.4 million from the fourth quarter of 2004.
John Kang, Chairman and Chief Executive Officer of Liquidmetal Technologies states, "Even though new products did not contribute to first quarter sales as we had hoped for, we are encouraged by our progress with our customers like Samsung as well as new potential customers. We are in the midst of working on many new programs which will begin to ship in the coming months. As these new programs begin to launch such as the SanDisk flash memory drives, we expect them to contribute substantially to the growth of our business in the coming quarters."
In addition, our existing customers continue to do well with Liquidmetal. Vertu, the luxury division of Nokia continues to receive great customer reviews of their Ascent phone with the Liquidmetal frame allowing for a unique design form and accompanying function. The new Liquidmetal Plasma bat by Rawlings is the third in their line of Liquidmetal baseball bats that is seeing the best pre-booked sell through ever. HEAD Liquidmetal skis also reportedly met with the highest pre-book of any HEAD new Winter Sports product.
Bulk Alloy revenues were $1.8 million for the first quarter compared to $5.2 million in the prior year, a decrease of $3.5 million, which is again primarily attributable to the discontinuation of equipment sales business and restatement of our 2003 financial statements. Loss before interest expense and discontinued operations was $1.1 million compared to $1.5 million profit in the prior year. Operating margins also decreased primarily because of the discontinuation of equipment business, and due to initial ramp up costs for newly launched products. We expect meaningful operating margin improvement in the second quarter as new products in the pipeline finally enter the mass production stage.
Coatings revenues were $1.0 million for the first quarter compared to $1.0 million in the prior year, showing it remains steady level business. Income before interest expense and discontinued operations was $0.3 million compared to $0.3 million in the prior year, which also shows stable profitability.
Net loss for the first quarter was $4.1 million or $0.10 per share compared to $0.7 million or $0.02 per share a year ago.
Commenting on the operations, Mr. Kang noted, "We were adversely affected in our operation in Q1 by extremely high professional fees, primarily legal, as the company dealt with defending the securities lawsuit while at the same time worked towards compliance with financial filings throughout the course of the year. We expect to see our operating expenses come down in the coming quarters since the remainder of the defense costs for the securities litigation will be picked up by our insurance carriers, and the company has achieved its primary goal of becoming current in its financial filings. With the continued focus on maintaining tight controls on our operating costs, the anticipated reduction in professional fees and expected increased revenues from new product launches, we expect to see a healthy improvement in our overall operations in the coming quarters."
As previously announced, Liquidmetal Technologies will host a conference call at 4:30 pm (EDT) on Wednesday, May 11, 2005 to discuss the results.
Listeners may access the conference call live over the Internet from Liquidmetal Technologies' website http://ir.liquidmetal.com or at http://www.companyboardroom.com.
The dial-in-number to access this operator-assisted call is toll free 1-800-289-0494 or toll 1-913-981-5520 for International callers. Institutional investors can also access the call via CCBN's password-protected event management site, StreetEvents http://www.streetevents.com.
About Liquidmetal Technologies
Liquidmetal Technologies (http://www.liquidmetal.com) is the leading developer, manufacturer, and marketer of products made from amorphous alloys. Amorphous alloys are unique materials that are characterized by a random atomic structure, in contrast to the crystalline atomic structure possessed by ordinary metals and alloys. Bulk Liquidmetal(R) alloys are two to three times stronger than commonly used titanium alloys, harder than tool steel, and relatively non-corrosive and wear resistant. Bulk Liquidmetal alloys can also be molded into precision net-shaped parts similar to plastics, resulting in intricate and sophisticated engineered designs. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. The combination of a super alloy's performance coupled with unique processing advantages positions Liquidmetal alloys for what the company believes will be The Third Revolution(TM) in material science.
This press release may contain "forward-looking statements" that involve risks and uncertainties, including statements regarding our anticipated financial results, as well as our plans, future events, objectives, expectations, forecasts, and the assumptions on which those statements are based. Any statement in this press release that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as "believe," "estimate," "project," "expect," "intend," "may," "anticipate," "plans," "seeks," and similar expressions identify forward-looking statements. These statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or result, and undue reliance should not be placed on these statements. These risks and uncertainties include: unforeseen events that could further delay completion of the company's ongoing audit process; pending litigation against the company and its potential outcome; our limited operating history in developing and manufacturing products from bulk amorphous alloys; the adoption of our alloys by customers; the commercial success of our customer's products; our ability to identify, develop, and commercialize new applications for our alloys; competition with suppliers of incumbent materials; the development of new materials that render our alloys obsolete; the ability to manage our anticipated growth; our limited direct experience in manufacturing bulk alloy products; scaling-up our manufacturing facilities; protecting our intellectual property; problems associated with manufacturing and selling our alloys outside of the United States; and other risks and uncertainties discussed in filings made with the Securities and Exchange Commission (including risks described in subsequent reports on Form 10-Q, Form 10-K, Form 8-K, and other filings). Liquidmetal Technologies disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(in thousands, except per share data, unaudited)
For the Three Months
Ended March 31,
2005 2004
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Revenue $ 2,843 $ 6,288
Cost of sales 2,835 3,557
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Gross profit 8 2,731
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Operating Expenses:
Selling, general, and administrative 2,590 3,065
Research and development 397 341
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Total operating expenses 2,987 3,406
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Loss from operations (2,979) (675)
Other income 133 586
Interest expense (1,257) (271)
Interest income 6 12
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Loss from continuing operations (4,097) (348)
Income (loss) from discontinued equipment
manufacturing operations, net of tax of $0 -- (393)
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Net Loss (4,097) (741)
Other comprehensive loss:
Foreign exchange translation gain (loss) 321 379
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Comprehensive loss $ (3,776) $ (362)
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Net loss per common share - basic and diluted:
Loss per share - continuing operations $ (0.10) $ (0.01)
Loss per share - discontinued operations $ -- $ (0.01)
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Loss per share - basic and diluted $ (0.10) $ (0.02)
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Number of weighted average shares -
basic and diluted 41,610 41,610
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CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
March 31, December 31,
2005 2004
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Assets:
Cash $ 341 $ 742
Restricted Cash -- 754
Trade accounts receivables, net of
allowance for doubtful accounts of
$97 and $108 1,785 1,668
Inventories 2,273 2,353
Prepaid expenses and other current assets 434 930
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Total current assets 4,833 6,447
Property, Plant and Equipment, net 15,941 16,434
Idle Equipment 1,948 1,906
Long Term Inventory 1,692 1,810
Other intangibles, net 1,161 1,143
Other assets 700 768
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$ 26,275 $ 28,508
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Liabilities and Shareholders' Equity
Accounts payable and accrued expenses $ 6,557 $ 4,969
Settlement Payable 3,317 3,246
Deferred revenue 880 900
Long-term debt, current portion 6,393 5,991
Other liabilities, current portion 1,349 1,032
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Total current liabilities 18,496 16,138
Long-term debt, net of current portion 2,367 2,618
Other long-term liabilities, net of current
portion 328 892
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Total liabilities 21,191 19,648
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Shareholders' equity 5,084 8,860
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$ 26,275 $ 28,508
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CONTACT: Liquidmetal Technologies, Lake Forest
Otis Buchanan, 949-206-8020
otis.buchanan@liquidmetal.com
SOURCE: Liquidmetal Technologies