UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2003
LIQUIDMETAL TECHNOLOGIES
(Exact name of Registrant as Specified in its Charter)
California 000-31332 33-0264467
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
100 North Tampa St., Suite 3150
Tampa, Florida 33602
(Address of Principal Executive Offices; Zip Code)
Registrant's telephone number, including area code: (813) 314-0280
1
LIQUIDMETAL TECHNOLOGIES
FORM 8-K
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press Release, dated May 1, 2003.
Item 12. Results of Operations and Financial Condition
The following information is being furnished under Item 12 of Form 8-K: Press
release by Liquidmetal Technologies announcing its results of operations for the
quarter ended March 31, 2003. A copy of this press release is attached as
Exhibit 99.1 to this Form 8-K.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
LIQUIDMETAL TECHNOLOGIES
By: /s/ John Kang
------------------------------------
John Kang
President and Chief Executive Officer
Date: May 1, 2003
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press Release, dated May 1, 2003.
2
Liquidmetal
Technologies
News Release
FOR IMMEDIATE RELEASE
- ---------------------
CONTACTS:
Investors Media
David Townsend Otis Buchanan
(813) 314-0280 ext. 127 (949) 206-8020
david.townsend@liquidmetal.com otis.buchanan@liquidmetal.com
Liquidmetal Technologies Reports 2003 First Quarter Results
--Quarterly Revenues Total $6.6 Million, A 12% Sequential Increase--
--New Agreement With Growell Metal Extends Product Reach to
South Korea Automotive Industry--
TAMPA, Fla., May 1, 2003--- Liquidmetal Technologies (NASDAQ: LQMT)
today announced results for its 2003 first quarter ended March 31, 2003.
Revenues for the first quarter were $6.6 million, a 348% increase over
revenues of $1.5 million for the first quarter of 2002 and a 12% sequential
increase over revenues of $5.9 million in the fourth quarter of 2002.
The company's bulk alloy segment accounted for $5.8 million, or 88%, of
total revenues, versus $171,000, or 12%, in the prior year first quarter. The
prior year contribution from this segment was comprised solely of research and
development revenues. The $5.6 million increase was attributable to the addition
of manufacturing equipment sales and production of bulk Liquidmetal alloy parts
and prototypes that were not a factor in prior year results. Higher R&D revenues
stemming from ongoing development contracts with the Department of Defense and
U.S. Army for defense-related products and with DePuy Orthopaedics for
orthopedic implant products also positively impacted results for the quarter.
--more--
(2)
"We are pleased to report solid growth in our bulk alloy segment versus
the prior year and sequentially. These results reflect the positive impact of an
expanded business strategy, increased revenues from product development, and the
manufacturing of first components for LG Electronics and new parts for Samsung,
demonstrating their continued commitment to incorporating Liquidmetal alloy
across multiple products," said John Kang, President and Chief Executive
Officer.
The company's coatings segment contributed revenues of $772,000, or 12%
of total first quarter revenues, compared with $1.3 million, or 88% in the same
period last year. The year-over-year decline was largely due to a slowdown in
oil drilling activity from the prior year as well as lower maintenance
expenditures at power generating plants stemming from the general downturn in
the U.S. economy. Proprietary Liquidmetal(R) coatings are sold to the oil
drilling and power generation industries as a protective application for
equipment in extreme-wear and corrosion conditions.
The reversal in percentage revenue mix between the bulk alloy and
coatings segments from the prior year first quarter is a direct outgrowth of the
company's planned transition from its original coatings business to the
development and manufacture of Liquidmetal alloy parts for OEM customers. The
initial focus of this effort has been on four core product areas--electronic
casing components, medical devices, sports and luxury goods, and defense--where
the superior strength, hardness and processing characteristics of Liquidmetal
alloys have attracted a roster of prominent companies engaged in ongoing product
development or production. In support of these efforts, the company completed
construction of its first manufacturing plant in September 2002. The plant,
located in Pyongtaek, South Korea, is in close proximity to the company's
initial base of customers in the electronic products industry.
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(3)
During the first quarter, parts and prototype revenues in the bulk
alloy segment included shipment of eight different casing components to Samsung
Electronics and LG Electronics. This was an increase from two parts produced in
the preceding fourth quarter of 2002, the company's first full quarter of
production at the Pyongtaek plant; however, volumes per part and in the
aggregate for the first quarter were lower than in the fourth quarter, resulting
in a sequential decline in part-related revenues. The revenues from coatings,
research and development, and manufacturing equipment sales offset the decline.
"Interest in our alloys and development of new products continues to
grow. While we are experiencing a longer development-to-production cycle than
expected with our parts customers, the number of parts in production during the
second quarter is expected be greater than in the first, and new product and
partnership announcements will accelerate in the months ahead," Kang said. He
noted that the first quarter included announcements relating to product
development programs with Lockheed Martin, Raytheon and OQO Inc. In early April,
a luxury watch featuring Liquidmetal alloy was debuted by TAG Heuer at the
renowned Basel Watch and Jewelry Show, and announcement of product launches by
Rawlings and HEAD Sports, among others, are expected in coming weeks.
Revenues from equipment sales during the quarter included $2.5 million
from the sale of Liquidmetal alloy casting machines to South Korea-based Growell
Metal, Inc., a KOSDAQ-listed company, as part of a five-year strategic agreement
finalized in March 2003. The agreement provides Growell Metal with the right to
manufacture and market an exclusive line of automotive parts made from
Liquidmetal alloys for customers in South Korea. Liquidmetal Technologies will
receive royalty payments from the sale of Liquidmetal alloy parts produced and
sold by Growell.
--more-
(4)
First quarter gross profit grew to $2.7 million from $781,000 in the
prior year, a result of the company's increased revenues; however, gross margins
were lower than in the prior year first quarter as a result of the swing in
revenue mix toward a much greater percentage of revenues from the company's bulk
alloy segment. Bulk alloy segment revenues currently carry a lower margin than
the substantially higher-margin coatings sales that dominated the company's
smaller base of revenues in the prior year. This effect was partially offset in
the first quarter by higher margins from equipment sales and research and
development revenues. Gross margin for the quarter was 40.8% versus 53.4% in the
first quarter of 2002.
Costs associated with the ramp-up of company operations resulted in a
loss from continuing operations of $5.8 million, or $0.14 per share, compared
with a loss of $4.5 million, or $0.13 per share, in the first quarter of 2002.
The net loss for the current quarter also totaled $5.8 million, or $0.14 per
share, compared with a prior year net loss of $5.0 million, or $0.14 per share.
Earnings per share calculations were based on 41,229,476 weighted
average shares outstanding for current first quarter versus 35,079,644 in the
prior year period.
Capital expenditures totaled $1.7 million for the quarter versus
$385,000 in the prior year, mainly reflecting costs of manufacturing and
R&D-related equipment. Cash and marketable securities totaled $20.4 million at
March 31, 2003.
The agreement with Growell Metal capitalizes on Liquidmetal
Technologies' advanced alloy technology and Growell's 30 years of experience die
casting products for South Korea-based companies in the automotive, farm
machinery and electronic product industries. It signals a first step in the
expansion of Liquidmetal Technologies' business strategy by establishing an
alliance with a proven partner to introduce the company's alloy technology into
a
--more--
(5)
previously untapped market. It also expands a strategic partnership between the
two companies that began in July 2002 when Growell contracted to manufacture
alloy ingots as feedstock for Liquidmetal's Pyongtaek, South Korea plant.
"This new agreement is a logical progression of our bulk alloy business
strategy. Growell has a long history in metal die-casting, extensive experience
with our unique alloy technology, and existing relationships with our team of
engineers and technical staff. Moreover, their established presence in South
Korea's automotive marketplace opens a new market opportunity to Liquidmetal
Technologies that might otherwise have taken us years to develop organically,"
said Kang.
"Recognition of our technology is spreading as we continue product
development with our established customers and introduce Liquidmetal alloys to
potential new partners across a diverse range of markets. The heightened
validation this brings us is generating inquiries from various strategic third
parties interested in joining forces to pursue new product applications or
manufacturing processes that would enhance our present resources and market
penetration. Our fundamental objective is to make Liquidmetal a pervasive
technology. Toward that objective, we will weigh all viable opportunities to
accelerate our progress while steadfastly protecting our valuable intellectual
property assets."
These results and other highlights of the 2003 first quarter will be
provided in a webcast conference call hosted by Mr. Kang and Brian McDougall,
Executive Vice President and Chief Financial Officer, at 8:30 a.m. EST today
(May 1). Interested parties are invited to access the conference call live via
the Internet from Liquidmetal Technologies' web site at
http://ir.liquidmetal.com or at www.companyboardroom.com. The dial-in number for
investors participating in the operator-assisted call is toll-free
1-800-915-4836 or toll 1-973-317-5319 for
--more--
(6)
international callers. Institutional investors can also access the call via
CCBN's password-protected event management site, www.streetevents.com. A
rebroadcast of the call will be available after 11 a.m. today on the company's
website at http://ir.liquidmetal.com or at toll-free 1-800-428-6051 or
1-973-709-2089 for international callers, access code 288517.
About Liquidmetal Technologies
- ------------------------------
Liquidmetal Technologies (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 RevolutionTM
in material science.
This press release may contain "forward-looking statements" that involve risks
and uncertainties, including statements regarding our plans, future events,
objectives, expectations, forecasts, or assumptions. 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 may include:
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.
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LIQUIDMETAL TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share data)
(unaudited)
For the Three Months
Ended March 31,
--------------------------
2003 2002
---- ----
REVENUE ..................................................................... $ 6,559 $ 1,463
COST OF SALES................................................................ 3,883 682
----------- -----------
Gross Profit................................................................. 2,676 781
----------- -----------
OPERATING EXPENSES:
Selling, general, and administrative...................................... 4,507 2,269
Research and development.................................................. 4,038 2,696
----------- -----------
Total expenses.......................................................... 8,545 4,965
----------- -----------
LOSS BEFORE INTEREST EXPENSE AND INCOME,
MINORITY INTEREST AND DISCONTINUED
OPERATIONS................................................................ (5,869) (4,184)
Interest expense.......................................................... (63) (312)
Interest income........................................................... 131 --
----------- -----------
LOSS BEFORE MINORITY INTEREST AND
DISCONTINUED OPERATIONS.................................................... (5,801) (4,496)
Minority interest in income of consolidated subsidiary.................... (7) --
----------- -----------
LOSS FROM CONTINUING OPERATIONS.............................................. (5,808) (4,496)
DISCONTINUED OPERATIONS:
Gain (loss) from disposal of discontinued retail golf segment, net........ -- (530)
----------- -----------
NET LOSS..................................................................... (5,808) (5,026)
Foreign exchange translation loss......................................... (940) (124)
Unrealized loss on marketable securities held-for-sale.................... (1,141) --
----------- -----------
COMPREHENSIVE LOSS........................................................... $ (7,889) $ (5,150)
=========== ===========
PER COMMON SHARE BASIC AND DILUTED:
Loss from continuing operations........................................... $ (0.14) $ (0.13)
=========== ===========
Income (loss) from discontinued operations................................ $ 0.00 $ (0.02)
=========== ===========
Net loss.................................................................. $ (0.14) $ (0.14)
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LIQUIDMETAL TECHNOLOGIES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
March 31, December 31,
2003 2002
---- ----
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................. $ 18,472 $ 26,003
Marketable securities held-for-sale....................................... 1,927 3,068
Trade receivables, net.................................................... 8,134 6,404
Inventories............................................................... 3,556 2,506
Prepaid expenses and other current assets................................. 1,101 2,142
----------- -----------
Total current assets................................................. 33,190 40,123
PROPERTY, PLANT AND EQUIPMENT, NET........................................... 22,374 23,505
INTANGIBLE ASSETS, NET....................................................... 855 785
GOODWILL..................................................................... 184 184
OTHER ASSETS................................................................. 469 408
----------- -----------
Total assets......................................................... $ 57,072 $ 65,005
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................................... $ 6,932 $ 11,174
Net liabilities of discontinued operations................................ 138 1,148
Deferred revenue.......................................................... 984 1,397
Other liabilities, current portion........................................ 20 19
----------- -----------
Total current liabilities............................................ 8,074 13,738
LONG-TERM NOTE PAYABLE....................................................... 5,175 74
OTHER LONG-TERM LIABILITES, NET OF CURRENT PORTION........................... 69 --
----------- -----------
Total liabilities.................................................... 13,318 13,812
----------- -----------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST............................................................ 28 21
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, no par value; 200,000,000 shares authorized and
41,576,523 issued and outstanding at March 31, 2003 and 41,009,245
issued and outstanding at December 31, 2002............................ 106,954 106,554
Paid in capital........................................................... 20,326 20,326
Unamortized stock-based compensation ..................................... (437) (480)
Accumulated deficit....................................................... (82,748) (76,940)
Accumulated comprehensive (loss) income................................... (369) 1,712
----------- -----------
Total shareholders' equity .......................................... 43,726 51,172
----------- -----------
Total liabilities and shareholders' equity ....................... $ 57,072 $ 65,005
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