RANCHO SANTA MARGARITA, Calif.--(BUSINESS WIRE)--Nov. 8,
2007--Liquidmetal(R) Technologies Inc. (OTCBB:LQMT) today reported
financial results for the three months ended September 30, 2007.
Revenue for the Third Quarter was $7.1 million. This represents a
(15%) decline from $8.3 million in the Second Quarter due to the
implementation of the licensing model for part of the business by the
Company during the Third Quarter. Financial numbers for the quarter
include royalties on sales by licensees as opposed to gross revenue
for direct customer sales by the Company as reported in the past. As
indicated last quarter, by pursuing licensing opportunities,
Liquidmetal Technologies is inherently trading off higher, but less
profitable top-line revenues in favor of higher profit margin, but
lower absolute revenues from royalties and material sales. For
comparison purposes, revenues for the quarter would have been $9.3
million if the gross revenues would have been captured by LQMT for the
quarter.
Overall Gross Margins improved to 27% in the Third Quarter versus
8% in the Second Quarter. This significant improvement in the
Company's gross margin is directly attributable to its transition to
the licensing model providing the ability to reduce manufacturing
costs while receiving royalties and material sales. Selling, General &
Administrative Expenses came in at $1.9 million for the quarter, down
from $2.5 million in the Second Quarter, and Research & Development
Expense was at $0.3 million in the Third Quarter, a level consistent
with the Second Quarter.
The improvement in the gross margin of the business and the
reduction in the overall expenses allowed us to achieve the best
results in the Company's history. Earnings before interest, taxes, and
depreciation and non-cash expenses ("Adjusted EBITDA") for the Third
Quarter were $0.7 million. This continues the improving trend seen in
recent quarters. Under GAAP, the Company had a net loss of $1.5
million in the Third Quarter compared to a net loss of $3.0 million in
the Second Quarter. The variation of net loss results reflects the
accounting treatment for the outstanding warrants and conversion
features of the convertible notes which are non-cash expenses.
Commenting on the operations, Mr. Larry Buffington, President and
CEO, noted, "We are very pleased with the smooth transition which we
made this quarter in licensing the Korean business. While the
transition did create a reduction in revenues for the quarter as we
had indicated it would, it generated a significant improvement in our
gross margin and the best earnings for the Company. We hope to build
on this model of licensing out certain markets while we continue to
manufacture and build key markets ourselves to continue to improve the
business going forward."
Conference Call
As previously announced, Liquidmetal Technologies will host a
conference call at 4:30 pm (EST) on Thursday, November 8th, 2007 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.
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.
Use of Non-GAAP Numbers
The financial results disclosed in this release include certain
measures calculated and presented in accordance with generally
accepted accounting principles in the United States of America
("GAAP"). In addition to the GAAP financial measures, Liquidmetal
Technologies provides supplemental, non-GAAP financial measures to
facilitate evaluation of Liquidmetal Technologies' operating
performance. Management believes that Adjusted EBITDA is a useful
financial measure that facilitates evaluating the past and future
performance of Liquidmetal Technologies' operations on a comparable
basis. Liquidmetal Technologies reports Adjusted EBITDA as an
alternative method for assessing total company performance. Included
in this press release is a reconciliation of the non-GAAP financial
measures to their most directly comparable GAAP financial measure as
provided with the financial statements attached to this press release.
Liquidmetal Technologies, Inc.
Consolidated Statements of Operations Data
(In thousands, except per share data)
For the three months For the nine months
ended ended
----------------------- -----------------------
9/30/2007 9/30/2006 9/30/2007 9/30/2006
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Revenue $ 7,106 $ 8,040 $ 20,504 $ 21,685
Cost of sales 5,194 6,449 19,321 17,337
----------- ----------- ----------- -----------
Gross profit 1,912 1,591 1,183 4,348
Operating expenses
Selling, general and
administrative
expenses 1,853 2,290 6,880 7,363
Research and
development
expenses 331 269 887 753
----------- ----------- ----------- -----------
Total operating
expenses 2,184 2,559 7,767 8,116
----------- ----------- ----------- -----------
Loss before interest,
other income and
income taxes (272) (968) (6,584) (3,768)
Loss from
extinguishments of
debt - - (648) -
Change in value of
warrants, gain
(loss) 220 1,361 4,476 (1,354)
Change in value of
conversion feature,
gain (loss) 625 1,987 6,137 (1,933)
Other income - - 49 572
Interest expense (1,991) (2,302) (7,454) (7,361)
Interest income 14 8 121 17
----------- ----------- ----------- -----------
(Loss) income before
minority interests
and income taxes (1,404) 86 (3,903) (13,827)
Minority interests (66) - (66) -
Income taxes - - - -
----------- ----------- ----------- -----------
Net (loss) income $ (1,470) $ 86 $ (3,969) $ (13,827)
=========== =========== =========== ===========
Net (loss) income per
share - basic and
diluted $ (0.03) $ 0.00 $ (0.09) $ (0.32)
=========== =========== =========== ===========
Weighted average
common shares - basic
and diluted 44,652 44,100 44,736 43,664
=========== =========== =========== ===========
Liquidmetal Technologies, Inc.
Reconciliation of EBITDA and Adjusted EBITDA
(In thousands)
For the three months For the nine months
ended ended
----------------------- -----------------------
9/30/2007 9/30/2006 9/30/2007 9/30/2006
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Net (loss) income as
reported $ (1,470) $ 86 $ (3,969) $ (13,827)
Add Back:
Interest expense,
net 1,977 2,294 7,333 7,344
Depreciation &
amortization 765 893 2,499 2,658
----------- ----------- ----------- -----------
EBITDA $ 1,272 $ 3,273 $ 5,863 $ (3,825)
Add Back:
Minority interests 66 - 66 -
Loss from
extinguishment of
debt - - 648 -
Change in value of
warrants, (gain)
loss (220) (1,361) (4,476) 1,354
Change in value of
conversion feature,
(gain) loss (625) (1,987) (6,137) 1,933
Stock based
compensation 172 296 575 831
----------- ----------- ----------- -----------
Adjusted EBITDA $ 665 $ 221 $ (3,461) $ 293
=========== =========== =========== ===========
CONTACT: Liquidmetal Technologies
Otis Buchanan, 949-635-2120
otis.buchanan@liquidmetal.com
SOURCE: Liquidmetal Technologies Inc.
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