LAKE FOREST, Calif.--(BUSINESS WIRE)--Aug. 2, 2006--Liquidmetal(R) Technologies Inc. (OTC:LQMT) today reported financial results for the three months ended June 30, 2006. Revenue for the second quarter was $7.1 million, up 90% over second quarter 2005 revenue and up 8% over the first quarter of 2006.

John Kang, Chairman of Liquidmetal Technologies, stated, "We are very pleased with the revenue growth and solid improvements in the Company during the second quarter. The record second quarter revenue was driven by the continued strength and growth in our Bulk Alloy business. This was partly offset by the decrease in our Coatings business from its record pace in the first quarter. Bulk Alloy revenues grew 123% over the second quarter 2005 and 28% over the first quarter of 2006. Coatings revenue grew 31% over second quarter of 2005, but was lower by 27% compared to the first quarter of 2006."

"The Company's gross margin also increased to 22%, up from a negative 6% in the second quarter of 2005 and a positive 19% in the first quarter of 2006. The strength of the Bulk Alloy business allowed the Company to achieve positive Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and other non cash expenses) for the first time in its history. We believe this is a major milestone and something we intend to build upon going forward," Mr. Kang further commented.

Actual Bulk Alloy revenue was $5.3 million for the second quarter compared to $2.4 million in the second quarter of 2005 and $4.2 million in the first quarter of 2006. Income before interest expense, discontinued operations, impairment of long lived assets and expensing of stock options was $0.03 million compared to a loss of $1.3 million in the second quarter of 2005 and loss of $0.4 million in the first quarter of 2006.

Coatings revenue was $1.7 million for the second quarter compared to $1.3 million in the second quarter of 2005 and $2.4 million in the first quarter of 2006. Income before interest expense and discontinued operations was $0.5 million compared to $0.4 million in the second quarter of 2005 and $0.8 million in the first quarter of 2006.

During the quarter, selling general and administrative costs were $2.4 million compared to $1.6 million in the second quarter of 2005 and $2.7 million in the first quarter of 2006. Research and development costs came in at $0.3 million compared to $0.2 million in the second quarter of 2005 and $0.2 million in the first quarter of 2006.

The Company had Adjusted EBITDA of positive $0.2 million in the second quarter compared to a negative $1.2 million in the second quarter of 2005 and a negative $0.1 million in the first quarter of 2006. Under GAAP, the Company had a net loss of $7.9 million in the second quarter of 2006 compared to a net loss of $5.5 million in the second quarter 2005 and a net loss $6.0 million in the first quarter of 2006. This was mainly due to the accounting treatment for the outstanding warrants and conversion features of the convertible notes.

Commenting on the operations, Mr. Salas, President and CEO, noted, "It is exciting to see the improvements which are being made throughout the Company. The second quarter was the first time we had profitable results from both Bulk Alloy and Coatings segments. As we continue to reduce manufacturing costs and benefit from greater production scale, our goal is to enhance the competitive position of our Liquidmetal alloys on cost in addition to our proven performance characteristics."

Mr. Salas added, "In addition to the continued improvement in the operation of the company, we are also looking to continue to shore up the balance sheet. As part of the plan to provide additional growth capital, the company is contemplating various options including the possible sale-leaseback of the company's main manufacturing facility in Korea. In the coming months we will continue to pursue all options allowing us to fortify our company and strengthen our position for the future."

Conference Call

As previously announced, Liquidmetal Technologies will host a conference call at 4:30 pm (EDT) on Wednesday, August 2nd, 2006 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.

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.

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.