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Liquidmetal Technologies Reports 2002 Third-Quarter Results
Thursday October 31, 6:02 am ET
Revenues Increase 229% Over Prior Year, EPS Achieve Consensus Estimates
TAMPA, Fla.--(BUSINESS WIRE)--Oct. 31, 2002--Liquidmetal Technologies (NASDAQ: LQMT - News) today announced results for its third quarter and nine months ended September 30, 2002.
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Revenues for the third quarter increased 229% to $3.7 million from revenues of $1.1 million in the third quarter of 2001. On a sequential quarterly basis, third-quarter revenues were 70% higher than the $2.1 million reported for the second quarter of 2002. Revenues for the first nine months grew to $7.3 million compared to $3.0 million in the prior year nine-month period, a 141% increase.
The year-over-year revenue growth was attributable to the company's first production shipments of parts manufactured from bulk Liquidmetal® alloy, increased sales of Liquidmetal® alloy coatings, furnace equipment sales, research and development revenues largely derived from ongoing Department of Defense contracts, and revenues related to the prototyping of test products for current and prospective customers engaged in active product development programs with the company.
As expected, higher expenses stemming from the rapid build-up of the company's infrastructure in support of its growing operations resulted in losses for the third quarter and nine months. For the quarter, the company reported a loss from continuing operations of $5.2 million, or $.13 per share, compared to a loss of $1.2 million, or $.03 per share, in the third quarter of 2001. For the nine months, the loss from continuing operations was $14.0 million, or $.37 per share, compared with a loss of $2.3 million, or $.07 per share, from continuing operations for the prior year nine months. Including discontinued operations, the net loss for the quarter totaled $3.8 million, or $.09 per share, versus a net loss of $20.8 million, or $.61 per share, in the prior year quarter. For the nine months, the net loss including discontinued operations amounted to $12.0 million, or $.32 per share, compared with a net loss of $26.1 million, or $.80 per share, in the same period last year.
While gross profit for the third quarter more than doubled on the strength of higher revenues, the gross margin was 30.9% compared to 50.6% in the third quarter of 2001. For the nine months, the gross margin was 39.5% versus 49.4% a year earlier. The margin reduction during the current year periods was an anticipated outgrowth of the shift in the company's revenue mix toward a greater percentage of bulk alloy business, which carries a lower margin than the higher-margin coatings sales that dominated revenues in the prior year.
"On balance, we are very pleased with the company's third-quarter financial performance and the operational strides we are making as Liquidmetal Technologies transitions into a full-scale manufacturing company," said John Kang, President and Chief Executive Officer. "Our expanded manufacturing facilities in Pyongtaek, South Korea came onstream in September as planned, and capacity there is ramping up to meet demand for the current wave of new commercial products employing Liquidmetal® alloys. We look forward to the impending arrival of Tom Trotter, our new Senior Vice President of Manufacturing, as we continue building strength in this critical area of the company."
Kang noted that the company shipped its first production parts made of bulk Liquidmetal® alloy--an MP3/CD player casing component--to Growell Telecom, Inc. (formerly Jascom Co., Ltd.) in September. Planned September shipments of cellular phone casing components to Samsung Electronics, LG Electronics and Chinese wireless manufacturer TCL Mobile were delayed to accommodate customer-driven product design and launch-schedule changes. Shipments to Samsung began in October, while shipments to LG Electronics and TCL are expected to begin later in the fourth quarter, Kang said.
In late September, as previously reported, Samsung announced the planned launch of its first line of mobile phones--the SCH-X199--incorporating Liquidmetal® alloy, while also stating its commitment to the application of Liquidmetal technology in a range of consumer electronic products in the future.
"Samsung's recent and very visible endorsement of Liquidmetal® alloys is, in our view, indicative of the enormous potential for our technology across a broad spectrum of existing and new product applications," Kang said. "In addition to the products currently in production, our active product development programs with such world-class organizations as LVMH, Ping, Cleveland Golf, Head Sports, Rawlings, Johnson & Johnson, Surgical Specialties, General Dynamics and the U.S. Army underscore the exciting growth opportunities ahead for Liquidmetal Technologies."
In other news related to its product development initiatives, the company announced that U.S. President George W. Bush last week signed into effect the nation's 2003 Defense Appropriations bill which includes a $5.25 million allocation to Liquidmetal Technologies for ongoing Department of Defense research and testing of Liquidmetal® alloy in armor-piercing ammunition and other defense-related applications. Contract awards for specific projects under the allocation are expected in mid-2003. |
