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Valence Technology Reports Fiscal 2009 Third Quarter and Year-to-Date Financial Results


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AUSTIN, Texas February 9, 2009: Valence Technology, Inc. , a leading international developer of safe lithium phosphate energy storage solutions, today reported financial results for its fiscal 2009 third quarter and nine months ended December 31, 2008.

Summary of results for fiscal 2009 third quarter compared to fiscal 2008 third quarter:

  • Revenue increased to $4.7 million compared to $3.4 million.
  • Gross margin improved to a positive $250,000 compared to a negative $35,000.
  • Operating expenses declined to $4.1 million compared to $4.3 million.
  • Operating loss improved to $3.8 million compared to a loss of $4.3 million.
  • Net loss available to common shareholders improved to $5.2 million or $0.04 per share, compared to a loss of $5.7 million or $0.05 per share.

Summary of results for fiscal 2009 nine months compared to fiscal 2008 nine months:

  • Revenue was $21.5 million compared to $13.0 million.
  • Gross margin was $52,000 compared to $1.2 million.
  • Operating expenses were $13.5 million compared to $11.9 million.
  • Operating loss was $13.5 million compared to a loss of $10.7 million.
  • Net loss available to common shareholders was $17.0 million or $0.14 per share, compared to a loss of $15.0 million or $0.14 per share.

“Despite the global economic slowdown, we are being sought out by customers for our industry leading products driven by their own interest in accelerating roll-out of various types of applications, including demonstration vehicle fleets,” said Robert L. Kanode, president and chief executive officer of Valence Technology. “Development of electric and hybrid vehicles in Europe appears to be moving at a faster pace than in the U.S. However, selection of platforms and the associated energy storage systems is a gradual process as OEMs conduct their extensive due diligence. We believe that our products, engineering capability, vast intellectual property and experience will fulfill their immediate needs. Both commercial and passenger vehicles are well-suited to be powered by our energy storage solutions and while opportunities are ample in Europe, we are now seeing increased interest from potential U.S. customers as well.”

THIRD QUARTER FINANCIAL RESULTS

For the third quarter of fiscal 2009, the Company reported total revenue of $4.7 million compared to $3.4 million for the same period last year mainly due to increased sales of large format battery systems to existing and new customers. Gross margin improved to a positive $250,000 compared to a negative $35,000 last year mainly due to higher sales.

Total operating expenses declined to $4.1 million from $4.3 million in last year’s quarter due to lower depreciation and amortization, marketing, and general and administrative costs slightly offset by higher research and product development costs. The Company’s operating loss improved to $3.8 million compared to $4.3 million for the same period last year due to higher revenue and gross margin and lower operating costs. The net loss available to common stockholders was $5.2 million or $0.04 per share, compared to a net loss of $5.7 million or $0.05 per share, for the same period last year.

NINE MONTH FINANCIAL RESULTS

For the nine-month period ended December 31, 2008, the Company reported total revenue of $21.5 million compared to $13.0 million for the same period last year, or a 65% increase. This was mainly due to new customer shipments of energy storage systems and qualification packs. Gross margin declined to $52,000 compared to $1.2 million for the same period last year. The nine-month period ended December 31, 2008 included inventory adjustments which increased cost of sales and reduced gross margin. This included a $2.2 million adjustment related to the previously announced plans to discontinue the N-ChargeŽ product line and focus on higher margin large-format energy solutions.

Overall operating expenses rose to $13.5 million from $11.9 million compared to the same period last year in order to facilitate the anticipated ramp in the current fiscal year revenues. The net loss available to common stockholders was $17.0 million or $0.14 per share, compared to a net loss of $15.0 million or $0.14 per share, for the same period last year.

THIRD QUARTER FISCAL 2009 CONFERENCE CALL AND WEBCAST

Valence will conduct a conference call today to discuss its third quarter fiscal 2009 financial results at 3:30 p.m. CST (4:30 p.m. EST). The conference call will be webcast and may be accessed by all interested parties at www.valence.com by clicking on the following links: Investor Relations - Events and Presentations. To access the webcast, please go to this Web site approximately fifteen minutes prior to the start of the call to register, download, and install any necessary audio software.

Those callers within the United States and Canada can dial 877-795-3604 and enter conference identification number 3514636 to participate. Callers outside the United States and Canada can dial 719-325-4753 and enter conference identification number 3514636 to participate.

A replay of the webcast will be available on the company’s Web site at VALENCE. A telephonic replay will also be available from 6:30 p.m. CST on February 9, 2009 through 6:30 p.m. CST on February 16, 2009. To access the replay, please dial 888-203-1112 and enter the following identification number 3514636. Callers outside the United States and Canada can access the replay by dialing 719-457-0820 and entering conference identification number 3514636.