Valence Technology Reports Second Quarter FY 2003 Results
AUSTIN, Texas--Nov. 13, 2002--Valence Technology Inc. , a leader in the development and commercialization of Saphion(tm) technology and Lithium-ion polymer rechargeable batteries, today reported results for its second quarter of fiscal year 2003, ended Sept. 30, 2002.The Company reported a net loss of $9.6 million, or $0.19 per basic and diluted share, on revenue of $260,000 for the second quarter of fiscal year 2003. These results compare to a net loss of $9.7 million, or $0.19 per basic and diluted share, on revenue of $509,000 in the first quarter of fiscal 2003, and a net loss of $10.1 million, or $0.22 per basic and diluted share, on revenue of $527,000 in the quarter ended Sept. 30, 2001.
"Our rapid resolution of the technical issue we discovered in August has put us back on track with our key notebook vendors. Two Tier One companies have recently given us the technical green light on the N-Charge system, and we are hoping to turn these vendors into our customers in the near term," stated Stephan Godevais, chairman and CEO of Valence. "This progress, along with ahead-of-plan achievements in our large format business, has us well positioned for long-term success."
Recent Highlights
| -- | Valence extended its presence in Asia through a joint venture with FengFan, a China-based manufacturer of lead-acid batteries, to produce Saphion(tm) Lithium-ion polymer batteries. The agreement will be effective once approved by the applicable governmental agency in China, which is expected in the next 60 to 90 days. |
| -- | Valence began shipment of Saphion(tm) Lithium-ion batteries to Wistron Corporation for a tablet PC expected to ship by the end of the year. |
| -- | Valence received a purchase order from the USABC to participate in its Technology Assessment Program. Representatives from Ford Motor Company, DaimlerChrysler and General Motors Corporation will evaluate Saphion technology for consideration in the development of batteries for electric vehicles. |
As previously announced, Valence will conduct a conference call today at 5:00 p.m. ET (2:00 p.m. PT) to discuss second quarter results and other business developments. The broadcast will be hosted on the company's Web site located at www.valence.com.
About Valence Technology Inc.
Valence is a leader in the development and commercialization of Saphion(tm) technology and Lithium-ion polymer rechargeable batteries. Valence has more than 722 issued and pending patents worldwide, including 254 issued in the United States. The company has facilities in Austin, Texas, Henderson, Nev., and Mallusk, Northern Ireland. Valence is traded on the Nasdaq National Market under the symbol VLNC and can be found on the Internet at www.valence.com.
Forward-Looking Statement
The information contained herein includes "forward-looking statements." The company cautions readers not to put undue reliance on forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those described herein, for the reasons, among others, discussed in our reports filed with the Securities and Exchange Commission.
VALENCE TECHNOLOGY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2002, and March 31, 2002
(in thousands, except share and per share amounts)
(unaudited)
September 30, March 31,
2002 2002
------------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 5,781 $ 623
Trade receivables, net of allowance of
$253 and $312 as of September 30, 2002,
and March 31, 2002, respectively 216 362
Inventory, net 3,401 2,589
Prepaid and other current assets 880 1,552
-------------- ------------
Total current assets 10,278 5,126
Property, plant and equipment, net 15,299 14,166
Intellectual property, net 10,514 11,239
-------------- ------------
Total assets $ 36,091 $ 30,531
============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 702 $ 683
Accounts payable 3,155 2,548
Accrued expenses 1,966 2,632
Grant payable 1,700 1,553
Accrued payroll and benefits 754 561
-------------- ------------
Total current liabilities 8,277 7,977
Long-term interest 5,126 3,778
Long-term debt, less current portion 6,001 5,884
Long-term debt to stockholder 30,818 28,755
-------------- ------------
Total liabilities 50,222 46,394
-------------- ------------
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.001 par value, authorized:
100,000,000 shares, issued and outstanding:
61,149,303 and 45,570,144 shares at
September 30, 2002, and March 31, 2002,
respectively 61 46
Additional paid-in capital 351,163 331,038
Notes receivable from stockholder (5,022) (5,990)
Accumulated deficit (355,975) (336,703)
Accumulated other comprehensive loss (4,358) (4,254)
-------------- ------------
Total stockholders' equity
(deficit) (14,131) (15,863)
-------------- ------------
Total liabilities and
stockholders' equity (deficit) $ 36,091 $ 30,531
============== ============
VALENCE TECHNOLOGY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS
For the Three and Six Month Periods Ended
September 30, 2002 and 2001
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
-------------------- ---------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2002 2001 2002 2001
---------- --------- --------- -----------
Revenue:
Licensing and royalty
revenue $ 7 $ 45 $ 8 $ 2,178
Battery and laminate sales 253 482 761 1,207
---------- --------- --------- -----------
Total revenues 260 527 769 3,385
Cost of sales: 2,713 1,534 5,235 4,336
---------- --------- --------- -----------
Gross profit (loss) (2,453) (1,007) (4,466) (951)
Operating expenses:
Research and product
development 2,285 2,282 5,083 4,502
Marketing 569 651 1,352 1,084
General and administrative 2,730 3,163 5,143 6,763
Depreciation and
amortization 652 2,463 1,297 4,853
---------- --------- --------- -----------
Total costs and expenses 6,236 8,559 12,875 17,202
---------- --------- --------- -----------
Operating loss (8,689) (9,566) (17,341) (18,153)
Loss on disposal of assets (147) (147)
Interest and other income 81 504 197 699
Interest expense (1,005) (898) (2,128) (1,647)
---------- --------- --------- -----------
Net loss (9,613) (10,107) (19,272) (19,248)
Net loss available to
common stockholders $ (9,613) $(10,107) $(19,272) $ (19,248)
========== ========= ========= ===========
Other comprehensive loss:
Net loss $ (9,613) $(10,107) $(19,272) $ (19,248)
Change in foreign currency
translation adjustments (164) 831 (104) 648
---------- --------- --------- -----------
Comprehensive loss $ (9,777) $ (9,276) $(19,376) $ (18,600)
========== ========= ========= ===========
Net loss per share
available to common
stockholders $ (0.19) $ (0.22) $ (0.37) $ (0.42)
========== ========= ========= ===========
Shares used in computing
net loss per share
available to common
stockholders, basic and
diluted 51,797 45,549 51,643 45,448
========== ========= ========= ===========