UQM Technologies Reports Third Quarter and Nine Month Operating Results
FREDERICK, Colo., Feb. 4 -- UQM TECHNOLOGIES, INC.
(Amex: UQM), a developer of alternative energy technologies, reported today
operating results for the quarter and nine months ended December 31, 2002.
Operations for the third quarter resulted in a net loss of $1,273,335 or
$0.07 per common share on total revenue of $3,701,837 versus a net loss of
$579,750 or $0.03 per common share on total revenue of $5,165,969 for the
third quarter last year. Earnings before interest, taxes, depreciation and
amortization ("EBITDA") for the quarter was $(912,323) or $(0.05) per common
share versus EBITDA of $(79,015) or nil per common share for the comparable
quarter last year. Operating results for the third quarter of this year
include the impairment of $532,500 of electronic component raw material
inventory at the Company's UQM Electronics business unit which was charged to
cost of product sales and an impairment charge for underutilized equipment of
$100,113.
Continuing operations for the nine months ended December 31, 2002 resulted
in a loss of $2,574,039 or $0.14 per common share on total revenue of
$12,547,400 versus a loss from continuing operations of $1,535,210 or
$0.09 per common share on total revenue of $16,897,250 for the same period
last year. Net loss for the nine months ended December 31, 2002 was
$2,759,010 or $0.15 per common share versus a net loss for the comparable
period last year of $3,856,310 or $0.22 per common share. EBITDA from
continuing operations for the nine months was $(1,489,557) or $(0.08) per
common share versus EBITDA from continuing operations of $(67,154) or nil per
common share for the comparable period last year. Including results from
discontinued operations, EBITDA for the nine months was $(1,674,528) or
$(0.09) per common share versus EBITDA for the same period last year of
$(1,842,877) or $(0.10) per common share.
EBITDA is a broadly used financial term which many investment
professionals use as an approximation of the operating cash flow generated by
a business. Management believes that this information may be useful to
investors in the Company due to the amount of noncash depreciation and
amortization charges reported by the Company. Investors are cautioned,
however, that EBITDA is not a replacement or substitute for net earnings or
loss determined by the application of generally accepted accounting principles
and our calculation of EBITDA may not be comparable to similarly titled
disclosures made by other companies.
Commenting on the operating results, UQM Technologies, Inc. Treasurer and
Chief Financial Officer, Donald A. French said, "Operating results for the
quarter were adversely impacted by our decision to increase our inventory
valuation reserves by $532,500 reflecting lower estimates of market value for
slow moving and obsolete electronic component raw material inventories and by
an impairment charge of $100,113 associated with the underutilization of
equipment at our UQM Electronics contract manufacturing business. Continuing
weak customer demand resulted in a 34 percent decline in revenue at this
operating unit from second quarter revenue levels, however, electronic
products segment losses, excluding inventory impairment charges and impairment
of manufacturing assets, declined 10 percent sequentially due to aggressive
cost reduction measures. Nevertheless, net loss for this business unit was
$1,243,639 for the third quarter and accounted for 98 percent of consolidated
net loss. Technology segment revenue rose 24 percent for the quarter to
$1,117,812 versus $904,687 for the comparable quarter last year, reflecting
continued strong demand for engineering services and strong low volume product
shipments during the quarter, primarily for hybrid electric Humvees. Revenue
from the production of wheelchair motors rose 6 percent for the quarter versus
the comparable quarter last year." Mr. French continued, "For the nine months
ended December 31, 2002 technology segment revenue declined 4 percent
reflecting reduced low volume product shipments, mechanical products segment
revenues rose 9 percent and electronic product segment revenues declined
41 percent. Despite the poor performance of the electronics segment, net cash
provided by continuing operations for the nine months was $120,901 and
liquidity at December 31, 2002 remained strong with cash balances of
$2.2 million and a current ratio of 2.56 to 1."
William G. Rankin, UQM Technologies' President and Chief Executive Officer
said, "Although the economy is still sputtering, on the technology front, this
has been a very exciting quarter. A number of automotive OEMs recently
announced new hybrid electric vehicle programs and this has created a surge of
interest in electric propulsion systems in general and our technology in
particular. And just a week ago, President Bush in his State of the Union
address, announced a $1.2 billion 'Freedom Fuel Initiative' to provide
research funding for the development of clean, hydrogen-powered automobiles,
which should bode well for additional applications of our technology. We are
expecting further growth in funded contract engineering for both hybrid
electric and fuel cell applications. During the quarter we announced:
-- New development contracts and product orders for key fuel cell
components totaling $1.5 million
-- An order for additional electric propulsion systems for two hybrid
HMMWVs capable of underwater operation
And following our quarter end, we announced:
-- A U.S. Marine Corps contract to define a hybrid electric propulsion
system for small unmanned ground combat vehicles
-- A follow-on order from Ballard Power Systems for additional fuel cell
compressor drive motors
-- The initiation of cold weather testing by the U.S. Army of a hybrid
electric HMMWV powered by UQM(R) propulsion systems
These new contracts and orders are adding to our backlog and provide the
Company with additional opportunities for expansion and growth."
UQM Technologies, Inc. is a developer and manufacturer of power dense,
high efficiency electric motors, generators and power electronic inverters for
the automotive, aerospace, telecommunications, medical, military and
industrial markets. A major emphasis of the Company is developing products for
the alternative energy technologies sector including power systems for
electric, hybrid electric and fuel cell electric vehicles, 42 volt under-the-
hood power accessories and other vehicle auxiliaries and distributed power
generation applications. The Company's headquarters, engineering and product
development center and motor manufacturing operation are located in Frederick,
Colorado. Its electronic products manufacturing facility is located in St.
Charles, Missouri. For more information on the Company, please visit its
worldwide website at http://www.uqm.com .
This press release contains statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act. These statements appear in a
number of places in this press release and include statements regarding our
plans, beliefs or current expectations, including those plans, beliefs and
expectations of our officers and directors with respect to, among other
things, the development of markets for our products. Important risk factors
that could cause actual results to differ from those contained in the forward-
looking statements include our ability to be profitable, our ability to obtain
additional financing, our reliance on major customers and suppliers, our
ability to commercialize our products, our ability to manage growth and the
possibility that product liability insurance may become unavailable to us.
UQM TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Quarter Ended Nine Months Ended
December 31, December 31,
2002 2001 2002 2001
Revenue
Contract services $837,769 888,736 2,225,811 2,206,011
Product sales 2,864,068 4,277,233 10,321,589 14,691,239
3,701,837 5,165,969 12,547,400 16,897,250
Operating costs
and expenses:
Costs of contract
services 719,831 640,951 1,931,419 1,602,249
Costs of product
sales 3,232,954 4,161,723 10,359,600 13,563,029
Research and
development -- 16,450 111,408 87,194
General and
administrative 919,045 938,807 2,911,764 2,955,170
Amortization of
goodwill -- 67,587 -- 202,761
Write-down of
assets 100,113 -- 100,113 --
4,971,943 5,825,518 15,414,304 18,410,403
Loss from
continuing
operations
before
other income
(expense) (1,270,106) (659,549) (2,866,904) (1,513,153)
Other income (expense):
Interest income 6,099 14,003 21,591 58,300
Interest expense (15,463) (95,273) (46,366) (292,801)
Gain on sale
of assets 6,135 161,069 317,640 212,444
(3,229) 79,799 292,865 (22,057)
Loss from
continuing
operations (1,273,335) (579,750) (2,574,039) (1,535,210)
Discontinued
operations:
Loss from
operations
of discontinued
gear division -- -- -- (644,650)
Loss on disposal
of gear division
including
operating losses
during phase-out
period -- -- (184,971) (1,676,450)
-- -- (184,971) (2,321,100)
Net loss $(1,273,335) (579,750) (2,759,010) (3,856,310)
EBITDA from
continuing
operations $(912,323) (79,015) (1,489,557) (67,154)
EBITDA $(912,323) (79,015) (1,674,528) (1,842,877)
Net loss per
common
share-basic
and diluted:
Continuing
operations $(.07) (.03) (.14) (.09)
Discontinued
operations -- (--) (.01) (.13)
$(.07) (.03) (.15) (.22)
EBITDA per common
share from
continuing
operations $(.05) -- (.08) --
EBITDA per
common share $(.05) -- (.09) (.10)
Weighted average
number of shares
of common stock
outstanding 18,844,144 17,536,527 18,771,157 17,508,078
UQM TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2002 March 31, 2002
Assets (Unaudited)
Current assets:
Cash and cash equivalents $2,157,330 1,411,509
Accounts receivable 2,087,501 2,662,554
Costs and estimated earnings in excess
of billings on uncompleted contracts 262,570 442,213
Inventories 2,944,497 4,636,312
Prepaid expenses 190,453 220,528
Equipment of discontinued operations
held for sale, net -- 1,253,432
Other -- 130,934
Total current assets 7,642,351 10,757,482
Property and equipment, at cost:
Land 181,580 181,580
Building 2,296,957 1,247,265
Machinery and equipment 7,000,198 8,622,471
9,478,735 10,051,316
Less accumulated depreciation (4,693,342) (5,482,194)
Net property and equipment 4,785,393 4,569,122
Patent and trademark costs, net of
accumulated amortization of $257,524
and $219,084 779,384 757,059
Other assets 24,205 45,872
$13,231,333 16,129,535
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,511,229 2,693,312
Other current liabilities 831,812 568,554
Current portion of deferred gain on sale
of real estate -- 322,139
Current portion of long-term debt 114,664 562,043
Term debt and accrued future losses
of discontinued operations -- 789,960
Revolving line-of-credit -- 2,254,000
Billings in excess of costs and estimated
earnings on uncompleted contracts 523,540 382,739
Total current liabilities 2,981,245 7,572,747
Long-term debt, less current portion 1,102,422 1,108,023
Total liabilities 4,083,667 8,680,770
Stockholders' equity:
Common stock, $.01 par value,
50,000,000 shares authorized;
18,844,467 and 17,679,848 shares issued 188,444 176,798
Additional paid-in capital 55,885,349 51,444,359
Accumulated deficit (46,516,388) (43,757,378)
Accumulated other comprehensive income (384,300) (384,300)
Note receivable from officer (25,439) (30,714)
Total stockholders' equity 9,147,666 7,448,765
$13,231,333 16,129,535
UQM TECHNOLOGIES, INC. AND SUBSIDIARIES
Other Financial Information
(unaudited)
Consolidated Segment
Operating Results
Quarter Ended Nine Months Ended
December 31, December 31,
2002 2001 2002 2001
Technology:
Revenue $1,117,812 904,687 2,603,012 2,698,734
Earnings (loss)
from continuing
operations (85,243) 136,137 (312,813) (307,077)
Net earnings
(loss) $(85,243) 136,137 (312,813) (307,077)
Mechanical products:
Revenue $1,110,452 1,051,340 3,390,283 3,100,715
Earnings (loss)
from continuing
operations 55,547 (51,192) 79,527 38,050
Net earnings (loss) $55,547 (51,192) (105,444) (2,283,050)
Electronic products:
Revenue $1,473,573 3,209,942 6,554,105 11,097,801
Loss from
continuing
operations (1,243,639) (664,695) (2,340,753) (1,266,183)
Net loss $(1,243,639) (664,695) (2,340,753) (1,266,183)
Reconciliation of
Net Earnings to
EBITDA
Quarter Ended Nine Months Ended
December 31, December 31,
2002 2001 2002 2001
Loss from
continuing
operations $(1,273,335) $(579,750) $(2,574,039) $(1,535,210)
Add:
Interest expense 15,463 95,273 46,366 292,801
Depreciation and
amortization
expense 345,549 405,462 1,038,116 1,175,255
EBITDA from
continuing
operations $(912,323) $(79,015) $(1,489,557) $(67,154)
Net loss $(1,273,335) $(579,750) $(2,759,010) $(3,856,310)
Add:
Interest expense 15,463 95,273 46,366 292,801
Depreciation and
amortization
expense 345,549 405,462 1,038,116 1,720,632
EBITDA $(912,323) $(79,015) $(1,674,528) $(1,842,877)