Amerigon Reports First Quarter Results With Revenues of More Than Three-Times the Prior Year Period; Loss Narrowed Significantly
500,000th Climate Control Seat(TM) (CCS(TM)) System Shipped
DEARBORN, Mich., May 13 -- Amerigon Incorporated today announced that results for its first quarter ended March 31, 2003, showed strong year-over-year improvements, with revenues of more than three times those of the year-earlier period, higher gross margins, a significant reduction in net loss and the shipment of the 500,000th Climate Control Seat(TM) (CCS(TM)) system. President and Chief Executive Officer Daniel R. Coker said that this year's first quarter results reflect the considerable operational progress the Company has made over the last 12 months and demonstrate the growing acceptance by the automotive industry and car buyers of the comfort and value provided by CCS.
Revenues for the first quarter of 2003 rose 244 percent to $5.2 million from $1.5 million in last year's first quarter. The net loss for this year's first quarter declined 56 percent to $925,000, or a loss per share of $0.09, from a net loss of $2.1 million, or a loss per share of $0.30, for the year-earlier period. Gross margins as a percentage of revenues for this year's first quarter improved to 20 percent, up from 10 percent for the first quarter of 2002.
The net loss for this year's first quarter also decreased sequentially by 19 percent from the net loss in the fourth quarter of 2002. As expected, revenues in the 2003 first quarter declined from revenues in last year's fourth quarter due principally to a decision to transfer manufacturing responsibilities for the blowers used in CCS from Amerigon to Toyota's seat supplier. This resulted in an extraordinary advanced stocking shipment to Toyota of an additional 12,000 CCS systems valued at approximately $850,000 in the 2002 fourth quarter, and as previously announced, it was expected to also reduce future quarterly revenues by $350,000, with no impact on gross margins.
Coker commented, "CCS has successfully made the transition from being an intriguing technological innovation to becoming an established value and comfort enhancing automotive feature, and our first quarter results are evidence of this. We showed strong year-over-year improvements in our business in this year's first quarter and we continued to expand the number of vehicles committed to offering CCS."
There are now a total of 12 vehicles committed to offering CCS and the Company expects to announce that CCS will be offered in several additional vehicle models in the coming months. By the end of the 2003 first quarter, Amerigon had shipped more than 500,000 CCS systems since first shipments began in late 1999. Based on current commitments, anticipated new vehicle introductions, vehicle production estimates and estimates of customers requesting the CCS option, Amerigon expects CCS volume will be up more than 50 percent in 2003 with 14 vehicle models offering the Company's seat system, including the first shipments of General Motors vehicles with CCS. Coker said that while the industry-wide slowdown in new vehicle sales could result in some short-term reductions in CCS shipments, he was optimistic about the Company's expected growth rate in 2003 and beyond.
"There are four major automotive manufacturers using our technology, and we have active development programs on over twenty-five vehicle platforms," Coker added. "Consumer demand for CCS continues to be strong and, based on the levels of interest, automotive manufacturers are increasingly recognizing the value of CCS and the important role it can play in favorably influencing consumer buying decisions."
In the past two months, the Company has announced three new vehicles will begin offering the seat system this Fall -- the 2004 Mercury Monterey, the first minivan to offer CCS, the 2004 Cadillac Sedan DeVille and the 2004 Cadillac Escalade ESV Sports Utility Vehicle, the first application of CCS for use in both front and middle row seats.
Research and development expenses for this year's first quarter increased 5 percent over the year-earlier period due primarily to prototype costs associated with the Company's next generation CCS products.
Amerigon's BSST subsidiary is developing thermoelectric devices (TED) with twice the efficiency of today's devices, which is expected to dramatically expand the market for TED-based automotive and non-automotive products. The Company has identified potential applications for this technology and is working with partners to develop product opportunities and paths to market. Prototypes are being tested by customers in the appliance, defense, automotive and communication industries.
The Company made significant progress on the development of its next generation CCS system, the micro thermal module(TM) (MTM(TM)) and plans to introduce MTM to the market in the second quarter of this year. MTM improves the CCS system by not only reducing size, weight, and cost, but the new system is also much easier to install in seats, making it even more attractive to automotive manufacturers.
Selling, general and administrative expenses for the first quarter of 2003 declined 11 percent over the prior year period as a result of lower costs associated with the outsourcing of manufacturing operations for the Company's North American customers to an assembly plant in Mexico.
Coker said that in response to the previously announced notice of non-compliance with listing requirements from Nasdaq, Amerigon is considering ways to maintain its listing on the Nasdaq SmallCap Market by taking steps to meet the Nasdaq net equity requirement of $2.5 million. Amerigon's present listed security market capitalization of $34 million (based on the May 9 closing of $3.19 per share) falls short of the alternative $35 million market capitalization requirement for maintaining listing on Nasdaq. If the Company fails to meet the listing requirements, its common stock will likely be delisted from the Nasdaq SmallCap Market.
The number of shares used to calculate basic and diluted net loss per share in the 2003 first quarter was 10.8 million compared with 7.1 million for the year-earlier period. The year-to-year increase in shares resulted primarily from the Company's private placement of 4.3 million shares on February 25, 2002.
Conference Call
As previously announced, Amerigon is conducting a conference call to review the financial results today at 10:00 AM EDT (Eastern). The dial-in number for the call is 1-800-946-0774. A live webcast and 10-day archive of the call can be accessed at www.viavid.com .
About Amerigon
Amerigon develops and markets its proprietary Climate Control Seat(TM) (CCS(TM)) products for automotive original equipment manufacturers (OEMs). This product significantly enhances individual driver and passenger comfort in virtually all climatic conditions by providing cooling and heating to seat occupants, as desired, through an active thermoelectric-based temperature management system. Amerigon is engaged in developing other proprietary thermoelectric-based heating and cooling products for automotive and other market applications. Amerigon maintains sales and technical support centers in Los Angeles, Detroit, Japan, Germany and England.
Certain matters discussed in this release are forward-looking statements that involve risks and uncertainties, and actual results may be different. Important factors that could cause the Company's actual results to differ materially from its expectations in this release are risks that sales may not significantly increase, that necessary additional financing may be unavailable, and that adverse conditions in the automotive industry may adversely affect its results. The liquidity and trading price of its common stock may be negatively affected by these and other factors. Please also refer to the Amerigon's Securities and Exchange Commission filings and reports, including but not limited to its Form 10-Q for the period ending March 31, 2003, and its Form 10-K for the year ended December 31, 2002.
For further information please contact: Jill Bertotti (investors), jill@allencaron.com, or Len Hall (media), len@allencaron.com, both of Allen & Caron Inc, +1-949-474-4300, for Amerigon Incorporated
AMERIGON INCORPORATED
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months
Ended March 31,
2003 2002
Product revenues $5,246 $1,525
Cost of sales 4,171 1,374
Gross margin 1,075 151
Operating costs and expenses:
Research and development 945 902
Selling, general and administrative 1,084 1,213
Total operating costs and expenses 2,029 2,115
Operating loss (954) (1,964)
Interest expense (23) (152)
Other income 50 50
Minority interest in net loss (income)
of subsidiary 2 (33)
Net loss $(925) $(2,099)
Basic and diluted net loss per share: $(0.09) $(0.30)
Weighted average number of common shares
outstanding 10,771 7,072
AMERIGON INCORPORATED
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
March 31, December 31,
ASSETS 2003 2002
Current Assets:
Cash & cash equivalents $336 $274
Accounts receivable, less allowance
of $59 and $55, respectively 3,588 4,530
Inventory 2,297 1,903
Prepaid expenses and other assets 398 563
Total current assets 6,619 7,270
Property and equipment, net 1,447 1,324
Deferred exclusivity fee 512 585
Total assets $8,578 $9,179
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $3,674 $4,296
Accrued liabilities 994 890
Bank loan payable 1,564 670
Deferred manufacturing agreement
- current portion 200 200
Total current liabilities 6,432 6,056
Deferred manufacturing agreement
- long term portion 1,400 1,450
Minority interest in subsidiary -- 2
Total liabilities 7,832 7,508
Shareholders' equity:
Preferred stock:
Series A - no par value; convertible;
9,000 shares authorized, 9,000 issued
and outstanding at March 31, 2003 and
December 31 2002; liquidation preference
of $11,363 and $11,205 at March 31, 2003
and December 31, 2002 8,267 8,267
Common stock:
No par value; 30,000,000 shares authorized,
10,771,000 issued and outstanding at
March 31, 2003 and December 31, 2002 43,051 43,051
Paid-in capital 19,504 19,504
Accumulated deficit (70,076) (69,151)
Total shareholders' equity 746 1,671
Total liabilities and
shareholders' equity $8,578 $9,179