UQM Technologies Reports Second Quarter and First Half Operating Results
FREDERICK, Colo., Oct. 29, 2003 -- UQM TECHNOLOGIES, INC. (AMEX:UQM) , a developer of alternative energy technologies, today reported operating results for the quarter and six months ended September 30, 2003. Net loss for the second quarter was $1,001,981 or $0.05 per common share on total revenue of $1,857,094 versus a net loss of $887,784 or $0.05 per common share on total revenue of $4,072,950 for the second quarter last year.
Continuing operations for the first half resulted in a loss of $1,392,307 or $0.07 per common share on total revenue of $5,026,557 versus a loss from continuing operations of $1,300,704 or $0.07 per common share on total revenue of $8,845,563 for the first half last year. Net loss for the six months ended September 30, 2003 was $1,392,307 or $0.07 per common share versus a net loss for the comparable period last year of $1,485,675 or $0.08 per common share.
Commenting on the operating results, UQM Technologies, Inc. Treasurer and Chief Financial Officer, Donald A. French said, "Loss from continuing operations for the quarter and six months ended September 30, 2003 increased compared to the same periods last fiscal year due to lower levels of product sales and product margins, higher levels of internally funded research and development expenditures and increases in reserves for potentially impaired electronic component inventory. For the second quarter, product sales declined 67 percent versus the comparable quarter last year, due to decreased shipments of motors by our mechanical products segment and substantially lower sales to a significant contract manufacturing customer by our electronic products segment. Technology segment revenues for the second quarter rose 36 percent versus the comparable quarter last year, reflecting continued strong demand for engineering and product development services and higher levels of low volume product sales. For the six months ended September 30, 2003, net loss decreased by $93,368 due to losses from discontinued operations during the first half last fiscal year. Technology segment revenues for the first half rose 17 percent to $1,739,702, however segment losses were $176,683 larger than the same period last year due principally to higher levels of internally funded research and development expenditures on a new method of control for our permanent magnet motors and generators that substantially improves their performance and efficiency. At September 30, 2003, cash balances were $2.0 million. Subsequent to the end of the quarter, we completed a secondary offering of common stock which increased cash balances and shareholders' equity by an additional $2.2 million."
"Although our revenues were adversely impacted by decreased product sales, we continued to experience strong demand for engineering and product development services. For the quarter and six months ended September 30, 2003 we invested $151,724 and $296,513, respectively, on the development of a new method of motor control that permits us to dramatically improve the performance of our permanent magnet motor and generator systems. In September, we announced performance enhancements from this initiative that included increased peak power output of 33 percent, an improvement in continuous power output of 10 percent and greater system efficiency ranging from two to eight percentage points. Additional validation testing since that time has demonstrated additional improvements exceeding our expectations, including increases in continuous power output approaching 100 percent. These improvements, for example, allow a UQM(R) system currently rated at 40 kW of continuous power to now deliver 75 kW of continuous power without increasing the dimensions, weight or cost of the motor/generator and the associated electronic controls. Conversely, UQM(R) motors and generators will be able to deliver the same power that dimensionally larger UQM(R) systems now deliver, resulting in greater power density and lower system cost per rated kilowatt of power delivered. In addition, peak and continuous torque ratings improved by 20 percent and 80 percent, respectively, providing added acceleration capability to vehicles incorporating our propulsion systems," said William G. Rankin, UQM Technologies, Inc. President and Chief Executive Officer.
"We also made a number of other significant announcements during the quarter including:
-- The award of a Navy contract for the development of a hybrid electric
boat
-- The award of a Department of Energy contract for the development of a
high performance integrated electric motor
-- Receipt of a production order from Keith Products, Inc. for a
1.1 horsepower condenser blower motor and integrated controller used
in aircraft air conditioning systems
-- The award of an Air Force contract to develop an advanced electric
truck
-- Receipt of a contract from Marathon Engine Systems to develop a
generator for its cogeneration product
-- The selection of a UQM(R) propulsion system to power a fuel cell
airplane being developed by Boeing and Advanced Technology Products,
Inc.
The newly developed performance improvements to our motors and generators, together with the ability to deliver a 10 to 1 constant power speed ratio, will further differentiate our power systems in the markets we serve."
UQM Technologies, Inc. is a developer and manufacturer of power dense, high efficiency electric motors, generators and power electronic controllers 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 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 Six Months Ended
September 30, September 30,
2003 2002 2003 2002
Revenue:
Contract services $705,989 616,890 1,339,304 1,388,042
Product sales 1,151,105 3,456,060 3,687,253 7,457,521
1,857,094 4,072,950 5,026,557 8,845,563
Operating costs
and expenses:
Costs of contract
services 639,380 553,099 1,110,921 1,211,588
Costs of product
sales 1,365,057 3,389,829 3,685,945 7,126,646
Research and
development 151,724 47,027 296,513 111,408
General and
administrative 686,010 1,116,886 1,292,554 1,992,719
2,842,171 5,106,841 6,385,933 10,442,361
Loss from
continuing
operations
before other
income
(expense) (985,077) (1,033,891) (1,359,376) (1,596,798)
Other income
(expense):
Interest income 4,483 7,342 11,070 15,492
Interest expense (21,987) (11,670) (44,601) (30,903)
Gain on sale of
assets 600 150,435 600 311,505
(16,904) 146,107 (32,931) 296,094
Loss from
continuing
operations (1,001,981) (887,784) (1,392,307) (1,300,704)
Discontinued
operations:
Loss on disposal
of gear division
operating losses
during phase-out
period -- -- -- (184,971)
-- -- -- (184,971)
Net loss $(1,001,981) (887,784) (1,392,307) (1,485,675)
Net loss per
common share -
basic and
diluted:
Continuing
operations $(.05) (.05) (.07) (.07)
Discontinued
operations -- -- -- (.01)
$(.05) (.05) (.07) (.08)
Weighted average
number of shares
of common stock
outstanding -
basic and diluted 18,849,333 18,843,128 18,847,793 18,734,464
UQM TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 2003 March 31, 2003
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $1,986,064 2,476,276
Accounts receivable 755,740 1,034,002
Costs and estimated earnings in
excess of billings on uncompleted
contracts 412,931 187,484
Inventory obligations of certain
customers, net 803,133 789,767
Inventories 911,616 1,620,262
Prepaid expenses and other current
assets 317,323 112,568
Total current assets 5,186,807 6,220,359
Property and equipment, at cost:
Land 181,580 181,580
Building 2,296,957 2,296,957
Machinery and equipment 7,045,490 6,962,596
9,524,027 9,441,133
Less accumulated depreciation (5,476,949) (4,944,608)
Net property and equipment 4,047,078 4,496,525
Patent and trademark costs,
net of accumulated amortization
of $302,798 and $276,218 769,730 751,473
Other assets 24,205 24,205
$10,027,820 11,492,562
September 30, 2003 March 31, 2003
(Unaudited)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $773,012 975,344
Other current liabilities 695,675 794,575
Note payable 81,607 --
Current portion of long-term debt 121,054 116,921
Billings in excess of costs and
estimated earnings on uncompleted
contracts 410,031 223,378
Total current liabilities 2,081,379 2,110,218
Long-term debt, less current portion 1,010,940 1,072,341
Total liabilities 3,092,319 3,182,559
Stockholders' equity:
Common stock, $.01 par value,
50,000,000 shares authorized;
18,850,243 and 18,844,515 shares
issued and outstanding 188,502 188,445
Additional paid-in capital 55,899,431 55,885,486
Accumulated deficit (48,748,335) (47,356,028)
Accumulated other comprehensive loss (384,300) (384,300)
Note receivable from officer (19,797) (23,600)
Total stockholders' equity 6,935,501 8,310,003
$10,027,820 11,492,562
UQM TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Segment Operating Results
(unaudited)
Quarter Ended Six Months Ended
September 30, September 30,
2003 2002 2003 2002
Technology:
Revenue $869,870 639,379 1,739,702 1,485,200
Net loss from
continuing
operations (291,658) (227,070) (404,253) (227,570)
Net loss $(291,658) (227,070) (404,253) (227,570)
Mechanical products:
Revenue $339,153 1,184,868 1,349,217 2,279,831
Net earnings (loss)
from continuing
operations (49,706) 18,626 (6,199) 23,980
Net earnings (loss) $(49,706) 18,626 (6,199) (160,991)
Electronic products:
Revenue $648,071 2,248,703 1,937,638 5,080,532
Net loss from
continuing
operations (660,617) (679,340) (981,855) (1,097,114)
Net loss $(660,617) (679,340) (981,855) (1,097,114)