IMPCO Reports 2005 Second Quarter Net Income
Second Quarter Revenues Increase 50% Due to the Addition of BRC
CERRITOS, Calif., Aug. 9 -- IMPCO Technologies, Inc. today reported results for its second quarter ended June 30, 2005.
IMPCO completed the acquisition of BRC S.r.l. ("BRC") on March 31, 2005 resulting in the full consolidation of BRC results beginning in the second quarter. Revenues during the second quarter of 2005 increased $16.1 million or 49.7% to $48.6 million from $32.5 million during the second quarter of 2004. Revenues for the six months ended June 30, 2005 increased $12.5 million or 20.5% to $73.6 million from $61.1 million during the same period in the prior year. The increase in revenues during the three and six months periods ended June 30, 2005, was primarily due to the inclusion of BRC revenues on a fully consolidated basis beginning with the second quarter of 2005.
Consolidated gross profit increased $4.5 million compared to the second quarter in 2004 primarily due to increased revenue, while consolidated operating income decreased $0.4 million or 12.1% during the second quarter of 2005 to $2.6 million from $3.0 million during the same period in the prior year, primarily due to:
* a $3.1 million increase in operating expenses associated with BRC;
* a $1.0 million increase in R&D costs related to the Seattle facility
closure scheduled for the third quarter of 2005; and
* a $0.8 million increase in operating expenses primarily due to higher
professional fees and other costs.
During the six months ended June 30, 2005, consolidated operating income decreased $5.0 million or 92.1% to $0.4 million from $5.4 million during the same period in the prior year. This decrease was primarily due to increased severance-related costs, higher professional fees and higher R&D costs related to the closure of the Seattle facility.
Other income of $1.1 million and $1.0 million for the three and six month periods ended June 30, 2005, respectively, consisted primarily of net foreign exchange gains.
Second quarter 2005 net income was $1.2 million or $0.04 per share compared to $1.0 million or $0.05 per share in 2004. For the six months ended June 30, 2005, IMPCO reported a net loss of $(1.0) million or $(0.04) per share compared to net income of $1.5 million or $0.08 per share for the six months ended June 30, 2004.
Mariano Costamagna, President and CEO, said, "We are pleased that we achieved our consolidated revenue and gross margin goals for the second quarter. Our BRC revenues are up 55% in the second quarter of 2005 compared to the second quarter of 2004. With the completion of the BRC acquisition behind us, we continue to integrate and consolidate the two companies with a focus on creating operating efficiencies that will allow us to take advantage of commercial growth opportunities while, at the same time, improving our profitability. Our decision to close the Seattle facility to consolidate our R&D operations is a step towards achieving this goal."
About IMPCO Technologies:
IMPCO designs, manufactures, markets and supplies advanced product and systems to enable internal combustion engines to run on clean burning gaseous fuels such as natural gas, propane and biogas. IMPCO is leader in the heavy duty, industrial, power generation and stationary engines sectors. Headquartered in Cerritos, California, IMPCO has offices throughout Asia, Europe, Australia and North America. More information can be found at IMPCO's web site, http://www.impco.ws/
About BRC Gas Equipment:
BRC produces a complete range of systems for converting vehicles to gaseous fuel to meet market requirements. BRC is a leader in the light duty and automobile alternative fuel sectors and has established alliances with several major car-makers for OEM projects. Headquartered in Cherasco, Italy, BRC has offices throughout Asia, Europe and South America. More information can be found at BRC's web site, http://www.brc.it/
Except for historical or factual information, other matter discussed in this press release, including anticipated improvements in operating efficiencies from the integration and consolidation of IMPCO and BRC, and revenue growth, are forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in any forward-looking statement. Factors that could cause or contribute to such differences included, but are not limited to, prevailing market and global economic conditions; changes in environmental regulations that impact the demand for the Company's products; the Company's ability to manage its leverage and address operating covenant restrictions relating to its indebtedness; the Company's ability to negotiate and comply with waivers pertaining to existing loan covenant defaults; the Company's ability to design and market advanced fuel metering, fuel storage and electronic control products; the company's ability to meet OEM specifications; and the level and success of the Company's development programs with OEMs. Readers also should consider the risk factors set forth in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to, those contained in "Management's Discussion & Analysis of Financial Condition and Results of Operation -- Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2004. The company does not undertake to update or revise any of its forward-looking statements even if experience or future changes show that the indicated results or events will not be realized.
For further information, please contact Dale Rasmussen, Vice President, Investor Relations.
Phone: +1-206-315-8242
Fax: +1-206-315-8301
IMPCO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2005* 2004 2005*
Revenue $32,478 $48,605 $61,081 $73,610
Costs and expenses:
Cost of revenue 23,881 35,507 44,941 53,716
Research and development
expense 1,059 2,674 2,001 4,015
Selling, general and
administrative expense 4,568 7,814 8,738 15,378
Acquired in-process
technology -- -- -- 75
Total costs and expenses 9,508 45,995 55,680 73,184
Operating Income 2,970 2,610 5,401 426
Other Income -- 1,077 -- 979
Interest expense, net (1,504) (123) (2,659) (380)
Income before income taxes
and equity share in income
of unconsolidated affiliates 1,466 3,564 2,742 1,025
Equity share in income (
loss) of unconsolidated
affiliates 323 (58) 283 852
Income tax expense (581) (2,040) (1,015) (2,367)
Income (loss) before
minority interests 1,208 1,466 2,010 (490)
Minority interest in income
of consolidated subsidiaries 224 294 510 519
Net income (loss) $984 $1,172 $1,500 $(1,009)
Net income (loss) per share:
Basic net income (loss). $0.05 $0.04 $0.08 $(0.04)
Diluted net income (loss) $0.05 $0.04 $0.08 $(0.04)
Number of shares used in per
share calculation:
Basic 18,592 28,586 18,584 25,164
Diluted 19,620 28,847 19,822 25,164
* The three and six months ended June 30, 2005 results include the consolidation of BRC's statement of operations following the acquisition of the remaining 50% of BRC on March 31, 2005.
IMPCO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
December 31, June 30,
2004 2005*
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $8,418 $16,359
Accounts receivable less allowance for
doubtful accounts of $1,687 and $2,590 18,072 38,060
Inventories:
Raw materials and parts 8,624 26,388
Work-in-process 233 1,126
Finished goods 3,747 6,308
Total inventories 12,604 33,822
Deferred tax assets 182 760
Other current assets 1,956 2,253
Related party receivables 2,746 6,570
Total current assets 43,978 97,824
Equipment and leasehold improvements
Dies, molds and patterns 7,174 7,177
Machinery and equipment 8,039 11,635
Office furnishings and equipment 7,809 9,176
Automobiles and trucks 409 602
Leasehold improvements 3,474 4,090
26,905 32,680
Less accumulated depreciation and amortization 19,702 22,169
Net equipment and leasehold improvements 7,203 10,511
Net goodwill 8,856 46,892
Deferred tax assets, net 8,183 8,183
Investment in affiliates 27,668 2,778
Business acquisition costs 788 --
Other assets 2,430 3,264
Non-current related party receivable 851 3,464
Total Assets $99,957 $172,916
*Includes the consolidation of BRC's balance sheet at June 30, 2005.
IMPCO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
December 31, June 30,
2004 2005*
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $9,914 $26,000
Accrued payroll obligations 2,889 3,866
Other accrued expenses 5,624 12,854
Current revolving line of credit 7,680 7,814
Current maturities of term debt 140 2,978
Current portion of related party long-term debt 2,600 --
Related party payables -- 3,196
Total current liabilities 28,847 56,708
Term loans -- 9,172
Related party term loan 19,400 --
Capital leases 151 173
Other liabilities 2,316 4,601
Minority interest 2,782 3,301
Stockholders' equity:
Preferred stock, $.001 par value, authorized
500,000 shares; none issued and outstanding
for each period -- --
Common stock, $.001 par value, authorized
100,000,000 shares; 18,737,437 issues and
outstanding at December 31, 2004 and
28,593,841 issued and outstanding at
June 30, 2005 19 29
Additional paid-in capital 135,291 190,898
Shares held in treasury (528) (615)
Accumulated deficit (89,242) (90,251)
Accumulated other comprehensive income (loss) 921 (1,100)
Total stockholders' equity 46,461 98,961
Total Liabilities and Shareholders'
Equity $99,957 $172,916
*Includes the consolidation of BRC's balance sheet at June 30, 2005.