Turbodyne Reports First Quarter 1998 Results
24 June 1998
Turbodyne Reports First Quarter 1998 Results
WOODLAND HILLS, Calif., June 24 -- Turbodyne Technologies
Inc. today announced financial results for its
first quarter ended March 31, 1998.
The company's revenues rose 7.5 percent to $9.7 million from $9.0 million
in revenues for its 1997 first quarter. The net loss for the quarter was
$4.0 million, or 13 cents a diluted share, compared to a net loss of
$2.0 million, or 12 cents a diluted share, for the quarter ended March 31,
1997. The weighted average basic and diluted shares outstanding for the 1998
first quarter were 31,172,000 compared to 16,641,000 weighted average basic
and diluted shares outstanding for 1997 first quarter.
"While revenues for the quarter increased by 7.5 percent, sales in the
light metals division were dampened by the production transfer of our wheel
manufacturing into our newly acquired facility in Ensenada, Mexico," said
Edward Halimi, Turbodyne's Chairman. "This resulted in lower delivery of
wheels in January and February. It also resulted in higher costs in our La
Mirada, California facility, especially in excess overtime. These issues,
along with some currency exchange loss, were the main reasons for the increase
in the loss for the quarter. However, during March, the additional Mexico
facility became operational and we expect to see improved economics during the
second quarter."
"Also contributing to the first quarter loss were costs associated with
the ramp-up of production facilities for Turbodyne's pollution-control and
engine performance technology, later stage research and development of the
technology, and the various testing programs we were, or are currently,
engaged in around the world," Mr. Halimi continued.
"Starting with our 1997 year end audit, we changed from Canadian GAAP to
U.S. GAAP due to our pending domicile move to the United States," said
Mr. Halimi. "This accounting change resulted in restating all of the
quarterly figures for 1997 for comparison purposes."
Turbodyne's balance sheet has strengthened from the year ago quarter with
a 42 percent increase in current assets to $22.8 million, a 43 percent
increase in working capital to $11.3 million and a 29 percent rise in total
assets to $55.8 million. The Company's current ratio is 1.97 to 1.
During the first quarter, all holders of the Company's Class A convertible
Preferred Stock elected to exercise their conversion rights, which resulted in
the issuance of 4,742,522 common shares.
"Management's outlook for the 1998 second quarter and the 1998 fiscal year
remains strong for the company as we roll-out our new breakthrough technology
on a global scale," Mr. Halimi continued. "We began shipments of
Turbopacs(TM) through our distribution agreement with Detroit Diesel
Corporation for the EPA's Urban Bus Retrofit/Rebuild Program in the second
quarter. We also signed an agreement to provide Turbopac(TM) 1500 and 2200
models to a major European vehicle and engine manufacturer, with the
Turbopacs(TM) to be installed during production on this manufacturer's 1999
models. We expect to begin shipments to this manufacturer in the latter part
of the fourth quarter of this year. At this time, management does not expect
this new agreement to have a material impact on the Company's 1998 top line
growth."
Turbodyne Systems, the high technology division of Turbodyne,
manufactures, designs, markets and develops patented pollution-reduction, fuel
economy and performance enhancing technology for internal combustion engines
in the automotive, transportation, construction, marine, agriculture, mining,
military and power generation industries. Turbodyne's light metals division
is a manufacturer of machined aluminum castings and a leading supplier to the
automotive industry.
Offices and plants are located in Carpinteria, La Mirada, Encinitas and
Woodland Hills, CA; Ensenada and Mexico City, Mexico; Northants, England;
Frankfurt, Germany; Vancouver, Canada; and Paris, France.
TURBODYNE TECHNOLOGIES INC.
"Edward M. Halimi"
Edward M. Halimi
Chairman
Turbodyne's world wide web address is: http://www.turbodyne.com
Except for the historical information contained in this news release, the
matters discussed herein include forward-looking statements that involve risks
and uncertainties. Among the important factors that could cause actual
results to differ from those indicated in the forward-looking statements are:
the availability and acceptance of the Turbodyne products; the impact of
competitive products and pricing; the performance by the company under
existing purchase contracts and the ability to obtain new contracts; the
ability of the company to contain expenses, conditions within the global
automotive market, general economic conditions and political changes both
domestically and overseas.
Turbodyne Technologies Inc.
And Subsidiaries
Consolidated Balance Sheets
March 31, 1998 and 1997
(in thousands of US dollars)
(Unaudited)
Assets
1998 1997
Current Assets:
Cash $ 2,569 $ 1,473
Trade accounts receivable 11,566 7,249
Employee advances receivable 805 99
Inventories 6,598 5,767
Prepaid expenses and other
current assets 1,269 1,531
Total current assets 22,807 16,119
Property, Plant and Equipment,
at cost, net 18,993 12,697
Goodwill, net 13,553 14,331
Other Assets 469 257
$ 55,822 43,404
Liabilities and Stockholders' Equity
Current Liabilities:
Current maturities of long term debt 534 931
Current maturities of obligation under
capital leases 683 451
Accounts payable and accrued
liabilities 9,285 6,655
Loan payable 1,000 --
Income taxes payable 48 210
Total current liabilities 11,550 8,247
Long term debt, less current maturities 9,354 1,174
Subordinated convertible debenture 1,500 --
Obligations under capital leases,
less current maturities 2,920 6,115
25,324 15,536
Stockholders' Equity
Class A preferred stock, no par value
Authorized 100,000,000 shares;
none issued -- --
Class B preferred stock, no par value
Authorized 100,000,000 shares;
none issued -- --
Common stock, no par value. Authorized
100,000,000 shares; issued and
outstanding 36,275,579 shares in
1998 and 24,049,566 shares in 1997 -- --
Additional paid in capital 58,731 24,734
Special warrants -- 16,007
Cumulative currency translation
adjustment 22 (214)
Accumulated deficit (28,255) (12,659)
Total Stockholders Equity 30,498 27,868
55,822 43,404
Turbodyne Technologies Inc.
And Subsidiaries
Consolidated Statements of Operations
Three months ended March 31, 1998 and 1997
(in thousands of US dollars, except per share information)
(Unaudited)
1998 1997
Net Sales $ 9,726 9,045
Cost of goods sold 8,301 6,797
Gross profit 1,425 2,248
Selling, research, general and
administrative expenses 5,150 3,850
Loss from operations (3,725) (1,602)
Other expense (income):
Interest expense, net 285 148
Other, net -- (11)
Loss before income taxes (4,010) (1,739)
Income tax expense 8 232
Net Loss $ (4,018) (1,971)
Net loss per share
Basic loss per share $ (.13) (.12)
Diluted loss per share (.13) (.12)
Weighted average shares used for
basic and diluted loss per share 31,172,000 16,641,000