Unique Mobility Shifts Emphasis to Near-Term Opportunities
15 October 1999
Unique Mobility Shifts Emphasis to Near-Term Opportunities; Company Announces Second Quarter Write-Down of Three Joint Ventures; New CEO Sets Goal of Profitability for Fourth Fiscal Quarter
GOLDEN, Colo., Oct. 14 -- UNIQUE MOBILITY, INC., a leading developer and
manufacturer of high efficiency motor/generator systems, announced that,
following a reassessment of its investments, it will take a charge against
earnings for its second quarter ended September 30, 1999 of approximately $4.5
million or $.27 per share arising from the write-down of its investments in
three joint ventures; Unique Mobility Europa GmbH, Taiwan UQM Electric Co., Ltd.
and EV Global Motors Company and a charge associated with the retirement of the
Company's former CEO.
In commenting on the write-down, William G. Rankin, Unique's recently
appointed President and Chief Executive Officer, said, "Our investments in
these joint ventures were directed toward participating in a potentially large
emerging market for 'electric' automobiles, scooters and bicycles, however,
these markets are developing slower than expected and the timing of revenue
levels sufficient to provide a return on our invested capital has become more
uncertain. This action was taken at this time as a result of the divergence
of these joint venture activities from those of our core businesses. Although
'electric' vehicles will likely meet with acceptance in selected 'niche'
markets, industry focus has shifted to 'hybrid electric' vehicles which have
the potential to achieve broad market acceptance. We believe that the market
for 'electric' vehicles could be a significant source of revenue for the
Company in the distant future, and we expect to continue to support the
efforts of our partners to gain significant market share when and if these
markets emerge. We are committed to the rapid commercialization of our
proprietary technology in existing and near-term markets and to achieving
revenue growth and profitability over a relatively short cycle. We are seeing
signs of accelerating demand in all of our core businesses and believe that
increased product development contracts, motor and gear production and
electronic assembly production will contribute to meeting our goal of
profitability for the fourth fiscal quarter."
Mr. Rankin added, "Today's announcement should by no means be seen as a
move away from exploiting Unique's technology in advanced vehicle
applications. To the contrary, we are actively involved in a wide range of
exciting product developments including a 'hybrid electric' drive system for
one of the 'big three' automakers, a $750,000 Department of Energy sponsored
development of a state-of-the-art, power dense, advanced automotive propulsion
system, generators and wheel motor systems for 'hybrid electric' military
vehicles including the Hummer, generators and wheel motor systems for various
'hybrid electric' bus developers and manufacturers, compressor motors for fuel
cell application and other vehicle auxiliaries including air conditioning
compressor drives, DC to DC power converters and high frequency battery
chargers. Our focus is to move these developed products into production as
soon as practicable. In addition, we are leveraging these developments into
existing markets; wind turbines, stationary power generators and industrial
vehicles, just to name a few. With our new, modern manufacturing operations
in place, we are well positioned to begin volume production of these products
as they move into the commercial marketplace."
Donald A. French, Unique's Treasurer and Chief Financial Officer said,
"After the write-down of these investments, our balance sheet will
appropriately reflect capital assets that are all actively deployed in
generating revenue and a return on invested capital. Operations for the
second quarter before the asset write-down and a charge associated with the
retirement of the Company's former CEO in August, are expected to result in
EBITDA of $0.01 per share and a net loss of $0.03 per share. Our balance
sheet remains strong following these write-offs with cash and available
borrowing capacity on short-term lines of credit of approximately $2.7 million
and shareholders' equity of approximately $13 million. We will continue to
focus our operations on accelerated commercialization of our technology
portfolio, continued growth of our manufacturing activities and achieving our
goal of profitable operations for the fourth quarter. We believe that
focusing the Company's operations on these objectives will yield the best
results for our shareholders."
Unique Mobility, Inc. is a leading developer and manufacturer of power
dense, high efficiency motors, gear assemblies and electronic assemblies for
the automotive, aerospace, telecommunications, medical and industrial markets.
The Company's headquarters and engineering and product development center are
located in Golden, Colorado. Manufacturing facilities are located in
Frederick, Colorado (electric motors and gear assemblies) and St. Charles,
Missouri (electronic assemblies and wire harnesses).
This press release contains forward-looking statements that involve risks
and uncertainties. Examples of forward-looking statements are statements of
the Company's expectations regarding future financial results and its ability
to further commercialize its technology and increase its manufacturing
activities. These statements may differ materially from actual future events
or results. Readers are referred to the Risk Factors section of the
Registration Statement on Form S-3 (File No. 333-78525) filed by the Company
with the SEC, which identifies important risk factors that could cause actual
results to differ from those contained in the forward-looking statements,
including the Company's ability to become profitable and its ability to obtain
additional financing, the Company's reliance on major customers and suppliers,
potential impacts from Year 2000 issues and the possibility that product
liability insurance may become unavailable. These forward-looking statements
represent the Company's judgment as of the date of the press release. The
Company disclaims, however, any intent or obligation to update these
forward-looking statements.