Turbodyne Reports Financial Results
24 November 1999
Turbodyne Reports Financial Results for the Nine Months and Three Months Periods Ended Sept. 30, 1999
CARPINTERIA, Calif.--Nov. 24, 1999--Turbodyne Technologies Inc. (EASDAQ:TRBD) today reported financial results for the nine months and three months periods ended Sept. 30, 1999.Revenues for the nine months ended Sept. 30, 1999 increased to $41,389,000 compared to $29,808,000 for the same period in 1998, an increase of 39%. Revenues in the Light Metals Division for the nine months ended Sept. 30, 1999 were $40,670,000 compared to $29,390,332 for the same period in 1998. Revenues in the Engine Technology Division for that period were $720,000, compared to $418,000 for the same period a year ago, an increase of 72%. For the three months ended Sept. 30, 1999 revenues increased to $11,137,000 compared to $9,058,000 in the third quarter of 1998, an increase of 23%.
Gross profit for the nine months ended Sept. 30, 1999 decreased to $3,461,710 from $4,812,000 for the same period in 1998, and for the three months ended Sept. 30, 1999 decreased to $(898,000) from $1,596,000 for the three months ended Sept. 30, 1998. Loss per share for the nine months ended Sept. 30, 1999 was 37 cents per share, compared to 35 cents per share for the same period in 1998. The fully diluted weighted average shares outstanding for the first nine months of 1999 were 40,648,000, compared to 34,296,000 shares a year ago. Loss per share for the quarter ended Sept. 30, 1999 was 19 cents per share, compared to 11 cents per share for the same period in 1998. The fully diluted weighted average shares outstanding for the third quarter of 1999 were 42,798,000, compared to 37,054,000 a year ago.
The decrease in gross profit is the result of increased costs and difficulties in inventory control as a result of the modernization and relocation of the Light Metals Division's operations which caused inefficiencies and manufacturing related difficulties. During the first nine months of 1999 the volume of product manufactured by the Light Metals Division increased. However, the cost of goods sold remained substantially higher than expected. The Company believes that the higher than expected costs were due primarily to a high turnover rate of employees at its manufacturing facilities in Mexico, higher than average scrap and a physical manufacturing process that did not provide for optimum efficiencies.
On Sept. 30, 1999, Pacific Baja and its subsidiaries commenced Chapter 11 bankruptcy proceedings in the United States Bankruptcy Court for the Central District of California. Pacific Baja has arranged Court-approved bank financing with Wells Fargo Bank which will finance Pacific Baja to the end of the fourth quarter. Pursuant to a Bankruptcy Court order, an auction sale is scheduled for Dec. 9, 1999, at which time substantially all of the assets of Pacific Baja and its subsidiaries will be sold to the highest bidder.
Turbodyne Technologies Inc. has developed a long-term strategy of working with an original equipment manufacturer within the framework of an already established joint development, licensing, supply and royalty agreement with the leading turbocharger manufacturer. Turbodyne has been granted the sole worldwide right to exclusively produce and supply high tech motors, generators and electronic controllers for Electrically Assisted Turbochargers (EAT) by the same leading turbocharger manufacturer.
Gerhard Delf, Turbodyne's Chief Executive Officer, summarized the corporate outlook, "Turbodyne focuses its main resources, under a joint development agreement with the leading turbocharger manufacturer, on the design and development of Electrically Assisted Turbochargers (EAT). Furthermore, as the exclusive supplier of the components mentioned above, Turbodyne will start preparing for the manufacture and sale of the high technology components, i.e. motors, generators and electronic controls, for OEM Electrically Assisted Turbochargers, which I expect will, together with royalties, be the long-term source of revenues for the Company."
"In a strong effort to increase efficiency and productivity, Turbodyne is engaged in the concentration of resources at two strategic locations, Carpinteria, CA, the Corporate Headquarter and Center for Research, Design and Development, and at Frankfurt, Germany, as a strong presence for Europe. The relocation of Corporate Headquarters to and the concentration of R&D in Carpinteria have already been completed. Subsequently, this has also allowed for personnel reductions," concluded Delf.
Turbodyne Systems, the Engine and Pollution Technology Division of Turbodyne, designs, develops, manufactures and markets patented pollution-reduction, fuel economy and performance enhancing products for internal combustion engines in the automotive, construction, marine, mining and military industries. Turbodyne's Light Metals Division is a manufacturer of machined aluminum castings and a supplier to the automotive industry.
Turbodyne Technologies Inc. maintains offices and/or plants in Carpinteria and La Mirada, CA; Syosset, NY; Ensenada, Mexico; Paris, France; and Frankfurt, Germany.
With the exception of the historical information contained in this news release, the matters discussed above include forward-looking statements that involve risks and uncertainties. Actual results may vary substantially as a result of a variety of factors, including, among others, the ability of the company to continue as a going concern, the sale of Pacific Baja, the resolution of the awards and judgements outstanding against the company, the effects of competition, the effects of the Company's ongoing cost reduction measures, as well as conditions within the global automotive market, general economic conditions, and political changes both domestically and overseas.
Turbodyne's World Wide Web address is: www.turbodyne.com
Turbodyne Technologies Inc.
and Subsidiaries
Condensed Consolidated Balance Sheets
September 30, 1999 and December 31, 1998
(Unaudited)
Assets 1999 1998
Current assets:
Cash $ 156,000 1,257,000
Trade accounts receivable, net 8,281,000 10,623,000
Inventories 5,892,000 6,507,000
Prepaid expenses and other
current assets 1,591,000 1,816,000
Total current assets 15,920,000 20,203,000
Property, Plant and Equipment,
at cost, net 20,897,000 20,616,000
Goodwill, net 12,431,000 12,992,000
Other assets 1,161,000 1,235,000
50,409,000 55,046,000
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt 10,171,000 497,000
Current maturities of obligations
under capital leases 1,102,000 778,000
Accounts payable 12,173,000 8,916,000
Accrued liabilities 3,890,000 5,127,000
Income taxes payable - 700,000
Total current liabilities 27,336,000 16,018,000
Long-term debt,
less current maturities 1,557,000 9,941,000
Convertible debentures 400,000 -
Obligations under capital leases,
less current maturities 2,743,000 3,138,000
32,036,000 29,097,000
Stockholders' Equity:
Preferred stock, $0.001 par value.
Authorized 1,000,000 shares; issued
10,000 Series A Convertible
Preferred and 10,000 Series B
Convertible Preferred shares and
outstanding none in 1999 and 1998 - -
Common stock, $0.001 par value.
Authorized 60,000,000 shares; issued
and outstanding 48,058,627 shares in
1999 and 41,313,816 shares in 1998 49,000 42,000
Treasury stock, at cost, 378,580 shares
in 1999 and 330,080 shares in 1998 (1,759,000) (1,500,000)
Additional paid-in capital 89,625,000 81,770,000
Cumulative other comprehensive
income (251,000) (94,000)
Accumulated deficit (69,291,000) (54,269,000)
Total stockholders' equity 18,373,000 25,949,000
50,409,000 55,046,000
Turbodyne Technologies Inc.
and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Net sales $ 11,137,000 9,058,000 41,390,000 29,808,000
Cost of goods
sold 12,035,000 7,462,000 37,928,000 24,996,000
Gross profit (898,000) 1,596,000 3,462,000 4,812,000
Selling, general
and administra-
tive expenses 6,286,000 3,170,000 14,001,000 10,421,000
Research and
development
costs 549,000 1,249,000 3,414,000 4,374,000
Relocation costs - 1,471,000 - 1,471,000
Loss from
operations (7,733,000)(4,294,000) (13,954,000)(11,454,000)
Other expense
(income):
Interest expense,
net 472,000 (22,000) 1,185,000 559,000
Other, net (7,000) (15,000) (122,000) (11,000)
Loss before
income taxes (8,198,000)(4,257,000) (15,018,000)(12,002,000)
Income tax expense - (24,000) 4,000 -
Net loss $(8,198,000)(4,233,000) (15,022,000)(12,002,000)
Net loss per
common share:
Basic loss
per share (0.19) (0.11) (0.37) (0.35)
Diluted loss
per share (0.19) (0.11) (0.37) (0.35)
Weighted average
shares used for
basic and diluted
loss per share 42,798,000 37,054,000 40,648,000 34,296,000