Liquidmetal Technologies Reports Third Quarter 2012 Results

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Liquidmetal Technologies Reports Third Quarter 2012 Results

RANCHO SANTA MARGARITA, Calif.--(BUSINESS WIRE)-- Liquidmetal® Technologies Inc. (LTI) (OTCQB: LQMT), the leading developer of amorphous alloys and composites, reported results for the third quarter ended September 30, 2012.

Q3 2012 Operational Highlights

  • During the quarter, the company shipped four new Liquidmetal prototype parts to customers in the industrial, medical, and aerospace industries, bringing the total number of prototypes shipped in 2012 to seven.
  • LTI expanded its strategic partnership with Materion Brush, the company's certified Liquidmetal alloy production partner, adding the expertise and customer relationships of their global sales team to LTI's sales and marketing efforts.
  • LTI engaged Nomad Sales, an independent manufacturer's representative firm, to promote commercial applications of Liquidmetal in the aerospace, medical and industrial markets. The Nomad Sales partners each have more than 25 years of industry experience, and will leverage their relationships to promote Liquidmetal alloy in the Midwest region of the U.S.
  • At quarter-end, the company's IP portfolio included more than 50 licensed U.S. patents, with an additional 50+ patent applications pending. Its patent applications relate to the composition, processing, and application of Liquidmetal alloys.
  • LTI completed a $12 million senior convertible note financing to fund additional sales and marketing initiatives focused on accelerating customer acceptance and revenue growth.

Management Commentary

"During the third quarter of 2012, we made progress toward the continued commercialization of our revolutionary Liquidmetal technology," said Tom Steipp, president and CEO of Liquidmetal Technologies. "We achieved several operational milestones in the quarter, including the delivery of four new prototype parts, the expansion of our sales reach through partnerships with Materion and Nomad Sales, and the shipment of our first production parts as produced by our new certified Liquidmetal manufacturing partners. We believe that we now have the resources and infrastructure in place to support continued growth of prototype parts leading to full production within our targeted applications and accounts."

Q3 2012 Financial Summary

In the third quarter of 2012, the company generated nominal revenues as it focused on penetrating target applications and customers to sell prototype parts.

Total operating expenses in the third quarter of 2012 were $1.6 million, compared to $2.3 million in the same year-ago period. The year-over-year decrease is primarily due to a one-time settle expense recognized in Q3 2011.

Cash and cash equivalents totaled $8.7 million at September 30, 2012, as compared to $1.5 million at the end of the prior quarter. The increase in cash was due to the $12.0 million capital raise completed in July 2012.

Conference Call

Liquidmetal Technologies' management will hold a conference call later today (November 13, 2012) to discuss these results. The company's President and CEO Tom Steipp and CFO Tony Chung will host the call starting at 4:30 p.m. Eastern time. A question and answer session will follow management's presentation.

Date: Tuesday, November 13, 2012
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 888-263-2884
International: 913-905-3226
Conference ID#: 9941801

The conference call will be broadcast simultaneously and available for replay via the investors section of the company's website at www.liquidmetal.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.

If you have any difficulty connecting with the conference call, please contact Liolios Group at 949-574-3860.

About Liquidmetal Technologies

Rancho Santa Margarita, California-based Liquidmetal Technologies, Inc. is the leading developer of bulk alloys and composites that utilize the performance advantages offered by amorphous alloy technology. Amorphous alloys are unique materials that are distinguished by their ability to retain a random structure when they solidify, in contrast to the crystalline atomic structure that forms in ordinary metals and alloys. Liquidmetal Technologies is the first Company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. For more information, go to www.liquidmetal.com.

Forward-Looking Statement

This press release contains "forward-looking statements," including but not limited to statements regarding the advantages of Liquidmetal's amorphous alloy technology, scheduled manufacturing of customer parts and other statements associated with Liquidmetal's technology and operations. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Liquidmetal's expectations and projections. Risks and uncertainties include, among other things; customer adoption of Liquidmetal's technologies and successful integration of those technologies into customer products; potential difficulties or delays in manufacturing products incorporating Liquidmetal's technologies; Liquidmetal's ability to fund its current and anticipated operations; the ability of third party suppliers and manufacturers to meet customer product requirements; general industry conditions; general economic conditions; and governmental laws and regulations affecting Liquidmetal's operations. Additional information concerning these and other risk factors can be found in Liquidmetal's public periodic filings with the U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Liquidmetal's 2011 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.

 
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share data)

   
September 30,December 31,

2012

2011

(Unaudited)(Audited)

ASSETS

 
Current assets:
Cash$8,701$122
Trade accounts receivable, net of allowance for doubtful accounts of $0 and $098241
Related party notes receivable200200
Prepaid expenses and other current assets 846  248 
Total current assets$9,845$811
Property and equipment, net154162
Patents and trademarks, net901968
Other assets 32  52 
Total assets$10,932 $1,993 
 

LIABILITIES AND SHAREHOLDERS' DEFICIT

 
Current liabilities:
Accounts payable235803
Accrued liabilities170457
Accrued dividends222571
Deferred revenue-67
Short-term debt-1,712
Convertible note, net of debt discount of $8,1772,823-
Embedded conversion feature liability 6,080  - 
Total current liabilities$9,530$3,610
 
Long-term liabilities
Warrant liabilities5,302-
Other long-term liabilities 856  609 
Total liabilities$15,688$4,219
 
Shareholders' deficit:
Convertible, redeemable Series A Preferred Stock, $0.001 par value; 10,000,000
shares authorized; 506,936 and 1,299,151 shares issued and outstanding at
September 30, 2012 and December 31, 2011, respectively-1
Common stock, $0.001 par value; 400,000,000 shares authorized; 196,962,069
and 134,467,554 shares issued and outstanding at September 30, 2012
and December 31, 2011, respectively193130
Warrants18,17924,438
Additional paid-in capital163,771149,064
Accumulated deficit (186,899) (175,859)
Total shareholders' deficit$(4,756)$(2,226)
  
Total liabilities and shareholders' deficit$10,932 $1,993 
 
LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share data)

(unaudited)

   

For the Three Months

For the Nine Months

Ended September 30,

Ended September 30,

2012

 

2011

2012

 

2011

(Restated)

(Restated)

Revenue
Products$80$112$471$345
Licensing and royalties 27  -  46  381 
Total revenue107112517726
 
Cost of revenue 73  43  256  212 
Gross profit3469261514
 
Operating expenses
Selling, marketing, general and administrative1,3728773,3382,741
Research and development217273616886
Manufacturing contract costs--6,300-
Settlement expense -  1,127  -  1,712 
Total operating expenses 1,589  2,277  10,254  5,338 
Operating loss from continuing operations(1,555)(2,208)(9,993)(4,824)
 
Change in value of warrants4,1847434,0101,327
Change in value of embedded conversion feature liability2,785-2,785-
Debt discount amortization(6,247)-(6,247)-
Financing costs--(1,355)-
Other income-20-26
Interest expense(240)(17)(258)(48)
Interest income 10  4  18  18 
 
Loss from continuing operations before income taxes(1,063)(1,458)(11,040)(3,501)
 
Income taxes -  -  -  - 
 
Loss from continuing operations(1,063)(1,458)(11,040)(3,501)
 
Discontinued operations:
Loss on disposal of subsidiary, net of tax-(331)-(331)
Loss from operations of discontinued operations, net of taxes -  (96) -  (637)
 
Net loss(1,063)(1,885)(11,040)(4,469)
 
Other comprehensive income

Foreign exchange translation gain (loss) during the period

 -  (25) -  11 
Comprehensive loss$(1,063)$(1,910)$(11,040)$(4,458)
 
Per common share basic and diluted:
 
Loss from continuing operations

$

(0.01

)

$

(0.01

)

$

(0.06

)

$

(0.03

)

Loss from discontinued operations 

-

  

-

  -  - 
Basic and diluted loss per share

$

(0.01

)

$(0.01)

$

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