CERRITOS, Calif., Nov. 21 /PRNewswire-FirstCall/ -- IMPCO
Technologies, Inc. (NASDAQ:IMCO) today reported results for its
third quarter ended September 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 of 2005. Revenues during the third quarter of 2005
increased $19.0 million or 63.2% to $49.1 million from $30.1
million during the third quarter of 2004. Revenues for the nine
months ended September 30, 2005 increased $31.6 million or 34.6% to
$122.7 million from $91.1 million during the same period in the
prior year. The increase in revenues during the three and nine
months periods ended September 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 for the
third quarter increased $6.2 million compared to the same period in
2004 primarily due to the addition of BRC revenues. Consolidated
operating expenses increased $8.2 million during the third quarter
of 2005 to $13.9 million from $5.7 million during the same period
in the prior year, primarily due to: * $6.3 million increase in
operating expenses associated with BRC, including $1.9 million in
increased amortization costs for intangible assets acquired; * $1.5
million increase in allowance for doubtful receivables from our
affiliates; and * $0.5 million increase in R&D costs related to
the Seattle facility closure. As a result of the above,
consolidated operating income decreased $1.9 million during the
third quarter of 2005 to $0.5 million from $2.4 million during the
same period in the prior year. For the nine months ended September
30, 2005, consolidated gross profit increased $9.9 million compared
to the same period in 2004 primarily due to the addition of BRC
revenues. Consolidated operating expenses for the nine months ended
September 30, 2005 increased $16.8 million to $33.3 million from
$16.5 million during the same period in 2004, primarily due to: *
$9.4 million increase in operating expenses associated with BRC,
including $1.9 million in increased amortization costs for
intangible assets acquired; * $2.2 million in higher compensation
and benefit costs related to two former officers; * $1.6 million in
higher outside professional fees; * $1.5 million increase in
R&D costs related to the Seattle facility closure; * $1.5
million increase in allowance for doubtful receivables from our
affiliates; and * $0.3 million in higher equipment leasing costs.
As a result, consolidated operating income for the nine months
ended September 30, 2005 decreased $6.9 million to $0.9 million
from $7.8 million during the same period in 2004. Other income of
$1.0 million for the nine month period ended September 30, 2005
consisted primarily of net unrealized foreign exchange gains as a
result of movements between the U.S. dollar and the euro. Income
tax expense for the third quarter and nine months ended September
30, 2005 included an $8.7 million non-cash charge associated with
an increase in the valuation allowance for deferred tax assets
related to domestic operations. Net loss for the third quarter of
2005 was $9.2 million or $0.32 per diluted share compared to net
income of $0.5 million or $0.03 per diluted share in the third
quarter of 2004. Net loss for the nine months ended September 30,
2005, was $10.2 million or $0.39 per diluted share compared to net
income of $2.0 million or $0.10 per diluted share for the same
period in 2004. Mariano Costamagna, President and CEO, said, "We
are pleased that we achieved our consolidated revenue and gross
margin goals for the third quarter. Our revenue growth continues to
be driven largely by the demand for our new fuel injection
technology that enables light duty vehicles to operate on
economical and clean burning alternative fuels rather than higher
cost fuels like gasoline or diesel. He continued: "Earlier this
year when I became CEO, I committed to our shareholders to promote
a corporate environment in which shareholders find our financial
statements clear and understandable, and our performance attractive
and predictable. Our work towards this goal and our activities to
integrate IMPCO and BRC continued through the third quarter. We
expect to enter 2006 in a position to capitalize on operating
efficiencies that will allow us to continue to take advantage of
commercial growth opportunities while at the same time improving
our profitability and to have more consistency in our financial
performance." Third Quarter 2005 Conference Call IMPCO will host a
conference call to discuss financial results on Monday, November
21, 2005 at 9:00 a.m. EST, 6:00 a.m. PST. All shareholders and
other interested parties are invited to dial into the call, which
may be accessed by calling (706) 679-3125. In order to ensure
participation, please dial in 15 minutes prior to the scheduled
time. A recording of the call will be available for 24 hours and
can be accessed by calling (800) 642-1687 or (706) 645-9291,
reference code #2523382. 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, 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, as amended, 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 IMPCO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In
thousands except per share data) Three Months Ended Nine Months
Ended September 30, September 30, 2004 2005* 2004 2005* Revenue
$30,064 $49,073 $91,146 $122,683 Costs and expenses: Cost of
revenue 21,933 34,749 66,874 88,463 Research and development
expense 1,189 2,488 3,190 6,503 Selling, general and administrative
expense 4,552 9,348 13,282 24,728 Amortization of intangible assets
-- 1,905 -- 1,905 Acquired in-process technology -- 129 -- 204
Total costs and expenses 27,674 48,619 83,346 121,803 Operating
income 2,390 454 7,800 880 Other income (expense) 10 (22) 3 957
Interest expense, net (1,504) (126) (4,163) (506) Income before
income taxes and equity share in income of unconsolidated
affiliates 896 306 3,640 1,331 Equity share in income of
unconsolidated affiliates 435 138 718 990 Income tax expense (483)
(9,282) (1,499) (11,649) Income (loss) before minority interests
and cumulative effect of a change in accounting principle 848
(8,838) 2,859 (9,328) Minority interest in income of consolidated
subsidiaries 343 264 853 783 Income (loss) before cumulative effect
of a change in accounting principle 505 (9,102) 2,006 (10,111)
Cumulative effect of a change in accounting principle, net of taxes
-- (117) -- (117) Net income (loss) $505 $(9,219) $2,006 $(10,228)
Net income (loss) per share before cumulative effect of a change in
accounting principle: Basic net income (loss) $0.03 ($0.32) $0.11
$(0.38) Diluted net income (loss) $0.03 ($0.32) $0.10 $(0.38) Per
share effect of the cumulative effect of a change in accounting
principle: Basic net income (loss) $ -- $ -- $ -- $(0.01) Diluted
net income (loss) $ -- $ -- $ -- $(0.01) Net income (loss) per
share: Basic net income (loss) $0.03 ($0.32) $0.11 $(0.39) Diluted
net income (loss) $0.03 ($0.32) $0.10 $(0.39) Number of shares used
in per share calculation: Basic 18,617 28,679 18,595 26,335 Diluted
19.478 28,679 19,704 26,335 * The results of the three and nine
months ended September 30, 2005, 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, September 30, 2004 2005* (Restated) (Unaudited) ASSETS
Current assets: Cash and cash equivalents $8,418 $22,265 Accounts
receivable less allowance for doubtful accounts of $1,687 and
$2,637 18,072 35,775 Inventories: Raw materials and parts 8,624
24,565 Work-in-process 233 1,265 Finished goods 3,747 5,061 Total
inventories 12,604 30,891 Deferred tax assets 182 901 Other current
assets 1,956 3,635 Related party receivables 2,746 3,730 Total
current assets 43,978 97,197 Equipment and leasehold improvements
Dies, molds and patterns 7,174 7,155 Machinery and equipment 8,039
12,660 Office furnishings and equipment 7,809 9,923 Automobiles and
trucks 409 994 Leasehold improvements 3,474 3,485 26,905 34,217
Less accumulated depreciation and amortization 19,702 23,111 Net
equipment and leasehold improvements 7,203 11,106 Goodwill 7,973
29,018 Deferred tax assets, net 8,183 -- Investment in affiliates
27,046 2,776 Intangible assets, net -- 25,372 Business acquisition
costs 788 -- Other assets 2,430 2,100 Non-current related party
receivable 851 3,748 Total Assets $98,452 $171,317 *Includes the
consolidation of BRC's balance sheet at September 30, 2005. IMPCO
TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands except share data) December 31, September 30, 2004 2005*
(Restated) (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $9,914 $22,888 Accrued payroll
obligations 2,889 5,556 Other accrued expenses 5,624 13,706 Current
revolving line of credit 7,680 5,940 Current maturities of term
debt 140 3,087 Current portion of related party long-term debt
2,600 -- Deferred tax liability -- 1,446 Related party payables --
3,619 Total current liabilities 28,847 56,242 Term loans -- 8,538
Related party term loan 19,400 -- Related party long-term
liabilities -- 195 Capital leases 151 191 Deferred tax liabilities
-- 9,042 Other liabilities 2,316 4,479 Minority interest 2,907
2,960 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
28,900,791 issued and outstanding at September, 2005 19 29
Additional paid-in capital 135,291 192,049 Shares held in treasury
(528) (617) Accumulated deficit (90,872) (101,100) Accumulated
other comprehensive income (loss) 921 (691) Total stockholders'
equity 44,831 89,670 Total Liabilities and Stockholders' Equity
$98,452 $171,317 *Includes the consolidation of BRC's balance sheet
at September 30, 2005. DATASOURCE: IMPCO Technologies, Inc.
CONTACT: Dale Rasmussen, Vice President, Investor Relations of
IMPCO Technologies, Inc., +1-206-315-8242 Web site:
http://www.brc.it/ Web site: http://www.impco.ws/
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