CERRITOS, Calif., April 3, 2006 (PRIMEZONE) -- IMPCO Technologies, Inc. (Nasdaq:IMCO) today reported results for its fourth quarter and year ended December 31, 2005, reflecting contributions from the full consolidation of its BRC acquisition beginning in the second quarter of 2005.
Revenues during the fourth quarter of 2005 increased 91.5 percent to $51.9 million from $27.1 million in the same period a year earlier primarily due to the addition of BRC revenues. The company reported a net loss for the 2005 fourth quarter of $0.5 million, or $0.02 per share, compared with a net loss of $17.9 million, or $0.96 per share, a year ago.
Revenues for the year ended December 31, 2005, increased 47.5 percent to $174.5 million from $118.3 million during the same period in the prior year. The increase in revenues was primarily due to the inclusion of BRC revenues beginning in the second quarter of 2005. For the year, the company reported a net loss of $10.7 million, or $0.40 per share, compared with a net loss of $15.9 million, or $0.85 per share, a year ago.
For the fourth quarter of 2005, consolidated gross profit increased $10.9 million compared with the same period in 2004. Consolidated operating expenses decreased $1.6 million during the fourth quarter of 2005 to $9.7 million from $11.3 million during the same period in the prior year, primarily due to:
-- a $2.8 million goodwill impairment loss and $0.9 million higher operating expenses which were included in the prior year related to two international operations; -- a decrease in operating expenses of $0.9 million in U.S. operations and $0.9 million in international operations; -- a partial offset by an increase of $3.9 million in operating expenses associated with BRC
As a result of the above factors, consolidated operating income increased $12.5 million during the fourth quarter of 2005 to $3.7 million from an operating loss of $8.8 million during the same period in the prior year.
For the year ended December 31, 2005, consolidated gross profit increased $20.8 million compared with the same period in 2004, primarily due to the addition of BRC revenues beginning in the second quarter of 2005.
Consolidated operating expenses for the year ended December 31, 2005 increased $15.2 million to $43.0 million from $27.8 million during the same period in 2004, primarily due to:
-- a $13.3 million increase in operating expenses associated with BRC,including $1.3 million in amortization costs for intangible assets acquired; -- $2.2 million higher compensation and benefit costs related to two former officers; -- a $1.6 million increase in outside professional fees relating to SEC filings and Sarbanes-Oxley compliance; -- a $1.5 million increase in R&D costs related to the Seattle facility closure
The above increases were offset by a decrease of $2.8 million goodwill impairment loss related to two international operations in the prior year.
As a result, consolidated operating income for the year ended December 31, 2005 increased $5.6 million to $4.5 million from an operating loss of $1.1 million during the same period in 2004. Other income of $0.5 million for the year ended December 31, 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 increased $11.7 million to $14.0 million for the year ended December 31, 2005 from $2.3 million for the same period in 2004. Income tax expense for 2005 and 2004 includes $8.5 million and $1.3 million, respectively, of non-cash charges associated with an increase in the valuation allowance for deferred tax assets related to domestic operations.
"Our focus in 2005 was on the integration of BRC, streamlining our business operations and on cost-reduction initiatives necessary to return the company to profitability. With these activities now nearing a close, we will bring a strict focus to our core business operations and markets. As we look forward, we see growing interest in our alternative fuel products driven by broad economic, political, and environmental initiatives on a global basis, and we look forward to capitalizing on the significant opportunities available to IMPCO as the company's strategic plan is implemented," said Mariano Costamagna, president and chief executive officer.
Teleconference and Web Cast
Mariano Costamagna, president and chief executive officer, Brad Garner, chief operating officer, and Thomas M. Costales, chief financial officer, will host an investor conference call today at 1:00 p.m. Pacific Time to discuss the company's financial results and operations for the year. The call will be open to all interested investors, either through a live audio Web broadcast via the Internet at http://www.impco.ws or live by calling (866) 715-8813 (domestic) or (706) 634-1323 (international) with call ID number 7527702. For those who are not available to listen to the live broadcast, the call will be archived for two weeks on IMPCO's Web site. A telephone playback of the conference call will also be available from 2:00 p.m. PDT Monday, April 3 through 9:00 p.m. Thursday, April 6 by calling (800) 642-1687 (domestic) or (706) 645-9291 (international) and using access code: 7527702.
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. Additional information is available at 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 automobile manufacturers for OEM projects. Headquartered in Cherasco, Italy, BRC has offices throughout Asia, Europe and South America. Additional information is available at BRC's web site, http://www.brc.it.
Some matters discussed in this press release are forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those discussed in any forward-looking statement. Those forward looking statements include statements relating to our intended focus to our core business operations and markets, the expected growing interest in our alternative fuel products, the expected broad economic, political, and environmental initiatives supporting alternative fuel products on a global basis, and our intent to capitalize on the significant opportunities available to IMPCO as the company's strategic plan is implemented. Factors that could cause or contribute to such differences between our expected future results and actual results include, 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, for the year ended December 31, 2005. 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.
(Tables follow)
IMPCO TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per share data) Three Months Ended Year Ended December 31, December 31, ------------ ------------ 2004 2005(a) 2004 2005(a) ---- ---- ---- ---- Revenue $ 27,147 $ 51,856 $ 118,292 $ 174,539 Costs and expenses: Cost of revenue 24,680 38,508 91,554 126,971 Research and development expense 1,445 1,549 4,634 8,052 Selling, general and administrative expense 7,049 8,813 20,331 33,541 Amortization of intangibles acquired -- (571) -- 1,334 Impairment loss of goodwill 2,833 -- 2,833 -- Acquired in-process technology -- (105) -- 99 -------- -------- -------- -------- Total costs and expenses 36,007 48,194 119,352 169,997 Operating (loss) income (8,860) 3,662 (1,060) 4,542 Other (expense) income (4) (409) -- 547 Loss on extinguishment of debt (6,752) -- (6,752) -- Interest expense, net (1,346) (185) (5,509) (690) -------- -------- -------- -------- (Loss) income before income taxes and equity share in income of unconsolidated affiliates (16,962) 3,068 (13,321) 4,399 Equity share in income of unconsolidated affiliates 439 85 1,157 1,075 Write-off of equity in unconsolidated affiliates (214) (1,045) (214) (1,045) Income tax expense (827) (2,376) (2,325) (14,025) -------- -------- -------- -------- Loss before minority interests and cumulative effect of a change in accounting principle (17,564) (268) (14,703) (9,596) Minority interest in income of consolidated subsidiaries (322) (192) (1,176) (975) -------- -------- -------- -------- Loss before cumulative effect of a change in accounting principle (17,886) (460) (15,879) (10,571) Cumulative effect of a change in accounting principle, net of taxes -- -- -- (117) -------- -------- -------- -------- Net loss $ (17,886) $ (460) $ (15,879) $ (10,688) ======== ======== ======== ======== Net loss per share before cumulative effect of a change in accounting principle: Basic and diluted $ (0.96) $ (0.02) $ (0.85) $ (0.39) ======== ======== ======== ======== Per share effect of the cumulative effect of a change in accounting principle: Basic and diluted $ -- $ -- $ -- $ (0.01) ======== ======== ======== ======== Net loss per share: Basic and diluted $ (0.96) $ (0.02) $ (0.85) $ (0.40) ======== ======== ======== ======== Number of shares used in per share calculation: Basic and diluted 18,646 28,903 18,608 26,977 ======== ======== ======== ======== (a) The results of the three and twelve months ended December 31, 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, December 31, 2004 2005(b) ---- ---- ASSETS Current assets: Cash and cash equivalents $ 8,418 $ 27,110 Accounts receivable less allowance for doubtful accounts of $1,687 and $3,194 18,072 37,447 Inventories: Raw materials and parts 8,624 23,226 Work-in-process 233 1,256 Finished goods 3,747 9,049 -------- -------- Total inventories 12,604 33,531 Deferred tax assets 182 -- Other current assets 1,956 4,475 Related party receivables 2,746 3,306 -------- -------- Total current assets 43,978 105,869 Equipment and leasehold improvements Dies, molds and patterns 7,174 7,196 Machinery and equipment 8,039 16,599 Office furnishings and equipment 7,809 9,818 Automobiles and trucks 409 1,043 Leasehold improvements 3,474 3,649 -------- -------- 26,905 38,305 Less accumulated depreciation and amortization 19,702 24,231 -------- -------- Net equipment and leasehold improvements 7,203 14,074 Goodwill 7,973 36,338 Deferred tax assets, net 8,183 1,097 Intangible assets, net -- 11,009 Investment in affiliates 27,046 1,387 Business acquisition costs 788 -- Other assets 2,430 3,501 Non-current related party receivable 851 3,570 -------- -------- Total Assets $ 98,452 $176,845 ======== ======== (b) Includes the consolidation of BRC's balance sheet at December 31, 2005.
IMPCO TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data) December 31, December 31, 2004 2005(c) ---- ---- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 9,914 $ 34,427 Accrued payroll obligations 2,889 5,247 Other accrued expenses 6,238 12,589 Current revolving line of credit 7,680 6,248 Current maturities of term debt 140 2,912 Current portion of related party term loan 2,600 -- Deferred tax liabilities -- 1,921 Related party payables -- 4,925 --------- --------- Total current liabilities 29,461 68,269 Term loans -- 7,688 Related party term loan 19,400 -- Capital leases 151 774 Deferred tax liabilities -- 4,997 Other liabilities 1,702 3,679 Minority interest 2,907 3,152 Stockholders' equity: Preferred stock, $.001 par value, authorized 500,000 shares; none issued and outstanding at December 31, 2004 and 2005 -- -- Common stock, $.001 par value, authorized 100,000,000 shares; 18,737,437 issued at December 31, 2004 and 28,902,791 issued at December 31, 2005 19 29 Additional paid-in capital 135,291 192,055 Shares held in treasury (528) (616) Accumulated deficit (90,872) (101,560) Accumulated other comprehensive income (loss) 921 (1,622) --------- --------- Total stockholders' equity 44,831 88,286 --------- --------- Total Liabilities and Stockholders' Equity $ 98,452 $ 176,845 ========= ========= (c) Includes the consolidation of BRC's balance sheet at December 31, 2005.