SANTA ANA, Calif., May 9, 2006 (PRIMEZONE) -- IMPCO Technologies, Inc. (Nasdaq:IMCO) today reported results for its first quarter ended March 31, 2006, reflecting record profitability driven primarily by the full consolidation of results derived from its BRC SrL acquisition, which was completed on March 31, 2005.
Revenue for the first quarter more than doubled to $56.1 million from $25.0 million a year earlier, primarily due to strong sales growth in the global transportation markets and the inclusion of BRC revenues on a fully consolidated basis beginning with the second quarter of 2005. Net income for the first quarter of 2006 was $3.7 million, or $0.12 per diluted share, compared with a net loss of $2.2 million, or $0.10 per share, in the same period last year.
"Results for the first quarter reflect the strength and position of our BRC brands and highlight the benefits of our BRC acquisition last year. Additionally, we are beginning to see improving margins resulting from our focus last year on streamlining our business operations," said Mariano Costamagna, president and chief executive officer. "Escalating oil prices have placed renewed attention on alternative fuel systems and IMPCO's financial turnaround greatly enhances the company's ability to capitalize on its leadership position within the gaseous fuels market," Costamagna added.
He noted that consolidated gross profit for the first quarter of 2006 increased 160 percent to $17.6 million from $6.8 million in the same period in 2005, primarily due to the addition of BRC operations.
Consolidated operating expenses increased 20 percent to $10.8 million from $9.0 million a year earlier, primarily due to:
-- A $4.7 million increase in operating expenses associated with the
consolidation of BRC expenses, including $439,000 in increased
amortization costs for intangible assets acquired; offset by,
-- A $2.7 million decrease in domestic operations expenses,
primarily due to:
-- A $700,000 decrease in U.S. Operations expenses resulting
primarily from streamlining activities;
-- A $2.0 million decrease in corporate expenses, primarily due to
compensation, medical benefits and previously granted stock
options for two former executives in the first quarter of 2005.
Income tax expense of approximately $2.7 million for the first quarter of 2006 was primarily related to international operations at an effective tax rate of 45 percent.
As a result of the above, consolidated operating income increased to $6.8 million from an operating loss of $2.2 million during the same period in the prior year.
Other expense of $230,000 for the first quarter ended March 31, 2006 consisted primarily of net unrealized foreign exchange losses as a result of fluctuations between the U.S. dollar and the euro.
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 6:30 a.m. Pacific Time to discuss the company's financial results and operations for the quarter. 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 9041065. 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 9:30 a.m. PDT Tuesday, May 9 through 9:00 p.m. Friday, May 12 by calling (800) 642-1687 (domestic) or (706) 645-9291 (international) and using access code: 9041065.
About IMPCO Technologies
IMPCO designs, manufactures, markets and supplies advanced products and systems that enable internal combustion engines to run on clean burning gaseous fuels such as natural gas, propane and biogas. IMPCO is a leader in the heavy duty, industrial, power generation and stationary engines sectors. Headquartered in Santa Ana, 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 ability to remain profitable, potential benefits of streaming our business operations, the expected growing interest in our alternative fuel products, 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 the "Risk Factors" section of the Company's Quarterly Report on Form 10-Q, for the quarter ended March 31, 2006. 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 share and per share data)
(unaudited)
Three Months Ended
March 31,
--------
2005 2006(a)
---- ------
Revenue $ 25,005 $ 56,081
Costs and expenses:
Cost of revenue 18,209 38,434
Research and development
expense 1,341 2,098
Selling, general and
administrative expense 5,805 8,054
Stock-based compensation expense 1,759 228
Amortization of intangible assets -- 439
Acquired in-process technology 75 --
------------ -----------
Total costs and expenses 27,189 49,253
Operating income (loss) (2,184) 6,828
Other expense, net 98 230
Interest expense, net 257 144
------------ -----------
Income (loss) before income
taxes and equity share in income
of unconsolidated affiliates (2,539) 6,454
Equity share in income of
unconsolidated affiliates, net (910) (227)
Income tax expense (327) (2,690)
------------ -----------
Income (loss) before minority
interests (1,956) 3,991
Minority interest in income of
consolidated subsidiaries 225 292
------------ -----------
Net income (loss) $ (2,181) $ 3,699
============ ============
Net income (loss) per share:
Basic $ (0.10) $ 0.13
============ ============
Diluted $ (0.10) $ 0.12
============ ============
Number of shares used in per
share calculation:
Basic 21,741,731 29,033,123
============ ============
Diluted 21,741,731 29,598,685
============ ============
(a) The results of the three months ended March 31, 2006 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 and per share data)
December 31, March 31,
2005 2006
---- ----
(unaudited)
---------
ASSETS
Current assets:
Cash and cash equivalents $ 27,110 $ 28,017
Accounts receivable less
allowance for doubtful
accounts of $3,194 and $3,460 37,447 45,711
Inventories:
Raw materials and parts 23,226 28,780
Work-in-process 1,256 1,562
Finished goods 9,049 14,408
-------- --------
Total inventories 33,531 44,750
Other current assets 4,475 4,327
Related party receivables 3,306 1,769
-------- --------
Total current assets 105,869 124,574
Equipment and leasehold
improvements
Dies, molds and patterns 7,196 7,212
Machinery and equipment 16,599 16,668
Office furnishings and
equipment 9,818 10,006
Automobiles and trucks 1,043 2,116
Leasehold improvements 3,649 4,134
-------- --------
38,305 40,136
Less accumulated
depreciation and amortization 24,231 24,887
-------- --------
Net equipment and
leasehold improvements 14,074 15,249
Goodwill 36,338 36,849
Deferred tax assets, net 1,097 1,167
Intangible assets, net 11,009 10,785
Investment in affiliates 1,387 1,286
Other assets 3,501 2,408
Non-current related
party receivable 3,570 3,784
-------- --------
Total Assets $176,845 $196,102
======== ========
IMPCO TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31 March 31,
2005 2006
---- ----
(unaudited)
---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,427 $ 45,269
Accrued payroll obligations 5,247 4,226
Other accrued expenses 12,589 15,487
Current revolving line of credit 6,248 4,843
Current maturities of other loans 2,634 2,568
Current maturities of capital leases 278 287
Deferred tax liabilities 1,921 1,928
Related party payables 4,925 6,582
--------- ---------
Total current liabilities 68,269 81,190
Term loans 7,688 7,282
Capital leases 774 731
Other liabilities 3,679 3,802
Minority interest 3,152 3,443
Deferred tax liabilities 4,997 4,858
Stockholders' equity:
Preferred stock, $.001 par value,
authorized 500,000 shares;
none issued and outstanding at
December 31, 2005 and March 31, 2006 -- --
Common stock, $.001 par value,
authorized 100,000,000 shares;
28,902,791 issued and
outstanding at December 31, 2005
and 29,147,689 issued and
outstanding at March 31, 2006 29 29
Additional paid-in capital 192,055 194,689
Unearned stock-based compensation -- (1,487)
Shares held in treasury (616) (510)
Accumulated deficit (101,560) (97,861)
Accumulated other comprehensive loss (1,622) (64)
--------- ---------
Total stockholders' equity 88,286 94,796
--------- ---------
Total Liabilities and
Stockholders' Equity $ 176,845 $ 196,102
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