IMCO Impco Technologies (MM)

IMPCO Reports First Quarter 2005 Results CERRITOS, Calif., May 18 /PRNewswire-FirstCall/ -- IMPCO Technologies, Inc. (NASDAQ:IMCO), today reported results for its first quarter ended March 31, 2005. IMPCO's first quarter fiscal 2005 results were $25.0 million in revenue and $2.2 million in operating loss, as compared to $28.6 million in revenues and $2.4 million in operating income for the same period in 2004. First quarter fiscal year 2005 revenue decreased $3.6 million, or 13%, while operating income decreased $4.6 million, or 190%, compared to the same period in 2004. Net loss for the first quarter of 2005 was $2.2 million or $0.10 net loss per share, compared to a net income of $0.5 million or $0.03 net income per share in the same period in 2004. Since the acquisition of the remaining 50% of BRC was completed on March 31, 2005, the consolidated statement of operations includes only our 50% share in BRC's earnings for the first quarter although the BRC balance sheet is fully consolidated with IMPCO's at March 31, 2005. The operating loss in the first quarter of 2005 of $2.2 million as compared to income of $2.4 million for the same period of 2004 is attributed primarily to: * A reduction in gross profit of $0.7 million due to reduced revenues of $3.6 million partially offset by a 1% higher gross margin. * Compensation expenses of $2.2 million including the remeasurement of stock options related to the departure of two former executive officers. * Higher costs of $0.9 million related to the filing of our 10-K for 2004 and expenses related to Sarbanes-Oxley compliance. * Higher research and development expenses of $0.4 million related to the development and testing of new product programs and releases * Recognition of $0.1 million for acquired in-process research and development related to the first quarter of 2005 acquisition of BRC. Mariano Costamagna, President and CEO, said, "Our first quarter revenue was down compared to the same period last year primarily due to the fact we are no longer consolidating the revenue of our operations in Mexico and India. Additionally, sales were down for the period in the industrial and power generation market due to fewer natural disasters and reduced demand for engine systems compared to last year when the product line was first introduced." Mr. Costamagna mentioned that, "With the closing of the BRC acquisition complete, we are now focused on the integration and consolidation of the two companies with a focus on creating operating efficiencies that will allow us to take advantage of industrial and commercial growth opportunities while at the same time improving profitability. We are very pleased with the current market demand being shown for our BRC transportation products with unconsolidated BRC revenues up 77% in the first quarter of 2005 compared to the same period last year." First Quarter 2005 Conference Call IMPCO will host a conference call to discuss financial results on Thursday, May 19, 2005 at 2:00 p.m. EDT, 11:00 a.m. PDT. 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 #6233187. 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 information, the statements, expectations and assumptions contained in the foregoing press release are forward-looking statements. Such forward-looking statements include, but are not limited to, the company's expectations regarding revenues in future periods and trends in the global economy and environmental regulation that impact our business from time to time. Such statements are subject to a number of risks and uncertainties, and actual results could differ materially from those discussed in any forward-looking statement. Accordingly, you should not construe statements of anticipated performance or planned courses of action as assurances or promises, and note that our statements of expectations are based on information currently available to management. Factors that could cause actual results to differ materially from our forward-looking statements include, among other factors, prevailing market and global economic conditions; changes in environmental regulations that impact the demand for our products; our ability to manage our leverage and address operating covenant restrictions relating to our indebtedness; our 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 from time to time in our SEC reports, including but not limited to those contained in the section entitled "Management's Discussion & Analysis of Financial Condition and Results of Operation - Risk Factors" in its Annual Report on Form 10-K 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 Fax: +1-206-315-8301 IMPCO TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Three Months Ended March 31, 2004 and 2005 (In thousands except per share data) Three Months Ended March 31, 2004 2005 Revenue $28,603 $25,005 Costs and expenses: Cost of revenue 21,060 18,209 Research and development expense 942 1,341 Selling, general and administrative expense 4,170 7,564 Acquired in-process technology -- 75 Total costs and expenses 26,172 27,189 Operating income (loss) 2,431 (2,184) Other expense -- 98 Interest expense, net 1,155 257 Income (loss) before income taxes and equity share in unconsolidated affiliates 1,276 (2,539) Equity share in (income) loss of unconsolidated affiliates 40 (910) Income tax expense 434 327 Income (loss) before minority interest 802 (1,956) Minority interest in income of consolidated subsidiaries 286 225 Net income (loss) $516 $(2,181) Net income (loss) per share: Basic net income (loss) $0.03 $(0.10) Diluted net income (loss) $0.03 $(0.10) Number of shares used in per share calculation: Basic 18,576 21,742 Diluted 19,986 21,742 IMPCO TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except share data) December 31, March 31, 2004 2005 (Unaudited) ASSETS Current assets: Cash and cash equivalents $8,418 $18,630 Accounts receivable, net 18,072 39,260 Inventories: Raw materials and parts 8,624 25,909 Work-in-process 233 843 Finished goods 3,747 8,207 Total inventories 12,604 34,959 Deferred tax assets 182 803 Other current assets 1,956 2,638 Related party receivables 2,746 2,892 Total current assets 43,978 99,182 Equipment and leasehold improvements Dies, molds and patterns 7,174 7,821 Machinery and equipment 8,039 10,316 Office furnishings and equipment 7,809 9,524 Automobiles and trucks 409 768 Leasehold improvements 3,474 3,847 26,905 32,276 Less accumulated depreciation and amortization 19,702 20,146 Net equipment and leasehold improvements 7,203 12,130 Net goodwill 8,856 46,815 Deferred tax assets, net 8,183 8,183 Investment in affiliates 27,668 5,544 Business acquisition costs 788 -- Other assets 2,430 2,481 Non-current related party receivable 851 4,307 Total Assets $99,957 $178,642 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $9,914 $33,720 Accrued payroll obligations 2,889 6,291 Other accrued expenses 5,624 11,238 Current revolving line of credit 7,680 6,423 Current maturities of other debt 140 2,920 Current portions of related long-term debt 2,600 -- Related party payables -- 3,373 Total current liabilities 28,847 63,965 Term loans -- 10,536 Related party term loans 19,400 -- Capital leases 151 149 Other liabilities 2,316 1,622 Minority interest 2,782 3,007 Stockholders' equity: Preferred stock, $.001 par value, authorized 500,000 shares; none issued and outstanding at December 31, 2004 and March 31, 2005 -- -- Common stock, $.001 par value, authorized 100,000,000 shares; 28,585,241 outstanding at March 31, 2005 (18,735,627 at December 31, 2004) 19 29 Additional paid-in capital 135,291 190,844 Shares held in treasury (528) (603) Accumulated deficit (89,242) (91,423) Accumulated other comprehensive income (loss) 921 516 Total stockholders' equity 46,461 99,363 Total Liabilities and Shareholders' Equity $99,957 $178,642 DATASOURCE: IMPCO CONTACT: Dale Rasmussen, Vice President, Investor Relations of IMPCO Technologies, Inc., +1-206-315-8242, or fax, +1-206-315-8301 Web site: http://www.brc.it/ Web site: http://www.impco.ws/

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