Valence Technology, Inc. (NASDAQ: VLNC), a leading U.S.-based
developer and manufacturer of advanced energy storage solutions
today reported financial results for its fiscal 2012 first quarter
ended June 30, 2011.
Highlights - Fiscal 2012 First Quarter
compared to Fiscal 2011 First Quarter:
- Revenue was $14.1 million compared to
$5.6 million.
- Gross margin improved to 20% compared
to 17%.
- Operating expenses were $5.1 million
compared to $4.5 million.
- Operating loss narrowed to $2.2 million
compared to a loss of $3.5 million.
- Net loss available to common
shareholders was $3.1 million, or $0.02 per share, compared to a
loss of $4.7 million, or $0.04 per share.
First quarter fiscal 2012 revenue increased compared to the same
period last year, due to higher sales to a more diverse group of
customers.
Executive Commentary
"We are very pleased with our revenue results as we continue to
fulfill the emerging energy storage needs of diverse world markets.
For example, in Q1 over 20 percent of our business was in the
medical industry. Within this sector, our advanced energy storage
solutions are increasingly displacing traditional lead acid
technology. Thanks to the intense focus of our sales and marketing
team we anticipate further success within this market, as well as
other emerging lithium markets," said Robert L. Kanode, president
and chief executive officer of Valence Technology. "On the fleet
and delivery vehicle portion of our business, we are happy to
report a $7.2 million June order from Electric Vehicles
International (EVI). This order is for 100 EVI Walk-In vans to be
placed throughout California. We are EVI’s exclusive supplier and
expect to begin shipments before year end as other truck and drive
train components are delivered.”
Business Outlook
Valence expects fiscal 2012 second quarter revenue to be in the
range of $8.5 million to $10.5 million. This Q2 guidance includes
no revenue from Smith Electric Vehicles. However, given that we
have several million dollars of Smith business already in backlog,
upside to our Q2 revenue guidance does exist. Until the impact of
Smith's dual sourcing decision can be better gauged, we believe it
is prudent to exclude any Smith business from our Q2 guidance at
this time.
Conference Call and Webcast
Valence Technology will conduct a conference call today at 3:30
p.m. CT (4:30 p.m. ET) to discuss its first quarter fiscal year
2012 financial results. Interested parties may participate in the
call by dialing (877) 375-1350 (international callers dial (253)
237-1153). No passcode is required. The conference call will also
be webcast live and can be accessed by visiting Valence's web site
at www.valence.com and clicking on the following links:
Investor Relations - Events & Presentations. To access the
webcast, please go to this web site approximately fifteen minutes
prior to the start of the call to register, download, and install
any necessary audio software. A replay of the webcast will be
available on the company's Web site at www.valence.com. A
telephonic replay will also be available from 6:30 p.m. CT on
August 3, 2011, through 6:30 p.m. CT on August 24, 2011. To access
the replay, please dial (855) 859-2056 and enter conference
passcode 83165571. Callers outside the United States and Canada can
access the replay by dialing (404) 537-3406 and entering the
conference passcode mentioned above.
About Valence Technology, Inc.
Valence Technology is a global leader in the development and
manufacture of safe, long-life lithium iron magnesium phosphate
advanced energy storage solutions and integrated command and
control logic. Headquartered in Austin, Texas, Valence enables and
powers some of the world’s most innovative and environmentally
friendly applications, ranging from commercial electric vehicles to
industrial and marine equipment. Valence Technology today offers a
proven technology and manufacturing infrastructure that delivers
ISO-certified products and processes that are protected by an
extensive global patent portfolio. In addition to the corporate
headquarters in Texas, Valence Technology has its Research &
Development Center in Nevada, its Europe/Asia Pacific Sales office
in Northern Ireland and global fulfillment centers in North America
and Europe. Valence Technology is traded on the NASDAQ Capital
Market under the ticker symbol “VLNC.” For more information,
visit www.valence.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, among other things, our statements regarding
continuing to fulfill the emerging needs of diverse world markets,
increasingly displacing traditional lead acid technology,
anticipating further success within this market, as well as other
emerging lithium markets, being the exclusive supplier to EVI and
expecting to begin shipments before year end, our second quarter
revenue guidance, upside to our Q2 revenue guidance and the impact
of Smith's dual sourcing decision. Our actual results could vary
substantially from these forward-looking statements as a result of
a variety of factors including: the impact of our limited financial
resources on our ability to execute on our business plan,
commercially exploit our technology, respond to unanticipated
developments, and compete effectively in the marketplace; the
possibility that our current equity financing arrangements may not
be sufficient to meet our cash requirements and the need to raise
additional debt or equity financing to continue as a going concern;
our uninterrupted history of quarterly losses and our ability to
ever achieve profitability; the overall demand for batteries to
power electric vehicles, and the demand for our lithium-ion
batteries and lithium phosphate battery technology; our ability to
service our debt, which is substantial in relationship to our
assets and equity values; the pledge of all of our assets as
security for our existing indebtedness; the rate of customer
acceptance and sales of our current and future products (including
sales to Smith); our ability to form effective arrangements with
OEMs to commercialize our products (including the success of our
relationship with EVI); the level and pace of expansion of our
manufacturing capabilities, including our ability to scale our
manufacturing and quality processes at a level necessary to support
potential demand; product or quality defects; the level of direct
costs and our ability to grow revenues to a level necessary to
achieve profitable operating margins to achieve break-even cash
flow; our dependence on sole or a limited number of suppliers for
key raw materials and components, and the ability of our vendors to
provide conforming materials for our products on a timely basis;
the level of our selling, general, and administrative costs; any
impairment in the carrying value of our intangible or other assets;
our ability to achieve our intended strategic and operating goals;
international business risks, particularly the many risks inherent
in doing business in China; our ability to attract and retain key
personnel; the failure to expand our customer base; the effects of
competition; and the outcome of any current or future litigation
regarding intellectual property and general economic conditions.
These and other risk factors that could affect our actual results
are discussed in our periodic reports filed with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for
the fiscal year ended March 31 and Quarterly Reports on Form 10-Q
and other documents filed with the Securities Exchange Commission.
The reader is directed to these statements for a further discussion
of important factors that could cause our actual results to differ
materially from those in our forward-looking statements. We
disclaim any intent or obligation to update these forward-looking
statements.
VALENCE TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, 2011 March 31, 2011
ASSETS
Cash $ 11,582 $ 2,915 Accounts Receivable 11,688 13,615 Inventory
14,743 12,491 Prepaids and Other Current Assets 2,156
2,661 Total Current Assets 40,169
31,682 Fixed Assets 4,342 4,192 Other
Long-Term Assets 229 143 Total Assets $
44,740 $ 36,017
LIABILITIES,
PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Accounts Payable $ 9,009 $ 9,150 Accrued Expenses 5,710 6,063
Short-Term Debt to Stockholder 2,000 — Short-Term Debt 7,780
10,686 Total Current Liabilities 24,499
25,899 Long-Term Debt and Other
Liabilities 66,085 65,342 Total
Liabilities 90,584 91,241
Redeemable Convertible Preferred Stock 8,610 8,610
Total Stockholders’ Deficit (54,454 ) (63,834 )
Total Liabilities, Preferred Stock and Stockholders’
Deficit $ 44,740 $ 36,017
VALENCE
TECHNOLOGY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (in
thousands, except per share amounts) Three Months Ended
June 30, 2011 2010
Total Revenues $ 14,085 $ 5,572 Cost of Sales 11,236 4,647
Gross Margin 2,849 925
Operating Expenses 5,098 4,454 Operating Loss
(2,249 ) (3,529 ) Net Loss Available to
Common Stockholders $ (3,134 ) $ (4,654 ) Net Loss
Per Share Available to Common Stockholders $ (0.02 ) $ (0.04 )
Shares Used in Computing Net Loss Per
Share Available to Common Stockholders, Basic and Diluted
156,344 132,409
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