Valence Technology Reports Third Quarter and Nine Month Fiscal 2008 Financial Results
February 07 2008 - 6:00AM
Business Wire
Valence Technology, Inc. (NASDAQ:VLNC), a leader in Lithium
Phosphate energy storage systems today reported financial results
for its fiscal third quarter and nine months ended December 31,
2007. Summary results for third quarter fiscal 2008 compared with
third quarter fiscal 2007 include: Revenue increased to $3.4
million compared with $2.3 million a year ago. Gross margin
improved to a negative $0.04 million compared with a negative $0.5
million last year. Operating loss of $4.3 million compared with
$4.5 million. Operating expenses of $4.3 million compared with $4.0
million. Net loss available to common shareholders of $5.7 million,
or $0.05 per share, compared to $6.0 million, or $0.06 per share.
Summary highlights for nine months fiscal 2008 compared with nine
months fiscal 2007 include: Revenue increased to $13.0 million for
the first nine months compared with $11.9 million last year. Gross
margin increased to $1.2 million or 9% of revenue compared with
$0.6 million or 5% of revenue last year. Operating expenses
declined by $0.5 million, or approximately 4% compared to the same
period last year. Operating loss was reduced by $1.0 million to
$10.7 million Net loss available to common shareholders improved to
$15.0 million, or $0.13 per share, compared with $16.4 million, or
$0.17 per share. "Our year-to-date performance has improved
compared to the same period last year,� said Robert L. Kanode,
president and chief executive officer. �And, given our outlook for
the current fiscal quarter, we expect to have year-over-year
revenue growth. Over 100 corporations and government entities are
evaluating our lithium phosphate technology for use in a wide
variety of applications. We expect our recently announced Epoch
battery system to enable a new generation of demanding applications
such as electric vehicles, plug-in hybrids, back-up power, and
other applications that require safety, long life, and
reliability.� Financial Results For the third quarter of fiscal
2008, the company reported total revenue of $3.4 million compared
with $2.3 million for the same period last year. While revenues
increased by $1.1 million due to additional sales of large format
batteries, the overall increase was less than expected in order to
implement a component change. Gross margin was negative but
improved in the current quarter mainly due to increased sales
revenue. The company reported a net loss available to common
shareholders of $5.7 million, or $0.05 per share, compared to a net
loss of $6.0 million, or $0.06 per share, for the third quarter
last year. For the nine month period ended December 31, 2007,
revenue was $13.0 million compared with $11.9 million for the same
period last year. Gross margin improved to 9% due to increased
revenue and reductions made to the inventory reserve. Operating
expenses declined by approximately $0.5 million or about 4% as part
of the company�s continued efforts to control costs. Net loss
available to common shareholders improved to $15.0 million, or
$0.13 per share compared with $16.4 million, or $0.17 per share for
the nine month period ended December 31, 2006. Third Quarter Fiscal
2008 Financial Results Conference Call and Webcast The Valence
management team will host a conference call and live webcast to
discuss the fiscal 2008 third quarter and nine month financial
results beginning at 3:00 p.m. CST on Thursday, February 7, 2008.
The conference call will be webcast and may be accessed by all
interested parties at www.valence.com. 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. Those callers within the United States
and Canada can dial (888) 820-9409 and enter conference
identification number 9064825 to participate. Callers outside the
United States and Canada can dial (913) 312-1417 and enter
conference identification number 9064825 to participate. A
telephonic replay will be available from 5:00 p.m. CST on February
7, 2008 through 5:00 p.m. CST on February 14, 2008. To access the
replay, please dial (888) 203-1112 and enter the following
identification number 9064825. In addition, a replay of the webcast
will be available on the company�s website at www.valence.com.
About Valence Technology Inc. Valence Technology developed and
markets the industry's first commercially available, safe,
large-format family of Lithium Phosphate Rechargeable Batteries.
Valence Technology holds an extensive, worldwide portfolio of
issued and pending patents relating to its Lithium Phosphate
Rechargeable Batteries. The company has facilities in Austin,
Texas; Las Vegas, Nevada; Mallusk, Northern Ireland and�Suzhou,
China. Valence is traded on the NASDAQ Capital Markets under the
ticker symbol VLNC and can be found on the internet at
http://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 our
statements that we are positioned to realize better execution,
improve gross margins, continue to reduce production costs and
expenses, realize a strong year in both customer orders and revenue
and our financial guidance. Actual results may vary substantially
from these forward-looking statements as a result of a variety of
factors. Among the important factors that could cause actual
results to differ are: the impact of our limited financial
resources on our ability to execute on our business plan and the
need to raise additional debt or equity financing to execute on
that plan; our uninterrupted history of quarterly losses; 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 products; the continuance of our
relationship with a few existing customers, which account for a
substantial portion of our current and expected sales in the
upcoming year; the level and pace of expansion of our manufacturing
capabilities; the level of direct costs and our ability to grow
revenues to a level necessary to achieve profitable operating
margins in order to achieve break-even cash flow; the level of our
selling, general and administrative costs; any impairment in the
carrying value of our intangible or other assets; our execution on
our business strategy of moving our operations to Asia and our
ability to achieve our intended strategic and operating goals; the
effects of competition; and general economic conditions. These and
other risk factors that could affect actual results are discussed
in our periodic reports filed with the Securities and Exchange
Commission, including our Report on Form 10-K for the year ended
March 31, 2007, and the reader is directed to these statements for
a further discussion of important factors that could cause actual
results to differ materially from those in the forward-looking
statements. {Financial Tables to Follow} � VALENCE TECHNOLOGY, INC.
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except
share amounts) � � December 31, 2007 March 31, 2007 ASSETS Current
Assets : Total Current Assets $16,461 $15,025 Total Assets $21,077
$19,200 � Liabilities, Preferred Stock and Stockholders� Deficit
Current Liabilities: Total Current Liabilities $7,674 $7,643 Total
Liabilities $81,688 $78,508 � Redeemable Convertible Preferred
Stock $8,610 $8,610 � Total Stockholders� Deficit ($69,221)
($67,918) � Total Liabilities, Preferred Stock and Stockholders�
Deficit $21,077 $19,200 � � VALENCE TECHNOLOGY, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (in thousands, except per share amounts) � � �
Three Months Ended Nine Months Ended December 31, December 31, �
2007 2006 2007 2006 � � Total revenues $3,378 $2,318 $12,983
$11,862 � Gross margin profit (loss) ($35) ($464) $1,153 $638 �
Operating loss ($4,326) ($4,458) ($10,741) ($11,759) � Net loss
available to common stockholders ($5,746) ($5,962) ($14,998)
($16,388) � Net loss per share available to common stockholders
($0.05) ($0.06) ($0.13) ($0.17)
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