Liquidmetal Technologies Reports Fiscal Year 2012 Results

RANCHO SANTA MARGARITA, Calif.--(BUSINESS WIRE)--Liquidmetal® Technologies, Inc. (LTI) (OTCQB: LQMT), the leading developer of amorphous alloys and composites, reported results for the fiscal year ended December 31, 2012.

“This is reflected in the 233% increase in prototype parts shipped versus last year.”

Q4 2012 Operational Highlights

In 2012, 10 prototype shipments were delivered to customers in the aerospace/defense, medical and other industries, which was up 233% from 2011.
At the end of Q4 2012, there were 10 Liquidmetal prototype parts actively being evaluated by customers. This is up from seven in the prior quarter and three in the prior year comparative quarter.
LTI partnered with a leading original design manufacturer to introduce the next generation of golf club design. The clubs will feature the “pure energy transfer” of Liquidmetal amorphous alloy, which allows for long, forgiving shots off the tee, with increased overall performance.
LTI completed the first successful transition of a prototype part into commercial production with the shipment of a large order of specialized parts from its certified manufacturing partner.
At quarter-end, the company’s IP portfolio included 56 owned or licensed U.S. patents, with an additional 50 patent applications pending. Its patent applications relate to the composition, processing, and application of Liquidmetal alloys.

Management Commentary

“During 2012, we made strong continued progress in our transition from a development stage to a commercial products company,” said Tom Steipp, President and CEO. “This is reflected in the 233% increase in prototype parts shipped versus last year.

“The increasing demand for prototype parts has been well-timed to the certification of our first commercial production capabilities. With our third-generation Liquidmetal manufacturing process introduced in early 2012, we’ve demonstrated we can meet the demanding requirements of our customers. As a result, interest and confidence in our Liquidmetal alloys has increased and our prototype pipeline is stronger than ever.

“As we continue to work closely with our customers to perfect their Liquidmetal alloy parts, we expect to see more prototypes entering into commercial production over the course of 2013.”

Fiscal Year 2012 Financial Summary

In 2012, the company generated nominal revenues as it focused on penetrating target applications and customers to sell prototype parts.

Selling, marketing, general and administrative expense was $4.9 million compared to $4.2 million in 2011. The increase was primarily due to additional headcount to support the company’s sales and business development efforts to further penetrate its existing customer base.

Research and development expense was $0.9 million compared to $1.1 million in 2011. The decrease was primarily due to lower spending on production supplies and consulting services. While research and development expense decreased year-over-year, the company continues to research Liquidmetal alloys and related processing capabilities, as well as manufacturing techniques that advance the development of Liquidmetal alloys.

Total operating expenses were $12.1 million compared to $7.1 million in 2011. The increase was primarily due to a one-time, non-cash expense of $6.3 million for the discount pricing Visser received under its master transaction agreement in June 2012.

Cash totaled $7.2 million at December 31, 2012, as compared to $8.7 million at the end of the prior quarter.

Conference Call

Liquidmetal Technologies, Inc.’s management will hold a conference call later today (February 26, 2013) to discuss these results. The company’s President and CEO Tom Steipp and CFO Tony Chung will host the call starting at 4:30 p.m. Eastern time. A question and answer session will follow management’s presentation.

Date: Tuesday, February 26, 2013
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 1-888-846-5003
International: 1-480-629-9856
Conference ID#: 4600833

The conference call will be broadcast simultaneously and available for replay via the investor section of the company's website at www.liquidmetal.com.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through March 26, 2013.

Toll-Free Replay Number: 1-877-870-5176
International Replay Number: 1-858-384-5517
Replay PIN Number: 4600833

About Liquidmetal Technologies

Rancho Santa Margarita, California-based Liquidmetal Technologies, Inc. is the leading developer of bulk alloys and composites that utilize the performance advantages offered by amorphous alloy technology. Amorphous alloys are unique materials that are distinguished by their ability to retain a random structure when they solidify, in contrast to the crystalline atomic structure that forms in ordinary metals and alloys. Liquidmetal Technologies is the first company to produce amorphous alloys in commercially viable bulk form, enabling significant improvements in products across a wide array of industries. For more information, go to www.liquidmetal.com.

Forward-Looking Statement

This press release contains "forward-looking statements," including but not limited to statements regarding the advantages of Liquidmetal's amorphous alloy technology, scheduled manufacturing of customer parts and other statements associated with Liquidmetal's technology and operations. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Liquidmetal's expectations and projections. Risks and uncertainties include, among other things; customer adoption of Liquidmetal's technologies and successful integration of those technologies into customer products; potential difficulties or delays in manufacturing products incorporating Liquidmetal's technologies; Liquidmetal's ability to fund its current and anticipated operations; the ability of third party suppliers and manufacturers to meet customer product requirements; general industry conditions; general economic conditions; and governmental laws and regulations affecting Liquidmetal's operations. Additional information concerning these and other risk factors can be found in Liquidmetal's public periodic filings with the U.S. Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in Liquidmetal's 2012 Annual Report on Form 10-K.

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data)

			December 31,			December 31,
			2012			2011

ASSETS

Current assets:
	Cash		$	7,162		$	122
	Trade accounts receivable, net of allowance for doubtful accounts of $11 and $0			64			241
	Related party notes receivable			-			200
	Prepaid expenses and other current assets			689			248
		Total current assets	$	7,915		$	811
Property and equipment, net				161			162
Patents and trademarks, net				869			968
Other assets				28			52
		Total assets	$	8,973		$	1,993

LIABILITIES AND SHAREHOLDERS' DEFICIT

Current liabilities:
	Accounts payable			154			803
	Accrued liabilities			248			457
	Accrued dividends			222			571
	Deferred revenue			-			67
	Short-term debt			-			1,712
	Convertible note, net of debt discount of $4,635			2,365			-
	Embedded conversion feature liability			3,934			-
		Total current liabilities	$	6,923		$	3,610

Long-term liabilities
	Warrant liabilities			2,766			-
	Other long-term liabilities			856			609
		Total liabilities	$	10,545		$	4,219

Shareholders' deficit:
	Convertible, redeemable Series A Preferred Stock, $0.001 par value; 10,000,000
		shares authorized; 506,936 and 1,299,151 shares issued and outstanding at
		December 31, 2012 and December 31, 2011, respectively		-			1
	Common stock, $0.001 par value; 400,000,000 shares authorized; 242,074,324
		and 134,467,554 shares issued and outstanding at December 31, 2012
		and December 31, 2011, respectively		242			130
	Warrants			18,179			24,438
	Additional paid-in capital			169,891			149,064
	Accumulated deficit			(189,884	)		(175,859	)
		Total shareholders' deficit	$	(1,572	)	$	(2,226	)

		Total liabilities and shareholders' deficit	$	8,973		$	1,993

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (in thousands, except share and per share data)


			Years Ended December 31,
			2012			2011

Revenue
	Products		$	591		$	572
	Licensing and royalties			59			400
		Total revenue		650			972

Cost of revenue, products				354			373
	Gross margin			296			599

Operating expenses
	Selling, marketing, general and administrative			4,850			4,243
	Research and development			943			1,120
	Manufacturing contract costs			6,300			-
	Settlement expense			-			1,713
		Total operating expenses		12,093			7,076
Operating loss from continuing operations				(11,797	)		(6,477	)

	Change in value of warrants, gain			6,547			1,328
	Change in value of embedded conversion feature liability, gain			4,931			-
	Debt discount amortization expense			(11,949	)		-
	Financing costs			(1,355	)		-
	Other income			34			26
	Interest expense			(459	)		(90	)
	Interest income			23			22

Loss from continuing operations before income taxes				(14,025	)		(5,191	)

	Income taxes			-			-

Loss from continuing operations				(14,025	)		(5,191	)

Discontinued operations:
	Gain on disposal of subsidiary, net of tax			-			12,109
	Loss from operations of discontinued operations, net of tax			-			(763	)

	Net income (loss)			(14,025	)		6,155

Other comprehensive income
	Foreign exchange translation gain during the period			-			-
		Comprehensive income (loss)	$	(14,025	)	$	6,155

Per common share basic and diluted:

Net income (loss) per share - basic
	Loss from continuing operations		$	(0.07	)	$	(0.04	)
	Income from discontinued operations			-			0.09
	Basic income (loss) per share		$	(0.07	)	$	0.05

Net income (loss) per share - diluted
	Loss from continuing operations		$	(0.07	)	$	(0.04	)
	Income from discontinued operations			-			0.07
	Diluted income (loss) per share		$	(0.07	)	$	0.03

Number of weighted average shares - basic				188,298,113			118,523,228
Number of weighted average shares - diluted				188,298,113			163,292,496