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Liquidmetal Technologies Reports Results for Fiscal Year 2019

Liquidmetal® Technologies, Inc. (OTCQB: LQMT), the foremost authority on commercial applications of amorphous alloys, reported results for the fiscal year ended December 31, 2019.

Management Commentary

During 2019, the Company announced and completed a corporate restructuring (the “Restructuring”) that was focused on the shifting of internal manufacturing efforts to partnered sources, right-sizing the Company’s expense structure and employee base, and maximizing the value of the Company’s proprietary and financial assets, while also maintaining the Liquidmetal brand. The Company notes the following highlights with respect to these efforts:

  • Successful completion of initial orders with Dongguan Yihao Metal Materials Technology Co. Ltd. during the fourth quarter of 2019 and the first quarter of 2020. The Company continues to seek transition and development projects to be manufactured under this arrangement.
  • Entering into a manufacturing partnership with Eutectix in February 2020, that combines licensed IP, specialized equipment, and facilities to support manufacturing performed by Eutectix in Tolleson, AZ.
  • Entering into a corporate lease agreement for the Company’s Lake Forest, CA, facility in January 2020. The lease will provide predicable rental income for at least the next five years.
  • Actively investing excess capital in investment grade debt securities to improve returns while maintaining liquidity and minimizing credit risk.
  • Successful completion of higher volume transition orders with existing customers to provide them with ample inventory for 2020, while the Company validates outsourced manufacturing options.

“Partnering with Yihao has significantly expanded our production capabilities and lowered our costs, improving our competitive position,” said Liquidmetal COO Dr. Bruce Bromage. “The Eutectix partnership re-establishes US-based production, which some customers prefer. Moreover, as a top-tier BMG manufacturer, Eutectix recycles BMG alloys within the US, overcoming a major obstacle for US operations. We will work closely with Eutectix to develop new applications with new alloys and new markets.”

2019 Financial Summary

Revenues were $1,373 thousand in 2019 and $532 thousand in 2018. The increase was primarily driven by the completion of transition orders with existing customers during 2019, as well as continued product development efforts with the goal of furthering the commercialization of the Company’s technology and generating sustained part deliveries.

Cost of goods sold was $832 thousand in 2019 and $1,164 thousand in 2018. This decrease was primarily attributable to decreases in book markdowns of raw materials inventory, taken in 2018, which were offset by higher production volumes in 2019.

Selling, marketing, general and administrative expense was $5.4 million in 2019 and $5.9 million in 2018. The decrease is primarily due lower costs associated with employee compensation, inclusive of non-cash stock-based compensation, offset by one-time severance expenses of $273 thousand associated with the Restructuring.

Research and development expenses decreased to $1.3 million in 2019, from $2.4 million in 2018. The decrease was primarily driven by reductions in personnel and internal development projects due to the Restructuring.

Cash and restricted cash totaled $19.5 million at December 31, 2019, as compared to $35.2 million at December 31, 2018. The change is primarily associated with the purchase of investments in debt securities, which have resulted in an increase interest and investment income to $459 thousand during 2019 from $259 thousand during 2018.

For a more detailed and complete analysis of the Company’s financial results, please refer to the Company’s December 31, 2019 Form 10-K, which was filed earlier today.

About Liquidmetal Technologies

Lake Forest, California-based Liquidmetal Technologies, Inc. is the leading authority and developer of parts made with amorphous alloys, also known scientifically as Bulk Metallic Glasses or BMGs. The non-crystalline atomic structure of these materials imparts unique performance properties, including the ability to injection-mold with micron-level precision, lustrous finishes, high strength, hardness and corrosion resistance, and remarkable elasticity. Liquidmetal Technologies is the first company to produce amorphous alloy parts commercially, 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, 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 2019 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,

 

2019

2018

  
ASSETS 
  
Current assets: 
Cash and cash equivalents 

$

19,543

$

35,229

Restricted cash 

5

5

Investments in debt securities- short term 

4,415

-

Trade accounts receivable, net of allowance for doubtful accounts 

303

120

Inventory 

12

31

Prepaid expenses and other current assets 

322

363

Total current assets 

$

24,600

$

35,748

Investments in debt securities- long term 

7,074

-

Property and equipment, net 

8,819

11,767

Patents and trademarks, net 

239

322

Equipment held for sale 

585

-

Other assets 

14

14

Total assets 

$

41,331

$

47,851

  
LIABILITIES AND SHAREHOLDERS' EQUITY 
  
Current liabilities: 
Accounts payable 

132

253

Accrued liabilities 

775

270

Deferred revenue 

-

31

Total current liabilities 

$

907

$

554

  
Long-term liabilities 
Other long-term liabilities 

856

856

Total liabilities 

$

1,763

$

1,410

  
Shareholders' equity: 
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively 

-

-

Common stock, $0.001 par value; 1,100,000,000 shares authorized; 914,449,957 and 914,206,832 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively 

914

914

Warrants 

18,179

18,179

Additional paid-in capital 

286,832

286,276

Accumulated deficit 

(266,284

)

(258,854

)

Accumulated other comprehensive income 

2

-

Non-controlling interest in subsidiary 

(75

)

(74

)

Total shareholders' equity 

$

39,568

$

46,441

  
Total liabilities and shareholders' equity 

$

41,331

$

47,851

LIQUIDMETAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Years Ended
December 31,

2019

2018

Revenue
Products

$

1,325

$

484

Licensing and royalties

48

48

Total revenue

1,373

532

Cost of sales

832

1,164

Gross profit (loss)

541

(632

)

Operating expenses
Selling, marketing, general and administrative

5,424

5,899

Research and development

1,342

2,429

Impairment of long-lived assets

1,676

-

Gain on disposal of long-lived assets

(11

)

-

Total operating expenses

8,431

8,328

Operating loss

(7,890

)

(8,960

)

Interest and investment income

459

259

Loss before income taxes

(7,431

)

(8,701

)

Income taxes

-

-

Net loss

(7,431

)

(8,701

)

Net loss attributable to non-controlling interest

1

1

Net loss attributable to Liquidmetal Technologies shareholders

(7,430

)

(8,700

)

Per common share basic and diluted:
Net loss per common share attributable to Liquidmetal Technologies shareholders, basic

$

(0.01

)

$

(0.01

)

Net loss per common share attributable to Liquidmetal Technologies shareholders, diluted

$

(0.01

)

$

(0.01

)

Number of weighted average shares - basic

914,352,127

910,546,059

Number of weighted average shares - diluted

914,352,127

910,546,059

Contacts:

Bryce Van
Media Relations
Liquidmetal Technologies, Inc.
949-635-2107
bryce.van@liquidmetal.com

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