1.7.2005: Melduung: Quantum Fuel Systems Technologies Worldwide, Inc.: Fiscal 2005 Fourth Quarter and Year End Results
Thursday June 30, 4:05 pm ET
* Completed Acquisition of Starcraft (now referred to as the Tecstar Automotive Group)
* Strong Revenues, Driven by Acquisition of Starcraft
* Record Fiscal 2005 Contract Revenues for Hydrogen-based Development Programs
* Significant Strides Toward Integrating Quantum-Tecstar
* Continued Progress on Fuel Cell Vehicle Commercialization
IRVINE, Calif., June 30 -- Quantum Fuel Systems Technologies Worldwide, Inc., a leading designer, manufacturer and integrator of packaged fuel systems and accessories for specialty vehicles and applications including hydrogen fuel cell, hybrid, and alternative fuel vehicles, today reported results for its fiscal 2005 fourth quarter and year ended April 30, 2005. Conference call information is provided below.
Fiscal 2005 Fourth Quarter Results
For the fourth quarter of fiscal 2005, the Company reported revenues of $37.6 million, representing a 313% increase over the prior year"s fourth quarter, driven by the incremental revenues of the Tecstar Automotive Group operating segment, which contributed $31.3 million to consolidated revenues from March 4, 2005 through April 30, 2005. This segment is comprised of all of the business activities acquired via the merger with Starcraft and provides OEM-level specialty equipment, vehicle accessories, and performance packages, which are added to OEM pick-up truck and sport utility vehicles through a second-stage assembly process or distributed through OEM dealer networks. The Tecstar Automotive Group segment"s revenues for this period are approximately 15% higher than the same period in the prior year, primarily as a result of a new special edition vehicle and the distribution of OEM-level parts. The Tecstar Automotive Group generated operating income of $0.3 million during the March 4, 2005 to April 30, 2005 period.
Revenues within the Quantum Fuel Systems operating segment were $6.3 million during the quarter, representing a decrease of 31% compared to revenues of $9.1 million during the fourth quarter of fiscal 2004. This segment had an operating loss of $2.6 million in the fourth quarter of fiscal 2005, compared to a $0.6 million loss for the same period in the prior year. This decrease in revenues and the increase in operating loss during the quarter, compared to the prior year fourth quarter, was primarily a result of lower development contract revenues and related product sales for the Toyota fuel cell SUV program, and lower compressed natural gas fuel system sales to General Motors. During the fiscal 2005 fourth quarter, the Quantum Fuel Systems segment recognized $4.1 million in development contract revenue related to engineering, design, and integration activities for hydrogen internal combustion engine applications, and new and expanded programs for the development of hydrogen systems for other automotive OEM customers and military programs. This segment is comprised of what was previously reported as the Alternative Fuels, Fuel Cell Systems, and Advanced Research and Product Development segments. During the quarter, the Company reported a consolidated net loss of $4.4 million, or $0.10 per share. This compared to a net loss of $2.0 million, or $0.06 per share, on revenues of $9.1 million for the same period of fiscal 2004.
Fiscal 2005 Results
For the fiscal year ended April 30, 2005, the Company reported consolidated revenues of $54.3 million, or a 93% increase compared to fiscal 2004 revenues of $28.1 million, primarily driven by the addition of the Tecstar Automotive Group segment revenues. Tecstar reported revenues of $31.3 million during the March 4, 2005 to April 30, 2005 period. During fiscal 2005, the Quantum Fuel Systems segment reported revenues of $23.0 million, or an 18% decrease from fiscal 2004 revenues of $28.1 million. The Quantum Fuel System segment product sales decreased $7.9 million, or 42.5%, from $18.6 million in fiscal 2004 to $10.7 million in fiscal 2005. Product sales consist of the Company"s hydrogen fuel metering and fuel storage systems for Toyota Motor Corporation"s fuel cell SUV platform and bus platform, and sales associated with General Motors" mid-size automobiles and pick-up trucks equipped with the Company"s bi-fuel and compressed natural gas fuel systems. Sales related to hydrogen fuel metering and fuel storage systems for fuel cell vehicle applications declined $4.5 million in fiscal 2005, to $4.7 million. This decrease is primarily a result of lower fuel cell SUV platform orders and the completion of units shipped in December 2004 for the current generation of Toyota"s fuel cell SUV platform. Sales related to compressed natural gas fuel systems declined $3.4 million, to $6.0 million. The Quantum Fuel Systems segment had an operating loss of $8.1 million compared to an operating loss of $4.1 million in fiscal 2004, primarily as a result of the lower overall product revenues that decreased gross profits by $4.8 million.
The Quantum Fuel Systems segment reported record contract revenues of $12.3 million in fiscal 2005, which represents a 30% increase over fiscal 2004. This increase was primarily driven by the increase in hydrogen storage development programs with OEMs and the U.S. military as they continue to drive toward fuel cell vehicle commercialization, as well as introducing hydrogen hybrid and hydrogen internal combustion vehicles. Product and contract revenues related to fuel cell systems and the commercialization of fuel cell vehicles were $13.2 million during fiscal 2005.
During fiscal 2005, the Company"s net cash used in operations was $6.8 million, compared to $4.8 million used during fiscal 2004. Depreciation and amortization expense was $5.6 million during fiscal 2005 compared to $5.2 million during fiscal 2004. The Company reported a net loss of $13.1 million in fiscal 2005, or $0.37 per share. This compared to a net loss of $8.9 million, or $0.33 per share, in fiscal 2004.
Alan P. Niedzwiecki, President and CEO, stated, "We are pleased with the progress the Company and our OEM customers are making toward fuel cell vehicle commercialization. Our fiscal 2005 record level of customer-funded hydrogen development work underscores the commitment from our OEM customers to this emerging technology.
"The pivotal strategic and operational development of fiscal 2005 was our acquisition and integration of Starcraft, which we now refer to as the Tecstar Automotive Group. Tecstar complements Quantum"s capabilities with its tier one automotive design and assembly experience as we position the company to capitalize on the anticipated commercialization of fuel cell vehicles, as well as build a foundation for the design, integration, and assembly of specialized hybrid vehicles. The acquisition of Tecstar significantly enhances our ability to provide our customers fuel cell and alternative fuel systems, specialized products and services, and vehicles from concept to production.
"Our recent accomplishments highlight the Company"s transition into specialized vehicle design, assembly, and advanced hydrogen and hybrid fuel system application and packaging. Over the past year, we:
* Acquired Starcraft, a tier one specialty vehicle equipment designer
and installer with strong powertrain and vehicle engineering
* Provided design, integration and assembly for over 36 vehicle
platforms or other applications for approximately 15 OEMs and / or
government agencies ranging from dedicated hydrogen fuel systems to
specialty assembly packages;
* Provided a specialized hydrogen storage system that allowed General
Motors" Sequel fuel cell vehicle to achieve a 300 mile driving range;
* Produced and delivered the "Quantum Aggressor," a high performance off
road fuel cell hybrid electric vehicle to the U.S. Army, which we
designed and built from the ground up;
* Produced and delivered the "Quantum MP Hybrids," two hybrid vehicles
to be used by the U.S. Army as a low cost, fuel efficient solution for
military base transportation;
* Delivered next generation hydrogen storage systems to Toyota for their
second fuel cell vehicle platform;
* Commenced initial production of the hydrogen hybrid vehicles for South
Coast Air Quality Management District"s hydrogen fleet;
* Developed the hydrogen fuel system and the special styling accessories
in collaboration with General Motors on the H2HUMMER unveiled by
Governor Schwarzenegger as part of the Governor"s efforts to develop
and bring attention to his Hydrogen Highway Network initiative;
* Were awarded a patent for transportable hydrogen refueling systems and
are currently building a complete transportable hydrogen refueling
system for the U.S. Army based on this patent;
* Received a contract from General Motors to produce the natural gas
pick-up truck through model year 2006; and
* Were added to the Russell 2000 and 3000 indexes, which are widely used
by investment managers and institutional investors for index funds and
as benchmarks for a variety of investment strategies.
"We believe that this growing list of accomplishments, technologies, and capabilities uniquely positions the Company as a complete tier one OEM supplier for fuel cell and hydrogen vehicles, hybrids, and specialty equipment and limited edition vehicle programs," stated Mr. Niedzwiecki.
Speaking specifically on the integration efforts, he added, "We are making significant strides toward integrating Quantum-Tecstar. We have leveraged existing facilities to expand upon customer programs and have consolidated activities in our administrative and operational areas to take advantage of cost savings and utilize each other"s competencies. Perhaps the most significant aspect of our integration efforts has been to combine our sales and marketing team. We are meeting with automakers worldwide to present our full array of technologies and capabilities and exploring opportunities to be the auto world"s supplier of choice as an experienced one-stop-shop for a wide variety of programs from concept to production. We believe that what we have to offer is very appealing to the automakers as they seek partners that offer full service capabilities."
In addressing the adoption of fuel cell vehicles, Mr. Niedzwiecki added, "We have seen a flurry of commercial and government activity relating to fuel cells and hydrogen over the past twelve months and we believe this speaks volumes for the importance of hydrogen-based solutions. Our real excitement emanates from the internal progress the Company has made in advancing technologies to meet commercialization requirements, broadening its capabilities, and developing and producing real solutions for the hydrogen economy stakeholders."
Progress Toward Fuel Cell Vehicle Commercialization
The past twelve months have been marked by tremendous progress toward fuel cell vehicle commercialization. Specifically:
* Quantum reported record levels of contract revenue in fiscal 2005
related to the hydrogen economy and fuel cell vehicle
* Through our customers" programs and our own internal initiatives, we
have reduced the material costs in our hydrogen storage tanks by
approximately 70% since 2001 and have increased our tank manufacturing
capacity by 150% since 2003.
-- We are currently working under contract with the U.S. Department
of Energy to advance our hydrogen storage technology toward
commercialization in terms of improved materials, optimized
manufacturing, and lower costs. We are also anticipating programs
for aerospace applications that can potentially lead to additional
improvements in terms of commercialization.
* Several of Quantum"s hydrogen storage systems were ordered for
"production intent" programs from the Company"s automotive customers.
Quantum believes the momentum of the hydrogen economy is also gaining momentum beyond the OEMs. Hydrogen refueling infrastructure stakeholders, government agencies, and elected officials are also participating in a wide variety of hydrogen initiatives:
* Approximately 30 hydrogen-refueling stations have been opened
worldwide in the past twelve months. Some of these are open for
retail service, such as the station opened by Shell Hydrogen in
Washington D.C. There are 100 hydrogen-refueling stations worldwide.
The trend is toward compressed hydrogen. In California alone, where
Governor Schwarzenegger is actively promoting a "Hydrogen Highway
Network" there are 16 operational hydrogen stations with plans for 23
more by 2007, and a total of 50-100 open by 2010. In addition to
signing an executive order that calls for a hydrogen refueling
infrastructure throughout California, the Governor continues to
support hydrogen technologies and claims that hydrogen is one of the
"environmental technologies [that] will allow us to conserve energy,
cut pollution, and protect our natural resources." Allied Business
Intelligence has projected that fuel cell vehicle commercialization
will begin in 2010 with approximately a half a million fuel cell
vehicles on the road by 2015.
* The Federal government continues to promote hydrogen as a viable fuel
of the future with funding for research and development, hydrogen
infrastructure implementation, codes and standards, and education
-- The U.S. energy bill, which is currently being considered by
Congress, includes provisions for development, demonstration, and
the ultimate commercialization of hydrogen and fuel cell
-- The U.S. Department of Energy currently has five hydrogen fleet
and infrastructure demonstration and validation projects underway
around the country.
* The number of hydrogen demonstration programs is increasing worldwide,
examples of which include the California Fuel Cell Partnership,
California Stationary Fuel Cell Collaborative, Compressed Hydrogen
Infrastructure Program, Clean Energy Partnership in Berlin, Controlled
Hydrogen Fleet & Infrastructure Demonstration and Validation Project,
Fuel Cell Bus Club, Japan Hydrogen & Fuel Cell Demonstration Project,
Hydrogen Highway Network in California, BC Hydrogen Highway in British
Columbia, South Coast Air Quality Management District"s Hydrogen Test
Fleet, Hi Way Initiative, Ruhr-Alps-Milan Hydrogen Supply Chain
Integrated Project, Hydrogen Corridor in Canada, Norwegian HyNor
Project, Illinois Hydrogen Highway, The Northern H in the Upper
Midwest, and Singapore"s Initiative in Energy Technology.
For more information regarding Quantum, please contact:
Director of Communications and Corporate Support
?2005 Quantum Fuel Systems Technologies Worldwide, Inc.
Advanced Technology Center
17872 Cartwright Road, Irvine, CA 92614
Phone 949-399-4500 Fax 949-399-4600
Source: Quantum Fuel Systems Technologies Worldwide, Inc.