IRVINE, Calif., Jan. 25 /PRNewswire-FirstCall/ — Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW), a leader in the development and production of advanced propulsion systems, energy storage technologies, and alternative fuel vehicles and applications including hybrid, plug-in hybrid, hydrogen, and alternative fuel vehicles, today reported results for fiscal 2009 and restated results for fiscal 2007 and fiscal 2008. Conference call information is provided below.
Fourth Quarter Operating Results
Total revenue in the fourth quarter of fiscal 2009 was $6.2 million compared to $9.7 million in the fourth quarter of fiscal 2008, a net decrease of 36%. The decrease in consolidated net revenue is primarily related to a decline in product shipments and engineering services provided to General Motors in the fourth quarter of fiscal 2009 compared to the fourth quarter of fiscal 2008. Product sales in fiscal 2008 included shipments of hydrogen fuel storage systems associated with General Motors’ Equinox fuel cell vehicle program. Product sales declined significantly in fiscal 2009 as a result of the last shipment of all units ordered under General Motors’ Equinox program at the end of the fourth quarter of fiscal 2008. Despite lower revenues, the Company’s consolidated operating loss decreased from $4.6 million in the fourth quarter of fiscal 2008 to $4.3 million in the fourth quarter of fiscal 2009. The decrease was primarily due to lower corporate segment general and administrative expenses as a result of the implementation of specific cost reductions and lower shared based compensation expenses.
The Quantum Fuel Systems operating segment loss increased $0.8 million from $1.1 million in the fourth quarter of fiscal 2008 to $1.9 million in the fourth quarter of fiscal 2009. The increase is primarily due to the lower level of product revenues. Corporate segment expenses decreased $1.2 million, from $3.6 million in the fourth quarter of fiscal 2008 to $2.4 million in the fourth quarter of fiscal 2009. The share-based compensation expense related to FAS 123R was $0.4 million and depreciation and amortization expense was $0.4 million during the fourth quarter of fiscal 2009.
Contract revenue for the Quantum Fuel Systems segment increased $1.1 million, or 22%, from $5.0 million in the fourth quarter of fiscal 2008 to $6.1 million in the fourth quarter of fiscal 2009. The increase was primarily due to higher development program revenues related to development of the Q-Drive propulsion system for Fisker Automotive. This increase was partially offset by a decline in hydrogen and fuel cell system programs with General Motors. Other hybrid and plug-in hybrid development programs, military programs and other advanced hybrid propulsion system development programs were comparable for the fourth quarter of fiscal 2008 and 2009.
The financial statements include fair value adjustments for the bifurcation of the derivative liabilities associated with conversion features contained within the Company’s convertible note and term note (that we refer to in our prior filings as Convertible Note 1 and Term Note B) debt instruments effective upon their issuance in January 2008 and reflect the derivative liabilities associated with the common stock purchase warrants the Company issued in October 2006, June 2007 and August 2008. During the fourth quarter of fiscal 2008, the Company had a loss on the fair value adjustment of derivative instruments in the amount of $11.5 million compared to a $2.2 million gain in the fourth quarter of fiscal 2009 on the fair value adjustment of derivative instruments.
The Company’s net loss decreased from $16.4 million, or $0.21 a share, in the fourth quarter of fiscal 2008 to $3.2 million, or $0.03 a share, in the fourth quarter of fiscal 2009.
Fiscal 2009 Results
For fiscal 2009, the Company reported revenues of $23.3 million compared to revenues of $26.5 million for the fiscal 2008. Contract revenues increased $7.7 million, or 53%, from $14.6 million in fiscal 2008 to $22.3 million in fiscal 2009. The increase was due primarily to an increased level of system development and application engineering of our Q-Drive hybrid propulsion and control system for the Fisker Karma vehicle program and other funded contract work with the United States military and other government agencies. The operating loss for the Quantum Fuel Systems segment increased $7.1 million, from $7.3 million in fiscal 2008 to $14.4 million in fiscal 2009, primarily due to the full impairment of the intangible asset associated with our Strategic Alliance Agreement with General Motors in the third quarter of fiscal 2009, which was $5.8 million, and the decrease in product sales, which was partially offset by the increase in contract revenues.
Corporate segment expenses decreased $0.7 million from $11.4 million in fiscal 2008 to $10.7 million in fiscal 2009. Corporate segment expenses reflect the general and administrative expenses that indirectly support our ongoing Quantum Fuel Systems operating segment and our anticipated future operating segments. Corporate segment expenses consist primarily of personnel costs, share-based compensation costs, and related general and administrative costs for executive, finance, legal, human resources, investor relations and our board of directors. Included in operating expenses are $2.9 million and $1.9 million of share-based compensation for fiscal 2008 and 2009, respectively.
The Company’s consolidated operating loss increased from $18.8 million in fiscal 2008 to $25.1 million in fiscal 2009. This increase is primarily due to a non-cash charge of $5.8 million recorded in the third quarter of fiscal 2009 for the full impairment of the remaining balance of the intangible asset associated with our Strategic Alliance Agreement with General Motors. During fiscal 2009, depreciation and amortization expense was $3.1 million. Cash used from operations during fiscal 2009 was $16.9 million, which included $3.8 million in prepayments to affiliates under an agreement with Asola Advanced and Automotive Solar Systems, GmbH (Asola) on a solar cell contract.
The Company’s net loss from continuing operations increased from $19.9 million, or $0.26 a share, in fiscal 2008 to $28.0 million, or $0.30 a share, in fiscal 2009. The Company’s net loss decreased from $86.8 million, or $1.13 a share, in fiscal 2008 to $28.0 million, or $0.30 a share, in fiscal 2009.
Fair value adjustments of derivative instruments amounted to a gain of $27.7 million in fiscal 2009 as compared to a loss of $0.6 million in fiscal 2008. The share price of our common stock represents the primary underlying variable that impacts the value of the derivative instruments. Additional factors include the volatility of our stock price, our credit rating, discount rates, and stated interest rates. In accordance with SFAS 133, changes in fair value of the derivatives resulting from a movement in the share price or the passage of time are recognized each period. In fiscal 2009, the $27.7 million gain was primarily attributable to the significant decline in our share price over the course of the fiscal year that reduced the fair value of the derivative instrument liabilities. The fair value adjustments in fiscal 2009 were offset by a $23.8 million loss recorded in the first quarter of fiscal year 2009 as a result of the modification of Term Note B that occurred on May 30, 2008, and a $4.3 million loss on settlement of derivative instruments resulting from debt conversions and warrant exercises that occurred during fiscal 2009. There were no debt conversions or warrant exercises in fiscal 2008.
Source: sys-con.com
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