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EX-99.1 - EX-99.1 - T3M INC. | a59982exv99w1.htm |
8-K - FORM 8-K - T3M INC. | a59982e8vk.htm |
Exhibit 99.2
T-3 Motion, Inc.
Second Quarter Fiscal Year 2011 Earnings
August 10, 2011
Second Quarter Fiscal Year 2011 Earnings
August 10, 2011
Operator: Please stand by. Good day, everyone, welcome to todays T-3 Motion Incorporateds second
quarter 2011 earnings footrprint. Todays call is being recorded and available via the webcast. At
this time, for opening remarks, I would like to turn things over to Mr. Gary Dvorchak of ICR.
Please go ahead, sir.
Gary Dvorchak: Thank you. On the call today for the company are Ki Nam, Chairman and CEO of T-3
Motion and Kelly Anderson, President and Chief Financial Officer of T-3 Motion. By now, everyone
should have access to the press release that went out this morning. If you have not received the
press release, its now available on the investor relations portion of T-3 Motions website,
www.t-3motion.com. The call is being webcast. And a replay will be available on the companys
website as well, through August 24, 2011. Before we begin, Id like to remind everyone that the
prepared remarks contain forward-looking statements and management may make additional
forward-looking statements in response to your questions. These statements do not guarantee future
performance. Therefore, undo reliance should not be placed on them. These statements are based on
current expectations of management and involve inherent risks and uncertainties. Including those
identified in the risk factors contained in the Companys annual report on form 10K and other
reports filed with the SEC. With that, Id like to turn the call over to the companys CEO, Ki Nam.
Ki Nam: Thank you, Gary. And, hello everyone and thank you for joining us this morning. On todays
call, Ill review the second quarter highlights and Kelly Anderson will discuss the details of our
financial overall result. First, lets discuss the current activity in T-3. During the first
quarter, this last quarter, we enjoyed robust order activity for the T-3 vehicles. We established
new distribution relationships in Egypt including initial orders and expect the following orders as
our distributors build their business. We also won a very high-profile order to provide a security
vehicle for 2011 (inaudible) in Singapore. As was said, our revenue opportunity would be the
introduction of our automated license plate recognition systems. What that product does, that means
the license plate of the car, while the vehicle the systems placed in T-3. The system can be
installed in a new vehicle or retrofitted in our existing fleet in the field. Now, lets move to
our really exciting long-term growth opportunities, the R3 electric consume vehicle. In early
April, we announced the completion of the prototype of the R3. From a static perspective, the
vehicle established the car the car is designed and it is very air dynamic. And the
three-wheel design with a double tired, single back wheel is unique in the market. The car has a
top speed of 70 mph. For those of you who do not want compromised driving pleasure, its engineering
is second to none. The rear wheel, two-tire design provides traction, agility and handling.
Also, the rolling resistance and round profile rear tire increases energy efficiency as well. Our
conduction motor is powered by lithium battery technology providing range of 8200 miles per charge.
Were able to achieve this range with our proven intelligent powered management battery system
which we have perfected in our T-3 vehicles. In preparation for ramping production, were
establishing vendor relationships for the R-3. As previously disclosed, we signed a letter of
intent with Panos motors (sp?), a Georgia-based company specializing in low volume specialty
vehicles. Over the next few months, we anticipate executing a performance contract with the
panelist to produce R3 and in establishing a relationship with a dealer across the United States.
We are expecting production in late 2012. Now, lets turn the call over to Kelly Anderson for more
detail on the financial results for third-quarter. Once Kellys finished, I will then briefly
discuss 2012 and then some closing remarks. Kelly?
Kelly Anderson: Thank you, Ki. Net revenues for the quarter decreased $97,000 or 6.8% to $1.3
million, compared to the same period of the prior year. And, it decreased $250,000 or 9.7% to $2.3
million for the six months ended June 30, 2011, compared to the same period of the prior year. The
revenue decrease was due primarily to certain customers deferring making purchasing decisions and
some orders not being shipped due to our inability to purchase some parts. A problem that was
resolved with the proceeds from the May offering. With that said, it should be noted that we did
not experience any meaningful level of order cancellation. As a result, we now have an all-time
high backlog of orders which should ship in the second half of the year. The backlog of June 30 was
approximately $4.4 million compared to $1 million as of June 30, 2010. As we purchase parts with
the proceeds of the recent equity offering, we expect the order shipment cycle time should return
to the standard 2 to 4 weeks. There are positive impacts on revenue from expansion into new markets
as Ki noted earlier. Higher average selling price per unit and growth in our service and parts
revenue as our fleet in the field continues to expand. Net loss for the quarter was $4 million or
$0.47 per share compared with a loss of $2 million or $0.42 per share a year ago. And, net loss for
the six months ended June 30 was $5.69 million or $0.81 per share compared with a loss of $5.4
million or $1.16 per share a year ago.
Another positive was an increase in our gross margins in the second quarter to 11.4%. Up from
the first quarter of 2011, actual (sp?) of 4% and lower than the prior year which was 14.4%. The
margins were lower than the prior year due to our production not running at full capacity which was
a result of the May public offering. We anticipate improvements in our margins as we increase
production in production efficiencies and take advantage of purchase volume discounts. A key
issue for the company was having the capital to ramp production for the face of strong demand for
T-3. We resolved this problem in May, when we raised $11.1 million from a public offering of units
consisting of one share of common stock, one class H warrant and one class I warrant. We also
affected a 1-for-10 reverse stock split and listed them
under NYSE AMEX under the ticker symbol of TTTM. We used the offering proceeds to retire debt and
to purchase parts inventory to ramp production. As the quarter ended, we had $5.3 million in cash
compared to $124,000 as of December 31. And our total liabilities were $3.3 million compared to
$19.3 million as of December 31. I will now turn the call back over to Ki for his final remarks.
Ki Nam: Thanks, Kelly. Our management team here at T-3 is very excited about the year ahead. Were
focused on broadening our product line including security and (inaudible) products, as well as
conserve products. And also increasing the level of orders for both T-3 for T-3 for both
domestically and internationally. I am pleased to deliver on the success we have achieved to date
and look forward to the quarter ahead. Thank you for your time today. And we look forward to
updating our progress on the third quarter call in November. In addition, T-3 will be hosting a
press event at the New York Stock Exchange this
Friday, August 12 around 9 AM. If you are in New York, youre welcome to join us out front of the
Exchange. For T-3 and also an R3 vehicle will be displayed out front of the Exchange. Thank you and
we hope to see you there.
Gary Dvorchak: Operator, can you open it up for questions now?
Operator: Certainly. At this time, if you do have a question, please signal by pressing *1 on your
touchtone telephone. Again, for questions, that is *1. Well pause for just a moment. Well go
first to George Santana with Ascendiant (sp?) Capital Markets.
George Santana: Hi, thanks and good morning.
Gary Dvorchak: Good morning.
George Santana: I dont know if youre comfortable with discussing the number of units shipped in
the quarter and how thats trended over time? And what we can expect over the next couple of
quarters? Even if its just a range?
Kelly Anderson: Hi, George, its Kelly.
George Anderson: Hi, Kelly.
Kelly Anderson: Nice to talk to you again. Yes, were not giving guidance on units. Were talking
to revenue and reaffirming our revenue projections for the year, at this point.
Gary Dvorchak: Are you talking about a past quarter or future quarter?
George Santana: Well, you know, just to get a sense of where you are. We understand the capital
constraints and getting over that hurdle.
Gary Dvorchak: Sure.
George Santana: But just looking at this as maybe establishing a base of a low quarter. What were
shipments in in this past quarter?
Kelly Anderson: George, well follow-up with you. We dont have that information at hand.
Ki Nam: Hes asking second quarter
Kelly Anderson: Shipment dollars units
Ki Nam: Number of units.
George Santana: Yes.
Ki Nam: Basically, you can figure it out yourself. You know our vehicle cost. So, if you have the
cost you can get a sense for the number of vehicles. Then theres battery sales and those are
sales also. So, you can get a sense of our units by number of approximate cost of vehicle.
Kelly Anderson: And, George, the backlog is all units sales. Just so you know. It is all unit
sales. There is no additional upsell items in our backlog.
George Santana: Okay. So, thats all so, theres no service revenue or anything like that?
Ki Nam: Not on the backlog.
Kelly Anderson: Correct.
George Santana: Thats good. Okay, great. And this is can you talk a little bit also with what
youre seeing? Everybodys so focused on government cutbacks and municipalities struggling. In
terms of what youre seeing or you just youve had people waiting for so long and youre just
signing so many new contracts, that its overwhelming. And (inaudible) you can see it in the
municipalities and other entities.
Ki Nam: Well, we actually have spent quite a bit on the export market. So, right now, over 50%
export. We havent seen a huge drop in this (inaudible). The US business has pretty much been flat.
And, were actually growing international quite a bit.
George Santana: What markets are strongest?
Ki Nam: International. Especially the Middle East. South Africa. Asia. Right now.
George Santana: Okay. Thank you so much. Ill jump back in the queue.
Ki Nam: Thank you.
Kelly Anderson: Thanks, George.
Operator: Once again, for questions, it is *1 at this time. And, we appear to have no further
questions at this time. Mr. Dvorchak, Ill turn things back to you for closing remarks.
Gary Dvorchak: Okay, we would like to thank everyone for participating in the call. And, like we
said, were going to have a press event at the New York Stock Exchange on Friday, starting at 9 AM.
At the Experience Square, which is right out front. So, everyones welcome to come and see, well
have T-3 and the R-3 there. So, we hope to see everyone there. And, thank you for participating.
Ki Nam: Thank you.
Kelly Anderson: Thank you.
Operator: That concludes todays conference. Thank you all for joining us.