Quantum Technologies Reports 2013 First Quarter Financial Results

      Quantum Technologies Reports 2013 First Quarter Financial Results

- Company reports 52% increase in natural gas tank and system revenues and
growing sales order backlog

PR Newswire

LAKE FOREST, Calif., May 15, 2013

LAKE FOREST, Calif., May 15, 2013 /PRNewswire/ -- Quantum Fuel Systems
Technologies Worldwide, Inc. (Nasdaq: QTWW), a global leader in natural gas
storage systems, integration and vehicle system technologies, today reported
its results for the first quarter 2013. Conference call information is
provided below.

2013 Highlights

  oNatural gas tank and system revenues increase 52% in first quarter 2013
    over the corresponding prior year period
  o$10.3 million of new orders received in first quarter for natural gas
    tanks and systems
  oOrder backlog grows to $17.4 million at March 31, 2013 for natural gas
    tanks and systems
  oExpansion of tank manufacturing capacity underway
  oInitiated several new programs for development of natural gas storage
    systems for truck and passenger vehicles anticipated to accelerate growth
    of future product sales
  oSale and monetization of Schneider Power wind assets progressing

2013 First Quarter Operating Results Overview

Product revenues from our lightweight compressed natural gas (CNG) fuel
storage tanks and systems increased by $1.2 million, or 52%, during the first
quarter of 2013 as compared to the corresponding period in the prior year.

During the first quarter of 2013, we received $10.3 million in new purchase
orders for our CNG fuel storage tanks and systems, which increased our backlog
for CNG fuel storage tanks and systems to $17.4 million as of March 31, 2013.

Our consolidated operating loss from continuing operations was $3.9 million in
the first quarter of 2013 compared to a loss of $4.0 million in the first
quarter of 2012.

We used $2.1 million of cash for our consolidated operating activities in the
first quarter of 2013, a $0.4 million improvement over the level of cash used
for operating activities in the comparable prior year period.

"We are very pleased with the continued growth of the order flow and new
customer programs that we have added in recent months which should become more
visible in our operating results as we move through the remainder of 2013 and
into the future," said Brian Olson, Quantum's President and Chief Executive
Officer. Mr. Olson continued, "We believe we have made tremendous strides in
bringing in new customers and programs that will accelerate growth of future
product sales in both the original equipment manufacturer (OEM) segment and
the aftermarket segment."

Fuel Storage & Vehicle Systems Segment

All revenues from continuing operations are generated by our Fuel Storage &
Vehicle Systems segment.

Product revenue for this segment was $3.5 million in the first quarter of
2013, the same as in the first quarter of 2012. The first quarter revenue in
2013 was substantially all related to shipments of our CNG storage tanks and
systems. In the first quarter of 2012, $2.3 million was generated from
shipments of CNG storage tanks and systems and $1.2 million was generated from
shipments of component parts to Fisker Automotive for the Fisker Karma
vehicle. The Fisker Karma vehicle has not been in production since
approximately July 2012 and, as a result, there have not been any product
shipments in 2013.

As a result of the significant increase in new purchase orders for our CNG
storage systems and our expectations for continued growth, we are implementing
our plan to expand tank manufacturing capacity. The capacity expansion,
anticipated to be completed in 2013, is designed to double our current
production capacity by setting up state-of-the art manufacturing lines at a
60,000 sq. ft. building adjacent to our existing 30,000 sq. ft. factory in
Lake Forest, California. The scheduled expansion is expected to provide
additional capacity starting in the second quarter of calendar 2013 with
continued incremental capacity coming on-line throughout calendar 2013.

Contract revenue for this segment was $0.9 million in the first quarter of
2013 as compared to $2.4 million in the first quarter of 2012. Contract
revenue is derived primarily from system development, application engineering
and qualification testing of our products and systems under funded contracts
with OEMs and other customers. The higher contract revenue in 2012 was mainly
due to the level of engineering services that we provided to Fisker Automotive
associated with the Fisker Karma program and to General Motors associated with
hydrogen tank development program that have since been completed or cancelled.
We have recently added significant new engineering development programs with
new customers associated with natural gas trucks and passenger vehicles that
we expect will boost our level of contract revenues for the remainder of
2013. These programs include arrangements for us to become the production
intent supplier of fuel storage systems for certain customers.

This segment had an operating loss of $1.9 million in the first quarter in
2013 as compared to an operating loss of $1.6 million in the first quarter in
2012.

The operating results of this segment include expenses associated with our
internally funded engineering programs. The expenses for these programs
amounted to $1.8 million in the first quarter of 2013, as compared to $2.2
million in the first quarter of 2012. Our internally funded research in 2013
primarily includes efforts to advance CNG storage technologies by integrating
and testing lighter materials, and developing different size storage vessels
to add to our existing product families. The decrease in expense during the
2013 period was primarily due to the suspension of activities associated with
our Ford F-150 plug-in hybrid electric vehicle (PHEV) program in late calendar
2012, which represented $1.1 million of internally funded costs for the first
quarter of 2012, that was partially offset by increased activities in the
first quarter of 2013 related to development of CNG storage technologies.

Included in the operating loss for the first quarter of 2013 was a charge of
$0.3 million to increase reserves for potential doubtful accounts receivable
primarily associated with Fisker Automotive.

Corporate Segment

Corporate expenses were $2.0 million for the first quarter of 2013 as compared
to $2.5 million for the same period in the prior year. Corporate 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.

The decrease in corporate expenses in the first quarter of the current year is
mainly attributable to savings from lower executive wages and benefits along
with other cost-cutting initiatives we have and continue to implement.

Renewable Energy Segment – held for sale

As previously announced, we have committed to a formal plan to sell our
renewable energy business segment conducted by our wholly owned subsidiary,
Schneider Power Inc. (Schneider Power), and initiated steps to locate buyers
for the business operations. Schneider Power, an operator and developer of
wind farms, represents the entire operations of our Renewable Energy business
segment. As a result of our intent to sell the business, the historical
activities and balances of the Renewable Energy business segment are reported
as discontinued operations held for sale in the accompanying condensed
consolidated financial information presented herein.

The results from the operations of the Renewable Energy segment, classified as
discontinued operations held for sale, net of taxes, was a net loss of $1.7
million in the first quarter of 2013 as compared to a net loss of $0.4 million
in the first quarter of 2012.

The net earnings or loss reported for discontinued operations held for sale
includes the recognition of $0.9 million of revenue from energy sales in the
first quarter of 2013 as compared to $0.1 million in the same period for 2012.
Energy sales in the first quarter of 2013 include activities of the 10.0
megawatt Zephyr Wind Farm (Zephyr), which Schneider Power acquired on
April20, 2012. Zephyr began generating revenues under its power purchase
agreement beginning on its official commercial operation date of May15, 2012.
The net loss reported for discontinued operations held for sale in the first
quarter of 2013 includes operating expenses of $0.5 million as compared to
operating expenses of $0.3 million in the same period in 2012. Also included
in expenses in the 2013 period were total impairment charges of $1.7 million,
of which $1.0 million related to goodwill associated with Zephyr and $0.7
million related to intangible assets associated with Schneider Power's
development project pipeline. Interest expense on long-term project financing
obligations was $0.4 million in the first quarter of 2013 as compared to $0.1
million in the first quarter of 2012.

On May 14, 2013, we announced that Schneider Power had closed on the sale of
its 1.6 Megawatt (MW) Providence Bay operational wind farm for a purchase
price of CAD 406,000 and the assumption of approximately CAD 1.1 million of
bank debt and certain other project related liabilities. In addition, we
previously announced that Schneider Power has entered into a separate
non-binding letter of intent with an unrelated third party for the sale of
Schneider Power's 10.0 MW Trout Creek wind farm development project and
certain other Schneider Power development projects and also received formal
offers and letters of interest for Schneider Power's 10.0 MW Zephyr
operational wind farm.

Non-Reporting Segment Results

Interest Expense.  Interest expense of our continuing operations, net of
interest income, amounted to $1.4 million in the first quarter of 2013 as
compared to $3.2 million in the first quarter of 2012. Interest expense
represents both cash payments based on stated contractual rates and non-cash
imputed rates associated with equity-linked characteristics (e.g. warrants and
debt principal conversion features), accelerated maturities and/or other
contractual provisions of the debt securities. Included in the first quarters
of 2013 and 2012 are non-cash interest costs of $0.9 million and $3.0 million,
respectively. Interest expense in 2013 now includes the imputed non-cash rate
associated with $1.8 million of bridge notes and certain warrants sold to
investors on January 24, 2013. 

Fair Value Adjustments of Derivative Instruments. Our consolidated financial
statements include fair value adjustments for the bifurcation of the
derivative liabilities associated with embedded features contained within
certain warrant contracts. Fair value adjustments of derivative instruments,
which represent non-cash unrealized gains or losses, amounted to a net gain of
less than $0.1 million in the first quarter of 2013 as compared to a net gain
of $0.1 million in the first quarter of 2012.

Consolidated Net Loss

Our consolidated net loss for the first quarter of 2013 was $6.9 million,
compared to a net loss of $7.8 million in the first quarter of 2012.

Quantum Fuel Systems Technologies Worldwide, Inc.
Condensed Consolidated Financial Information
                                       Three Months Ended
                                       March 31,
                                       2012                2013
                                       (Unaudited)         (Unaudited)
Statements of Operations:
Revenue:
 Net product sales                    $    3,545,741   $    3,505,095
 Contract revenue                      2,359,563           902,162
         Total revenue                5,905,304           4,407,257
Costs and expenses:
 Cost of product sales                2,506,879           2,603,876
 Research and development             3,941,269           2,354,500
 Selling, general and administrative  3,492,491           3,328,607
         Total costs and expenses     9,940,639           8,286,983
Operating loss                        (4,035,335)         (3,879,726)
 Interest expense, net                 (3,245,227)         (1,395,433)
 Fair value adjustments of derivative  106,000             87,000
 instruments, net
 Loss on settlement of debt and        (95,450)            -
 derivative instruments, net
 Equity in losses of affiliates, net   (121,590)           (5,998)
Loss from operations before income     (7,391,602)         (5,194,157)
taxes
 Income tax expense                    -                   (1,600)
Loss from continuing operations        (7,391,602)         (5,195,757)
Loss from discontinued operations,     (423,288)           (1,708,163)
net of taxes
Net loss attributable to stockholders  $   (7,814,890)   $   (6,903,920)
Per share data - basic and diluted:
 Loss from continuing operations       $             $      
                                       (0.25)             (0.11)
 Loss from discontinued operations     (0.01)              (0.03)
Net loss attributable to stockholders  $             $      
                                       (0.26)             (0.14)
Weighted average shares outstanding -
 basic and diluted                     29,503,356          48,356,602
Cash Flow Information (1):
 Net cash used in operating            $   (2,502,149)   $   (2,119,514)
 activities
 Net cash used in investing            $    (218,473)  $   (1,245,326)
 activities
 Net cash provided by financing        $    9,635,100   $    2,894,453
 activities
 (1)     The cash flow information includes Schneider Power for the periods
         presented.
                                       December 31,        March 31,
                                       2012                2013
Balance Sheet Information:                                 (Unaudited)
 Continuing Operations:
         Cash and cash equivalents     $    1,435,658   $    1,516,799
         Working capital (deficit)     $   (8,387,625)   $  (11,516,420)
         Total assets                  $   27,034,902    $   27,293,348
         Derivative instruments,       $     600,000  $    1,218,000
         classified as current
         Debt obligations, current &
         non-current:
         Principal & accrued interest  $   13,564,903    $   15,038,449
         Debt discounts                (1,504,353)         (1,787,930)
         Total                         $   12,060,550    $   13,250,519
 Discontinued Operations:
         Cash and cash equivalents     $     578,080  $      32,503
         Total assets                  $   34,226,458    $   31,108,058
         Total liabilities             $   26,908,713    $   26,078,426
 Total stockholders' equity            $   14,222,681    $    8,623,231
 Shares issued and outstanding:
         Preferred stock; $0.001 par   -                   -
         value
         Series B common stock; $0.02  49,998              49,998
         par value
         Common stock; $0.02 par       47,761,119          49,799,198
         value
         Total                         47,811,117          49,849,196

Financial Results Call Scheduled:

Wednesday, May 15, 2013 1:30 p.m. Pacific time (04:30 p.m. Eastern time). If
you are interested in participating in the financial results conference call,
please call 800-207-9287 or 706-679-1155, Conference ID #67538558,
approximately ten minutes prior to the starting time. An operator will
request your name and organization.You will then be placed on hold until the
call begins.

For those of you unable to join us for the earnings call, a playback of the
call will be available via telephone approximately three hours after the call
untilMay 24, 2013 at 11:45 p.m. Pacific Time. The number for this service is:
855-859-2056.

The call will also be available on the Company's Investor Relations web page
approximately two hours after the call at:

http://www.qtww.com/about/investor_information/conference_calls/index.php

For assistance, please call Bonnie Poyer at (949) 399-4536.

About Quantum:

Quantum Fuel Systems Technologies Worldwide, Inc. is a leader in the
innovation, development and production of natural gas fuel storage systems and
the integration of vehicle system technologies including engine and vehicle
control systems and drivetrains. Quantum produces one of the most innovative,
advanced, and light-weight compressed natural gas storage tanks in the world
and supplies these tanks, in addition to fully-integrated natural gas storage
systems, to truck and automotive OEMs and aftermarket and OEM truck
integrators. Quantum provides low emission and fast-to-market solutions to
support the integration and production of natural gas fuel and storage
systems, hybrid, fuel cell, and specialty vehicles, as well as modular,
transportable hydrogen refueling stations. Quantum is headquartered in Lake
Forest, California, and has operations and affiliations in the United States,
Canada, and India.

Forward Looking Statements:

This press release contains forward looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements included
in this report, other than those that are historical, are forward-looking
statements and can generally be identified by words such as "may," "could,"
"will," "should," "assume," "expect," "anticipate," "plan," "intend,"
"believe," "predict," "estimate," "forecast," "outlook," "potential," or
"continue," or the negative of these terms, and other comparable
terminology.Examples of forward looking statement included in this release
include whether our new engineering programs will result in growth of our
product sales, whether our CNG sales will grow to the level we anticipate, and
whether we will be able to complete the planned expansion of our manufacturing
capacity by the end of calendar 2013 and, if we do, whether it will result in
the output we anticipate. Various risks and other factors could cause actual
results, and actual events that occur, to differ materially from those
contemplated by the forward looking statements.The risk factors include the
ability of the customer and Quantum to fulfill their obligations under the new
orders. The Company undertakes no obligation to update the information in
this press release to reflect events or circumstances after the date hereof or
to reflect the occurrence of anticipated or unanticipated events.

More information can be found about the products and services of Quantum at
http://www.qtww.com/ or you may contact:

Brion D. Tanous
Principal, CleanTech IR, Inc.
Email:btanous@cleantech-ir.com
310-541-6824

SOURCE Quantum Fuel Systems Technologies Worldwide, Inc.

Website: http://www.qtww.com
 
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