Valence Technology Reports Fiscal 2009 First Quarter Financial Results

August 11, 2008 by Jeff Shepard

Valence Technology, Inc. reported financial results for its fiscal 2009 first quarter ended June 30, 2008. For the first quarter of fiscal 2009, the company reported total revenue of $11.0 million compared to $4.1 million for the same period last year. The company states that the increased revenue was mainly due to increased volumes of Segway product sales as well as new shipments of large-format energy storage solutions to The Tanfield Group PLC’s Smith Electric Vehicle division.

"I am very pleased that during the first quarter we produced and shipped more energy storage packs than any other period in our company’s history," said Robert L. Kanode, President and Chief Executive Officer of Valence Technology. "The steps we have taken over the last few quarters to begin establishing the appropriate infrastructure for the continued future growth of our company are gaining traction. We are very encouraged with the growing level of interest in our energy storage solutions and vast portfolio of intellectual property as clearly the marketplace is beginning to better understand the advantages of our safe lithium ion phosphate technology."

Gross margin declined to a negative $26,000 compared to a positive $525,000 last year. The recent quarter included inventory adjustments which increased cost of sales and reduced gross margin. This included a $1.5 million adjustment related to the previously announced plans to discontinue the N-Charge product line and focus on higher margin large-format energy solutions.

Overall operating expenses rose to $4.6 million from $3.5 million in last year’s quarter. Among the reasons given by the company for the higher expense levels were increased marketing, research, and product development costs. The company reported a net loss available to common shareholders of $5.6 million or $0.05 per share, compared to a net loss of $4.4 million or $0.04 per share, for the same period last year.