Disclaimer:
All of the following informationhas been extracted from the notes of Sage, a share-
holder of record of Liquidmetal Technologies, Inc.,
who was invited to attend the 2007 Liquidmetal
Annual Shareholders Meeting, Nov 15, 2007. As such,
these notes are not too be considered a substitute for
a Company Statement as to what occurred.
Any shareholder desiring to know what occurred at
the shareholders meeting should contact Otis
Buchanan, Vice President of Investor Relations at
Liquidmetal Technologies, Inc.
This is one person's reporting, and as such, should not
be construed as fact, but only an opinion as to what w
as significant or important to write down. It is in no
way a substitute for due diligence of the individual
or institutional investor.
Sage refuses to be held accountable or liable for any
investment decision made by virtue of this report.
This is not a complete analysis of every material fact
regarding Liquidmetal and its subsidiaries. The opinions
expressed here reflect Sages judgment at this date and
are subject to change. The information has been obtained
as stated, but we cannot guarantee the accuracy.
In no way should be considered as investment advice
or reliable information by which an investment decision
should be made.
End of Disclaimer
The 2007 Annual Shareholders Meeting of Liquidmetal
was called to order at 10:30 by President and CEO
Larry Buffington.
Company Officials Participating Were:
Board of Directors:
John Kang, Chairman
William Lewis Johnson
Dean Tanella
CK Cho
Lt Gen Patrick P. Caruana
(excused abscence of Robert Biehl)
Officers
Larry Buffington, Pres & CEO
Won Chung, VP Finance
David Y-S Choi, Gen Mgr of Casting Business Unit
Dennis Ogawa, Vice President, Special Projects
Employees:
Gerry Croopnick, Senior Researcher, Shareholder,
and Co- Founder of Amorphous Technologies, Inc.
Robert DiNunzio, Manufacturing Engineer
Consultants:
Rick Salas (Former CEO and Director)
Shareholders Attending: Less than 20
***********************************************
Business: Approximately 37 million of approximately
44 million eligible shares were cast, constituting a
quorum and the new slate of directors was approved
as per proxy.
**********************************************
Presentation By Chairman of the Board John Kang
Summary:
Revenues for 2007 (in millions)
Q1 ..... Q2 ..... Q3 ...... Q4....................................... FY 2007
5.1 ..... 8.3 ..... 9.3 .....10.8 .. (Incl. Grace Met) 33.5 mil Est
5.1...... 8.3 ..... 7.3 ..... 8.8 .....(Net of Grace Met).29.5 mil
Gross Margins: Achieved 27% in Bulk Alloys in 3Q
and inching up higher in 4Q
Manufacturing Strategy:
Continue Coatings (Short Term) Oil Well, Power, Paper
Continue Die Casting (Short Term)
Develop Manufacturing of Sheets (Long Term)
Develop Liquidmetal Composites (Long Term)
Products Manufactured Since 2003
Hinges: 10 million units
Antennae: 2 million units
Casings: 2 million units
Coatings: 1 million pounds
Bulk Alloy Product Mix: Continue categories of
electronics; sporting goods; medical.
Medical business to be accentuated in 2008, but Kang said
focus will be on external medical devices and instruments;
internal applications (such as implants) is on hold.
Economics of Competitive Materials
Competitors
Forged Titanium Most expensive
Die Cast Titanium
Stainless Steel = parity = Liquidmetal
Aluminum
Plastic Least expensive
Commercial Viability
Company has made significant cost savings in:
1) Composition of Liquidmetal: Reducing Berrylium
and increasing aluminum % while maintaining
desired specifications for application.
2) New machinery (Buhler)
For comparison purposes, old machines (150 tons)
platen capacity was 1/2 of the new machines (250
tons) capacity.
Parameter Old Machine New Machine
1 Mach Cycle 60 seconds 20min-30max secs
Capacity 2 cavities 8 cavities
No. Operators 1.5 persons o.5 persons
Control Manual Computer Controlled
Summary of New machine advantages:
Twice as many (say) San Disk Cruzers can be cast in 1 mach cycle;
up to 3 cycles per minute vs old 1 cycle per minute equals about
6 times the number of Cruzers can be made in a minute compared
to the old machines.
One operator can operate two new machines.
Before it took 3 operatiors on two old machines.
Just on these two parameters alone, it is easy to see the cost
savings. One new machine does 5-6 times the product output
in a 24 hour day of the old machine. Originally, we had 20+
machines operating at Pyong Taek. 30 machine operators
per shift were required to keep them running at full production
speed. A total of 90 operators were required 24-7/
4 New machines equals the output of the 20+ old machines.
But, the 4 new machines require only 2 operators per shift.
This is only 6 operators per day compared with 90.
Hello....anybody home......? We can lay-off 65 people, keep 3
as alternative workers, and end up with, say, 6 instead of 90,
a 93% reduction in machine operators.
What a tremendous savings in labor.
This justifies keeping the Pyong-Taek plant open.
On top of this, due to increased precision in mold and
increased die casting process, finishing is virtually
eliminated, rejects are kept to a bare minimum and yield
is greatly increased.
I think achieving gross margins of 50% or more is easy.
Company Growth Trajectory
Adding new customers (only Sagem was mentioned)
Licensing partnerships (New JV in Q4 2007)*
Buhler Joint Venture: (Sage thinks will happen
within Q4) although Company not announce date.
************************************************
Shareholders Q and A
Suffice it to say that every question was fielded and
answered by John Kang. Everyone in the room was
given more than enough time to voice questions,
complaints and constructive criticism. To this extent,
the meeting was conducted above board and quite
professionally.
Selected Questions
SH#1 - Why has share price been plummeting?
(Let the reader fill in the answer, cause anybody's
is as good as another)
SH#2 - When will the Company seek Re-listing?
Kang: We have neglected the Wall Street side of things
until we worked out our manufacturing problems. We
will address the markets strongly in 2008.
SH#3 - When are we going to stop bandaiding our
financing? Why don't we issue more shares?
Kang: - We will have the current short-term funding
soon under control and paid off. We do not want to
dilute the stock further.
SH#4 - Are you going to go back to the well again?
Kang: - We want to avoid that, we think we can manage
the way we are going. We are continuing to capitalize
via joint ventures and believe that is the way to go.
SH#5: I think the Company needs to address the election
of the Board of Directors; we are concerned about "
entrenchment and think the process of nominating and
election needs to be addressed by changes.
SAGE: Posed all of the questions posted yesterday
"Questions for Shareholders"
SH#6: Strongly indicated a concern about cyclicality of the
retail electronics product sector and the need to address
industrial markets for volume and stability in shipments,
and to fully utilize the attributes of Liquidmetal so as to
receive the premium price it deserves. (Sage notes that
Dean Tanella and and Rick Salas agreed that diversification
is necessary.
Kang: - Well, I disagree. We need to establish ourselves first
with the electronics segment as a core business from which
to build other product segments.
SH#6 - Why are we moving the new machines to Korea?
Shouldn't we sell the building in Korea and move to China
ourselves, like Grace?
Kang: - Well, we would like to sell the facility, but we don't
have many people trippin over our doorstep to make us
an acceptable offer. (Another shareholder stated it is better
to trust the South Koreans with our assets over the Chinese,
who can nationalize at a moment's notice. (Sage says, "Good
point")
SUMMARY THOUGHTS:
Financing should finish within weeks and 2 JV's
(*one electronic contract manufacturing) (and
the other Buhler) will materialize within 4Q.
Upon the close of the meeting, the Board of
Directors departed to attend their regular
monthly meeting at the Liquidmetal headquarters.
To be sure, the issues raised at the shareholders
meeting will be addressed in the meeting, in the
opinion of this writer.
Disclaimer:
All of the following informationhas been extracted from the notes of Sage, a share-
holder of record of Liquidmetal Technologies, Inc.,
who was invited to attend the 2007 Liquidmetal
Annual Shareholders Meeting, Nov 15, 2007. As such,
these notes are not too be considered a substitute for
a Company Statement as to what occurred.
Any shareholder desiring to know what occurred at
the shareholders meeting should contact Otis
Buchanan, Vice President of Investor Relations at
Liquidmetal Technologies, Inc.
This is one person's reporting, and as such, should not
be construed as fact, but only an opinion as to what w
as significant or important to write down. It is in no
way a substitute for due diligence of the individual
or institutional investor.
Sage refuses to be held accountable or liable for any
investment decision made by virtue of this report.
This is not a complete analysis of every material fact
regarding Liquidmetal and its subsidiaries. The opinions
expressed here reflect Sages judgment at this date and
are subject to change. The information has been obtained
as stated, but we cannot guarantee the accuracy.
In no way should be considered as investment advice
or reliable information by which an investment decision
should be made.
End of Disclaimer
*Jabil
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