Gylling Optima Batteries report 9 month 1999

Gylling Optima Batteries AB January - September 1999 * Net sales excluding GM rose by 18.5 % * Operating profit rose to SEK 11.393 (-13.367) million * Operating profit after financial items SEK 4.5 (-17.9 ) million * Number of batteries sold increased by 17.8 % to 370,000 ( 314,000 ) * 5-year distribution and technology development agreement signed with GNB Technologies Inc. Gylling Optima Batteries AB is the parent company of the Optima Group. Optima Batteries Inc in Denver, Colorado is the group's manufacturing company and and handles sales and marketing in North and South America. Optima Batteries AB is reponsible for Europa, Asia, the Middle East and Africa. GYLLING OPTIMA BATTERIES AB (a publically held corporation ) Vendevägen 90, Box 742, S-182 17 Danderyd, Sweden Phone: +46-8-6223200 Fax:+46-8-6223290 Optima Batteries home page: http://www.optimabatteries.s GYLLING GROUP OF SCANDINAVIA, ESTABLISHED 1912 GYLLING OPTIMA BATTERIES AB ( a publically help corporation ) REPORT JANUARY-SEPTEMBER 1999 Market and Sales Sales continued to develop strongly during the first nine months of 1999. In comparison with the corresponding period last year, Optima has increased volume by 17.8 %. During the period 370,000 (314,000) batteries were sold. After continuing favourable develop-ment of Japanese sales, Optima is now advancing its front line by opening a sales office in Tokyo on October 1. A local presence is necessary to meet the requirements for an OEM supplier. Competitors and Collaborative Parteners During the third quarter Exide, the biggest battery manufacturer in the world, began to launch its version of a wound-cell battery. This will focus interest and marketing efforts in the battery market on this type of battery. This may, at the same time, be seen as proof of the market potential of Optima's in- house Spiral Cell technology. Optima's experience of this technology, stretching over more than ten years, is apparent from a performance clearly superior to competitors' comparable products. Optima has signed a five year strategic distribution and technology development agreement with GNB Technologies Inc, one of the three biggest battery manufacturers in the USA. A new market segment in the USA is currently opening up before Optima and net sales are estimated to grow by 25-30 %. Production Production over the quarter has gone to plan. Optima has begun to produce a small battery, the 75/35 for launch in the USA and Europe during the fourth quarter of 1999 in order to reach new market segments. A Swedish senior production manager with solid experience of industries with complex production systems (ABB) has taken charge at the Aurora factory for the duration. This is particularly important given the prospect of future increases in volume and to ensure further improvements in quality and production efficiency. Research and Development Vehicle manufacturers are presently meeting requirements for reduced fuel consumption and emissions at the same as modern vehicles are being equipped with ever more complex and energy-hungry electrical systems. A new electrical system technology is therefore being developed whereby the battery voltage is increased from 12 to 36. Optima is well ahead with this development project, working with many of the major car manufacturers. Optima and Volvo's joint battery project, EFF Power AB and the ALAC deep- discharge cycle project in the USA are running closely to the arranged plan. Earnings After financial items, the Optima Group's earnings amounted to SEK 4.5 million (SEK -17.9 million). Financial Position The liquid assests of the group on September 30 amounted to SEK 4.0 (0.1) million. Unused overdraft facilities amounted to SEK 16.1 (11.3) millioin. Some of the company's leasing contracts have been reclassified from operational to financial leasing, and consequuently SEK 36.6 million are accounted as an an increase in plant and inventories. A corresponding amount has been entered as a liability. The group's investments during the period amounted to SEK 9.5 (19.6) million of which SEK 9.1 (19.2) million refers to leasing. The equity ratio was 32.8 (28.3) % while the debt ratio was 1.58 (1.58) (multiple). Net Sales Net sales rose to SEK 232 (201) million. The figures for the previous year include sales of SEK 5.6 million to General Motors. Future Prospects The battery industry's strong increase in interest in the Spiral Cell technology introduced by Optima has now resulted in a 5-year contract with GNB Technologies Inc. The contract, which ensures a decent basic volume, will have a significant effect. Optima's net profit/loss for the coming year. Optima has continued the favorable trend begun with the first half year with a satisfactory third quarter. The board's earlier forecast of continued good sales and sales development during the fourth quarter of 1999 remains unchanged. Scheduled Reports * 1999 Earnings Report, Thursday, February 24, 2000 Danderyd, November 11, 1999 Bertil Gylling [Removed Graphics] For more information, please refer to the corporate counsel, Lars Burström. This report has not been reviewed by the company's auditors. CONSOLIDATED INCOME STATEMENT 01-01-1999 01-01-1998 01-01-1998 SEK (000s) 09-30-1999 09-30-1998 12-31-1998 Net sales 231,122 200,878 278,705 Cost of goods sold -158,060 -153,331 -217,353 Gross Income 73,062 47,547 61,352 Sales and marketing expenses -32,140 -29,900 -42,948 Administration expenses -25,673 -24,886 -30,855 Research and development costs -3,856 -6,128 -7,794 Operating profit/loss 11,393 -13,367 -20,245 Net financial income/expenses -6,933 -4,553 -8,687 Operating profit/loss after net 4,460 -17,920 -28,932 financial items Tax - -32 -20 Profit/loss for period 4,460 -17,952 -28,952 CONSOLIDATED BALANCE SHEET SEK (000s) 09-30-1999 09-30-1998 12-31-1998 Fixed assets 142,031 105,100 104,657 Other current assets 30,368 24,886 33,733 Inventory 52,657 53,106 54,116 Accounts receivable 56,057 49,901 47,138 Cash and cash equivalents 4,037 57 12,801 Total assets 285,150 233,050 252,445 Equity 93,472 66,105 88,489 Interest-bearing liabilities 147,874 104,451 116,666 Accounts payable 18,678 30,111 28,120 Other non-interest paying debts 25,126 32,383 19,170 Total equity and liabilities 285,150 233,050 252,445 BUSINESS RATIOS 09-30-1999 09-30-1998 12-31-1998 Gross margin (%) 31.61% 23.67% 22.01% Operating margin (%) 4.93% -6.65% -7.14% Profit margin (%) 1.93% -8.92% -10.21% Return on equity (%) 4.90% -23.98% -33.64% Return on capital employed (%) 8.16% -5.50% -8.07% Equity ratio (%) 32.78% 28.37% 35.05% Debt ratio (multiple) 1.58 1.58 1.32 Percentage shareholders' funds (%) 32.78% 28.37% 35.05% Interest coverage ratio (multiple) 1.32 -1.22 -1.18 Number of batteries sold 370,000 314,000 444,000 PER SHARE DATA 09-30-1999 09-30-1998 1998 Number of shares 29,915,400 27,164,667 29,915,400 Earnings per share after tax 0.15 -0.66 -1.06 P/E- ratio (multiple) 101 neg neg Equity SEK 3.12 2.43 2.95 CONSOLIDATED CASH FLOW STATEMENT 01-01-1999 01-01-1998 01-01-1998 SEK (000s) 09-30-1999 09-30-1998 12-31-1998 OPERATING ACTIVITIES Profit/loss after financial items 4,461 - 17,920 -28,932 Adjustment for items not affecting 8,500 5,558 7,431 cash flow Changes in working capital - 23 236 7 983 2,006 Cash flow from operating activities - 10 275 - 4379 -19,495 Cash flow from investment - 364 - 403 -720 activities Cash flow from financing activities 1,874 2,013 30,191 Net change in cash - 8,765 - 2,769 9,976 Cash at beginning of year 12,802 2,826 2,826 Cash at end of period 4,037 57 12,802 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/11/11/19991111BIT00130/bit0001.doc http://www.bit.se/bitonline/1999/11/11/19991111BIT00130/bit0002.pdf