<PAGE> 1
EXHIBIT 99.1
[TURBBDYNE LOGO]
TURBODYNE REPORTS FINANCIAL RESULTS FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2000
CARPINTERIA, CALIFORNIA - AUGUST 14, 2000 - Turbodyne Technologies Inc.
(EASDAQ:TRBD) today reported financial results for the half year and quarterly
periods ended June 30, 2000.
In December 1999, the Company sold substantially all of the assets of Pacific
Baja pursuant to an order of the U.S. Bankruptcy Court. Pacific Baja accounted
for substantially all of the Company's sales on a consolidated basis for the
twelve months ended December 31, 1999. Accordingly, the comparative analysis of
Turbodyne Technologies Inc.'s results of operations for the three months and six
months periods ended June 30, 2000 and 1999 are reported without and with
Pacific Baja's results of operations for comparative periods in 1999.
Comparative Analysis without Pacific Baja
Net sales for the six months ended June 30, 2000 increased to $449,000 compared
to $429,000 for the same period in 1999, an increase of $20,000 or 4.66%. Net
sales for the three months ended June 30, 2000 decreased to $181,000 from
$325,000 for the same period in 1999, a decrease of $144,000 or 44.31%. This
decrease is attributed to the transfer of sales and marketing to Garrett(R)
Engine Boosting Systems, a division of Honeywell International Inc., pursuant to
the joint agreements.
Gross profit for the six months ended June 30, 2000 increased to $78,000, or
17.37% of sales, from $76,000, or 17.72% of sales, for the same period in 1999,
an increase of $2,000, or 2.63%, and from 7.54% for the full year 1999, an
increase of 9.83%. Gross profit for the three months ended June 30, 2000
increased to $64,000 from $55,000 for the same period in 1999, an increase of
$9,000 or 16.36%. This increase in gross profit is attributed to the change in
cost of goods sold.
Selling, general and administrative expenses for the six months ended June 30,
2000 decreased to $2,016,000 from $2,690,000 for the same period in 1999, a
decrease of $674,000, or 25.06%, and for the three months ended June 30, 2000
increased to $1,164,000 from $839,000 for the same period in 1999. The increase
in selling, general and administrative expenses for the three month period ended
June 30, 2000 is a result of the Company resolving prior debts. The decrease in
selling, general and administrative expenses for the six months ended June 30,
2000 is a result of attrition and staff reductions implemented by management.
Research and development costs for the six months ended June 30, 2000 increased
to $2,970,000 from $2,865,000 for the same period in 1999, an increase of
$105,000, or 3.67%, and for the three months ended June 30, 2000 increased to
$1,724,000 from $1,694,000 for the same period in 1999, an increase of $30,000,
or 1.78%. This increase is primarily a result of an increase in research and
development necessary for the Joint Development Project with Honeywell's
Garrett(R) Engine Boosting Systems Division.
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Page 2 - Turbodyne Reports Q2
Net loss for the six months ended June 30, 2000 was $5,144,000 compared to
$5,413,000 for the same period in 1999, a decrease of $269,000, or 4.97%, and
for the three months ended June 30, 2000 increased to $3,026,000 from $2,445,000
for the same period in 1999, an increase of $581,000 or 23.77%.
Comparative Analysis with Pacific Baja
Net sales for the six months ended June 30, 2000 decreased to $449,000 from
$30,252,000 for the six months ended June 30,1999, a decrease of $29,803,000 or
98.52% and for the three months ended June 30, 2000 decreased to $181,000 from
$16,180,000 for the three months ended June 30, 1999, a decrease of $15,999,000
or 98.88%. This decrease is attributed to the transfer of sales and marketing to
Honeywell, pursuant to the joint agreements, and to the loss of revenues from
Pacific Baja.
Gross profit for the six months ended June 30, 2000 decreased to $78,000, or
17.37% of sales, from $4,359,000, or 14.41% of sales, for the six months ended
June 30, 1999, a decrease of $4,281,000 or 98.21% and for the three months ended
June 30, 2000 decreased to $64,000 from $1,966,000 for the three months ended
June 30, 1999, a decrease of 1,902,000 or 96.75%. Gross profit increased to
17.37% of sales for the six months ended June 30, 2000 from 7.54% for the full
year 1999. This increase in gross profit is attributed to the change in cost of
goods sold.
Selling, general and administrative expenses for the six months ended June 30,
2000 decreased to $2,016,000 from $7,715,000 for the six months ended June 30,
1999, a decrease of 5,699,000 or 73.87% and for the three months ended June 30,
2000 decreased to $1,164,000 from $3,333,000 for the three months ended June 30,
1999. Selling, general and administrative expenses as a percentage of sales
increased to 448.99% from 25.50% for the comparable periods: June 30, 2000 and
June 30, 1999 and for the comparable three month periods increased to 643.09%
from 20.60%. The increase in selling, general and administrative expenses as a
percentage of sales is a result of lower sales to Detroit Diesel Corporation and
the loss of revenue from Pacific Baja. The decrease in actual selling general
and administrative expense is a result of attrition and staff reductions
implemented by management.
Research and development costs for the six months ended June 30, 2000 increased
to $2,970,000 from $2,865,000 for the six months ended June 30, 1999, an
increase of $105,000, or 3.67%, and for the three months ended June 30, 2000
increased to $1,724,000 from $1,694,000 for the three months ended June 30,
1999, an increase of $30,000 or 1.78%. This increase is primarily a result of an
increase in research and development necessary for the Joint Development Project
with Honeywell.
Net loss for the six months ended June 30, 2000 was $5,144,000 compared to
$6,823,000 for the same period in 1999, a decrease of $1,679,000 or 24.61% and
for the three months ended June 30, 2000 decreased to $3,026,000 from $3,339,000
for the three months ended June 30, 1999, a decrease of $313,000 or 9.37%. The
decrease in net loss improvement is the result of reduced costs of selling,
general and administrative expenses as discussed in more detail above.
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Page 3 - Turbodyne Reports Q2
In 1999, the Company entered into joint development, licensing, supply and
royalty agreements with Garrett(R) Engine Boosting Systems, formerly
Turbocharging Systems, a division of Honeywell International, a leading
turbocharger manufacturer, under which the Company and Honeywell will jointly
continue the development for mass production of the Dynacharger(TM) and
Turbopac(TM) product lines. As a result of this ongoing joint development work,
Dynacharger(TM) prototypes have been delivered to five automobile manufacturers
by the end of the first half of 2000. The prototypes are being tested and
evaluated by these automobile manufacturers for possible application on a total
of seven different engine families, including diesel as well as gasoline
engines. This number includes Dynacharger(TM) prototypes delivered to two
automobile manufacturers for three engine families in 1999. Revenues under these
agreements in 1999 and the first six months of 2000 were minimal. Mass
production for automotive manufacturers of the Dynacharger(TM) product line is
expected to commence in calendar year 2003.
Up to May 2000, the Company also continued low volume production and limited
sales of the Turbopac(TM) 2500 model pursuant to its contract with Detroit
Diesel Corporation, a major global diesel engine producer. The contract with
Detroit Diesel Corporation is presently the main source of sales of Turbodyne's
products. In the second quarter of 2000 marketing and sales was transferred from
Turbodyne to Honeywell, pursuant to the joint development and licensing
agreements. So far, Turbodyne has not received further orders from Honeywell
under the Detroit Diesel contract. Supply will not continue until such orders
are received. Aside from this contract, the Company is largely dependent on its
ability to raise funds for its working capital and research and development
through financings. Therefore substantial doubts have been raised about the
Company's ability to continue as a going concern.
After having concentrated on the development and delivery of Dynacharger(TM)
models for engines with approximately 2 liter displacement, Turbodyne and
Honeywell have entered first phases of feasibility testing to jointly develop an
electrically assisted turbocharger (EAT) for an engine with larger displacement.
In addition, Turbodyne has been selected in a team with Honeywell and Navistar
for the joint development of an EAT for improved vehicular response, reduced
fuel consumption and lower emission levels. This development work is partially
funded, as announced by the US Secretary of Energy for the United States
Department of Energy on March 3, 2000.
The Company intends to file its Quarterly Report on Form 10-Q for the second
quarter of 2000 today with the U.S. Securities and Exchange Commission via the
Edgar system and with the Market Authority of EASDAQ. The complete filing will
be available at http://www.freeedgar.com or through the respective link on the
Company's homepage.
Turbodyne Technologies Inc., a California based high technology company,
specializes in the development of charging technology for internal combustion
engines plus the development and manufacturing of high-tech assemblies for
electrically assisted turbochargers and superchargers. Turbodyne Technologies
Inc.'s headquarters is located in Carpinteria, CA; the European business
location is Frankfurt, Germany. Additional information about the company is
available on the Internet at http://www.turbodyne.com.
Contacts:
Kenneth Fitzpatrick, VP Group Finance - Investor Relations: (800) 566-1130
Markus Kumbrink, Turbodyne Europe Investor Relations: +49-69-69-76-73-13
Peter Weichselbraun, Corporate Communications: (800) 566-1130
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Tables - Page 1
TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2000 and December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
Assets 2000 1999
<S> <C> <C>
Current assets:
Cash $ 223,000 29,000
Trade accounts receivable, net 570,000 2,678,000
Employee advances receivable 641,000 696,000
Inventories 992,000 1,524,000
Prepaid expenses and other
current assets 50,000 25,000
Total current assets 2,476,000 4,952,000
Property, Plant and Equipment,
at cost, net 1,597,000 1,765,000
Other assets 62,000 47,000
4,135,000 6,764,000
Liabilities and Stockholders' Equity
Current liabilities:
Current maturities of long-term debt 1,250,000 1,250,000
Current maturities of obligations
under capital leases 51,000 40,000
Accounts payable 2,084,000 2,455,000
Accrued liabilities 674,000 506,000
Reserves for lawsuit settlement 356,000 350,000
Total current liabilities 4,415,000 4,601,000
Obligations under capital leases,
less current maturities 66,000 48,000
4,481,000 4,649,000
Stockholders' Equity:
Common stock, $0.001 par value
Authorized 99,000,000 shares; issued
and outstanding 52,203,955 shares in
2000 and 52,120,962 shares in 1999 51,000 51,000
Treasury stock, at cost, 378,580 shares
in 2000 and 378,580 shares in 1999 (1,756,000) (1,756,000)
Additional paid-in capital 96,761,000 94,057,000
Cumulative other comprehensive
income -- 21,000
Accumulated deficit (95,402,000) (90,258,000)
Total stockholders' equity (384,000) 2,115,000
4,135,000 6,764,000
</TABLE>
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Tables - Page 2
TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2000 and 1999
(Unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $ 181 16,180 449 30,252
Cost of goods sold 117 14,214 370 25,893
Gross profit 64 1,966 78 4,395
Selling, general and
administrative expenses 1,391 3,333 2,243 7,715
Research and development
costs 1,724 1,694 2,970 2,865
Loss from operations (3,051) (3,061) (5,135) (6,221)
Other expense (income):
Interest expense, net 37 376 78 713
Other income 3 9 (115)
Loss before income taxes (3,026) (3,335) (5,144) (6,819)
Income tax expense (benefit) -- 4
Net loss $ (3,026) (3,339) (5,144) (6,823)
Net loss per common share:
Basic loss per share (0.06) (0.09) (0.11) (0.18)
Diluted loss per share (0.06) (0.09) (0.11) (0.18)
Weighted average shares
Used for basic and diluted
loss per share 47,266 36,906 47,231 37,933
</TABLE>
See notes to consolidated financial statements as contained in Form 10-Q
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Tables - Page 3
TURBODYNE TECHNOLOGIES INC.
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net loss $(5,144,000) (6,823,000)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization
of property and equipment 184,000 81,838,000
(Increase) decrease in operating assets:
Trade accounts receivable 2,108,000 (3,401,000)
Inventories 532,000 (82,000)
Employee advance receivable 55,000 --
Prepaid expenses and other current assets (25,000) (275,000)
Other assets (15,000) (26,000)
Increase (decrease) in operating liabilities:
Trade accounts payable (371,000) 3,347,000
Accrued expenses 193,000 535,000
Reserve for Lawsuit Settlement 6,211 --
Net cash used in operating activities (2,477,000) (5,793,000)
Cash flows from investing activities:
Purchase of property and equipment $ (16,000) (1,084,000)
Net cash used in investing activities (16,000) (1,084,000)
Cash flows from financing activities:
Net proceeds from long-term borrowing
and capital lease obligation $ 3,000 2,375,000
Repurchase of treasury stock -- (259,000)
Proceeds from convertible debentures -- 500,000
Issuance of common stock -- --
Proceeds from exercise of
stock options and warrants 2,704,000 3,663,000
Issuance costs paid -- --
Net cash provided by
financing activities 2,708,000 6,279,000
Effect of exchange rate changes on cash (21,000) (134,000)
Net increase (decrease) in cash 194,000 (732,000)
Cash at beginning of period 29,000 1,275,000
Cash at end of period $ 223,000 525,000
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 36,000 723,000
Income taxes 800 4,000
</TABLE>
