Liquidmetal Technologies Inc (LQMT)

[Anax]

Some Information and thoughts on Paul Hauck`s appointment.

Paul Hauck has been President of the MIMA (Metal Injection Molding Association) three times from 1999 to 2005. MIMA The MIM Association is one of the six associations representing the entire PM industry: The Metal Powder Industries Federation. MPIF

"Every year MPIF sponsors a Powder Metallurgy Design Excellence Awards competition in which parts fabricators among our member companies are invited to submit components that epitomize the possibilities inherent in these metal-forming technologies, including metal injection molding. A distinguished panel of industry judges evaluates the entries according to a stringent set of criteria and awards Grand Prizes and Awards of Distinction to those parts deemed worthy.

The awards are presented each year at a gala luncheon during the annual technical conference and details about the winning parts appear in many publications over the next year, giving added exposure to these achievements in PM and MIM design while honoring the fabricators and end users responsible for them. Below are all the MIM parts that have earned awards in this annual competition, going back to 1997."

Award-winning MIM Parts (All pictures below are linked from this MIMA website)

As president of the MIMA Paul Hauck was in charge for this MIM evaluating process. Since then he must have gained exclusive insight into the core of a currently $1.65 billion industry - the interdepend design process between industry customer and MIM Manufacturer. Not only that he must know a lot of various potential customers in different industries, he must have one of the industries broadest and most profound knowledge of the different design requirements each application has. I mean 25 years of MIM design engineering experience speaks for itself! One could say that he is one of the pioneers of the MIM industry.

This is an extraction of an article about the MIM industry in 2005, interviewing him. This represents also the time when he stopped being president of MIMA and continued being director of egineering design and marketing at kinetics:

"MIM has increased noticeably in the last couple of years. Metal powder processing has made its way into class-rooms. Additionally, word of mouth has driven MIM adoption in medical parts and firearms manufacturing and other areas where small, highly complex parts would otherwise require many costly manufacturing setups. "We`ve never seen such an uptick in activity as in the last half year," said Paul Hauck, director of design engineering and marketing for Kinetics Inc,, Wilsonville, Ore., a MIM parts manufacturer since 1982. "Maybe we as an industry have finally educated enough people."

"While the MIM market remains fairly small - the Metal Powder Industries Federation indicates that annual sales of MIM products represent around $200 million in value worldwide"
Cutting into MIM

"According to a new technical market research Metal and Ceramic Injection Molding, from BCC Research (www.bccresearch.com), the global metal and ceramic injection molding components market was valued at $1.5 billion in 2012. BCC Research projects the market to grow to nearly $2.9 billion by 2018, and register a six-year compound annual growth rate of 11.4% from 2012 to 2018."
BCC Research

Why would a former president and fellow of the MIM manufacturer industry he has been helping from $200 Mio. to a $1500 Mio. suddenly switch to another MIM process and lead the worldwide sales of Liquidmetal Technology? I think because Liquidmetal Technology represents the next step of advancement in Metal Injection Molding. I think Liquidmetal received its knightly accolade by the MIM industry!

I have always wondered how the confrontation of LM and MIM looks like. As Liquidmetal is clearly more advantageous than state-of-the-art MIM processes, some MIM manufacturer may have felt threatened. When going through the different Award-winning MIM Design I realized, that the MIM Manufacturer industry will eventually just adopt LM technology.

Last week on Wednesday Paul Hauck was a Speaker at the 2014 International Conference of the Powder and Metal Injection Molding Industry. His topic was "Medical Application Development Requirements". MIM2014 Isn`t it a coincidence that one week later he gets announced as the vice president of the worldwide sale and support of LM Technology? As next week Engel will present LM Technology on their Medical Day trade fair.

I believe we finally approached the critical moment of market adoption. There are now 28 prototypes in LM`s design engineering pipeline. Heavyweights Engel and Materion have made their commitments and there are now 15 reps in place plus the add-on of the former MIM president. More and more high-class people are sharing the same belief, namely that LM Technology is the future of metal injection molding. I am also really urging for the first contract and revenue announcement, as anyone does. But one has to acknowledge that the development of this LM technology generation has taken nearly 4 years since august 2010. The market penetration started two years ago with the first prototypes in 2012. Everything needs time. Its always about anticipation, and considering the marketing effort with regard to the established network and 28 prototypes, I totally anticipate a first customer announcement in the near time.

Let`s take the dental brackets for instance. In 2005 (Paul Hauck`s last year at MIMA) they awarded the first MIM design for dental appliances and in 2007 the second (you can also find their pictures below:

http://www.mpif.org/DesignCenter/MIM_partpopup.asp?id=106
http://www.mpif.org/DesignCenter/MIM_partpopup.asp?id=130

Interestingly both MIM parts were made for Ormco! And Ormco`s MIM manufacturer is Flomet. Ormco is also known as one of the first companies who have filed patent applications for the Liquidmetal process, directly naming it. As there is a 18months locked period, we only know of the first prototypes in the first half of 2012. Here is a summary of Ormcos patent:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=94595579

Steipp mentioned in the last CC quite clearly that he expects the medical dental industry to be the first to adopt LM. Considering the current focus and events in this domain, this will be highly likely.

"Global sales of orthodontic MIM brackets is estimated to be in the region of $130 million". With Ormco Liquidmetal has already a big market opportunity on the hook. I believe it represents a market potential of $20-40 million annually. Add another 27 potential applications with companies like Covidien, Halliburton or Lockheed and one can realize that they are already dealing with a market potential of $200-400 million. Materion conservatively projected 5-10$ million for the next one to two years. I think this represents only the material, the value of the ingots. As each 100g can be injected into multi-cavities, forming on avarage 10 parts per shot, the value of the LM parts will be 10 times the projected market: 50-100$ million. "BCC Research projects the [MIM] market to grow to nearly $2.9 billion by 2018" (link above) Considering the 28 prototypes I believe Liquidmetal is currently developing and designing Non-CE LM parts with annual market potentials in whole of $200-400 million. I believe LQMT will eventually receive royalties on net revenue for each sold LM part. I think that they can achieve 5%. See this study of 3500 interviewed companies referring royalty standards across various industries: http://law.unh.edu/assets/images/uploads/pages/ipmanagement-royalty-rates.pdf

While more and more prototypes transfer over into licenses and full production, Liquidmetal will eventually receive $10-20 million in the next 1-2 years in the NON-CE domain. The Liquidmetal INjection Molding process is the logical next step of Metal injection molding, as it has no shrinkage (MIM: 20%), smoother surfaces, better mechanical properties and more.

Every developments of the last 3-4 years are now coming together and the first contract is imminent. I am definitely going to hold all my shares during the next year, because there will be so many new information/application/capabilities unveiled.

There are so many unspoken facts about LQMT, but I have to continue to work. See ya

Pictures worth a million words!

1999

Sports Watchcase - Pressure-Balancing Valve - Pump Body and Cavity Plates

2000

Body Assembly - Gun Safety Lock Parts - Endoscopic Metzenbaum Scissors

2001

Biopsy Instrument - Needle Drive & Distal Clevis Assembly

2002

Cell Phone Hinge Barrel, Knuckles & Cam - Optical Transceiver Housing

2003

Open Center Impeller - Multi-Port Housing - Blade Clamp

2004

Suturing Jaw - Laparoscopic Jaws - Carriere Distalizer

2005

Dental Manifold - Electrical Connectors - Orthodontic Buccal Tube System

2006

Mobile Phone Flip Slider and Hinge Barrel

2007

Handcuff Parts - Pin Shroud - Trigger Guard - Orthodontic System Bracket, Slide, and Hook

2008

Articulation Gear - Locking Bar, Pin, And Rack - Hearing Aid Can Receiver - Handle Body and Yoke

2009

Handle Body and Yoke - Stainless Steel Housing Block - Stainless Steel Compressed-Air Nozzle - Stainless Steel MIM Flagstaff Nose


2010

Four Complex Locking Device Parts - Safe and Arm Rotor - Shuttle T-Lock Broadhead Hunting Arrow Tip - Upswept Grip Safety

2011

Housing Cup and Lid - Hunting Arrow Broadhead - Distal Channel Retainer - Rifle Rear Sight

2012

Eyeglasses-Frame Bridge Parts - Mechanical Introducer Device - Rotor - Lever - Printer Datums and Tabs - Cable-Tie Tool Parts - Sealing Seat

2013

Grasping Device Jaw - U-Bracket and Stop - Tool Holder Assembly - Sensing Element, Threaded Port, and Support Ring - Stapling Device Shuttle - Actuator - Gear Segment