Liquidmetal Technologies Inc (LQMT)

[Barney Vissur]

ob or anyone - is the conference call available in archives yet? I would like to even see the transcript if anyone knows of its location. I will get in touch with LQMT if no one currently has a location for it. My take (no one thought I could keep quiet from what I heard, did they???) of the good, and not so good, and please note that I missed WAYYY too much of the Q&A session both to know if these questions were answered or not and for my own education (so I'm disappointed as hell I didn't get to ask some of these questions):

1) The earnings reported were a disappointment IMHO, but did anyone not expect the possibility the numbers weren't going to be stellar when they had done only limited rev's through the first 9 months and were basically revamping the business model? (I would have liked to ask, and have answered, numerous questions that I will probably pose to them soon via email or tel call). Do we even know exactly when they started shipping? Was it the last 2 weeks of December? Was it early December? Was it the last week? Just days? Etc.

The date shipment started is obviously a critical question because we all know that when a customer orders, they won't normally make their first order their largest. The customer normally starts with company samples and prototypes (usually free) and then does their own R&D on it. If that checks out ok, then small orders are placed before any bigger orders are put in place. Those small orders are the use and application and then the company determines based on cost and application if they want more. We all know it's that complex and that simple. So, those initial sales were the "test phase" IMHO for those customers. But, hey, they liked it enough that they started ordering.

As I recall, Steipp said they needed 1 mill a month to break-even. Now, that is presuming the customers loved the product so far and want more. I'm betting they do because I'm also speculating they did a load of R&D before doing those initial orders and were happy enough with the testing phase that they started ordering when everyone's budgets are tight as hell and they won't throw money into something in a wanton manner. If a mill a month is break-even, they look pretty damn close to being where they need to be with those hypothesized relatively small initial orders.

2) There was a comment about precarious cash/financial position. IMHO, there are 2 answers to that.

a) It is now again, basically a DSC (development stage company), but if they make money with that $1 mill monthly break-even (which is basically NOTHING if you know anything about the way that the aerospace industry spends money on parts and equipment), both the cash flow and financing will find them.

b) Steipp has the partners spending the large portion of the money for all of this. He stated that BOTH Materion AND Engel had SIGNIFICANT (his words, and that was the one time he spoke where his voice rose a bit and he almost indicated they had a LOT at stake with how much they invested - almost that he was surprised how much they had "risked") investments in this and you can bet on 2 things - they aren't spending significant amounts of money on something they believe is going to be a failure and they have put a TON of their own R&D into this product to make sure they will be making HUGE dollars from it. Simple risk/reward analysis and an NYSE company (Materion) is not going to do much risk for their shareholders unless they see a big reward and VERY calculated risk.

3) Finally, Steipp - the guy came off exactly the way you'd want your CEO to come off. Organized, incredibly intelligent, focused, charismatic, and level. He didn't indicate any overt excitement, stuck to the points, answered questions honestly (from what I heard) not pulling any punches. He told it like it is. Fact is, the success of LQMT depends totally on this guy as he has totally revamped the failed business model of the useless predecessors.

I had always predicted (and I am fully aware that my predictions are as useful or useless as anyone else's) 2nd half 2012 or early 2013. BUT, if they already did qtr mill revs in Q4 2011, Materion and Engel (AND Visser - and I think Barney Visser has the most to lose here because he doesn't seem to have the capital they do, along with a large stock stake at .26 backed up by all that money he locked up in what I'm sure are VERY expensive molds) are ALL IN, and Steipp as CEO, it may take some time, but let's see if they continue to move those numbers forward.

Two final replies with all respect in mind. If this was the "worst 10-K ever seen," then you have not seen many 10-K's other than Fortune 1000 10-Ks. That's really not a fair statement. It's not pretty, but to say this is the worst ever - that's really not a valid statement when, for all intents and purposes, we're dealing with a DSC. Secondly, Red re-posted Steipp's comments on the company release - it is critical to note that all the pieces are now in place - between alloys, molds, etc. to execute. That speaks volumes.

There was the point made that there is a reason why this is a 20 cent stock with a market cap of only 27 mill, but if they end up with 15-20 mill in revs at end of 2012 and expanding markets, the potential has not diminished, it's expanded. Not much to report here until next earnings call so I'm sure there won't be a ton of posting here for a while. GLTA.