Transense Regulatory News (TRT)

22 Mar 2005 07:01

Transense Technologies PLC22 March 2005 Transense Technologies plc - Final Results 22 March 2005 2004 was another excellent year for Transense with our technology basesignificantly enriched and our routes to commercialisation materiallystrengthened. This represents a powerful step change for the Company and bodeswell for our shareholders over the long term. I am pleased to report that with licence fees, engineering projects support, anda small royalty contribution, our turnover last year rose 115% to £563,000. Atthe same time, our running overheads reduced from £1,432,000 to £1,358,000, withvirtually all activities lower than last year. This left us with a reduced lossfor the year of £683,000 compared with £1,077,000 in 2003. We continued to broaden our valuable intellectual property base and now have 20granted patents (14 last year) along with 35 applications against 21 previously.The costs of these new additions, and maintenance of those already granted,came to £136,000 against £164,000 in 2003. Our patent coverage now spans all the main constituent parts that make up ourtyre pressure monitoring system (TPMS) and Torque systems, from the surfaceacoustic wave (SAW) devices and packaging to electronic interrogation andantennas, to the application specific integrated circuit (ASIC), which wasdelivered last November. I am pleased to report that it is already working welland has only a limited number of small changes needed before it can go into fullproduction. Our technicians continue to impress us with their inventiveness andtenacity in making sure that our technology will be protected for many years tocome. The most significant event during 2004 was undoubtedly the signing of asubstantial further licence agreement with Honeywell. Apart from a healthyseries of up-front payments the credibility and confidence this transaction,with one of the world's largest sensor manufacturers, affords to Transense isvery significant. Large automotive manufacturers need to be convinced that, atthe end of a long process of proving out the technology, there is an acceptableTier 1 supplier who can supply it in volumes at the highest automotive qualitystandard. It is not only the size and reputation of Honeywell but their abilityto manufacture and market complete systems that is such a powerful change insupport of Transense's technology. Honeywell are now vigorously promoting SAWtechnology. As a result of our growing relationship with Honeywell, and the increasedconfidence emanating from it, the stage is now set for the step change we hadbeen anticipating. I can reveal that from this strengthening we now haveprograms running with three of the top four car companies in the world, plus afurther two major Tier 1 suppliers for powertrain torque applications. The funded torque driveline demonstration project, which I referred to last yearand which is included in the above, has started very well with the initial trialexceeding expectations. We anticipate that a follow on project, to take theapplication to the next stage, will start shortly. Our original lead customer for electric power steering systems has been awaitingthe availability of the ASIC, but working ASIC meetings have now been arrangedfor April. Meanwhile two much larger potential customers are also showing akeen interest, one of which has already identified a car platform, which ourtransducer would suit, which is scheduled for volume supply in model year 2008. We have now finished our TPMS engineering development program for commercialvehicle applications on behalf of a major licensee and we are advised that aproduction batch of sensors has been ordered for delivery in 2005. We have alsobeen informed that this same licensee has demonstrated our SAW technology topassenger car manufacturers. In addition to the above, we have now agreed with three of the world's leadingcar companies to provide, in 2005, demonstration cars and trucks equipped withour tyre pressure technology. Some of these will be made available to theNational Highway Traffic Safety Authority (NHTSA). This organisation, chargedwith implementing the US Federal Tread Act, is requiring fitment of TPMS to allvehicles up to 10,000 lb weight (including passenger cars) starting September2005. Along with the help of Honeywell and another large US Tier 1 supplier(currently supplying battery TPMS systems), this will open up another channel tocommercialise our world beating technology. The ongoing plan is that thedemonstration vehicle type will implement Transense's TPMS technology from modelyear 2007. Strengthened routes to commercialisation include assisting our licensee Tai-Sawin qualifying at the very highest standard as a supplier in China to Honeywell;particularly important as we were also working with Honeywell on the TPMS sensorfor volume production at Honeywell's Intellesense plant in China. Also, with licensee Temex, we developed the production version of the torque SAWfor Honeywell to package. A significant step for the torque sensor was thedevelopment of a dedicated adhesive with a North American specialist adhesivemanufacturer which fixes the torque SAW in the sensor, and the sensor to themetal component eliminating welding or soldering. Another route to market will be through our agreement with Stack, which is wellknown in Formula 1 racing circles. The strategy is to introduce our technologyin one of the leading race teams during the 2005 racing season. F1 is anextremely hostile environment and will prove an excellent testing platform forSAW sensors, which should help to open the door to leading European carmanufacturers. Transense has, in line with accounting practice, followed a path of writingdown, or showing its assets at costs. This is now having the effect of reducingour net assets below 50% of our issued capital - a topic that will be addressedat the AGM. However, in the opinion of your directors, the Company's intangibleassets are worth well in excess of their book value. This is borne out by thelicence agreements we have already entered into. You will recall that last year shareholders agreed to our workforce beinggranted further options to reflect all the effort they have put into the Companyover the years. We are now asking you to agree to new options being granted tothe directors who also have seen the benefit of existing options being erodedover the course of time. The Remuneration Committee is conscious of the factthat salary levels are low in comparison with like businesses and, based on theperformance conditions attached to these new options, we feel that bothshareholders and directors will benefit. We continue to watch the market carefully for strategic partners to strengthenour competence, broaden our product offering, reduce financial risk and improverevenue and profit growth potential. On behalf of the Board I would like to thank all in the Transense team for theirpersistence, ingenuity and very hard work over the past year. The market forTransense's intellectual property rights continues to be highly attractive. P.J. WoodsChairman Profit & Loss Account for the year to 31 December 2004 2004 2003 £000 £000Turnover 563 262Cost of Sales (42) (45)Gross Profit 521 217 Administration expenses (1,358) (1,432) Operating Loss (837) (1,215) Net interest income 54 56 Loss on ordinary activities before taxation (783) (1,159) Taxation 100 82Loss on ordinary activities after taxation (683) (1,077) Dividends - - Loss per share (1.3p) (2.1p) Balance Sheet at 31 December 2004 2004 2004 2003 2003 £000 £000 £000 £000Fixed Assets 1,579 1,492 Current assets:Debtors 590 141Cash 1,161 2,071 1,751 2,212Less: creditors falling due within one year 242 112 Net Current Assets 1,509 2,100 Net Assets 3,088 3,592 Capital & reservesShare capital 5,376 5,319Share premium 3,473 3,351Profit & Loss account (5,761) (5,078)Shareholders' funds 3,088 3,592 Cash Flow Statement for the Year to 31 December 2004 2004 2003 £000 £000 £000 £000 Net cash outflow from operating activities (1,079) (1,128) Returns on investments and servicing of 54 56 finance Taxation - Corporation tax received 100 134 Capital expenditure and financial (164) (222) investment Cash outflow before financing (1,089) (1,160) Management of liquid resources Receipts from / (payments to) short term 850 (250) deposits Proceeds from sale of net current asset - 850 91 (159) investment Financing - issue of new ordinary shares 179 1,291 Decrease in cash in the year (60) (28) Reconciliation of operating loss to net cash outflow from operating activities Operating loss (837) (1,215) Depreciation, amortization etc 77 132 Profits on disposal of fixed asset and - (41) current asset investment Net movement in current debtors & (319) (4) creditors Net cash outflow from operating activities (1,079) (1,128) Reconciliation of net cash flow to movement in net funds Decrease in cash in the year (60) (28) (Increase) / decrease in cash flow from (850) 159 liquid resources Change in net funds resulting from cash (910) 131 flows Gain on sale of current asset investment - 40 Movement in net funds in the year (910) 171 Net funds at 1 January 2,071 1,900 Net funds at 31 December 1,161 2,071 Analysis of net funds Liquid Cash Total resources £000 £000 £000 At 1 January 1,950 121 2,071 Cash flow (850) (60) (910) At 31 December 1,100 61 1,161 Notes to the Preliminary results for the year 2004 1. The Accounts The summary of results for the year to 31 December, 2004 does not constitutestatutory accounts within the meaning of Section 240 of the Companies Act 1985.The full statutory accounts, which will be available to shareholders shortly,have been reported on by the Company's auditors but have not yet been deliveredto the Registrar of Companies. Full accounts in respect of the year to 31December, 2003 have been delivered to the Registrar of Companies and the AuditReport on these accounts was unqualified. 2. The Annual Report and the AGM The Annual Report and Accounts will be posted to shareholders by the end ofApril and the Annual General Meeting will be held on 20 May, 2005. For further information please contact: Transense Technologies plc 01869 238380Jim Perry, Chief ExecutiveGraham Eves, Commercial Director This information is provided by RNS The company news service from the London Stock Exchange