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LQMT News Liquidmetal(R) Technologies Reports Record Revenues for 2006 Third Quarter of $8.0 Million

LAKE FOREST, Calif.--(BUSINESS WIRE)--Liquidmetal^® Technologies Inc. (OTCBB:LQMT) today reported financial results for the three months ended September 30, 2006. Revenue for the third quarter was $8.0 million, up 85% over third quarter 2005 revenue and up 13% over the second quarter of 2006.

The Company’s gross margin also increased to 20%, up from 13% in the third quarter of 2005, but down slightly from 22% in the second quarter of 2006. During the quarter, selling general and administrative costs were $2.3 million compared to $2.4 million in the third quarter of 2005 and $2.4 million in the second quarter of 2006. Research and development costs came in at $0.3 million compared to $0.2 million in the third quarter of 2005 and $0.3 million in the second quarter of 2006.

The Company had Adjusted EBITDA of positive $0.2 million in the third quarter compared to a negative $1.1 million in the third quarter of 2005 and a positive $0.2 million in the second quarter of 2006. Under GAAP, the Company had net income of $0.1 million in the third quarter of 2006 compared to a net loss of $2.4 million in the third quarter 2005 and a net loss $7.9 million in the second quarter of 2006. Changes in net income fully reflect the accounting treatment for the outstanding warrants and conversion features of the convertible notes.

Commenting on the operations, Larry Buffington, President and CEO, stated, “I am very excited to be at Liquidmetal Technologies during this dynamic stage of the Company’s growth. The Company is making solid progress in its effort to successfully commercialize our revolutionary technology. The Company is continuing to build solid momentum with revenue growth of 85% versus the same quarter of 2005 and 13% growth versus the second quarter of 2006. In addition to the impressive revenue growth, the Company has now achieved two consecutive quarters of positive Adjusted EBITDA. The strong performance is being accomplished by going deeper into existing customer relationships, adding new customers, maintaining strong cost controls, and continuing improvements in our operating costs.”

Mr. Buffington added, “As I look at the current opportunity and with the benefit of my 36 year career of growing manufacturing businesses, I am excited to see where we can take this business. The Company has built a solid foundation in its business. It will require some work to build upon this foundation, but I see the opportunity to replicate what I have been able to achieve throughout my career and create a strong growth platform. I am excited to get started and look forward to working with our customers, employees and shareholders to make this vision a reality in the coming years.”

Conference Call

As previously announced, Liquidmetal Technologies will host a conference call at 4:30 pm (EDT) on Tuesday, November 14, 2006 to discuss the results.

Listeners may access the conference call live over the Internet from Liquidmetal Technologies' website http://ir.liquidmetal.com or at http://www.companyboardroom.com.

Use of Non-GAAP Numbers

The financial results disclosed in this release include certain measures calculated and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”). In addition to the GAAP financial measures, Liquidmetal Technologies provides supplemental, non-GAAP financial measures to facilitate evaluation of Liquidmetal Technologies’ operating performance. Management believes that Adjusted EBITDA is a useful financial measure that facilitates evaluating the past and future performance of Liquidmetal Technologies’ operations on a comparable basis. Liquidmetal Technologies reports Adjusted EBITDA as an alternative method for assessing total company performance. Included in this press release is a reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measure as provided with the financial statements attached to this press release.

This press release may contain “forward-looking statements” that involve risks and uncertainties, including statements regarding our plans, future events, objectives, expectations, forecasts, or assumptions. Any statement in this press release that is not a statement of historical fact is a forward-looking statement, and in some cases, words such as "believe," "estimate," "project," "expect," “intend,” “may," "anticipate," "plans," "seeks," and similar expressions identify forward-looking statements. These statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from the anticipated outcomes or result, and undue reliance should not be placed on these statements. These risks and uncertainties may include: our limited operating history in developing and manufacturing products from bulk amorphous alloys; the adoption of our alloys by customers; the commercial success of our customer’s products; our ability to identify, develop, and commercialize new applications for our alloys; competition with suppliers of incumbent materials; the development of new materials that render our alloys obsolete; the ability to manage our anticipated growth; our limited direct experience in manufacturing bulk alloy products; scaling-up our manufacturing facilities; protecting our intellectual property; problems associated with manufacturing and selling our alloys outside of the United States; and other risks and uncertainties discussed in filings made with the Securities and Exchange Commission (including risks described in subsequent reports on Form 10-Q, Form 10-K, Form 8-K, and other filings). Liquidmetal Technologies disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.