Successful program starts in Colorado, Indiana, and California
Press release – January 14, 2015
Opus Inspection successfully began vehicle inspection operations under its renewed exclusive contracts in the States of Colorado and Indiana. Opus Inspection also successfully launched its new rental program of DAD-OBD equipment in the State of California with over 4,100 signed rental contracts. All these operations began on or around January 1, 2015.
The vehicle inspection program in Colorado, under the new contract, was successfully started on January 1, 2015. The new contract period is five years and can be extended by the Colorado Department of Public Health and Environment and Department of Revenue for an additional six years (2 + 4 year).
The annual test volume in Colorado is expected to decrease in 2015 by approximately 212,000 vehicles due to new regulations that will increase the model year exemption for new cars from four years to seven years. To compensate for the reduced test volume, Opus Inspection has successfully reduced its operational costs, among others by changing the test type for certain model year vehicles from the time intensive IM 240 test to a faster and more efficient OBD test. Further improvements to our operational expenses in Colorado are necessary to compensate for the lower inspection volume in Colorado.
In addition to Colorado, Opus Inspection successfully started the vehicle inspection program in Indiana under a new contract. The new contract term is four (4) years, through December 31, 2018, with an option for the State to extend the contract up to four (4) additional years. Financials for the Indiana program where we perform emission test and registration renewal services are essentially unchanged compared to the previous contract. Approximately 220,000 vehicles will be tested annually under the new contract.
Further, in 2014 Opus launched a new business model for its activities in California by offering full service rental contracts for DAD-OBD equipment. The business model has proven to be significantly more successful than anticipated. To this date, Opus Inspection has signed over 4,100 rental contracts with workshops in California, with that number increasing daily until the final implementation date of March 9, 2015. Opus Inspection is offering all new OBD System equipment through an open-ended rental agreement, which includes delivery, installation and service warranty. The new OBD emission testing equipment will be used in California for many years to come. Opus Inspection’s new business model in California will lead to increased revenues and improved margins.
There is further growth potential for Opus Inspection in the California equipment market in 2015 as soon as its newly designed BAR-97 Emissions Inspection System (EIS) Gen3 is certified by BAR for sale. Opus Inspection is the only company launching an all new BAR-97 analyzer in California. The new EIS Gen3 rental contracts allow smog check stations to replace the older generation equipment that is at least fifteen years old. An EIS is required in approximately 3,000 STAR certified Smog Check stations located in California, optional in all other stations, and will be used in addition to the new DAD-OBD equipment. The BAR-97 EIS tests vehicles under simulated driving conditions to detect oxides of nitrogen (NOx), hydrocarbons (HC), and carbon monoxide (CO) emissions; major chemical components of smog. Opus Inspection will offer these stations rental agreements in the same form as for the DAD-OBD equipment, including full service to the Smog Check stations.
“We are excited to have delivered three successful program start-ups during the past few weeks. We appreciate the great teamwork between the Opus Inspection engineering, operations employees and our customers, the state agen¬cies DPHE and DOR in Colorado, IDEM in Indiana and BAR in California”, says Lothar Geilen, CEO of Opus Inspection. “I am looking forward to further success in California in 2015 with our new Gen3 BAR-97 analyzers, which are newly designed for the tough emission inspection environment in California smog check stations” Geilen continued.
For additional information, please contact:
Magnus Greko, VD and President
Tel: +46 31 748 34 00
Peter Stenström, Investor Relations
Tel: +46 765 25 84 93
About Opus Group
Opus Group is a leading company in vehicle inspection technology and vehicle inspection program operations. The Group has two main business areas which are vehicle inspection and equipment. Opus Group is one of the market leaders in vehicle inspection operations in the US and Sweden. Opus Bilprovning has 73 vehicle inspection stations in Sweden. Opus Inspection operates vehicle inspection programs in the U.S., Bermuda, Chile and Peru and is active in sales and service of emission control equipment in North America and Mexico. Through the subsidiaries, Opus Equipment and J&B Maskinteknik, Opus Group conducts production, sales, and service of vehicle inspection equipment for vehicle inspection companies and vehicle workshops. Opus Group’s revenues amounted to approximately SEK 1,047 million in 2013. Opus Group’s shares are listed on Nasdaq OMX Stockholm.
FFFS 2007:17 (10 kap 11§) (SFSA rules) – The information in this press release is published in accordance with the rules in the law (2007:528) under the Securities Market Act (2007:528). The information was given for publication on January 14, 2015 at 0830 CET.