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 agencies 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.
Mölndal, January 14, 2015
Opus Group AB (publ)
For additional information, please contact
Magnus Greko
President and CEO
Phone: 46 31 748 34 00
E-mail: magnus.greko@opus.se
Peter Stenström
Investor Relations
Phone: 46 765 25 84 93
E-mail: peter.stenstrom@opus.se
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., Chile, Peru and on Bermuda 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).
