Amerityre losses deepen despite higher annual sales
BOULDER CITY, Nev.—Polyurethane tire developer Amerityre Corp.'s net loss for the fiscal year ended June 30 was nearly 40 percent deeper than in the previous year despite 18.7-percent higher sales.
Boulder City-based Amerityre attributed the deeper loss, $1.18 million, to higher raw materials costs and increased selling, general and administrative expenses relating to stock-based compensation and selling costs associated with increased sales activity. Sales rose to $4.36 million.
The firm also incurred a loss of about $47,000 related to failures of forklift tires—a problem the company attributed to “product design and chemical mixing problems” that resulted in a production shutdown for several months.
The company said the problems “have since been resolved” and production resumed in March. The Amerityre's dealer network experienced growth during the fourth quarter, Amerityre President Tim Ryan said.
The $532,000 net loss for the fourth quarter was Amerityre's 68th consecutive quarterly net loss. Sales during the quarter fell 12.4 percent from a year ago to $953,588.
The cumulative loss now exceeds $62 million over 17 years on approximately $28.4 million in sales.
In addition, redesigning and retooling the forklift tire production lines resulted in higher-than-expected costs, the company said.
Amerityre said forklift tire sales more than doubled over fiscal 2011, but the problems also led to a number of customers and distributors returning their entire forklift tire inventory along with the tires that failed.
In order to retain its customers and dealers, the company honored warranties and accepted the return of the tires, Mr. Ryan said. In the meantime, distributors have had a chance to see the redesigned tire and have expressed satisfaction, he added, saying the company has signed 36 new distributors in the past year, including several since the reintroduction.
Amerityre said it is evaluating its options for the returned tires. One option stated in the firm's 10-K report is to “sell those tires to international customers on an 'as is' basis at a reduced price.”
The tire maker cautioned it “may incur additional losses if our plan to dispose of the returned forklift tires is unsuccessful.”
Amerityre also is gearing up for a “major launch” next spring of its agricultural tire line.
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