BOULDER CITY, Nev. — Polyurethane tire producer Amerityre Corp. was in the red for the quarter and six months ended Dec. 31 despite slight increases in gross profit in both periods.
Amerityre cited increases in general and administrative expenses — primarily salaries, consultant fees, audit fees and repairs — as reasons for falling back into the red after reporting a full-year net profit for the first time in the firm's 21-year history in fiscal 2017.
The net loss for the quarter was $2,569, compared to a net profit of $2,816, while the net loss for the half-year was $66,224, which was 6.9-percent deeper than in the previous year.
Sales for the quarter of $866,944 were down 1.5 percent from the fiscal 2017 second quarter, while six-month sales of $1.79 million were 4.5 percent ahead of the 2017 period.
Amerityre said its performances in both periods were "in line with expectations" and driven primarily by sales of closed-cell foam tires, including golf cart and baggage cart tires, demand for which has been rising. International sales have been adversely affected by the strong U.S. dollar.
Sales of products for the agriculture market — a key targeted market segment — continue to be depressed due to low commodity pricing, and Amerityre said it anticipates "continued challenging sales" in the agricultural tire market because of the low commodity prices.
Amerityre said it also may see increased sales in the industrial tire segment due to several new initiatives the firm is working on using its elastomer technology.
The company also said it expects raw material price increases to become a major headwind moving forward in fiscal 2018, putting pressure on gross margins.
Additionally, the company cautioned that due to its limited resources, tire projects that are contingent on additional significant development have been put on hold.