BOULDER CITY, Nev. (Sept. 19) — Polyurethane tire developer Amerityre Corp. reported it suffered several business setbacks in its latest fiscal year but posted a 29-percent rise in sales and narrowed its loss.
The firm — which has operated in the red for 12 consecutive years — had a net loss of $5 million on sales of $2.62 million for fiscal 2006, according to its 10-K filing with the Securities and Exchange Commission. A year earlier Amerityre had a $5.32 million loss on sales of $2.03 million.
Most of the sales increase came from the sale of equipment to a foreign licensee, the firm said.
Amerityre management said it is optimistic sales of traditional and new products will reduce the net loss and move the company closer to profitability. Most of Amerityre's revenues comes from the sale of "flat-free" PU foam industrial tires sold to original equipment and aftermarket customers, but the firm's business model calls for increasing revenue from licensing agreements for its proprietary systems.
Setbacks reported by Amerityre in the 10-K included:
— The expiration and nonrenewal of a licensing pact with FlatFree Korea. That company didn't set up manufacturing of flat-free, closed-cell foam tires in South Korea as it had planned. Amerityre said it is negotiating with unnamed parties for manufacturing and marketing rights in Asia.
— The suspension of talks with a foreign conglomerate about developing a relationship that might have included selling up to 50 percent of Amerityre's equity. The company said it still is talking about a joint venture with an undisclosed company about making Amerityre run-flat radial car tires.
— A halt in a deal with recreational boat maker Genmar Holdings Inc. to design and develop a PU run-flat boat trailer tire, pending further development of the Arcus run-flat concept.
— A delay in the start-up of licensed off-the-road tire retread production by Qingdao Qizhou Rubber Co. Ltd. in Qizhou, China. Amerityre said the September opening goal wasn't met when problems arose in getting equipment completed by a third-party fabricator and shipped to China.