BOULDER CITY, Nev.—Polyurethane tire developer Amerityre Corp. suffered higher losses in the quarter and six months that ended Dec. 31 on the negative effects of double-digit drops in sales.
The net loss of $344,644 for the second quarter was 49.6-percent worse than the corresponding fiscal 2012 quarter, Amerityre reported in its latest 10-Q quarterly report with the Securities and Exchange Commission.
The loss was the firm's 70th consecutive quarterly loss and brings to $62.6 million the cumulative net losses Amerityre has reported in more than 17 years in business.
Sales in the quarter plunged 30.7 percent to $727,194 as the firm dealt with returns of forklift tires as part of a warranty issue, chemical and production shortages that led to delayed and cancelled orders and delays in the redesign of a key product.
Also impacting earnings were higher operating costs related to the company's shift to more full-time production-related employees, a move made to improve product quality and quality control. As a result, costs as a share of revenue rose 8 percentage points to 70.8 percent.
The net loss for the six months ended Dec. 31 worsened by 46.6 percent to $622,532, while sales dropped 30.2 percent to $1.64 million. Amerityre cited the drop in net revenues and the related impact on profits for the net loss.
For the coming months, management is focusing on the sale and distribution of profitable product lines, Boulder City-based Amerityre said, and has invested about $116,000 in higher output production equipment to be in a position to "capitalize on revenue growth opportunities."
The company said the success of the business strategy depends upon obtaining additional working capital, which management put at a minimum of $800,000—of which nearly half has been raised.
To that end, management "has increased its efforts to obtain financing through means that previously were not considered, such as preferred stock offerings, structured debt and asset-based lending."
The company currently does not have an existing credit facility.