Boulder City, Colorado — Amerityre, which makes polyurethane tyres for industrial applications, experienced a rise in sales of 14% to $926,000 for the first-quarter of 2017, and incurred a $19,000 expense when it abandoned a CRM system in the quarter.
The company saw gross profit fall 2% to $274,000 in the first quarter of 2017 compared with the first quarter of 2016, when it recorded $281,000 gross profit.
Amerityre said that during the fiscal year 2017 it had seen increased demand for our golf cart in baggage car tyres. ‘We expect this can trend to continue in the future,’ it said. ‘In general, sales internationally over the past year have been adversely affected by the strong US dollar.’
In its industrial tyre segment, the company said that the ‘slow acceptance’ of its forklift tyres in the marketplace continued, and there is also limited interest in its scissor lift to tyres as OEMs have not approved the use of tyre as a replacement for the current offering.
In agricultural tyres, sales continue to be hit by low farm commodity prices and projections suggest that this may continue to be weak for the course of the year, Amerityre said.
The company says it has limited resources, and tyre projects that need additional significant development have been halted. However, it will ‘selectively invest important opportunities that fit in our current budget’. Focus will be on in-house polyurethane formulations for specific tyre applications.
Amerityre said there had been a 75% increase in golf carts and baggage cart tyre sales, as well as an 11% increase in mobility tyre sales in the first quarter of 2017 compared with 2016.
It added that costs in the quarter increased because of higher raw material prices, as well as impacts from Hurricane Irma.
The company said that expenses increased to $18,728 in the first quarter of 2017 compare two $3,132 for the same period in 2016 because of a failed CRM implementation. Interest expenses also increased as a result of bank debt.
Amerityre says that its principal source of liquidity is cash payments from customers, and that it has no significant revolving credit arrangements. Historically, ‘our expenses have exceeded our sales, resulting in operating losses,’ it added.
The company has remedied this by offering shares the sale and placement of short term debt. However, Amerityre does not believe that this would be good value, and said it has ‘notified our preferred shareholder that we are suspending future payments of their preferred crash dividends payments so that the company can increase its working capital levels’.