Boulder City, Colorado — Amerityre, which makes polyurethane tyres for industrial applications, experienced an 11% fall in sales in the first quarter of 2019, but gross profit fell less steeply.
The company sold $827,000 worth of products in the 2019 quarter, compared with $926,000 in the 2018 quarter. Gross profit was down by 3% to $266,000.
Amerityre cut $90 m from the inputs needed to make its products.
Below the gross profit level, that 14% in costs of revenues was dwarfed by a 60% reduction in R&D expenditure in the quarter. The company spent $23,000, compared with $58,000 in the 2018 quarter.
There was a 14% reduction in sales and marketing costs in the quarter, too. This saved a further $15,000 in costs. Meanwhile, general, sales and administration costs were cut by 3%.
Amerityre said that demand for its light-duty polyurethane foam tyres for golf carts and baggage carts continued in the quarter, and that it expects this to continue.
However, polyurethane elastomer industrial tyres contributed negligible revenue during the first quarter of fiscal year 2019. 'We intend to continue promotion of these products in our target market,' it said.
The company reported that several customers purchased samples of its Elastothane tyres in the final quarter of 2018. These are more wear-resistant, and can carry heavier loads than its standard closed cell tyres. 'We expect more customers to order tyres made in this formulation as the year progresses,' the company said.
Low farm income continued to hit sales in the agricultural division. The company added: 'With the recent introduction of tariffs by China on US farm products, the prospects for improved agricultural prices is not promising.'
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