Boulder City, Colorado — Amerityre, which makes polyurethane tyres for industrial applications, experienced a 10% fall in sales to $1.61m in the first half of 2018.
The company’s gross profit was $414,000 in the 2018 half. Gross profit in the first half of 2017 was $134,000 higher at $548,000.
The firm’s light duty polyurethane foam tyres were hit in the second quarter of the year by a decline in purchases from a major PU foam customer, the company said. This is important because, the company added, sales of polyurethane foam tyres to original equipment manufacturers, distributors and dealers accounts for the majority of its revenue.
Amerityre said its industrial tyre segment was field testing a higher load-bearing, higher abrasion resistance formulation; more customers purchased samples for evaluation in the quarter, it said. The company added it is aiming this formulation at personnel carriers, luggage carts and some lawn mowers.
Low farm commodity prices continue to hit sales in agricultural tyres segment. This is partly a result of Chinese tariffs, which have hurt US farmers, Amerityre added. 'We are likely to find better investment of our development funds in other market segments,' the company said.
High raw material prices and tariffs on imported materials have been the main factors behind declining numbers year-on-year. The company raised prices in September 2018, but in response customers became more frugal and sales declined.
'We are hopeful that raw material costs will stabilise during the rest of 2019,' the company said. 'The question as to whether sales volumes will recover is unknown. Despite reports of a robust economy, we are seeing evidence of an economic slowdown adversely affecting demand for our products. We are managing our business activities accordingly.'
| Amerityre numbers H1 2018 | |||
|---|---|---|---|
| H1 2018 $(k) | H1 2017 $(k) | % Change | |
| Sales | 1,612 | 1,793 | -10.1 |
| Gross Profit | 414 | 548 | -24.5 |
| Margin | 25.7 | 30.6 | |
| Source: Amerityre | |||
