SmarTire Systems Announces Fiscal Third Quarter Results
RICHMOND, B.C.--June 12, 2001--SmarTire Systems Inc. reported today financial performance for its fiscal third quarter ended April 30, 2001.The Company reported a net loss of CDN $2.1 million or $0.14 per share, compared with a net income of CDN $9.6 million or $0.64 per share for the same period in 2000. The substantial difference in financial performance between the two fiscal quarters is the result of a $12.2 million gain on the sale of an investment in March 2000 that provided SmarTire with the necessary cash reserves to fund the build up of the Company's Generation ll tire monitoring products.
"In an environment of heightened public scrutiny in tire safety and a new regulatory statute from the U.S. government, the automotive industry has a renewed sense of urgency for an effective tire monitoring solution," said Robert Rudman, President and Chief Executive of SmarTire Systems, Inc. "From our perspective, the best tire monitoring solution will provide a high level of technical sophistication and have wide applications to address the myriad of industry specifications. SmarTire's technology is among the most advanced on the market today and we believe the Company will be a leader in providing the industry with a solution."
Amendments to the Transportation Recall Enhancement Accountability and Documentation (TREAD) Act announced last November are forcing rapid changes to the scope of the tire monitoring supply chain. Traditionally viewed as a high-end component for luxury automotive accessory programs, tire monitoring systems will become standard equipment in all vehicles within a few short years. Suppliers to the automotive industry have recognized the massive opportunity that the TREAD Act has created and are striving for a position within this new technology sector.
"SmarTire has been pioneering the research and development of tire monitoring technology for over a decade," said Robert Rudman. "Our latest generation of products has leading edge technology and universal applications for all sectors of the automotive and transportation industries on both the original equipment and aftermarket levels."
"The impact of the TREAD Act on SmarTire has been immediate and profound," continued Mr. Rudman. "All aspects of our corporate plan have been reviewed to ensure that we can maximize on these opportunities. Powerful strategic alliances are critical to our success and establishing new business relationships to improve production and enhance marketing efforts are of the highest priorities."
Rudman concluded, "At SmarTire, we believe in building long-term shareholder value through continuous technological innovations and solid business models. New product development, a dynamic corporate culture and key strategic alliances are the cornerstones of our business."
Kevin A. Carlson, C.A., Chief Financial Officer and Managing Director
SMARTIRE SYSTEMS INC
Financial Summary
Expressed in Canadian dollars
Three Nine
months months
ended ended
April 30, April 30,
2001 2000 2001 2000
---------------------------------------------------------------------
Revenue $265,463 $226,963 $862,585 $816,116
Cost of goods sold 136,272 118,438 355,307 431,899
---------------------------------------------------------------------
Gross profit 129,191 108,525 507,278 384,217
Expenses 2,253,115 2,695,008 6,784,671 7,786,676
---------------------------------------------------------------------
Net loss from
operations $(2,123,924)$(2,586,483) $(6,277,393) $(7,402,459)
---------------------------------------------------------------------
Other Income
Gain on sale
of investment - $12,201,832 - $12,201,832
---------------------------------------------------------------------
Net income
(loss) $(2,123,924)$ 9,615,349 $(6,277,393) $ 4,799,373
---------------------------------------------------------------------
Income (Loss)
per share
Basic $ (0.14)$ 0.69 $ (0.42) $ 0.38
Fully Diluted $ (0.14)$ 0.64 $ (0.42) $ 0.36
SMARTIRE SYSTEMS INC.
Balance Sheet Summary
Expressed in Canadian dollars
April 30, July 31,
2001 2000
---------------------------------------------------------------------
Cash and cash equivalents $ 7,635,344 $ 14,512,558
Total current assets $ 9,151,252 $ 15,047,204
Total assets $ 12,712,939 $ 15,966,373
Current liabilities $ 1,485,194 $ 739,155
Shareholders' equity $ 11,227,745 $ 15,227,218
Total liabilities and
shareholders equity $ 12,712,939 $ 15,966,373