SmarTire Reports on First Quarter Performance
As Industry Regulations Tighten, Company Expands Product Offering and Distribution Channels
OTCBB: SMTR
RICHMOND, BC, Nov. 20 -- Robert Rudman, President and CEO of SmarTire Systems Inc. (OTCBB: SMTR) reports that the Company achieved solid performance during its first fiscal quarter ended October 31st, 2003 in terms of sales and marketing, product development, business relationships, manufacturing of its tire pressure monitoring systems (TPMS) and corporate development.
"SmarTire greatly expanded its presence in the TPMS industry during the first quarter of its 2004 fiscal year by achieving success on several levels," stated Robert Rudman. "New products were introduced, markets were expanded and important business relationships were established. As well, the recent decision by the Appeals Court to direct the U.S. National Highway Traffic Safety Administration (NHTSA) to rewrite its regulation defining TPMS standards resulted in an increased focus on SmarTire's direct TPMS solutions."
Sales and Marketing
During its first fiscal quarter, SmarTire and its distributors demonstrated the Company's ability to provide TPMS products to the retail aftermarket, to original equipment manufacturers and to accessory suppliers. These sales and marketing achievements included an agreement to appoint a master distributor in China involving the sale and distribution of SmarTire aftermarket products. The agreement provides for the purchase of $1.5 million of product in year one and the requirement to purchase an additional $3.9 million in year two to maintain master distribution status in China.
In addition, SmarTire's Australian distributor, Autron, entered into an agreement with Holden Special Vehicles (HSV) to provide for the supply of TPMS on certain vehicles as standard equipment. HSV creates niche premium performance luxury cars sourced from Holden Ltd., a subsidiary of General Motors Corporation.
Subsequent to the end of the first fiscal quarter, SmarTire announced that Tecstar Innovations had selected SmarTire's TPMS products for inclusion in Tecstar's Hummer H2 accessory program. Tecstar designs, engineers and manufactures special accessories to the aftermarket and to original equipment manufacturers.
New Products and New Business Relationships
During its first fiscal quarter, SmarTire also announced:
- Significant new products targeted specifically at the recreational
vehicle, towed vehicle and trailer markets.
- A joint development agreement with Vansco Electronics Ltd. that the
Company believes holds the potential to create new TPMS opportunities
in the commercial truck, bus, agricultural, construction and
recreational vehicle markets. The agreement provides for the merging of
Vansco's vehicle communication expertise with SmarTire's proven radio
frequency technology.
- A co-development and marketing agreement and a supply agreement with
Haldex Brake Products Limited, a leading supplier of anti-lock and
electronic braking systems. SmarTire's TPMS will be integrated with
Haldex's brake systems and these jointly developed products will be
marketed through Haldex's customer base that includes many of the
world's largest manufacturers of heavy commercial vehicles.
Manufacturing
SmarTire achieved a major milestone on October 20th, when it signed a contract manufacturing services agreement with Hyundai Autonet Company (HACO), a leading Korean automotive electronics supplier and a subsidiary of Hyundai Group. SmarTire anticipates that HACO's Tier One manufacturing status will provide SmarTire with the opportunity to compete on a worldwide basis with higher quality products, an increased volume capability and a more flexible cost structure.
Corporate Development
SmarTire strengthened its management team with the addition of two key individuals; John Taylor-Wilson as VP, Sales and Marketing and Randy Halischuk as Communications Manager. In addition, Johnny Christiansen was appointed to the Board of Directors. Mr. Christiansen is an industry expert having been the former President of SensoNor, the leading supplier of sensing devices for TPMS applications.
SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the transportation industry worldwide. Incorporated in 1987, SmarTire is a public company with offices in North America and Europe. Additional information can be found at www.smartire.com.
Robert Rudman President and Chief Executive Officer SAFE HARBOR STATEMENT
Statements in this press release, which are not purely historical, are forward-looking statements, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward looking statements in this press release include: our belief that our joint development agreement with Vansco Electronics Ltd. holds the potential to create new TPMS opportunities in the commercial truck, bus, agricultural, construction and recreational vehicle markets; our expectation that our strategic alliance with Hyundai Autonet Company will give us the opportunity to compete on a worldwide basis with higher quality products, an increased volume capability and a more flexible cost structure. In addition, while the purchase of $1.5 million of product in year one and the requirement to purchase an additional $3.9 million in year two is a condition for our master distributor in China to maintain master distribution status, there are no assurances that the distributor will be able to meet these requirements. Further, there are no assurances that Vansco's vehicle communication expertise can be successfully merged with our radio frequency technology, nor that any products developed with Haldex under our co-development and marketing agreement will reach commercialization. It is important to note that actual outcomes and our actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ include the uncertainty of our ability to secure agreements with original equipment vehicle manufacturers and aftermarket suppliers on a worldwide basis for the supply of tire pressure monitoring systems or components in both our existing and newly targeted markets (such as the recreational vehicle, commercial and construction markets), in the face of intense competition; the uncertainty that our master distributor in China will be able to secure agreements to supply sufficient tire pressure monitoring products to customers in China to maintain its master distribution status; and the uncertainties surrounding the integration of our technologies into new products whether developed internally or pursuant to co- development agreements with parties such as Vansco Electronics and Haldex. Readers should also refer to the risk disclosures outlined in the Company's most current annual report of Form 10-KSB filed with the SEC.
Email: investor_relations@smartire.com Contact: Judy Leclercq 1.800.982.2001