SmarTire Reports Year End Results
1 November 1999
SmarTire Reports Year End Results
RICHMOND, B.C.--Oct. 29, 1999--For the year ended July 31, 1999 SmarTire Systems Inc. recorded revenues of CAN$2.7 million, up 30% from CAN$2.1 million one year earlier primarily due to increased sales in Europe. The loss for the year totaled CAN$17.2 million ($1.69 per share) compared with a loss of CAN$6.7 million ($1.12 per share) for the 1998 fiscal year. The higher loss was due to increased expenditures, including a CAN$7.3 million special charge to research and product development expense. As reported in the third quarter, the charge reflected the write-down of the carrying value of certain assets associated with the Company's current tire monitoring systems.The Company believes that its strengthened product development program, the imminent launch of new products, and the entry into the commercial vehicle market provide a positive outlook for the Company.
"There is no doubt that revenues for 1999 were considerably lower than we had anticipated last year as extremely low run-flat tire sales worldwide dramatically impacted our sales into this market," said Robert Rudman, Chairman and Chief Executive Officer. "However, our efforts to raise consumer and industry awareness about tire monitoring over the past year, combined with our aggressive product development program, are creating markets for our next generation of products that are most promising, and completely unrelated to run-flat tires."
The Company will be introducing its next generation passenger car product at a major trade show in Las Vegas next week. This next generation of product will provide major improvements in price, size, installation and performance over the current system. The Company's marketing activities for passenger vehicles in the next fiscal year will be focused on the Company's new and improved product line.
Next year will also mark SmarTire's entry into the commercial vehicle market with a family of tire monitoring products. The Company expects to introduce the first of its commercial vehicle systems by the middle of the year. These tire monitoring systems will use the same advanced computer chip technology as the passenger car system and be capable of monitoring up to 42 wheel positions. "The commercial vehicle market, which includes everything from local delivery truck fleets to large tractor trailers presents tremendous opportunities. Tire monitoring systems offer significant financial and safety benefits to this significant market segment," said Rudman.
Another new market for SmarTire will involve the Company customizing its products for large volumes of specific vehicle models. The vehicles involved would be part of corporate car or truck fleets, or new car models that would be fitted with SmarTire as a dealer installed option. The Company is currently pursuing several of these opportunities with major automakers and major fleet operators in both Europe and North America.
SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the North American and European automotive aftermarkets. Through their strategic alliance, SmarTire Systems and TRW Inc. are committed to providing superior tire monitoring systems for both aftermarket and original equipment applications. Additional information is available at www.smartire.com.
Kevin A. Carlson, CA, Chief Financial Officer
Except for the historical information contained herein, this news release contains forward looking statements that involve risks and uncertainties, including the impact of competitive products and pricing and general economic conditions as they affect the Company's customers. Actual results and developments may therefore differ materially from those described in this release.
SMARTIRE SYSTEMS INC.
Financial Summary
Expressed in Canadian dollars
Year ended July 31,
1999 1998
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Revenue $ 2,677,935 2,057,251
Cost of Goods Sold 2,184,048 1,636,262
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Gross Profit 493,887 420,989
Expenses 17,680,135 7,113,754
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Net Loss $ 17,186,248 6,692,765
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Loss Per Share $ 1.69 1.12
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SMARTIRE SYSTEMS INC.
Balance Sheet Summary
Expressed in Canadian dollars
July 31, July 31,
1999 1998
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Cash and short-term Investments $ 2,484,995 $ 8,718,258
Total Current Assets $ 3,943,953 $ 12,778,885
Total Assets $ 4,467,434 $ 14,186,109
Current Liabilities $ 1,892,503 $ 801,832
Shareholders' Equity $ 2,574,931 $ 13,384,277
Total Liabilities and
Shareholders' Equity $ 4,467,434 $ 14,186,109