TORONTO, March 19, 2012 /CNW/ - Cymat Technologies Ltd., a materials technology company focused on the architectural, military and automotive industries, announced its results for the quarter ending January 31, 2012.
The quarter ending January 31, 2012, is the third quarter that Cymat is reporting under International Financial Reporting Standards ("IFRS"). The net loss for the quarter was $251,000 compared to $985,000 for the same quarter in the prior year.
Highlights for the Quarter
- Quarterly revenues increased by approximately $494,000, or 358%, as the result of increased Alusion™ sales primarily associated with the Congress Center in Mallorca Spain.
- Loss from operations decreased by approximately $94,000, or 59%, as the result of the increased revenue.
- Cash used in operating activities improved by approximately $456,000, or 62%, compared to the third quarter of fiscal 2011.
- A work stoppage at the Mallorca Congress Center construction site resulted in a second quarter slowdown of AlusionTM sales and production. This has since been remedied with third quarter AlusionTM activity back at pre-stoppage pace. However, production activity in the third quarter was curtailed as a result of an unanticipated furnace relining at the Cymat production facility, causing deliveries of Mallorca orders to be pushed into the fourth quarter.
"While AlusionTM sales continue to provide solid cash flow for Cymat, our SmartMetalTM strategy of reaching beyond the US military is starting to get traction," said Michael Liik, Executive Chairman of Cymat.
Key Financial Information
|Three months ended January 31||Nine months ended January 31|
|Plant operating expenses||872,211||446,469||2,779,801||1,931,739|
|Research and material testing expense||3,136||(44,242)||17,586||50,383|
|Selling, general and administrative expenses||547,010||620,887||1,846,762||2,505,296|
|Loss from operations||(790,689)||(885,436)||(2,333,987)||(3,809,245)|
|Basic and diluted net loss per share||(0.00)||(0.01)||(0.02)||(0.04)|
|Cash used in operating activities||(274,177)||(729,582)||(533,690)||(2,683,294)|
The materials industry for architectural and construction remains highly competitive with numerous solutions competing for high profile projects. For many world economies the recovery from the 2008-2009 financial crisis has stalled, with the threat of another recession possible. Accordingly, the industry is dealing with budget cuts and project delays.
Earlier in the year, economic conditions in Spain resulted in a construction delay at the Congress Center in Mallorca. In the previous quarter, the Company had resumed production of material on the Mallorca contract and the pace of production had returned to the pre-stoppage level. As of the date of this report, the final material shipment of the Mallorca contract has left the Company's plant.
Management anticipates that the Company will continue to build upon the successes achieved in the architecture market in fiscal 2011 with the awards pertaining to the National September 11 Memorial Museum at the World Trade Center site in New York City and the Congress Center in Mallorca. The Company also expects continued expansion of its international network of agents and distributors of Alusion™, resulting in increased sales opportunities.
Military forces and OEM manufacturers continue to focus on developing counter measures for IED threats, including retrofitting existing vehicles and incorporating next-generation vehicles with lightweight, high-energy absorption materials such as SmartMetalTM. At the same time military budgets face increasing pressure and cost-cutting initiatives as the result of government deficit and debt levels and weakening global economies. Still, IED countermeasures remain as high priority needs for NATO forces.
As of last quarter's end, the US military had issued a draft Request for Proposal ["RFP"] for the Humvee retrofit program which indicated specific timelines and volumes of vehicles subject to retrofit, with submissions under this RFP due by January 13, 2012. Subsequently the US military withdrew the due date for RFP submissions. As of the date of this report, the final RFP has not been released and there is no due date for RFP submissions.
While the uncertainty regarding the Humvee retrofit program is disappointing, SmartMetalTM continues to be evaluated by several OEMs in various military vehicle platforms for next generation and retrofit vehicles. Sales of this nature generally have long timelines, require deep relationships and require the ability to design and engineer customized solutions. In addition to the continued focus of its internal resources on development of this market, Cymat has expanded its strategy for military markets to include the use of agents to assist in the development of more effective structures for customer communication, product awareness, clarity for local program opportunities and customer needs, together with recognition of local market dynamics.
On the automotive front, Cymat continues to investigate the efficacy of SmartMetal™ applications in automotive design. A recent meeting with a major manufacturer in the automotive industry centered on a renewed interest in the possibility of incorporating SmartMetalTM, as produced from Cymat's flat panel line, into the design for automotive crash-boxes. Management believes that SmartMetalTM has the potential to resolve the conflicting requirements within automotive design for increased vehicle crashworthiness while at the same time reducing vehicle weight.
Additionally, Cymat is also exploring markets for various non-vehicular applications of SmartMetalTM. For example, Cymat has recently delivered prototype orders in connection with the investigation of SmartMetalTM's utility for blast mitigation with respect to stationary objects. Additionally, Cymat has recently provided prototype SmartMetalTM material to be examined for its usefulness as a consumable energy absorption agent in a manufacturing process.
Cymat develops innovative materials for industry. The company has worldwide rights, through patents and licenses, for producing Stabilized Aluminum Foam. The ultra-light metallic foam is manufactured by bubbling gas through molten alloyed aluminum containing a dispersion of fine ceramic particles and can be produced as either Near-net Shapes or Flat Panels. The result is a revolutionary material with a wide array of features including very low density, mechanical energy absorption, thermal and acoustic insulation, is recyclable, time and temperature insensitive and has a relatively low cost of production. Cymat is collaborating with a number of partners spanning the automotive, architectural and blast mitigation industries. For further information, visit the Web site www.cymat.com.
The foregoing press release contains forward-looking statements relating to the development of markets, development programs, future revenues and improvements in technology, which are subject to important risks and uncertainties. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include the availability of funding, existing and future relationships with suppliers and manufacturers, the results of research and development activities, risks of technological breakthroughs that make Cymat stabilized aluminum foam less attractive, risks relating to the breadth, scope and enforceability of intellectual property rights, general industry and market conditions, availability of qualified personnel, and reliance on co-development partners. For additional information with respect to these and other factors, see the reports filed by Cymat Technologies Ltd. with the Ontario Securities Commission. Cymat Technologies Ltd. disclaims any intention or obligation to update or revise any forward-looking statements.
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