Alyn Reports Fourth Quarter Loss
IRVINE, Calif. - Alyn Corp. (NASDAQ:ALYN), an advanced metal matrix technology company, Friday reported financial results for the fourth quarter and full year 1999.
For the quarter ended Dec. 31, 1999, the company reported a net loss attributable to common stockholders of $5,615,000, or $0.47 per diluted share, on net revenues of $362,000. This compares with a net loss attributable to common stockholders of $2,802,000, or $0.25 per diluted share, on net revenues of $604,000 in the fourth quarter of 1998.
Unusual expenses which can be attributed to the fourth quarter related to legal fees of $421,000, expenses of $231,000 related to the issuance of warrants in connection with the conversion of Series B preferred stock to common stock, consulting expenses related to nuclear qualification and management reorganization of $321,000, a write off of intangible assets of $544,000, and the accretion on preferred stock of $477,000.
Without these additional expenses the total loss for the fourth quarter of $5,615,000 would have been $3,621,000, or $1,994,000 lower.
For the 12 months ended Dec. 31, 1999, Alyn reported a net loss attributable to common stockholders of $16,309,000, or $1.43 per diluted share, on net revenues of $2,248,000. This compares with a net loss attributable to common stockholders of $12,069,000, or $1.11 per diluted share, on net revenues of $1,266,000 for the year ended Dec. 31, 1998. The company's cash position on Dec. 31, 1999, was $2,644,000, compared with $3,294,000 ending 1998.
Fiscal year 1999 has been characterized by the transition process in which Alyn changed its strategy, restructured its operations and made considerable progress in introducing its innovative materials into the marketplace. Alyn Corp. as a company is being converted from an R&D company to a production company.
Alyn's strength is its materials know-how and the new corporate strategy is to develop and manufacture metal matrix composite materials for high volume, high added value applications. Sales efforts are now focused at a number of larger volume key markets that can sustain the current price levels of the company.
Sales cycles are long with the material typically having to be designed into the new application. In the meantime, the company seeks to fill its capacity with more generic and lower tech products.
Alyn brought in a new management team headed by Arne van Roon, president and CEO, in April 1999. Other new members of the senior management team include Maurizio Tosca, recently appointed vice president of operations, who came on board in April 1999 and Ray E. Brooks, chief financial officer, who joined the company in January 2000.
In addition to new management, the company raised a net amount of $13,686,000 in a series of debt and equity transactions. The major investors the company has attracted recognize the problems associated with launching a new technology in the materials field and the long sales cycles that result. The company will continue to rely on outside funding sources to cover the current negative cash burn rate.
Operating expenses as a percentage of revenue will continue to decline in fiscal year 2000, and the company expects to achieve a break even cash position by fiscal year end 2000.
Alyn recently introduced new MMC's into the market including high temperature and high strength materials for pressure, gravity cast and wrought applications. These new materials have met excellent reception in the marketplace and it is expected that all of these new materials will make a considerable contribution to the future revenue stream of the company.
Alyn continues in its efforts to provide quality products to the market and to ensure that its customers receive the highest level of sales and service support. Alyn currently is in the process of becoming certified as an ISO 9002 supplier for aerospace, QS 9000 supplier for automotive, and to be 10 CFR 50 Appendix B certified for the nuclear industry.
Successes with the materials achieved during the last twelve months are the applications in robotics, automotive racing, nuclear shielding and sporting goods. Atlas Snowshoe launched the first pair of sub one pound snowshoes in January 2000 using the Boralyn(R) material. Boralyn(R) bicycle rims are beginning to appear in the market, as well as other bicycle components. In addition, Alyn's first nuclear order (Trans Nuclear Inc.) was successfully completed in December 1999.
The company expects to continue to expand its client base in each of these focus industries in which it now has an established presence. By almost doubling its revenue results in 1999 over the previous year and with a backlog of $1.8 million at the end of 1999, Alyn is demonstrating its ability to take the company to the next level of growth during fiscal year 2000.
During 2000, the company will remain focused on its primary goals of increasing sales and production in a timely manner, and at the same time achieving production and other operating efficiencies. Successfully accomplishing the company's ambitious plan depends upon the continued effort of Alyn's dedicated staff, company-wide commitment to quality and the customer base as well as the further development of a culture that is innovative and results oriented.
Alyn Corp. provides engineered solutions through metal matrix technology to meet the needs of its customers in consumer and industrial markets. Alyn is a vertically integrated company offering advanced metal matrix composites, customer driven engineering solutions and strategically developed manufacturing processes.
Boralyn(R), the company's principal product, continues to be considered one of the premier metal alloys which has the properties of being lighter than aluminum, stronger than titanium, and stiffer than steel.
For additional information, contact Ray Brooks, Alyn Corp., 949/475-1525 or e-mail: rbrooks@alyn.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are fluctuations in quarterly operating results, limited historical revenues and prior losses, the company's limited manufacturing history, market acceptance of the company's products in commercial quantities, the need for future capital, rapid technological change and new product development, competition and other factors detailed in the company's filings with the Securities and Exchange Commission, including its filing on Form 10-K for the year ended Dec. 31, 1999.