Altair Nanotechnologies Reports Third Quarter 2010 Financial Results
Altair Nanotechnologies, Inc. (Altairnano) reported financial results for the third quarter ended September 30, 2010.
"In the third quarter we took a major step forward in securing our financial future. In September, we entered into a Share Subscription Agreement with Canon Investment Holdings whereby they will invest $48.9 million into the company in return for a controlling interest. We also signed a concurrent supply and license agreement with Zhuhai Yintong Energy Co. Ltd., a subsidiary of Canon, that provides access to the vast Chinese market," said Dr. Terry Copeland, Altairnano’s President and CEO. "We are excited about the potential that the Canon and YTE relationship creates for both of our companies."
For the quarter ended September 30, 2010, Altairnano reported revenues of $2.0 million, up from $1.7 million for the same period in 2009. This increase is the result of higher battery product sales, contract and grant activity with the Office of Naval Research and the Department of Defense. Gross margin was lower by $0.6 million primarily as a result of one-time royalty revenue of $0.8 million with no offsetting cost of goods sold for our Spectrum transaction during the third quarter of 2009. Operating expenses increased $0.5 million to $5.8 million from $5.3 million in the third quarter of 2009 primarily as a result of higher R&D expense. The net loss attributable to Altairnano was $5.3 million, or five cents per share, compared to a net loss of $3.3 million, or three cents per share, for the third quarter of 2009. In addition to the margin and operating expense drivers described above, our third quarter 2009 results also benefited from the $0.8 million gain on the sale of our Spectrum common stock. The basic and diluted weighted average shares outstanding for the quarter were 107.2 million, compared to 105.1 million reported in the third quarter of 2009.
Altairnano’s cash and cash equivalents decreased by $0.7 million, from $8.2 million at June 30, 2010 to $7.5 million at September 30, 2010. This is primarily due to net cash used in operations of approximately $0.2 million, the bulk of which went to cover normal compensation and non-labor expenses, $0.2 million was for increased product inventories, offset by $1.8 million in decreased accounts receivable and an increase of $1.6 million in deferred revenue; investing activities primarily consisting of purchases of fixed assets of approximately $0.1 million; and financing activities of $(0.5) million that is comprised mainly of the costs associated with the forthcoming Canon investment. Third quarter 2009 results reflected a net cash increase as a result of the $2.0 million sale of the Company’s available for sale securities (Spectrum common stock).
Altairnano’s third quarter net cash burn rate of about $0.2 million per month represents a significant improvement compared to the first half of 2010, but is a timing aberration rather than a fundamental change in the business.
"Because we have not yet reached the point of a stable, consistent baseline revenue stream, individual orders can have a magnified impact on our cash consumption," added Copeland. "For the first nine months of 2010 our net cash consumption averaged a little less than $1.2 million per month."
