SOURCE: Altair Nanotechnologies Inc.

Altair Nanotechnologies Inc.

August 09, 2012 08:00 ET

Altair Nanotechnologies Reports Second Quarter 2012 Financial Results

RENO, NV--(Marketwire - Aug 9, 2012) - Altair Nanotechnologies, Inc. ("Altair") (NASDAQ: ALTI), today reported financial results for the second quarter ended June 30, 2012.

Altair reported revenues of $0.5 million for the second quarter, essentially flat compared to the same period in 2011. The gross loss was $620,000 reflecting an increase of $399,000 in inventory reserves. Operating expenses increased to $4.4 million primarily due to investments in research and development, compared to $3.8 million for the same quarter in 2011.

"The second quarter marked an important turning point for our company," said Alexander Lee, Altair's Chief Executive Officer. "We completed a series of agreements in China that will create a unique point of entry into the Chinese market; we took actions to consolidate our operations and reduce our cost structure; and, we focused on the completion and delivery of four turnkey energy storage system projects that will allow us to recognize revenue in the third and fourth quarters of this year."

Recent Highlights and Subsequent Events

  • On April 1, 2012, Altair board members Alexander Lee and Liming Zou (a/k/a Albert Zou) were respectively named as Chief Executive Officer and President of the Company.
  • On April 19, 2012, Altair entered into economic development agreements with the Cities of Handan and Wu'an in the People's Republic of China ("PRC"). Under these agreements, the two cities shall provide Altair Nanotechnologies (China) Co., Ltd. ("Altair China") with a package of economic incentives, including a land use rights grant, which shall be used for Altair's new manufacturing facilities.
  • On May 15, 2012, Altair entered into a new supply agreement with Proterra to supply its nano lithium titanate ("nLTO") battery modules for use in their rapid-charging EV buses. On June 19, 2012, Proterra released its first purchase order under the agreement for deliveries in the first quarter of 2013.
  • On May 15, 2012, Altair completed the domestication of its Canadian corporate entity into the United States as a Delaware corporation. We believe that the change will reduce certain administrative costs and regulatory reporting complexity.
  • On June 28, 2012, Altair received an order from the Hawaiian Natural Energy Institute ("HNEI") for the development of advanced system control algorithms, which will be used to integrate wind and solar resources for the two Altair energy storage systems, which will be delivered to HNEI later this year.
  • On July 6, 2012, Altair's Board of Directors approved a plan to repatriate funds from its wholly-owned subsidiary, Altair China, to support and fund Altair's ongoing U.S. operations.
  • On July 9 2012, the Company shipped a 1.2 MW energy storage system to a European renewable energy customer, who will utilize the system in a wind farm application. We anticipate that the system will be installed and commissioned in the fourth quarter of 2012.
  • On July 27, 2012, Altair completed a reduction in force in its Reno facility to further consolidate its U.S. operations and reduce the Company's operating costs. Total U.S. headcount (regular and temporary employees) dropped from 95 on March 31, 2012 to 68 on August 2, 2012.
  • On Aug. 1, 2012, Altair China received an initial down payment of $1.9 million (12 million Chinese RMB) from the city of Wu'an for its first EV bus order under its April 2012 economic development agreement with Wu'an. Altair China shall deliver 50 electric buses to Wu'an by the end of 2012.
  • On Aug. 8, 2012, the company entered into a $1 million loan agreement to provide general working capital to fund the company's operations.

The net loss for the second quarter was $4.9 million, or $0.07 per share, compared to a net loss of $3.0 million, or $0.10 per share, for the second quarter of 2011. The basic and diluted weighted average shares outstanding for the quarter were 69.5 million, compared to 30.4 million for the same period in 2011. The net loss increase was primarily due to the change in the market value of previously issued warrants, increases in research and development expense associated with our next generation LTO chemistry and LTO cells, as well as an increase in inventory reserves.

Altair's cash and cash equivalents decreased by $11.2 million, from $46.5 million at Dec. 31, 2011 to $35.3 million at June 30, 2012. This is primarily due to the $10.8 million of cash used in operating activities during the first half of 2012. The bulk of the cash used in operations went to cover normal compensation and non-labor expenses, and the build-up of work in process inventory related to the fulfillment of customer sales backlog.

Second Quarter 2012 Conference Call
Altair will hold a conference call to discuss its second quarter 2012 results on Thursday, Aug. 9, 2012 at 11 a.m. Eastern Daylight Time (EDT). Shareholders and members of the investment community are invited to participate in the conference call. The dial-in number for both U.S. and international callers is +1 678-224-7719. Please dial in to the conference 5 minutes before the call is scheduled to begin. Ask the operator for the Altair Nanotechnologies call.

Post call, a phone-based audio replay will be available from 2 p.m. EDT, Thursday, Aug. 9, 2012 until Midnight EDT, Aug. 16, 2012. It can be accessed by dialing +1 404-537-3406 and entering the conference number 13762442. Additionally, the conference call and replay will be available online, and can be accessed by visiting Altair's website, www.altairnano.com.

About Altair Nanotechnologies, Inc.
Headquartered in Reno, Nev. with manufacturing in Anderson, Ind., Altair is a leading provider of energy storage systems for clean, efficient power and energy management. Altair's lithium-titanate based battery systems are among the highest performing and most scalable, with applications that include complete energy storage systems for use in providing frequency regulation and renewables integration for the electric grid, and battery modules and systems for transportation and industrial applications. For more information please visit Altair at www.altairnano.com.

Forward-Looking Statements
This report may contain forward-looking statements as well as historical information. Forward-looking statements, which are included in accordance with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, may involve risks, uncertainties and other factors that may cause Altair's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this report. These risks include the risk that the government entities with which the Company has contracted will be unable to fulfill their commitment due to legal limitations, including certain procedures required in connection with land use grants and major product purchases; that the government entities will not fulfill their commitments for political or other discretionary reasons, in which case the Company will have no, or limited, remedies; that the Company will run into regulatory, finance or other obstacles as it attempts to expand its operations into China; that the Company interest may be harmed by the absence from the Agreement of terms and conditions that are customary in contracts under U.S. law; that the Company will be unable to expand capacity (or contract with third parties) in order to meet the demand of product orders, particularly products like electric vehicles which the Company does not itself manufacture; that the Company will not experience expected costs savings as a result of its expansion into China and that the Company will not experience an increase in sales volume or, even if it experiences such an increase, that the Company will experience low (or negative) gross margins and not operate profitably in China. Other risks are identified in Altair's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the SEC. Such forward-looking statements speak only as of the date of this release. Altair expressly disclaims any obligation to update or revise any forward-looking statements found herein to reflect any changes in Altair expectations or results or any change in events.

             
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
(Expressed in thousands of United States Dollars, except shares)  
             
   
    (Unaudited)        
    June 30,     December 31,  
    2012     2011  
ASSETS            
Current assets                
  Cash and cash equivalents   $ 35,275     $ 46,519  
  Restricted cash     293          
  Accounts receivable, net     576       333  
  Product inventories, net     9,860       7,220  
  Prepaid expenses and other current assets     2,022       2,240  
    Total current assets     48,026       56,312  
                 
Property, plant and equipment, net     6,297       6,870  
                 
Patents, net     312       350  
                 
        Total Assets   $ 54,635     $ 63,532  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities                
  Trade accounts payable   $ 6,225     $ 5,870  
  Accrued salaries and benefits     928       1,132  
  Accrued warranty     383       354  
  Accrued liabilities     438       421  
  Deferred revenues     2,561       1,616  
  Warrant liabilities     475       654  
  Capital lease obligation     21       12  
    Total current liabilities     11,031       10,059  
                 
                 
        Total Liabilities     11,031       10,059  
                 
                 
Stockholders' equity                
  Common stock, no par value, unlimited shares authorized; 69,452,487 shares issued and outstanding at June 30, 2012 and December 31, 2011     245,617       245,617  
  Additional paid in capital     12,276       12,279  
  Accumulated deficit     (214,157 )     (204,423 )
  Accumulated other comprehensive loss     (132 )        
    Total stockholders' equity     43,604       53,473  
                 
      Total Liabilities and Stockholders' Equity   $ 54,635     $ 63,532  
                       
                       
                 
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Expressed in thousands of United States Dollars, except shares and per share amounts)  
(Unaudited)  
                 
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
 
  2012   2011   2012   2011  
Revenues                        
  Product sales $ 376   $ 174   $ 573   $ 2,540  
  License fees   60     60     120     120  
  Commercial collaborations   18     78     18     80  
  Contracts and grants         164           287  
    Total revenues   454     476     711     3,027  
                         
Cost of goods sold                        
  Product   613     314     1,019     2,925  
  Commercial collaborations         197           197  
  Contracts and grants         168           296  
  Warranty and inventory reserves   461     12     475     58  
    Total cost of goods sold   1,074     691     1,494     3,476  
                         
Gross loss   (620 )   (215 )   (783 )   (449 )
                         
Operating expenses                        
  Research and development   1,789     1,284     3,622     3,340  
  Sales and marketing   925     913     1,845     1,964  
  General and administrative   1,425     1,204     3,174     3,376  
  Depreciation and amortization   250     379     519     754  
  Loss on disposal of assets                     16  
    Total operating expenses   4,389     3,780     9,160     9,450  
Loss from operations   (5,009 )   (3,995 )   (9,943 )   (9,899 )
                         
Other (expense) income                        
  Interest income (expense), net   32     (52 )   30     (59 )
  Change in market value of warrants   102     1,022     179     1,022  
    Total other income, net   134     970     209     963  
                         
Net loss $ (4,875 ) $ (3,025 ) $ (9,734 ) $ (8,936 )
                         
Loss per common share - basic and diluted $ (0.07 ) $ (0.10 ) $ (0.14 ) $ (0.31 )
Weighted average shares - basic and diluted   69,452,487     30,424,730     69,452,487     28,644,546  
                         

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