Altair Nanotechnologies Reports Fourth Quarter and Full Year 2012 Financial Results

Marketwired

RENO, NV--(Marketwire - Mar 28, 2013) - Altair Nanotechnologies Inc. ("Altair") (NASDAQ: ALTI) today reported financial results for the fourth quarter and the year ended December 31, 2012.

For the year ended December 31, 2012, Altair reported revenues of $1.5 million compared to $5.2 million in 2011. The gross loss was $1.3 million compared to $571,000 a year ago. The net loss for 2012 was $18 million, or $1.55 a share, compared to a net loss of $19.9 million, or $2.55 a share, for 2011. Deferred revenues grew to $7.2 million as of December 31, 2012, compared to $1.6 million as of December 31, 2011.

For the 2012 fourth quarter, Altair reported revenues of $476,000 compared to $1.3 million for the same period in 2011. The gross loss was $114,000 compared to $445,000, primarily due to the reversal of inventory reserves. Operating expenses were $4.1 million compared to $5.6 million, primarily due to the impairment of fixed assets in the fourth quarter of 2011. The net loss for the fourth quarter of 2012 was $3.6 million, or $0.31 per share, compared to a net loss of $5.1 million, or $0.51 per share, for the same period in 2011.

"In 2012, we focused our efforts on the execution of key milestones, including our customer deliverables, product development, cost reduction, and the expansion of our business into the Chinese market," stated Alexander Lee, Altair's Chief Executive Officer. "We are well positioned to leverage our operational successes in 2012 and to ramp up and recognize revenue in 2013."

Highlights for the year ended December 31, 2012 and subsequent events include:

 5 ALTI-ESS systems were built, and 4 were shipped in 2012 -- the most ever for Altair.

  • In July 2012, the Company shipped a 1.2 megawatt (MW) ALTI-ESS to Vestas for a wind integration project in Denmark. This system was installed and commissioned in November 2012, and it went into commercial operation in February 2013.

  • In August 2012, the Company shipped an ALTI-ESS to the Hawaii Natural Energy Institute (HNEI). This system was installed and commissioned at a wind farm in December 2012.

  • In October 2012, the Company entered into a contract with TSK Solar, a leading energy EPC contractor and engineering firm, to supply a 2 MW ALTI-ESS Advantage system that will be installed at the San Fermin 26 MW photovoltaic solar farm in Puerto Rico. The Company shipped the system in November 2012.

  • In November 2012, the Company shipped a 1.8 MW ALTI-ESS system to an east coast utility customer. This system was installed and commissioned in December 2012, and it went into commercial operation in January 2013.

 Economic development deals.

  • In April 2012, Altair's subsidiary in China, Northern Altair Nanotechnologies Co., Ltd. ("Northern Altair") entered into an economic development agreement with the cities of Wu'an and Handan in Hebei Province, China.

  • In August 2012, Northern Altair received a 30 percent down payment of $1.9 million from Wu'an for its initial order of 50 electric buses under our economic development agreement.

  • In October and November 2012, the Company and Northern Altair entered into a series of transactions, wherein, Northern Altair set aside, as restricted cash, $5.9 million with two banks in China. In return, the banks loaned the Company $5.7 million to be used as working capital.

  • In October 2012, the Company and Northern Altair entered into two intercompany agreements, which involve the transfer and sale of lithium titanate (nLTO) manufacturing equipment and nLTO materials from the Company to Northern Altair. Under the Agreements, Northern Altair will transfer $2.9 million to the Company. In March 2013, Northern Altair transferred $878,000 as a down payment on the nLTO equipment and materials.

  • In November 2012, Northern Altair entered into a $13.6 million agreement to acquire the commercial land use rights for 66 acres of land in Wu'an, China. In November 2012, Northern Altair received $11.8 million in cash for grant incentives, which shall be used for the development and construction of Northern Altair's new nLTO and ESS assembly plants. In December 2012, Northern Altair's land use rights were appraised for $32 million. However, the Company has recorded the transaction based on the $13.6 million cost for acquiring the land use rights.

 Sales and Contracts.

  • In May 2012, the Company closed a supply agreement with Proterra for the sale of battery modules, which shall be delivered throughout the year in 2013.

  • In September 2012 and March 2013, the Company was granted contract extensions by INE, which allows INE to seek the required regulatory approvals.

  • In January 2013, the Hawaii Natural Energy Institute placed its third ALTI-ESS order with the Company.

Altair's cash and cash equivalents decreased by $34.1 million, from $46.5 million at December 31, 2011 to $12.4 million at December 31, 2012. The decrease in cash was primarily due to the $20.6 million of cash used in operating activities during 2012. The bulk of the cash used in operations went to cover our net loss of $18 million offset by $6.7 million in proceeds from three short-term notes payable used towards the $5.5 million build-up of work in process inventory related to the fulfillment of customer sales backlog, of which $2.4 million is included in deferred contract costs. Northern Altair also received cash grant incentives of $11.8 million from the Wu'an government and recorded it as restricted cash, which can be used subject to meeting certain guidelines agreed upon by the Wu'an government and the Company.

A summary of the cash position at December 31, 2012 included cash and cash equivalents of $12.4 million. In addition, the Company has $18.0 million in restricted cash of which $6.2 million is classified as short-term. A $293,000 stand-by-letter of credit is included in the $6.2 million short-term restricted cash. This $293,000 stand-by-letter of credit will be released in the first quarter of 2013. The remaining $11.8 million in restricted cash, relates to the grant incentives which is classified as long-term.

"We initiated several measures to reduce our overall burn rate in 2012. We have targeted additional cost reduction items that will further reduce our operating expenses starting in the second quarter," said Mr. Lee. "Our overall cash position, including restricted and long-term restricted classifications, currently stands at $30.4 million. Some of the restricted cash is ear marked for our expansion plans in China. As we continue to grow and gain sales and installations, we believe we will have access to the necessary capital to fund our growth." 

Altair received $5.9 million in customer receipts during 2012. The Company is expecting an estimated $2.0 million in cash receipts during 2013, which relates to three large projects sitting in our deferred revenue at December 31, 2012. Of this amount, $1.0 million has already been invoiced and is in the accounts receivable balance at December 31, 2012 and the other $1.0 million is expected to be invoiced for these large projects in the first half of 2013.

Fourth Quarter and Full Year 2012 Conference Call
Altair will hold a conference call to discuss its fourth quarter and full year 2012 results on Thursday, March 28, 2013 at 11:00 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 five 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 2:00 p.m. EDT, Thursday, March 28, 2013 until Midnight EDT, April 4, 2013. It can be accessed by dialing +1 404-537-3406 and entering the conference number 27496431. Additionally, the conference call and replay will be available online, and can be accessed by visiting Altair's web site, www.altairnano.com.

About Altair Nanotechnologies Inc.
Altair is a leading provider of high-power, energy storage systems for the electric grid, industrial equipment and transportation markets. The company's lithium titanate technology is built on a proprietary nano-scale processing technology that creates high-power, rapid-charging battery systems with industry-leading performance and cycle life. Altair is headquartered in Reno, Nevada and maintains operations in Anderson, Indiana; Zhuhai, China; and Wu'an, China. For additional information, please visit: 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 our revenue will not increase for various reasons, including our failure to close on expected orders or INE's failure to obtain required approvals; that our land use rights may be worth significantly less than the appraised or recorded value, particularly in light of the risk of forfeiture and the requirement that we make a substantial investment related to the property prior to pledging or selling the land use rights; that the Company will run into regulatory, finance or other obstacles as it attempts to expand its operations into China or other countries; that the company will be unable to close sales due to its pricing; the characteristics of its products, competing energy storage systems or alternatives to energy storage systems; that the Company will be unable to expand production capacity (or contract with its suppliers to expand their capacity) in order to meet the demand of product orders, particularly with respect to products like electric vehicles which the Company does not itself manufacture and will have to source from third parties; 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 and generally. 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)  
   
             
    December 31,     December 31,  
    2012     2011  
             
ASSETS                
Current assets                
  Cash and cash equivalents   $ 12,372     $ 46,519  
  Restricted cash     6,245          
  Accounts receivable, net     1,498       333  
  Product inventories, net     7,416       7,220  
  Prepaid expenses and other assets     937       1,562  
  Deferred contract costs     4,532       678  
  Other assets, related party     1,754          
    Total current assets     34,754       56,312  
                 
Restricted cash     11,803          
Property, plant and equipment, net held and used     4,076       6,870  
Property, plant and equipment, net held and not used     1,857          
Patents, net     274       350  
Land use right, net     13,625          
                 
Total Assets   $ 66,389     $ 63,532  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities                
  Trade accounts payable   $ 2,599     $ 5,870  
  Accrued salaries and benefits     632       1,132  
  Accrued warranty     418       354  
  Accrued liabilities     384       421  
  Deferred revenues     7,218       1,616  
  Warrant liabilities     90       654  
  Note payable, current     6,680          
  Capital lease obligation     5       12  
    Total current liabilities     18,026       10,059  
                 
Deferred income     11,803          
Capital lease obligation, less current portion     4          
                 
Total Liabilities     29,833       10,059  
                 
                 
Stockholders' equity                
  Common stock, no par value, unlimited shares authorized;
11,590,067 shares issued and outstanding at
December 31, 2012 and December 31, 2011
    246,667       245,617  
  Additional paid in capital     12,410       12,279  
  Accumulated deficit     (222,409 )     (204,423 )
  Accumulated other comprehensive loss     (112 )        
    Total stockholders' equity     36,556       53,473  
                   
      Total Liabilities and Stockholders' Equity   $ 66,389     $ 63,532  
                 
                 
             
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Expressed in thousands of United States Dollars, except shares and per share amounts)  
             
             
             
    Year Ended December 31,  
    2012     2011  
Revenues                
  Product sales   $ 1,284     $ 4,619  
  License fees     240       240  
  Commercial collaborations     23       80  
  Contracts and grants             287  
    Total revenues     1,547       5,226  
                 
Cost of goods sold                
  Product     2,667       5,149  
  Commercial collaborations             73  
  Contracts and grants             296  
  Warranty and inventory reserves     205       279  
    Total cost of goods sold     2,872       5,797  
                 
Gross loss     (1,325 )     (571 )
                 
Operating expenses                
  Research and development     6,423       6,960  
  Sales and marketing     2,864       3,603  
  General and administrative     6,908       7,669  
  Depreciation and amortization     1,071       1,324  
  Loss on disposal of assets             924  
    Total operating expenses     17,266       20,480  
Loss from operations     (18,591 )     (21,051 )
                 
Other (expense) income                
  Interest income (expense), net     48       (156 )
  Change in market value of warrants     564       1,274  
  Loss on foreign exchange     (7 )        
    Total other income, net     605       1,118  
                 
Net loss   $ (17,986 )   $ (19,933 )
                 
Loss per common share - basic and diluted   $ (1.55 )   $ (2.55 )
Weighted average shares - basic and diluted     11,590,067       7,814,957  
                 
                 
             
ALTAIR NANOTECHNOLOGIES INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Expressed in thousands of United States Dollars, except shares and per share amounts)  
             
             
             
    For the Three Months Ended December 31,  
    2012     2011  
Revenues                
  Product sales   $ 415     $ 1,284  
  License fees     60       60  
  Commercial collaborations     1          
  Contracts and grants                
    Total revenues     476       1,344  
                 
Cost of goods sold                
  Product     875       1,665  
  Commercial collaborations                
  Contracts and grants                
  Warranty and inventory reserves     (285 )     124  
    Total cost of goods sold     590       1,789  
                 
Gross loss     (114 )     (445 )
                 
Operating expenses                
  Research and development     1,377       2,027  
  Sales and marketing     520       805  
  General and administrative     1,898       1,559  
  Depreciation and amortization     300       311  
  Loss on disposal of assets             906  
    Total operating expenses     4,095       5,608  
Loss from operations     (4,209 )     (6,053 )
                 
Other (expense) income                
  Interest income (expense), net     (19 )     (1 )
  Change in market value of warrants     652       928  
  Loss on foreign exchange     (5 )     3  
    Total other income, net     628       930  
                 
Net loss   $ (3,581 )   $ (5,123 )
                 
Loss per common share - basic and diluted   $ (0.31 )   $ (0.51 )
Weighted average shares - basic and diluted     11,590,067       10,037,072  
                 
                 
Contact:
For Additional Information:

Investors
Tony Luo
tluo@altairnano.com
775.858.3726
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