Smartire Net Loss Lower than in 2006

Canada based tyre pressure and temperature monitoring system producer SmarTire Systems has announced that the revenue for its fiscal year ending July 31, 2007 increased to $3,661,821 from $3,455,649 during fiscal 2006. However this rise in revenue was again accompanied by a net loss; $19.6 million or $0.07 per share, a reduced loss from fiscal year 2006, in which net figures were $28.8 million or ($0.10) per share in the red.

Cash used to fund operating and investing activities in fiscal 2007 decreased to $5.1 million from $8.1 million in fiscal 2006. The decrease in cash used was primarily due to the closure of the company’s UK office in late February, the reduction in the number of company employees by approximately 45 per cent and the issuance of shares to settle debt. Smartire state it anticipates that cash required for operating and investing activities in fiscal 2008 will decrease by another 50-60 per cent of the amount of the cash used to fund operating and investing activities in fiscal in fiscal 2007. The company’s operating expenses for the year increased to $7.7 million from $7.1 million in fiscal year 2006.

“Our objective is to make this company profitable and we took a step in the right direction by reducing our burn rate by $3 million for the year”, said David Warkentin, president and CEO, in announcing results. “We continue to reduce our burn rate as evidenced by our cash used during our fourth quarter, when we used cash of $672,918, a decrease of $227,122 from $900,040 during our third quarter. While I am extremely pleased that we have been able to reduce costs, I am still disappointed that revenues have not grown faster. Unfortunately, although we have not lost any business to our competitors, our customers’ production implementation schedules have been slower than anticipated and are not an issue we can control.

“However, I am pleased with the progress we have made, especially our continued focus on our strategy, filing of our lawsuit against Siemens and Schrader, cost reductions and the strengthening of our supply chain as evidenced by our long-term supply agreement with GE Sensing. During this year, we landed several key customers, including John Deere, International Truck and Setra, a division of Daimler Chrysler.”