Kyzen Corp. Reports Third Quarter, Nine Month Results
Kyzen Corp., a leading provider of CFC-free specialty chemicals and processes for precision cleaning applications in high-technology manufacturing, announced results for the third quarter and the nine months ended Sept. 30, 1999.
Revenue for the third quarter of 1999 was $1.4 million, with a net loss of $39,942, representing a net loss of $0.01 per share. This compares with revenue of $1.5 million, and net income of $41,220, or $0.01 per share, for the year-earlier period.
According to Kyzen President and CEO Kyle J. Doyel, the decreases in revenues in this year's third quarter are due to softness in Kyzen's core electronic and aerospace cleaning markets and lower international sales, resulting principally from production interruptions at a key customer that is relocating its production facilities.
For the first nine months of 1999, revenue was $4.4 million, with a net loss of $181,048, or a net loss of $0.04 per share. This compares with revenue of $4.4 million, with net income of $32,114, or $0.01 per share, for the same period in 1998. The net loss for the first nine months of 1999 includes the recording of non-cash charges that equal approximately $0.02 per share.
Doyel commented: "While overall nine-month revenues were flat on a year-to-year basis, our domestic sales grew 3 percent this year despite the loss of Zenith, which represented 5 percent of our sales this time last year. "In the third quarter of this year our expenses have returned to historically lower levels from our abnormally high expenses in the first six months of this year, which were due to the previously announced extraordinary corporate and non-cash charges. While we would like to have seen stronger results over the last two quarters, we are encouraged going forward.
"First, despite the losses this year we still have a positive cash contribution from operations. Second, we are continuing to get positive signals from our work in the optics area and last month Kyzen was issued a U.S. patent covering a technology to be used in cleaning high technology polymers used in the optics market. Even though our sales expansion in optics has been slower than anticipated, product sales in this area are well ahead of last year.
"Since we are targeting specification driven industries, our growth is still dependent on how fast the customer adopts our technology. It now seems that the significant sales expected this year from the optics niche will be shifted into next year.
"We believe some of the softness in our core aerospace and electronics markets can be attributed to consolidation of production lines by our customers, and a potential decrease in production rates due to Year 2000 concerns. While these factors have kept us from the growth rate we had expected 1999, we expect their impact to be greatly diminished early next year."
The company's focus continues to be on increasing revenues. Kyzen has targeted a number of new cleaning opportunities within the high-tech market, but outside of its traditional core electronics markets. It has also refocused its sales and marketing staff to capitalize on those opportunities.
The company's balance sheet at Sept. 30, 1999 showed a current ratio of 3.7-to-1, total assets of $2.8 million, working capital of $1.2 million, cash and equivalents of $400,000, shareholders' equity of $2.3 million and no debt.
Kyzen Corp. is a specialty chemical company focused on CFC-replacement chemistries and processes for electronic and other high-technology industries where precision cleaning processes are required.