CONCORD, Mass., Jan. 14 /PRNewswire/ -- Starmet Corporation (Nasdaq: STMT)
a Concord, Massachusetts based manufacturer of specialized metal products,
today announced its financial results for the fiscal year ending September 30,
1998. The Company announced total fiscal 1998 revenues of $34,823,000, a
24% increase over total prior year revenue of $28,062,000. Although the
Company experienced an increase in total revenues, the Company incurred a net
loss of $19.0 million for FY'98 compared with net income of $482,000 for
FY'97. Among the factors comprising the bulk of this significant loss are the
following: Beralcast(R) and penetrator contract margin deterioration of
$3.7 million; the estimated cost to remediate the holding basin at its Concord
facility resulted in an impact of $1.7 million; discretionary spending, failed
public offering costs and higher debt servicing costs had a $3.8 million
impact; reassessment of the carrying value of all the Company's assets
resulted in a write-off of its UF4 inventory by approximately $2.3 million;
other DU related inventory and supplies resulted in a write-off of
approximately $2.4 million and the recognition of a liability of approximately
$3.4 million for the estimated future disposal of the UF4 inventory.
In addition to the foregoing losses, the Company experienced a cash flow
crisis during the Fall of 1998 and defaulted on its bank arrangements, which
remain in default. The Company is operating under a forbearance agreement
with the bank, which expires on March 31, 1999. The auditors report for the
year ended September 30, 1998 will include a reference to substantial doubt
about the Company's ability to continue as a going concern. The Company
intends to file its Annual Report on Form 10-K for the fiscal year ending
September 30, 1998 with the Securities and Exchange Commission in the next
several days.
Recently the Board of Directors appointed Kenneth Hurley as Interim Chief
Financial Officer. Mr. Hurley is the principal and a founder of Hurley,
Vaughn & Associates, P.C., a management advisory services and public
accounting firm. Mr. Hurley has extensive financial turnaround experience and
has helped the Company in the first quarter of fiscal 1999 reduce its expected
annual cash burn by approximately $5.0 million. The Company is currently
negotiating proposals for alternative sources of secured subordinated debt and
is also actively pursuing new partnering relationships with targeted companies
as it attempts to raise necessary financing to support its future business
growth.
Fiscal 1998 results reflected minimal revenues from the Company's
$13 million contract received in July 1998 for conversion services work at its
South Carolina facility. Management expects revenues from this major contract
to begin in the first quarter of FY'99. The Company's year end backlog of
$29,380,000 does not reflect the expected threefold increase in Beralcast(R)
hardware required for a continuation of the Comanche Helicopter Program which
is expected to provide continuity to existing orders in the second quarter of
FY'99. Additionally, the Company has recently expanded its family of
Beralcast(R) armature materials, which has resulted in several leading disk
drive manufacturers evaluating prototype quantities and assessing production
ramp up costs and schedules.
Safe Harbor Statement: Certain statements in this Press Release including,
without limitation, statements concerning (i) expected future revenues and
earnings; (ii) management's future plans; (iii) the ability of the Company to
continue as a going concern; and (iv) the future business of the Company,
contain certain forward-looking statements concerning the Company's
operations, economic performance and financial condition. Said forward-
looking statements involve known and unknown risks and uncertainties and other
factors which may cause the actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Specifically, the
Company faces substantial risks related to its transition from the manufacture
of depleted uranium penetrators to beryllium-aluminum products including but
not limited to the Company's ability to obtain new contracts and to continue
existing contracts; the continuing need to obtain financing for its ongoing
operations; the potential inadequacy of working capital; and the potential for
continuing transitional losses. Additional Risk Factors will be discussed in
greater detail in the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1998. The words "believe," "expect," "intend," "attempt"
and "plan" and similar expressions identify forward-looking statement which
speak only as of the date such statement was made.
SOURCE Starmet Corporation
 back to top
Related links:
http://www.starmet.com
Company News On-Call:
http://www.prnewswire.com/comp/632850.html or fax,
800-758-5804, ext. 632850
CONTACT:
Robert E. Quinn, President or Kenneth A.
Hurley, CFO of Starmet, 978-369-5410
|
