Alyn Corp. Had a Patent and Funding, but It Missed Its Chance
Irvine-based Alyn Corp. had an impressive product,Boralyn, a patented metal matrix composite material that was lighter than aluminum, stronger than titanium and lasted longer than steel.
Automotive Engineering International chose Boralyn as one of its top 15 technologies of 1998. Design News Magazine cited Boralyn as the best product of 1998 for its category of plastics, metals and other materials.
It was made into battery holders for GM’s electric cars, casks for spent nuclear-fuel rods and the heads and shafts of golf clubs. When the company had its IPO in 1996, it raised $33 million, followed by $5 million in a secondary offering. GE Capital and Imperial Bank loaned it another $10 million in a debt offering.
Alyn leased two manufacturing facilities totaling 130,000 square feet in Irvine. It installed a 4,000-ton press where the floor had to be supported to keep it from sinking.
Its revenue growth was the eye-popping kind: 1,197% over the past three years, to $1.9 million. That puts it at No. 6 on the Orange County Business Journal’s list of the fastest growing publicly traded companies by revenue during the past three years.
At the start of 1999, its then-CEO, Steve Price, predicted that the company would ramp up to $20 million in revenue for the year.
“This is a make-or-break year for us,” Price said at the time.
It turned out to be a break year. Sales didn’t materialize. Alyn posted a mere $459,000 in revenue for the first quarter ended March 31, about half of its sales for the same period in 1999. The quarterly loss was $1.8 million. From 1996 to 1999, Alyn’s combined losses totaled $36.9 million.
For the Street, it was the last straw. Since its 1996 IPO, Alyn’s stock price had steadily declined from its peak of nearly 15. In July, it hit 16 cents a share. On July 31, Alyn declared Chapter 7 bankruptcy, and trading was halted.
Alyn is the middle name of company founder Robin Carden. In the 1980s, he had been a senior sales engineer and an inventor at defense contractor Costa Mesa-based Ceradyne Inc.
“I got no royalties but a whole bunch of ‘attaboys.’ That’s why I decided to go out on my own,” he said in a 1999 interview.
He started Alyn in 1989 and after he patented Boralyn in 1996, he took the company public. But company officials had trouble deciding whether to sell the raw material or finished products. Alyn went through a succession of CEOs. One potentially big market evaporated when GM stopped manufacturing its electric vehicle.
Earlier this year, PricewaterhouseCoopers issued a letter expressing doubt that Alyn could stay in business.
Then-CEO Arne Van Roon said the warning was a boilerplate necessity and predicted it would be in Alyn’s reports for the next two or three years.
Instead, the company is selling its assets, which its last quarterly report listed as worth $22.4 million, including $17 million in equipment. It also listed liabilities of $7.4 million in long term debt and another $3 million in current liabilities. n
