Boralyn, touted to be as strong as steel and as light as aluminum, is a promising technology. Robin Carden invented the product and began an Irvine-based company, Alyn Corp., to manufacture it.
Since Alyn went public in 1996, it has raised nearly $45 million and obtained $10 million more in debt financing from Imperial Bank and GE Capital. It built heavy machinery worth nearly $20 million at its Irvine facilities. Boralyn won awards from two industry publications. GM used it on its electric vehicle and MacGregor tried out Boralyn on clubs and putters. Last year, then-CEO Stephen Price declared the company was ready to ramp up its production to reach $20 million in annual sales.
But Alyn is nowhere close to that revenue promise. Its stock has dipped, from a high of 16 in 1996 to its current level just above 1. GM recently announced it would suspend production of its electric vehicle. Price is gone. Alyn has switched accounting firms, recently announcing that Deloitte & Touche would be taking over for Pricewater-houseCoopers. And about a third of Alyn’s floated shares are being shorted.
The latest blow came with its fourth-quarter report, released April 14. Revenue was $362,000, a 41% decline from the fourth quarter of 1998. Alyn posted a loss of $5.1 million for the quarter, up from $2.8 million loss in the 1998 quarter. For the year, net sales were $2.2 million, up from $1.3 million in 1998, but the net loss for the year also was up, to $15.5 million from $12.1 million in 1998.
Much of the 1999 revenue was generated by one order, from Transnuclear Inc. to begin production of Boralyn for casks that will contain spent fuel rods from nuclear reactors.
CEO Arne Van Roon, who took over after Price’s abrupt resignation, acknowledged that the situation doesn’t look good, but he said Alyn should be compared with an industry that’s an investor favorite.
“You should look at it as a biotech, where you don’t see sales for quite a while,” said Van Roon. “The sales cycles we have are extremely long.”
He said that Alyn’s clients are designing Boralyn into their products, particularly in the automotive sector, and that he expects sales to begin going up again in a year.
Van Roon said Alyn received a $7.5 million investment in October from the Fleming Group and that the company expects to receive more investments this quarter, from both new and current investors.
In its latest annual report, the company said it has $2.6 million cash on hand. Its report also warned that it might not have sufficient working capital if it didn’t raise the needed funds this second quarter.
“You’ll see that warning in our reports for the next two or three years,” said Van Roon. n
