Altair Nanotechnologies Inc. embarks on a search for a new chief as it absorbs last year's $20 million increase in operating expenses, the result of a replacement battery-pack order.
Meanwhile the company will launch an inquiry into compensation practices following last month's resignation of Chief Executive Officer Alan J. Gotcher, who took with him a $715,000 bonus. That was $400,000 above bonus guidelines, said Chief Financial Officer Ed Dickerson.
Altair Nanotechnologies Inc. is in no rush to replace Gotcher, who agreed to resign February 26, company officials said last week.
A number of candidates are being considered, including interim president Terry Copeland. Meanwhile, "a strong senior management" would guide the firm.
Altair's board of directors lost confidence in Gothe's ability to lead the company due to poor performance, and asked for his resignation, said Dickerson.
Now the Compensation Committee will initiate an inquiry into the circumstances under which the bonus was granted, said Board Chairman Jon Bengtson. And In future, bonuses would only be awarded after year-end financials became available.
Altair designs nanomaterials technology for use in energy, pharmaceutical, life sciences and industrial applications.
The company lat week reported 2007 revenues of $9.11 million compared with $4.32 million the year before. The net loss for 2007 was $31.47 million, or 45 cents per share, compared with a net loss of $17.20 million, or 29 cents per share, for the prior year period.
Altairnano assigned $6.7 million in operating expenses to a module configuration problem that creates a potential overheating risk in battery packs sold to Phoenix Motor Cars, Inc., an electric vehicle manufacturer. The problem was due to assembly, and was not a defect in the proprietary lithium titanate-based cell technology.
The company said that only the first-generation electric automobile battery modules for Phoenix vehicles were affected.
"No damage was actually done," said Copeland. "But it delays our timetable for commercializing battery packs for commercial vehicles."
Meanwhile, Altair has completed the redesign of a second-generation battery pack. And expects to begin delivering those battery packs to Phoenix.
"Our relationship with Phoenix is strong," says Dickinson.
"This company is in talks with auto manufacturers large and small due to interest in pollution control," he adds. "We're making solid progress in building the company."
Current Altair employment stands at 110.
Explaining the $20 million increase in operating expenses last year, $42 million compared to $20 the previous year, the company cited warranty expenses and inventory impairment plus ramped up research and development efforts. And the purchase of a 100-square-foot office headquarters on 6.7 acres.
Another customer, AES Corporation, connected two one-megawatt stationary battery packs to the electric grid and testing has begun. AES told Altair that it sees numerous potential applications for the technology, which it expects to pursue, assuming the successful testing of the development project, says Dickinson.
Now Altair looks ahead to work on a $2.5 million contract with the U.S. Navy, said Copeland. It's part of a $2.4 megawatt stationery power supply to replace generators on Navy ships.
Looking ahead, it says results on its Sherwin-Williams pilot plant program have been positive.
And plans for a European launch are pegged to 2010.
