MIRA
INFORM REPORT
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Report Date : |
06.04.2013 |
IDENTIFICATION DETAILS
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Name : |
ASPEN AEROGELS INC |
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Registered Office : |
Building B, |
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Country : |
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Financials (as on) : |
31.12.2010 |
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Date of Incorporation : |
04.05.2001 |
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Legal Form : |
Private Independent Company |
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Line of Business : |
designs,
develops, and manufactures aerogel insulation products |
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No. of Employees : |
157 |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Slow but Correct |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30th, 2012
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Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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United
States |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
United States - ECONOMIC OVERVIEW
The US has the largest and most technologically powerful economy in the
world, with a per capita GDP of $48,100. In this market-oriented economy,
private individuals and business firms make most of the decisions, and the
federal and state governments buy needed goods and services predominantly in
the private marketplace. US business firms enjoy greater flexibility than their
counterparts in Western Europe and Japan in decisions to expand capital plant,
to lay off surplus workers, and to develop new products. At the same time, they
face higher barriers to enter their rivals' home markets than foreign firms
face entering US markets. US firms are at or near the forefront in
technological advances, especially in computers and in medical, aerospace, and
military equipment; their advantage has narrowed since the end of World War II.
The onrush of technology largely explains the gradual development of a
"two-tier labor market" in which those at the bottom lack the
education and the professional/technical skills of those at the top and, more
and more, fail to get comparable pay raises, health insurance coverage, and
other benefits. Since 1975, practically all the gains in household income have
gone to the top 20% of households. Since 1996, dividends and capital gains have
grown faster than wages or any other category of after-tax income. Imported oil
accounts for nearly 55% of US consumption. Oil prices doubled between 2001 and
2006, the year home prices peaked; higher gasoline prices ate into consumers'
budgets and many individuals fell behind in their mortgage payments. Oil prices
increased another 50% between 2006 and 2008. In 2008, soaring oil prices
threatened inflation and caused a deterioration in the US merchandise trade
deficit, which peaked at $840 billion. In 2009, with the global recession
deepening, oil prices dropped 40% and the US trade deficit shrank, as US
domestic demand declined, but in 2011 the trade deficit ramped back up to $803
billion, as oil prices climbed once more. The global economic downturn, the
sub-prime mortgage crisis, investment bank failures, falling home prices, and
tight credit pushed the United States into a recession by mid-2008. GDP
contracted until the third quarter of 2009, making this the deepest and longest
downturn since the Great Depression. To help stabilize financial markets, in
October 2008 the US Congress established a $700 billion Troubled Asset Relief
Program (TARP). The government used some of these funds to purchase equity in
US banks and industrial corporations, much of which had been returned to the
government by early 2011. In January 2009 the US Congress passed and President
Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus
to be used over 10 years - two-thirds on additional spending and one-third on
tax cuts - to create jobs and to help the economy recover. In 2010 and 2011,
the federal budget deficit reached nearly 9% of GDP; total government revenues
from taxes and other sources are lower, as a percentage of GDP, than that of
most other developed countries. The wars in Iraq and Afghanistan required major
shifts in national resources from civilian to military purposes and contributed
to the growth of the US budget deficit and public debt - through 2011, the
direct costs of the wars totaled nearly $900 billion, according to US
government figures. In March 2010, President OBAMA signed into law the Patient
Protection and Affordable Care Act, a health insurance reform bill that will
extend coverage to an additional 32 million American citizens by 2016, through
private health insurance for the general population and Medicaid for the
impoverished. Total spending on health care - public plus private - rose from
9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the
DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to
promote financial stability by protecting consumers from financial abuses,
ending taxpayer bailouts of financial firms, dealing with troubled banks that
are "too big to fail," and improving accountability and transparency
in the financial system - in particular, by requiring certain financial
derivatives to be traded in markets that are subject to government regulation
and oversight. Long-term problems include inadequate investment in deteriorating
infrastructure, rapidly rising medical and pension costs of an aging
population, sizable current account and budget deficits - including significant
budget shortages for state governments - energy shortages, and stagnation of
wages for lower-income families.
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Source : CIA |
Company name & address
Aspen Aerogels Inc
Building B, 30 Forbes Road
Northborough, MA 01532
United States
Tel: 508-691-1111
Fax: 508-691-1200
Synthesis
Employees: 157
Company Type: Private Independent
Incorporation Date:
04-May-2001
Auditor:
KPMG LLP
Financials in: USD
(Millions)
Fiscal Year End:
31-Dec-2010
Reporting Currency: US
Dollar
Annual Sales: 43.2
1
Net Income: (9.9)
Total Assets: 88.8
2
Business Description
Aspen Aerogels, Inc., is a United States-based company, which designs, develops, and manufactures aerogel insulation products. The Company offers aerogels that provides thermal insulation, acoustic insulation, infrared suppression, shock absorption, and performance capabilities for various commercial and government applications. Its products include: Cryogel x201, Cryogel Z, Pyrogel 2250, Pyrogel 6650, Pyrogel XT, Pyrogel XTF, Spaceloft, and Spaceloft Subsea. The Company's products are used in various industries including oil and gas production and processing, transportation and storage, building and construction, outdoor apparel, appliances, and military and aerospace. The Company produces Aerogel, which is a synthetically produced amorphous silica gel impregnated into a non-woven flexible fabric substrate, offering the twin benefits of extreme thermal performance and a flexible blanket form. For the three months ended 31 March 2011, Aspen Aerogels Inc.'s revenues increased 40% to $12.3M. Net loss totaled $64.2M, up from $4.3M. Revenues reflects increase product demand in the market. Higher net loss reflects from a significant increase in selling & marketing expenses and increase in general & administrative expenses. The company engaged are design, develop & manufacture innovative, high-performance aerogel insulation.
Industry
Industry Construction - Supplies and
Fixtures
ANZSIC 2006: 3339 - Other
Hardware Goods Wholesaling
NACE 2002: 5153 - Wholesale of
wood, construction materials and sanitary equipment
NAICS 2002: 32614 -
Polystyrene Foam Product Manufacturing
UK SIC 2003: 5153 - Wholesale
of wood, construction materials and sanitary equipment
UK SIC 2007: 4673 - Wholesale of
wood, construction materials and sanitary equipment
US SIC 1987: 5033 - Roofing,
Siding, and Insulation Materials
Key Executives
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Name |
Title |
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President, Chief Executive Officer, Director |
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Chief Financial Officer, Vice President, Treasurer |
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Senior Vice President - Sales and Marketing |
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Chief Information Officer |
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Vice President - Europe Building and Construction |
news
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Title |
Date |
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Rubber
Aerogel Material Sought by NASA |
3-Apr-2013 |
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NASA
Solicitation: Rubber Aerogel Material for Space Suit Glove Applications |
2-Apr-2013 |
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Presolicitation
Notice - 93-- RUBBER AEROGEL MATERIAL FOR SPACE SUIT GLOVE APPLICATIONS |
2-Apr-2013 |
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High-Temperature
Insulation conserves installation effort. |
28-Mar-2013 |
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Pyrogel XT-E
Insulation Offers Best Thermal Performance and Handling |
20-Mar-2013 |
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Nanotechnology
in Energy Applications |
12-Mar-2013 |
Financial Summary
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1 - Profit & Loss Item Exchange Rate: USD 1 = USD 1
2 - Balance Sheet Item Exchange Rate: USD 1 = USD 1
Corporate Overview
Location
Building B, 30 Forbes Road
Northborough, MA, 01532
Worcester County
United States
Tel: 508-691-1111
Fax: 508-691-1200
Sales USD(mil): 43.2
Assets USD(mil): 88.8
Employees: 157
Fiscal Year End: 31-Dec-2010
Industry: Construction
- Supplies and Fixtures
Incorporation Date: 04-May-2001
Company Type: Private
Independent
Quoted Status: Not
Quoted
President, Chief
Executive Officer, Director:
Donald R. Young
Industry Codes
ANZSIC 2006 Codes:
3339 - Other Hardware Goods Wholesaling
1913 - Polymer Foam Product Manufacturing
NACE 2002 Codes:
5153 - Wholesale of wood, construction materials and sanitary
equipment
2524 - Manufacture of other plastic products
NAICS 2002 Codes:
32614 - Polystyrene Foam Product Manufacturing
326140 - Polystyrene Foam Product Manufacturing
US SIC 1987:
5033 - Roofing, Siding, and Insulation Materials
3086 - Plastics Foam Products
UK SIC 2003:
5153 - Wholesale of wood, construction materials and sanitary
equipment
2524 - Manufacture of other plastic products
UK SIC 2007:
4673 - Wholesale of wood, construction materials and sanitary
equipment
2229 - Manufacture of other plastic products
Business
Description
Aspen Aerogels,
Inc., incorporated on May 4, 2001, is an energy efficiency company that
designs, develops and manufactures aerogel insulation. The Company’s
insulation is principally used by industrial companies, such as ExxonMobil and
NextEra Energy that operate petrochemical, refinery, industrial and power
generation facilities. The Company is also working with Badische Anilin- und
Soda-Fabrik (BASF) Construction Chemicals and other companies to develop and
commercialize products for applications in the building and construction
market. The Company maintains wholly owned subsidiaries in Rhode Island, Aspen
Aerogels Rhode Island, LLC, and in Germany, Aspen Aerogels Germany, GmbH.
The Company
manufactures its products using the process technology at its facility in East
Providence, Rhode Island. The Company’s Cryogel and Pyrogel product lines
have been used by some of the world’s oil refiners and petrochemical
companies, including ExxonMobil, Petrobras, Shell and Dow Chemical. These
products are also used in applications as diverse as liquefied natural gas
facilities, food processing facilities, oil sands extraction and electric power
generation facilities, with end-use customers, such as Chevron, Archer Daniels
Midland, Suncor Energy, NextEra Energy and Exelon.
The Company
produces Aerogel, which is a synthetically produced amorphous silica gel impregnated
into a non-woven flexible fabric substrate, offering the twin benefits of
extreme thermal performance and a flexible blanket form. The Company’s other
products include: Cryogel Z, Pyrogel 2250, Pyrogel 6650, Pyrogel XT, Pyrogel
XTF, Spaceloft , Spaceloft A2, Cryogel x201 and Spaceloft Subsea. Pyrogel XT is
reinforced with a glass-fiber batting and has an upper use temperature of
650oC. Pyrogel XT was designed for use in high temperature systems in
refineries and petrochemical facilities. Pyrogel XTF is similar in thermal
performance to Pyrogel XT, but is reinforced with a glass- and silica-fiber
batting. Pyrogel XTF is formulated to provide protection against fire. Cryogel
Z is designed for sub-ambient and cryogenic applications in the industrial market.
Cryogel Z is reinforced with a glass- and polyester-fiber batting and is
produced with an integral vapor barrier. Cryogel Z is also formulated to
minimize the incidence of stress corrosion cracking in stainless steel systems.
Spaceloft Subsea
is reinforced with glass- and polyester-fiber batting and is designed for use
in pipe-in-pipe applications in offshore oil production. Spaceloft is
reinforced with a glass- and polyester-fiber batting and is designed for use in
the building and construction market. Spaceloft is designed for use in solid
wall buildings and where space is at a premium. Spaceloft A2 is reinforced with
a glass-fiber batting and designed to meet Euroclass A2 standards for fire
properties of building and construction products. Spaceloft A2 is designed for
use in systems subject to European fire performance standards, including
hospitals, schools, warehouses, factories, shopping centers and commercial
buildings over 15 meters high.
Pyrogel 2250 is
reinforced with carbon-fiber batting and has an upper use temperature of 200oC.
Pyrogel 2250 is designed for use in applications where space is limited.
Pyrogel 6650 is reinforced with silica-fiber batting and has an upper use
temperature of 650oC. Pyrogel 6650 is the Company’s lowest-density product
and is designed for use in applications where weight is critical. Cryogel X201
is similar in composition to Cryogel Z, but is produced without a vapor
barrier. Cryogel X201 is designed for use in cold system designs where space is
at a premium.
The Company
competes with Armacell, BASF, Bayer, CRH, Dow Chemical, Huntsman, Johns
Manville, Kingspan, Knauf Gips, Owens Corning, Recticel, Saint-Gobain, Knauf
Gips, Uralita, Rockwool, Beijing New Building Materials, CSR, KCC, Nichias,
Paroc Group, TechnoNICOL, Aspen Aerogels and Cabot
More Business
Descriptions
Aspen Aerogels,
Inc., is a United States-based company, which designs, develops, and
manufactures aerogel insulation products. The Company offers aerogels that
provides thermal insulation, acoustic insulation, infrared suppression, shock
absorption, and performance capabilities for various commercial and government
applications. Its products include: Cryogel x201, Cryogel Z, Pyrogel 2250,
Pyrogel 6650, Pyrogel XT, Pyrogel XTF, Spaceloft, and Spaceloft Subsea. The
Company's products are used in various industries including oil and gas
production and processing, transportation and storage, building and
construction, outdoor apparel, appliances, and military and aerospace. The
Company produces Aerogel, which is a synthetically produced amorphous silica
gel impregnated into a non-woven flexible fabric substrate, offering the twin
benefits of extreme thermal performance and a flexible blanket form. For the
three months ended 31 March 2011, Aspen Aerogels Inc.'s revenues increased 40%
to $12.3M. Net loss totaled $64.2M, up from $4.3M. Revenues reflects increase
product demand in the market. Higher net loss reflects from a significant
increase in selling & marketing expenses and increase in general & administrative
expenses. The company engaged are design, develop & manufacture innovative,
high-performance aerogel insulation.
Aspen Aerogels is
a supplier of nanotechnology-enabled aerogels for insulating applications. It
has a more than 31,000-square-feet prototype manufacturing facility and over
80,000-square-foot chemicals, applications and prototype development labs and
office space. The comppany serves military, oil field, aerospace, processing,
transportation, emerging markets, and building and construction industries. The
company produces a thermal insulation material for cryogenic insulation
applications. Its partners include AGI, Anchor Insulation, Foam Design,
Insultech, Carpenter, Polyformes, Spacetherm and Tighitco. Additionally, the
company offers fabrication and applications engineering, mechanical and
physical testing, and consulation services. Aspen Aerogels has ISO 9001:2000
certification and is located in Northborough, Mass.
Aspen Aerogels, Inc.
(Aspen Aerogels) is a clean technology company, based in the US. The company
operates through sustainable construction and material management. It develops,
manufactures and markets nanotechnology materials known as aerogels. The
company provides thermal insulation, acoustic insulation, infrared suppression,
and shock absorption for commercial and government applications. It markets its
products through the brand CRYOGEL, SPACELOFT and PYROGEL. The company operates
through its customers in Technip, ExxonMobil, General Electric, Boeing, 3M, and
other federal government agencies. It caters to customers in the sectors such
as oil and gas production and processing, LNG shipping and storage, outdoor
apparel, building and construction, appliance, transportation, military and
aerospace. Aspen Aerogels is headquartered in Northborough, Massachusetts, the
US.
Aspen Aerogels
participates in a variety of government contract R&D programs and has
transitioned R&D projects into procurement. Additionally investments made
through Title III of the Defense Production Act played a significant role in
supporting the development and commercialization of aerogel blanket technology.
See projects at right for examples of government programs Aspen has underway or
has completed. Aspens aerogel blankets are listed on the GSA schedule. Also
referred to as the Federal Supply Schedule this is the most common government
contract vehicle and is a Multiple Award Schedule (MAS) Contract. Federal state
and local government had spending in excess of $37 billion in fiscal year 2009
through GSA Schedule contracts administered by the General Services
Administration.
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Credit Report as of 10/01/2012
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Location |
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30 Forbes Rd |
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County: |
Worcester |
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MSA: |
Boston, MA |
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Phone: |
508-691-1111 |
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URL: |
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ABI©: |
595503129 |
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Annual Sales: |
$28,704,000 (USD) |
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Employees: |
157 |
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Facility Size(ft2): |
40,000+ |
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Business Type: |
Private |
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Location Type: |
Single Location |
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Primary Line of Business: |
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SIC: |
8711-11 - Engineers-Consulting |
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NAICS: |
541330 - Engineering Svcs |
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Secondary Lines of Business: |
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SICs: |
9999-66 - Federal Government Contractors |
Competitors Report
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Company
Name |
Location |
Employees |
Ownership |
|
Altair Nanotechnologies, Inc. |
Reno, Nevada, United States |
77 |
Public |
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Dart Container Corporation |
Mason, Michigan, United States |
6,000 |
Private |
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Industrial Nanotech Inc. |
Naples, Florida, United States |
8 |
Public |
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Nanopoint Inc. |
Honolulu, Hawaii, United
States |
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Private |
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Nanostellar, Inc. |
Redwood City, California,
United States |
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Private |
Executive report
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Board of
Directors |
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Board Member |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Board Member |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Independent Director |
Director/Board Member |
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Board Member |
Director/Board Member |
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President, Chief Executive Officer, Director |
Director/Board Member |
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Executives |
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President, Chief Executive Officer, Director |
Chief Executive Officer |
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Vice President - Operations |
Operations Executive |
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Chief Financial Officer, Vice President, Treasurer |
Finance Executive |
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Vice President - Finance and Corporate Strategy |
Finance Executive |
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Vice President - Human Resources |
Human Resources Executive |
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Vice President - Sales and Marketing |
Sales Executive |
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Senior Vice President - Sales and Marketing |
Sales Executive |
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Marketing |
Marketing Executive |
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Chief Information Officer |
Information Executive |
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IT Executive |
Engineering/Technical Executive |
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Vice President Engineering And Design |
Engineering/Technical Executive |
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Vice President - Research and Development |
Research & Development Executive |
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Vice President - Europe Building and Construction |
Facilities Executive |
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Annual
Income Statement
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
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31-Dec-2010 |
31-Dec-2009 |
31-Dec-2008 |
31-Dec-2007 |
31-Dec-2006 |
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Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
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UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
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Filed Currency |
USD |
USD |
USD |
USD |
USD |
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Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
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Auditor |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
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Auditor Opinion |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
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Net Sales |
43.2 |
28.6 |
20.1 |
13.8 |
11.4 |
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Revenue |
43.2 |
28.6 |
20.1 |
13.8 |
11.4 |
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Total Revenue |
43.2 |
28.6 |
20.1 |
13.8 |
11.4 |
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Cost of Revenue |
37.5 |
32.3 |
35.9 |
16.9 |
19.8 |
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Cost of Revenue, Total |
37.5 |
32.3 |
35.9 |
16.9 |
19.8 |
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Gross Profit |
5.7 |
-3.6 |
-15.8 |
-3.1 |
-8.4 |
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Selling/General/Administrative Expense |
10.2 |
9.4 |
10.2 |
12.0 |
12.4 |
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Total Selling/General/Administrative Expenses |
10.2 |
9.4 |
10.2 |
12.0 |
12.4 |
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Research & Development |
3.0 |
2.5 |
2.1 |
3.2 |
6.2 |
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Total Operating Expense |
50.7 |
44.2 |
48.2 |
32.2 |
38.4 |
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Operating Income |
-7.5 |
-15.6 |
-28.1 |
-18.3 |
-27.0 |
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Interest Expense -
Non-Operating |
-2.6 |
-3.1 |
-7.4 |
-10.7 |
-10.0 |
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Interest Expense, Net Non-Operating |
-2.6 |
-3.1 |
-7.4 |
-10.7 |
-10.0 |
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Interest Income -
Non-Operating |
0.2 |
0.0 |
0.3 |
0.1 |
0.3 |
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Interest/Investment Income - Non-Operating |
0.2 |
0.0 |
0.3 |
0.1 |
0.3 |
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Interest Income (Expense) - Net Non-Operating Total |
-2.4 |
-3.1 |
-7.1 |
-10.7 |
-9.7 |
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Income Before Tax |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
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Total Income Tax |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
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Income After Tax |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
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Net Income Before Extraord Items |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
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Net Income |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
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Preferred Dividends |
-57.0 |
-3.0 |
-2.4 |
-1.8 |
-1.8 |
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Total Adjustments to Net Income |
-57.0 |
-3.0 |
-2.4 |
-1.8 |
-1.8 |
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Income Available to Common Excl Extraord Items |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
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|
Income Available to Common Incl Extraord Items |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
|
|
|
|
|
|
|
Basic/Primary Weighted Average Shares |
95.0 |
95.0 |
95.0 |
95.0 |
95.0 |
|
Basic EPS Excl Extraord Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Basic/Primary EPS Incl Extraord Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Dilution Adjustment |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Diluted Net Income |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
Diluted Weighted Average Shares |
95.0 |
95.0 |
95.0 |
95.0 |
95.0 |
|
Diluted EPS Excl Extraord Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Diluted EPS Incl Extraord Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Dividends per Share - Common Stock Primary Issue |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Gross Dividends - Common Stock |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Interest Expense, Supplemental |
2.6 |
3.1 |
7.4 |
10.7 |
10.0 |
|
Depreciation, Supplemental |
4.5 |
5.4 |
6.5 |
- |
- |
|
Normalized Income Before Tax |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Inc Tax Ex Impact of Sp Items |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Normalized Income After Tax |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Normalized Inc. Avail to Com. |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
|
|
|
|
|
|
|
Basic Normalized EPS |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Diluted Normalized EPS |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Rental Expenses |
0.8 |
1.0 |
1.1 |
- |
- |
|
Research & Development Exp, Supplemental |
3.0 |
2.5 |
2.1 |
3.2 |
6.2 |
|
Normalized EBIT |
-7.5 |
-15.6 |
-28.1 |
-18.3 |
-27.0 |
|
Normalized EBITDA |
-2.9 |
-10.2 |
-21.7 |
-18.3 |
-27.0 |
Annual Balance Sheet
Financials in: USD (mil)
|
|
31-Dec-2010 |
31-Dec-2009 |
31-Dec-2008 |
31-Dec-2007 |
31-Dec-2006 |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Cash & Equivalents |
26.8 |
27.5 |
- |
- |
- |
|
Short Term Investments |
4.0 |
0.0 |
- |
- |
- |
|
Cash and Short Term Investments |
30.8 |
27.5 |
- |
- |
- |
|
Trade Accounts Receivable - Net |
10.2 |
4.2 |
- |
- |
- |
|
Total Receivables, Net |
10.2 |
4.2 |
- |
- |
- |
|
Inventories - Finished Goods |
0.6 |
0.3 |
- |
- |
- |
|
Inventories - Raw Materials |
1.7 |
1.3 |
- |
- |
- |
|
Total Inventory |
2.3 |
1.6 |
- |
- |
- |
|
Prepaid Expenses |
0.4 |
0.4 |
- |
- |
- |
|
Other Current Assets |
0.1 |
0.1 |
- |
- |
- |
|
Other Current Assets, Total |
0.1 |
0.1 |
- |
- |
- |
|
Total Current Assets |
43.8 |
33.8 |
- |
- |
- |
|
|
|
|
|
|
|
|
Buildings |
12.9 |
12.9 |
- |
- |
- |
|
Machinery/Equipment |
37.0 |
32.7 |
- |
- |
- |
|
Construction in
Progress |
13.2 |
0.2 |
- |
- |
- |
|
Property/Plant/Equipment - Gross |
63.1 |
45.7 |
- |
- |
- |
|
Accumulated Depreciation |
-20.5 |
-16.0 |
- |
- |
- |
|
Property/Plant/Equipment - Net |
42.6 |
29.8 |
- |
- |
- |
|
Restricted Cash - Long Term |
0.9 |
0.6 |
- |
- |
- |
|
Other Long Term Assets |
1.5 |
0.6 |
- |
- |
- |
|
Other Long Term Assets, Total |
2.4 |
1.2 |
- |
- |
- |
|
Total Assets |
88.8 |
64.7 |
- |
- |
- |
|
|
|
|
|
|
|
|
Accounts Payable |
5.6 |
2.9 |
- |
- |
- |
|
Accrued Expenses |
6.0 |
0.8 |
- |
- |
- |
|
Current Portion - Long Term Debt/Capital Leases |
0.3 |
0.3 |
- |
- |
- |
|
Customer Advances |
0.4 |
0.6 |
- |
- |
- |
|
Other Current Liabilities |
6.8 |
7.4 |
- |
- |
- |
|
Other Current liabilities, Total |
7.2 |
8.0 |
- |
- |
- |
|
Total Current Liabilities |
19.1 |
12.0 |
- |
- |
- |
|
|
|
|
|
|
|
|
Long Term Debt |
7.8 |
0.2 |
- |
- |
- |
|
Capital Lease Obligations |
0.1 |
0.1 |
- |
- |
- |
|
Total Long Term Debt |
7.9 |
0.3 |
- |
- |
- |
|
Total Debt |
8.1 |
0.6 |
- |
- |
- |
|
|
|
|
|
|
|
|
Other Long Term Liabilities |
10.1 |
14.6 |
- |
- |
- |
|
Other Liabilities, Total |
10.1 |
14.6 |
- |
- |
- |
|
Total Liabilities |
37.1 |
26.9 |
- |
- |
- |
|
|
|
|
|
|
|
|
Redeemable Convertible Preferred Stock |
109.8 |
31.7 |
- |
- |
- |
|
Redeemable Preferred Stock |
109.8 |
31.7 |
- |
- |
- |
|
Common Stock |
0.0 |
0.0 |
- |
- |
- |
|
Common Stock |
0.0 |
0.0 |
- |
- |
- |
|
Additional Paid-In Capital |
138.0 |
192.4 |
- |
- |
- |
|
Retained Earnings (Accumulated Deficit) |
-196.2 |
-186.3 |
- |
- |
- |
|
Other Comprehensive Income |
0.0 |
0.0 |
- |
- |
- |
|
Other Equity, Total |
0.0 |
0.0 |
- |
- |
- |
|
Total Equity |
51.7 |
37.8 |
- |
- |
- |
|
|
|
|
|
|
|
|
Total Liabilities & Shareholders’ Equity |
88.8 |
64.7 |
- |
- |
- |
|
|
|
|
|
|
|
|
Shares Outstanding - Common Stock Primary
Issue |
95.0 |
95.0 |
- |
- |
- |
|
Total Common Shares Outstanding |
95.0 |
95.0 |
- |
- |
- |
|
Deferred Revenue - Current |
0.4 |
0.6 |
- |
- |
- |
|
Interest Costs |
0.0 |
- |
- |
- |
- |
|
Total Capital Leases, Supplemental |
0.1 |
- |
- |
- |
- |
|
Capital Lease Payments Due in Year 1 |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in Year 2 |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in Year 3 |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in Year 4 |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in Year 5 |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in 2-3 Years |
0.0 |
- |
- |
- |
- |
|
Capital Lease Payments Due in 4-5 Years |
0.0 |
- |
- |
- |
- |
|
Total Operating Leases, Supplemental |
1.6 |
- |
- |
- |
- |
|
Operating Lease Payments Due in Year 1 |
0.5 |
- |
- |
- |
- |
|
Operating Lease Payments Due in Year 2 |
0.5 |
- |
- |
- |
- |
|
Operating Lease Payments Due in Year 3 |
0.5 |
- |
- |
- |
- |
|
Operating Lease Pymts. Due in 2-3 Years |
1.1 |
- |
- |
- |
- |
|
Oper. Lse. Pymts. Due in Year 6 & Beyond |
0.0 |
- |
- |
- |
- |
Annual Cash Flows
Financials in: USD (mil)
|
|
31-Dec-2010 |
31-Dec-2009 |
31-Dec-2008 |
31-Dec-2007 |
31-Dec-2006 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
|
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Net Income/Starting Line |
-9.9 |
-18.6 |
-35.2 |
- |
- |
|
Depreciation |
4.6 |
5.6 |
7.1 |
- |
- |
|
Depreciation/Depletion |
4.6 |
5.6 |
7.1 |
- |
- |
|
Unusual Items |
0.1 |
0.0 |
2.5 |
- |
- |
|
Other Non-Cash Items |
2.9 |
3.8 |
8.0 |
- |
- |
|
Non-Cash Items |
2.9 |
3.8 |
10.6 |
- |
- |
|
Accounts Receivable |
-6.0 |
0.2 |
-1.1 |
- |
- |
|
Inventories |
-0.7 |
1.6 |
-1.8 |
- |
- |
|
Prepaid Expenses |
-0.3 |
0.0 |
-0.1 |
- |
- |
|
Other Assets |
0.0 |
0.0 |
0.2 |
- |
- |
|
Accounts Payable |
0.2 |
-1.3 |
1.9 |
- |
- |
|
Accrued Expenses |
1.6 |
0.1 |
0.0 |
- |
- |
|
Other Liabilities |
-7.6 |
-4.5 |
-3.5 |
- |
- |
|
Changes in Working Capital |
-12.8 |
-3.8 |
-4.4 |
- |
- |
|
Cash from Operating Activities |
-15.1 |
-13.0 |
-22.0 |
- |
- |
|
|
|
|
|
|
|
|
Purchase of Fixed Assets |
-11.3 |
-1.6 |
-1.1 |
- |
- |
|
Capital Expenditures |
-11.3 |
-1.6 |
-1.1 |
- |
- |
|
Sale of Fixed Assets |
0.0 |
0.0 |
0.0 |
- |
- |
|
Sale/Maturity of Investment |
11.0 |
0.0 |
0.0 |
- |
- |
|
Purchase of Investments |
-15.0 |
0.0 |
0.0 |
- |
- |
|
Other Investing Cash Flow |
-0.3 |
-0.1 |
0.1 |
- |
- |
|
Other Investing Cash Flow Items, Total |
-4.4 |
-0.1 |
0.2 |
- |
- |
|
Cash from Investing Activities |
-15.7 |
-1.8 |
-1.0 |
- |
- |
|
|
|
|
|
|
|
|
Other Financing Cash Flow |
-0.7 |
0.0 |
0.0 |
- |
- |
|
Financing Cash Flow Items |
-0.7 |
0.0 |
0.0 |
- |
- |
|
Sale/Issuance of
Common |
0.0 |
0.0 |
0.0 |
- |
- |
|
Common Stock, Net |
0.0 |
0.0 |
0.0 |
- |
- |
|
Sale/Issuance of
Preferred |
21.1 |
30.5 |
26.6 |
- |
- |
|
Preferred Stock, Net |
21.1 |
30.5 |
26.6 |
- |
- |
|
Issuance (Retirement) of Stock, Net |
21.1 |
30.5 |
26.6 |
- |
- |
|
Long Term Debt Issued |
10.0 |
0.0 |
8.0 |
- |
- |
|
Long Term Debt
Reduction |
-0.3 |
-0.3 |
-0.5 |
- |
- |
|
Long Term Debt, Net |
9.7 |
-0.3 |
7.5 |
- |
- |
|
Issuance (Retirement) of Debt, Net |
9.7 |
-0.3 |
7.5 |
- |
- |
|
Cash from Financing Activities |
30.1 |
30.3 |
34.1 |
- |
- |
|
|
|
|
|
|
|
|
Net Change in Cash |
-0.7 |
15.5 |
11.2 |
- |
- |
|
|
|
|
|
|
|
|
Net Cash - Beginning Balance |
27.5 |
12.0 |
0.8 |
- |
- |
|
Net Cash - Ending Balance |
26.8 |
27.5 |
12.0 |
- |
- |
|
Cash Interest Paid |
0.0 |
0.0 |
0.1 |
- |
- |
|
Cash Taxes Paid |
0.0 |
0.0 |
0.0 |
- |
- |
Annual Income Statement
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
|
31-Dec-2010 |
31-Dec-2009 |
31-Dec-2008 |
31-Dec-2007 |
31-Dec-2006 |
|
Period Length |
12 Months |
12 Months |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
1 |
1 |
|
Auditor |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
KPMG LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
Unqualified |
|
|
|
|
|
|
|
|
Product |
38.7 |
24.8 |
17.2 |
9.1 |
5.6 |
|
Reserach Services |
4.5 |
3.9 |
2.9 |
4.7 |
5.8 |
|
Total Revenue |
43.2 |
28.6 |
20.1 |
13.8 |
11.4 |
|
|
|
|
|
|
|
|
Cost of Revenue - Product |
35.4 |
30.5 |
32.2 |
15.4 |
17.5 |
|
Cost of Revenue - Research Services |
2.1 |
1.8 |
1.2 |
1.6 |
2.3 |
|
Cost of Revenue - Impairment Charge |
0.0 |
0.0 |
2.5 |
0.0 |
0.0 |
|
Research & Development |
3.0 |
2.5 |
2.1 |
3.2 |
6.2 |
|
Sales & Marketing |
4.5 |
4.0 |
4.0 |
4.9 |
5.7 |
|
General & Administrative |
5.7 |
5.4 |
6.2 |
7.2 |
6.7 |
|
Total Operating Expense |
50.7 |
44.2 |
48.2 |
32.2 |
38.4 |
|
|
|
|
|
|
|
|
Interest Income |
0.2 |
0.0 |
0.3 |
0.1 |
0.3 |
|
Interest Expenses |
-2.6 |
-3.1 |
-7.4 |
-10.7 |
-10.0 |
|
Net Income Before Taxes |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Provision for Income Taxes |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Net Income After Taxes |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Net Income Before Extra. Items |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
Net Income |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Dividends and Accretion of Redeemable |
-57.0 |
-3.0 |
-2.4 |
-1.8 |
-1.8 |
|
Income Available to Com Excl ExtraOrd |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
|
|
|
|
|
|
|
Income Available to Com Incl ExtraOrd |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
|
|
|
|
|
|
|
Basic Weighted Average Shares |
95.0 |
95.0 |
95.0 |
95.0 |
95.0 |
|
Basic EPS Excluding ExtraOrdinary Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Basic EPS Including ExtraOrdinary Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Dilution Adjustment |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Diluted Net Income |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
Diluted Weighted Average Shares |
95.0 |
95.0 |
95.0 |
95.0 |
95.0 |
|
Diluted EPS Excluding ExtraOrd Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Diluted EPS Including ExtraOrd Items |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
DPS-Common Stock |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Gross Dividends - Common Stock |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Normalized Income Before Taxes |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Inc Tax Ex Impact of Sp Items |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Normalized Income After Taxes |
-9.9 |
-18.6 |
-35.2 |
-29.0 |
-36.7 |
|
|
|
|
|
|
|
|
Normalized Inc. Avail to Com. |
-66.9 |
-21.6 |
-37.6 |
-30.8 |
-38.6 |
|
|
|
|
|
|
|
|
Basic Normalized EPS |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Diluted Normalized EPS |
-0.70 |
-0.23 |
-0.40 |
-0.32 |
-0.41 |
|
Research & Development Exp, Supplemental |
3.0 |
2.5 |
2.1 |
3.2 |
6.2 |
|
Interest Expense, Supplemental |
2.6 |
3.1 |
7.4 |
10.7 |
10.0 |
|
Depreciation, Supplemental |
4.5 |
5.4 |
6.5 |
- |
- |
|
Rental Expense, Supplemental |
0.8 |
1.0 |
1.1 |
- |
- |
Annual Balance Sheet
Financials in: USD (mil)
|
|
31-Dec-2010 |
31-Dec-2009 |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
|
Exchange Rate |
1 |
1 |
|
Auditor |
KPMG LLP |
KPMG LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
|
|
|
|
|
Cash & Cash Equivalents |
26.8 |
27.5 |
|
Marketable Securities |
4.0 |
0.0 |
|
Accounts Receivable,Net |
10.2 |
4.2 |
|
Costs in Excess of Billings |
0.1 |
0.1 |
|
Raw Material |
1.7 |
1.3 |
|
Finished Goods |
0.6 |
0.3 |
|
Prepaid Expenses and Other Current Asset |
0.4 |
0.4 |
|
Total Current Assets |
43.8 |
33.8 |
|
|
|
|
|
Restricted Cash |
0.9 |
0.6 |
|
Construction in Progress |
13.2 |
0.2 |
|
Buildings |
12.9 |
12.9 |
|
Machinery & Equipment |
35.6 |
31.2 |
|
Computer Equipment & Software |
1.4 |
1.4 |
|
Accumulated Depreciation & Amortization |
-20.5 |
-16.0 |
|
Other Assets |
1.5 |
0.6 |
|
Total Assets |
88.8 |
64.7 |
|
|
|
|
|
Long-Term Debt,Current Portion |
0.2 |
0.3 |
|
Capital Leases,Current Portion |
0.0 |
0.0 |
|
Accounts Payable |
5.6 |
2.9 |
|
Accrued Expenses |
6.0 |
0.8 |
|
Deferred Revenue |
0.4 |
0.6 |
|
Other Current Liabilities |
6.8 |
7.4 |
|
Total Current Liabilities |
19.1 |
12.0 |
|
|
|
|
|
Long-term Debt Excluding Current Portion |
7.8 |
0.2 |
|
Capital Leases, Excluding Current Portio |
0.1 |
0.1 |
|
Total Long Term Debt |
7.9 |
0.3 |
|
|
|
|
|
Other Long-Term Liabilities |
10.1 |
14.6 |
|
Total Liabilities |
37.1 |
26.9 |
|
|
|
|
|
Series B Redeemable Convertible Preferre |
28.8 |
0.0 |
|
Series A Redeemable Convertible Preferre |
81.0 |
31.7 |
|
Common Stock |
0.0 |
0.0 |
|
Additional Paid-in Capital |
138.0 |
192.4 |
|
Accumulated Deficit |
-196.2 |
-186.3 |
|
Accumulated Other Comprehensive Income |
0.0 |
0.0 |
|
Total Equity |
51.7 |
37.8 |
|
|
|
|
|
Total Liabilities & Shareholders' Equity |
88.8 |
64.7 |
|
|
|
|
|
S/O-Common Stock |
95.0 |
95.0 |
|
Total Common Shares Outstanding |
95.0 |
95.0 |
|
Deferred Revenue - Current |
0.4 |
0.6 |
|
Capital Lease Payments Due within 1 Year |
0.0 |
- |
|
Capital Lease Payments Due in Year 2 |
0.0 |
- |
|
Capital Lease Payments Due in Year 3 |
0.0 |
- |
|
Capital Lease Payments Due in Year 4 |
0.0 |
- |
|
Capital Lease Payments Due in Year 5 |
0.0 |
- |
|
Interest Costs |
0.0 |
- |
|
Total Capital Leases, Supplemental |
0.1 |
- |
|
Operating Lease Pymts. Due within 1Year |
0.5 |
- |
|
Operating Lease Payments Due in Year 2 |
0.5 |
- |
|
Operating Lease Payments Due in Year 3 |
0.5 |
- |
|
Total Operating Leases, Supplemental |
1.6 |
- |
Annual Cash Flows
Financials in: USD (mil)
|
|
31-Dec-2010 |
31-Dec-2009 |
31-Dec-2008 |
|
Period Length |
12 Months |
12 Months |
12 Months |
|
UpdateType/Date |
Updated Normal |
Updated Normal |
Updated Normal |
|
Filed Currency |
USD |
USD |
USD |
|
Exchange Rate
(Period Average) |
1 |
1 |
1 |
|
Auditor |
KPMG LLP |
KPMG LLP |
KPMG LLP |
|
Auditor Opinion |
Unqualified |
Unqualified |
Unqualified |
|
|
|
|
|
|
Net Income |
-9.9 |
-18.6 |
-35.2 |
|
Depreciation |
4.6 |
5.6 |
7.1 |
|
Asset Impairment Charge |
0.0 |
0.0 |
2.5 |
|
Imputed Interest |
2.4 |
3.0 |
3.5 |
|
Paid-in-Kind Interest |
0.0 |
0.0 |
3.4 |
|
Loss on Sale of Marketable Securities |
0.1 |
0.0 |
0.0 |
|
Stock Compensation Expense |
0.5 |
0.8 |
0.9 |
|
Change in Fair Value of Preferred Stock |
0.0 |
0.0 |
0.2 |
|
Settlement of Asset Retirement Obligatio |
0.0 |
0.0 |
0.0 |
|
Accounts Receivables |
-6.0 |
0.2 |
-1.1 |
|
Costs In Excess of Billings |
0.0 |
0.0 |
0.2 |
|
Inventories |
-0.7 |
1.6 |
-1.8 |
|
Prepaid Expenses & Other Assets |
-0.3 |
0.0 |
-0.1 |
|
Accounts Payable |
0.2 |
-1.3 |
1.9 |
|
Accrued Expenses |
1.6 |
0.1 |
0.0 |
|
Deferred Revenue |
-0.2 |
-0.1 |
0.5 |
|
Other Long-Term Liabilities |
-7.4 |
-4.4 |
-4.0 |
|
Cash from Operating Activities |
-15.1 |
-13.0 |
-22.0 |
|
|
|
|
|
|
Capital Expenditure |
-11.3 |
-1.6 |
-1.1 |
|
Proceeds from Sale of Equipment |
0.0 |
0.0 |
0.0 |
|
Decrease(Increase) in Restricted Cash |
-0.3 |
-0.1 |
0.1 |
|
Purchase of Marketable Securities |
-15.0 |
0.0 |
0.0 |
|
Proceeds from Maturities & Sale of Marke |
11.0 |
0.0 |
0.0 |
|
Cash from Investing Activities |
-15.7 |
-1.8 |
-1.0 |
|
|
|
|
|
|
Proceeds from Issuance of Long-Term Debt |
10.0 |
0.0 |
8.0 |
|
Repayment of Borrowings under Long-Term |
-0.3 |
-0.2 |
-0.5 |
|
Deferred Fiancing Costs |
-0.7 |
0.0 |
0.0 |
|
Repayment of Obligations Under Capital L |
0.0 |
0.0 |
0.0 |
|
Proceeds from Issuance of Preferred Stoc |
21.1 |
30.5 |
26.6 |
|
Proceeds from Issuance of Common Stock |
0.0 |
0.0 |
0.0 |
|
Cash from Financing Activities |
30.1 |
30.3 |
34.1 |
|
|
|
|
|
|
Net Change in Cash |
-0.7 |
15.5 |
11.2 |
|
|
|
|
|
|
Cash - Beginning |
27.5 |
12.0 |
0.8 |
|
Cash - Ending |
26.8 |
27.5 |
12.0 |
|
Cash Interest Paid |
0.0 |
0.0 |
0.1 |
|
Cash Taxes Paid |
0.0 |
0.0 |
0.0 |
Financial
Health
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
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Annual Ratios
Financials in: USD (mil)
Except for share items (millions) and per share items (actual units)
|
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Standard &
Poor’s
|
United
States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks,
Rising Debt Burden; Outlook Negative |
|
Publication
date: 05-Aug-2011 20:13:14 EST |
·
We have lowered our long-term sovereign
credit rating on the United States of America to 'AA+' from 'AAA' and affirmed
the 'A-1+' short-term rating.
·
We have also removed both the short- and long-term ratings
from CreditWatch negative.
·
The downgrade reflects our opinion
that the fiscal consolidation plan that Congress and the Administration
recently agreed to falls short of what, in our view, would be necessary to
stabilize the government's medium-term debt dynamics.
·
More broadly, the downgrade
reflects our view that the effectiveness, stability, and predictability of
American policymaking and political institutions have weakened at a time of
ongoing fiscal and economic challenges to a degree more than we envisioned when
we assigned a negative outlook to the rating on April 18, 2011.
·
Since then, we have changed our
view of the difficulties in bridging the gulf between the political parties
over fiscal policy, which makes us pessimistic about the capacity of Congress
and the Administration to be able to leverage their agreement this week into a
broader fiscal consolidation plan that stabilizes the government's debt
dynamics any time soon.
·
The outlook on the long-term rating
is negative. We could lower the long-term rating to 'AA' within the next two
years if we see that less reduction in spending than agreed to, higher interest
rates, or new fiscal pressures during the period result in a higher general
government debt trajectory than we currently assume in our base case.
TORONTO (Standard &
Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it
lowered its long-term sovereign credit rating on the United States of America
to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the
long-term rating is negative. At the same time, Standard & Poor's affirmed
its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's
removed both ratings from CreditWatch, where they were placed on July 14, 2011,
with negative implications.
The
transfer and convertibility (T&C) assessment of the U.S.--our assessment of
the likelihood of official interference in the ability of U.S.-based public-
and private-sector issuers to secure foreign exchange for
debt service--remains
'AAA'.
We lowered our long-term
rating on the U.S. because we believe that the prolonged controversy over
raising the statutory debt ceiling and the related fiscal policy debate
indicate that further near-term progress containing the growth in public
spending, especially on entitlements, or on reaching an agreement on raising
revenues is less likely than we previously assumed and will remain a
contentious and fitful process. We also believe that the fiscal consolidation
plan that Congress and the Administration agreed to this week falls short of
the amount that we believe is necessary to stabilize the general government
debt burden by the middle of the decade.
Our lowering of the
rating was prompted by our view on the rising public debt burden and our
perception of greater policymaking uncertainty, consistent with our criteria
(see "Sovereign Government Rating Methodology and
Assumptions ," June 30, 2011,
especially Paragraphs 36-41). Nevertheless, we view the U.S. federal
government's other economic, external, and monetary credit attributes, which
form the basis for the sovereign rating, as broadly unchanged.
We have taken the ratings
off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment
of 2011 has removed any perceived immediate threat of payment default posed by
delays to raising the government's debt ceiling. In addition, we believe that
the act provides sufficient clarity to allow us to evaluate the likely course
of U.S. fiscal policy for the next few years.
The political
brinksmanship of recent months highlights what we see as America's governance
and policymaking becoming less stable, less effective, and less predictable
than what we previously believed. The statutory debt ceiling and the threat of
default have become political bargaining chips in the debate over fiscal
policy. Despite this year's wide-ranging debate, in our view, the differences
between political parties have proven to be extraordinarily difficult to
bridge, and, as we see it, the resulting agreement fell well short of the
comprehensive fiscal consolidation program that some proponents had envisaged
until quite recently. Republicans and Democrats have only been able to agree to
relatively modest savings on discretionary spending while delegating to the
Select Committee decisions on more comprehensive measures. It appears that for
now, new revenues have dropped down on the menu of policy options. In addition,
the plan envisions only minor policy changes on Medicare and little change in
other entitlements,
the containment of which
we and most other independent observers regard as key to long-term fiscal
sustainability.
Our opinion is that
elected officials remain wary of tackling the structural issues required to
effectively address the rising U.S. public debt burden in a manner consistent
with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and
Assumptions," June 30, 2011,
especially Paragraphs 36-41). In our view, the difficulty in framing a
consensus on fiscal policy weakens the government's ability to manage public
finances and diverts attention from the debate over how to achieve more
balanced and dynamic economic growth in an era of fiscal stringency and
private-sector deleveraging (ibid). A new political consensus might (or might
not) emerge after the 2012 elections, but we believe that by then, the
government debt burden will likely be higher, the needed medium-term fiscal
adjustment potentially greater, and the inflection point on the U.S.
population's demographics and other age-related spending drivers closer at hand
(see "Global Aging 2011: In The U.S., Going Gray Will Likely
Cost Even More Green, Now,"
June 21, 2011).
Standard & Poor's
takes no position on the mix of spending and revenue measures that Congress and
the Administration might conclude is appropriate for putting the U.S.'s
finances on a sustainable footing.
The act calls for as much
as $2.4 trillion of reductions in expenditure growth over the 10 years through
2021. These cuts will be implemented in two steps: the $917 billion agreed to
initially, followed by an additional $1.5 trillion that the newly formed
Congressional Joint Select Committee on Deficit Reduction is supposed to
recommend by November 2011. The act contains no measures to raise taxes or
otherwise enhance revenues, though the committee could recommend them.
The act further provides
that if Congress does not enact the committee's recommendations, cuts of $1.2
trillion will be implemented over the same time period. The reductions would mainly
affect outlays for civilian discretionary spending, defense, and Medicare. We
understand that this fall-back mechanism is designed to encourage Congress to
embrace a more balanced mix of expenditure savings, as the committee might
recommend.
We note that in a letter
to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated
total budgetary savings under the act to be at least $2.1 trillion over the
next 10 years relative to its baseline assumptions. In updating our own fiscal
projections, with certain modifications outlined below, we have relied on the
CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to
include the CBO assumptions contained in its Aug. 1 letter to Congress. In
general, the CBO's "Alternate Fiscal Scenario" assumes a continuation
of recent Congressional action overriding existing law.
We view the act's
measures as a step toward fiscal consolidation. However, this is within the
framework of a legislative mechanism that leaves open the details of what is finally
agreed to until the end of 2011, and Congress and the Administration could
modify any agreement in the future. Even assuming that at least $2.1 trillion
of the spending reductions the act envisages are implemented, we maintain our
view that the U.S. net general government debt burden (all levels of government
combined, excluding liquid financial assets) will likely continue to grow.
Under our revised base case fiscal scenario--which we consider to be consistent
with a 'AA+' long-term rating and a negative outlook--we now project that net
general government debt would rise from an estimated 74% of GDP by the end of
2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign
indebtedness is high in relation to those of peer credits and, as noted, would
continue to rise under the act's revised policy settings.
Compared with previous
projections, our revised base case scenario now assumes that the 2001 and 2003
tax cuts, due to expire by the end of 2012, remain in place. We have changed
our assumption on this because the majority of Republicans in Congress continue
to resist any measure that would raise revenues, a position we believe Congress
reinforced by passing the act. Key macroeconomic assumptions in the base case
scenario include trend real GDP growth of 3% and consumer price inflation near
2% annually over the decade.
Our revised upside
scenario--which, other things being equal, we view as consistent with the
outlook on the 'AA+' long-term rating being revised to stable--retains these
same macroeconomic assumptions. In addition, it incorporates $950 billion of
new revenues on the assumption that the 2001 and 2003 tax cuts for high earners
lapse from 2013 onwards, as the Administration is advocating. In this scenario,
we project that the net general government debt would rise from an estimated
74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.
Our revised downside
scenario--which, other things being equal, we view as being consistent with a
possible further downgrade to a 'AA' long-term rating--features less-favorable
macroeconomic assumptions, as outlined below and also assumes that the second
round of spending cuts (at least $1.2 trillion) that the act calls for does not
occur. This scenario also assumes somewhat higher nominal interest rates for
U.S. Treasuries. We still believe that the role of the U.S. dollar as the key
reserve currency confers a government funding advantage, one that could change
only slowly over time, and that Fed policy might lean toward continued loose
monetary policy at a time of fiscal tightening. Nonetheless, it is possible
that interest rates could rise if investors re-price relative risks. As a
result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in
10-year bond yields relative to the base and upside cases from 2013 onwards. In
this scenario, we project the net public debt burden would rise from 74% of GDP
in 2011 to 90% in 2015 and to 101% by 2021.
Our revised scenarios
also take into account the significant negative revisions to historical GDP
data that the Bureau of Economic Analysis announced on July 29. From our
perspective, the effect of these revisions underscores two related points when
evaluating the likely debt trajectory of the U.S. government. First, the revisions
show that the recent recession was deeper than previously assumed, so the GDP
this year is lower than previously thought in both nominal and real terms.
Consequently, the debt burden is slightly higher. Second, the revised data
highlight the sub-par path of the current economic recovery when compared with
rebounds following previous post-war recessions. We believe the sluggish pace
of the current economic recovery could be consistent with the experiences of
countries that have had financial crises in which the slow process of debt
deleveraging in the private sector leads to a persistent drag on demand. As a
result, our downside case scenario assumes relatively modest real trend GDP
growth of 2.5% and inflation of near 1.5% annually going forward.
When comparing the U.S.
to sovereigns with 'AAA' long-term ratings that we view as relevant
peers--Canada, France, Germany, and the U.K.--we also observe, based on our
base case scenarios for each, that the trajectory of the U.S.'s net public debt
is diverging from the others. Including the U.S., we estimate that these five
sovereigns will have net general government debt to GDP ratios this year
ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%.
By 2015, we project that their net public debt to GDP ratios will range between
30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at
79%. However, in contrast with the U.S., we project that the net public debt
burdens of these other sovereigns will begin to decline, either before or by
2015.
Standard & Poor's
transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment
reflects our view of the likelihood of the sovereign restricting other public
and private issuers' access to foreign exchange needed to meet debt service.
Although in our view the credit standing of the U.S. government has
deteriorated modestly, we see little indication that official interference of
this kind is entering onto the policy agenda of either Congress or the
Administration. Consequently, we continue to view this risk as being highly
remote.
The outlook on the
long-term rating is negative. As our downside alternate fiscal scenario
illustrates, a higher public debt trajectory than we currently assume could
lead us to lower the long-term rating again. On the other hand, as our upside
scenario highlights, if the recommendations of the Congressional Joint Select
Committee on Deficit Reduction--independently or coupled with other
initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high
earners--lead to fiscal consolidation measures beyond the minimum mandated, and
we believe they are likely to slow the deterioration of the government's debt
dynamics, the long-term rating could stabilize at 'AA+'.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.88 |
|
UK Pound |
1 |
Rs.83.54 |
|
Euro |
1 |
Rs.70.90 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.