SmarTire Systems, a Canadian company that makes tire pressure monitoring systems for cars and light trucks, posted a $5.5 million loss for its 2001 fiscal year, compared to net income of $1.9 million in its 200 fiscal year.
SmarTire said the difference in financial performance between the two fiscal years is the result of an $8.3 million gain on the sale of an investment in March 2000. In addition, lower revenues were reported in fiscal 2001 due to the delay in the release of its second generation tire monitoring products. The distribution of SmarTire’s new aftermarket products in both the United States and Europe occurred in late July and September this year, the company added.
The key to SmarTire’s future is legislation introduced by the U.S. Congress in November 2000 that requires tire pressure warning devices on all passenger cars, light trucks, sport utility vehicles and vans sold in the U.S. after 2003. Called the Transportation Recall Enhancement Accountability Documentation (TREAD) Act, SmarTire said it will affect 16 million new vehicles in the United States each year, resulting in an estimated $1 billion annual market for tire monitoring systems.