COLONIE -- MTI MicroFuel Cells Inc.
says it will not sign a development deal with an electronics maker this
year, as originally planned, while it rethinks its strategy to break
into the consumer hand-held market.
In a statement released after the markets closed Thursday, miniature
fuel-cell developer said it will continue its work with The Gillette
Co. -- maker of Duracell batteries -- to figure out which piece of the
$15 billion-a-year hand-held electronics market it could supply power
to first.
The company eventually hopes its Mobion methanol-filled fuel cells --
which create energy through a chemical reaction -- will replace
batteries in devices such as cellphones, cameras, personal digital
assistants and hand-held electronic game systems.
But on Friday, William Acker, president and chief executive officer,
said the power needs, size and weight of electronics is always changing.
That prompted MTI Micro to step back from the previously announced
milestone of signing a major electronics contract this year. It still
intends to sign a development deal with a big name, but isn't saying
when.
"I remain very optimistic about the technology and the marketplace
we're entering," Acker said. "We're talking about a $15 billion market
and a technology that has clear advantages to the incumbent technology
that's out there."
The company also said it will miss a milestone of shipping a prototype
powerpack for a remote sensor unit for the U.S. Army special forces.
The units will be ready by the end of the third quarter, not the end of
this month, as specified in the contract with the Army.
MTI Micro said the units it does deliver will not have double the
energy density of the batteries they're intended to replace, as it
originally said. MTI said those more powerful versions -- not required
in the military contract -- would be coming by the end of the year. On
Friday, Acker described the milestone adjustments as business decisions
within a changing technology environment.
"We're not at all talking about any shifts away from our long-term
vision, which is powering the hand-held electronics space," Acker said.
MTI Micro, a subsidiary of Latham-based Mechanical Technology Inc.,
announced its partnership with Gillette to develop the fuel cell and
methanol-refilling system in 2003. Along with the milestone
adjustments, the company also said both sides had amended portions of
the agreement that allow each to terminate the development deal at
certain points.
The company did say it had finished development of its first
engineering prototype fuel cell with a replaceable fuel refill, a
milestone it completed one quarter ahead of schedule.
Last year, MTI Micro impressed analysts and investors when it sold
commercially its first fuel cell, which was incorporated into a
hand-held radio frequency tag identification reader, used in warehouses
for inventory.
But earlier this year, the company backed away from that line slightly,
saying it was focusing on the military applications.
"I'm not as excited about the company as I was a while ago," said
Walter Nasdeo, who follows the company for the New York City-based
investment firm Ardour Capital Partners LLC. He had a "buy" rating on
Mechanical Technology's stock, but reduced it to "sell" in May, with a
$3.50 price target.
"The way I've characterized it is they've essentially pulled themselves
back to the group," he said.
Share of Mechanical Technology (Nasdaq: MKTY) closed Friday at $3.614,
down 35.6 cents. |
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