Hardide (LON:HDD) , the AIM quoted specialist coatings business whose surface technology helps prolong the life of engineering components, has signed a seven year exclusivity agreement with a multi-billion dollar blue chip US-based manufacturer of high pressure fluid handling equipment. The deal is based on minimum revenues of US$3.65 million (£2.21 million) over the period, which started in late April. Should revenues drop below an agreed annual minimum, the customer will pay a percentage of the shortfall to retain exclusivity or Hardide will have the option to limit or negate the exclusivity. In turn, Hardide will discount any sales generated over the agreed yearly minimum.
The agreement covers Hardide coatings for defined applications of high pressure fluid handling equipment. As a result, it will not impact on any other existing sales or customers. In the year to September 2010 sales at Hardide increased by 44% to £1.74 million while pre-tax losses fell by 74% to £0.4 million. The group’s UK arm, Hardide Coatings, turned a profit of £0.4 million but the overall group was hampered by the costs associated with its Houston, US, facility which was put into hibernation during 2009 following a fall-off in demand from customers in the US.
Dr Graham Hine, the chief executive of Hardide, said: “We are extremely pleased with the agreement as it provides for guaranteed income that will facilitate our cash flow and forecasting. It is a major endorsement of the Hardide coating technology to be so firmly embedded with such a leading blue chip customer. It is our strategic aim to develop long term relationships with key customers and this is a well-crafted deal that will provide considerable benefits to both parties.”
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