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    3. Starmet Corp.

    By Gregg Krupa, Globe Staff, 05/18/99

    ith slower-than-expected sales of its metal products to military contractors, Starmet would like to find more customers among manufacturers of golf clubs, bicycles, and other consumer products.

    But that has been the talk at the Concord company for a few years now, and investors recognized in a big way that in 1998, by and large, it remained just talk.

    Starmet's stock lost 82 percent of its value between March 31, 1998, and March 31, 1999, falling from 31 to 51/2.

    ''Orders for our products slowed significantly, and the hope for finding new markets just never came about as quickly as it should have,'' said Frank Vumbaco, vice president of corporate communication.

    Starmet does have a customer list that contains some fairly impressive names.

    Lockheed Martin buys Starmet's Beralcast advanced metal product, a lighter-than-aluminum beryllium-aluminum alloy, for the Army's Comanche helicopters.

    Also, Royal Ordnance of England buys Starmet's uranium alloy technology for use in bullets.

    But according to Starmet's most recent annual report, some longer-than-expected learning curves in the development of products and inefficiencies in manufacturing have led to a lot more discretionary spending than anticipated.

    Add to that a failed stock offering in early 1998 that, in part, was to have helped in the development of new markets, as well as Starmet's loss of $19 million on revenues of $34.8 million in fiscal 1998, and it's understandable that investors are leery.

    There are, however, only about 270 investors in Starmet stock, most of which is owned by families closely associated with the company.

    A recent auditor's report even questions the company's long-term viability as a growing concern.

    For Starmet, it remains a challenge to attract more customers who build bicycles.

    This story ran on page D22 of the Boston Globe on 05/18/99.
    © Copyright 1999 Globe Newspaper Company.

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