Cash-burning Bookham arranges $25m credit
Bookham, the San Jose, US, company with an optoelectronic wafer fab in Caswell, UK, registered a net loss of $27 million in its latest financial quarter.
Despite increased customer diversification, strong growth in its non-telecom business, and the addition of Avalon sales to its overall revenue, the expected drop in orders from key client Nortel dragged Bookham's total sales down to $55 million.
That figure represented a marginal increase sequentially, but compares with $61 million in the equivalent period last year.
Bookham now holds cash, cash equivalents and restricted cash of $43.3 million, down from $66.9 million only three months ago.
And although the effects of a shift to lower-cost production in Shenzhen, China, are about to kick in, the resulting cost savings are no longer expected to be as great as previously envisaged.
CEO Giorgio Anania explained, "We initially expected these moves to result in savings of between $5 million and $6 million per quarter. We now expect cost savings of about $4 million in the December quarter, with an additional $1.5 million-$2.5 million achieved by the March 2007 quarter."
Having eliminated Bookham's long-term debt earlier this year, Anania has now arranged a new three-year revolving $25 million credit facility with the Wells Fargo bank.
Secured on "a substantial portion of the company's assets", access to this new credit line is described by Bookham as being subject to the performance of certain post-closing conditions.
While Anania said that the market outlook for Bookham remained strong and demand for its products "solid", he is expecting only a small increase in revenue to between $55 million and $58 million in the current quarter.
After the latest results were announced, the company's share price dropped to $2.30, its lowest value since early 2005 and way down on the year-high of nearly $10.