POET posts higher sales and better margins
POET Technologies, a US developer of opto-electronic fabrication process IP and devices, has reported consolidated financial results for the period ended September 30, 2016.
Third quarter 2016 sales were $861,545, which comprises the first full quarter of revenue from its acquisition of DenseLight Semiconductor, compared to $576,741 in the second quarter of 2016.
Gross margin in the third quarter was 47.3 percent, compared to 28.9 percent in the prior quarter. Third quarter 2016 net loss was $2.8 million, or ($0.01) per share, compared to $3.4 million, or ($0.02) per share, in the second quarter 2016.
During the quarter, the company completed internal qualification and began early production of DenseLight 2.5G DFB (distributed feedback) lasers, winning an initial customer order in China for applications in the Passive Optical Network (PON) broadband access network architecture, which is the dominant Fibre-to-the-X (FTTx) network architecture in use today.
POET's CEO Suresh Venkatesan commented: "Revenue in the quarter reflects expanded sales of DenseLight photonic sensors, primarily to existing customers for test & measurement applications.
"Although we are making solid progress on revenue and product expansion within our DenseLight subsidiary, our integration activities intended to establish a commercial foundation for the consolidated company are not without challenges. We have uncovered certain deficiencies in the organisational, functional and operational structure of the fab.
"Importantly, we have already begun to address and remedy these vulnerabilities in order to realise the full value of this business and its related infrastructure. Despite these short-term challenges, we remain highly confident in the potential and unique value proposition that DenseLight represents for its customers and the company alike."
"In terms of progress on the POET technology, we continue to maintain a strong focus on the development and refinement of the integrated opto-electronics engine, which includes the integrated detector.
"As a direct result of the capital raise, we are now able to pursue parallel development paths for our VCSEL design and validation and have taken meaningful steps to accelerate our cycles of learning. Furthermore, we are making selective investments in capital equipment as well as other key capabilities to give us greater control over some of the most time-sensitive aspects the technology development process.
"The previous delays we encountered largely related to epitaxial wafer supply and more recently export license controls were both resolved subsequent to quarter-end, which has enabled us to resume progress toward the production of integrated device prototypes. Although this pre-prototype stage of product development has taken longer than we originally anticipated due to various constraints, we believe we are on the right path to achieve commercialization in 2018."
Business Outlook
The company says it has not been able reconfirm its previously provided guidance to achieve revenue of $2,000,000 in the second half of 2016, primarily as a result of unexpected production delays at its Singapore fab.
The new guidance is for revenue in the range of $1,600,000 to $1,800,000 for the second half of 2016, and depends on closing and shipping multiple orders for sensor products, 2.5G DFB lasers and the timely completion of NRE for key clients.Â
Even with the reduced revenue guidance, the company says it has achieved significant quarter on quarter revenue increases and expects that the DenseLight business unit will develop into a robust platform for the commercialisation of POET technology. The company anticipates continued revenue growth at DenseLight and its intention to reach positive operating cash flow by the first half of 2017.
