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Bookham outlines cash-raising plan as sales grow

Following a 22% sequential increase in revenue, optoelectronic chip manufacturer Bookham says that it will look to raise up to $35 million through stock offerings over the next two years.

InP chip maker Bookham is planning to raise up to $35 million through public offerings of its stock over the next two years.

The company announced its intention to file a registration statement with the Securities and Exchange Commission to that effect as it revealed its fiscal 2005 financial results.

The latest Bookham sales figures revealed a 22% sequential increase in revenue to $61 million, with CEO Giorgio Anania saying that he saw strong signs of market growth.

Despite the largely positive vibes, Bookham is still losing money fast and it posted a net loss of $18 million "“ a figure excluding an additional $21 million in charges relating to severance payments and its acquisition of New Focus.

Bookham has cut costs recently by shifting much of its test and assembly operation from Paignton in the UK to Shenzhen, China. It has also cut research and development expense substantially "“ from $14.4 million in the equivalent period last year to $9.8 million in the latest quarter.

As a result of the increased sales and cost-cutting, Bookham is now operating at a gross margin of 19%, a massive improvement on the situation one year ago.

But as croaky company CFO Steve Abely pointed out in a conference call to discuss the figures, Bookham now needs to raise more money.

Apart from the intended public stock offering, Bookham reckons on raising as much as $25 million through asset sales. This is set to include the sell-off of land and buildings over the next three months, as well as other assets that Abely declined to identify.

Bookham management expects revenue to continue growing by between 2% and 7% in the current quarter to reach $62 million-$65 million. Excluding restructuring charges, that should put the company close to operational breakeven.

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