POET Technologies Reports Second Quarter 2017 Financial Results
August 10th, 2017
SAN JOSE, CA, August 10, 2017 – POET Technologies Inc. (the “Company” or “POET”) (OTCQX: POETF; TSX Venture: PTK), a developer of opto-electronic fabrication process IP and devices, and manufacturer of sensing and optical light source products, reported its unaudited condensed consolidated financial results for the second quarter ended June 30, 2017 (Q2 2017). The Company’s unaudited condensed consolidated financial statements as well as the Management Discussion and Analysis for Q2 2017 have been filed on SEDAR.
Second Quarter and Recent Highlights:
- Revenue was US$648,382
- Product revenue, which excludes non-recurring engineering (NRE) revenue, increased 39% year-over-year
- Gross profit was US$327,525, or 50.5% of sales, compared to 51.4% in the second quarter of 2016, after taking into account a reclassification of certain costs from cost of sales to operating expenses
- Ended the quarter with cash and short-term investments of US$9.8 million
- Held 2017 AGM in July, where all proposals were approved
- Delivered detailed presentation and business update covering strategy, technology and products
- Highlighted strategy to address rapidly growing InP market
- Announced industry-leading performance of new Narrow Linewidth Laser products
- Sponsored and previewed new products at Conference on Lasers and Electro-Optics (CLEO-Pacific Rim) in Singapore, with a formal product announcement planned in conjunction with the world’s largest optoelectronic expo in Shenzhen, China (CIOE)
Revenue in the second quarter of 2017 was US$648,382, compared to US$712,550 in the first quarter of 2017 and US$576,741 in the second quarter of 2016. Revenue primarily reflects the sale of DenseLight photonic sensors for test & measurement applications. Gross margin remained strong year-over-year at 50.5% during the second quarter of 2017, compared to 59.6% in the first quarter of 2017 and 51.4% in the second quarter of 2016. In the second quarter of 2017, management performed a detailed review of the Company’s cost structure and determined that certain product costs historically included in cost of sales should be more appropriately categorized in selling, marketing and administration expenses. As a result, gross margin for comparative periods have been adjusted to reflect this determination. Second quarter 2017 net loss was US$2.8 million, or ($0.01) per share, compared to a loss of US$3.5 million, or ($0.01) per share, in the first quarter of 2017 and a loss of US$3.4 million, or ($0.02) per share, in the second quarter of 2016. The second quarter 2017 loss included non-cash stock-based compensation of US$159,783 and depreciation & amortization of US$558,919. Non-cash stock-based compensation and depreciation & amortization in the first quarter of 2017 were US$894,813 and US$540,393, respectively, and US$887,990 and US$239,958 in the first quarter of 2016.
Dr. Suresh Venkatesan, Chief Executive Officer of POET, commented, “Our second quarter results reflect a year-over-year increase in product revenue attributable to our continued shipment of DenseLight photonic sensors, primarily for test & measurement applications. Gross margin was over 50% in the quarter, and we continued to diligently manage operating expenses. Our collective reductions in wages, professional fees, as well as management and consulting fees, resulted in a meaningful year-over-year improvement in net loss during the second quarter.
“As outlined at the 2017 Annual General Meeting (AGM) in July, we are focusing our design and engineering resources on further development of our Indium Phosphide (InP)-based hybrid dielectric photonics platform to introduce disruptive new solutions with lower cost and higher performance. Also, as discussed at the AGM, we are focused on securing a strategic partner to assist with further developing and commercializing our monolithic gallium arsenide (GaAs) optical engine. InP-based solutions for 100G applications have emerged as one of the largest and fastest growing segments in the data communications market. We believe our recently introduced hybrid dielectric photonics platform based on InP, which leverages a combination of POET’s integrated photonics expertise and proprietary dielectric waveguide technology, provides a compelling and differentiated solution in the multi-billion-dollar transceiver market. Reinforcing our strategic decision to focus on an InP-based hybrid platform is the ability to leverage the Company’s established InP fabrication and manufacturing facility in Singapore, which provides a number of operational and economic benefits.
“As we make progress toward developing a transceiver optical engine, we also expect to introduce photonic transceiver components for the data communications market. As an example, we recently introduced multiplexing and de-multiplexing devices that are based on our proprietary dielectric waveguide technology. We also expect to introduce distributed feedback (DFB) lasers with wavelengths spanning the O-band and C-band, with delivery of engineering samples to customers expected during the third quarter. Additionally, we are making solid progress on incorporating our Hybrid Integrated Photonics Packaging (HiPP) into new high-performance packaged solutions, such as narrow linewidth lasers, that will expand DenseLight’s existing line of sensor products beginning in 2018.
“In conclusion, our fundamental vision continues to be enabling disruptive solutions by leveraging innovative photonics integration to lower cost and increase performance for the data communications and sensing markets. POET’s strategic direction fully capitalizes on our core competencies and assets and is also well aligned with the trends and substantial growth opportunities within our targeted end markets, which is critical to realizing the highest return on investment for POET’s shareholders.”
Grant of Options
The Company also announced the granting of previously approved incentive stock options under the Company’s stock option plan to Kevin Barnes. The grant consists of the right to purchase up to an aggregate of 150,000 common shares and a four-year vesting schedule beginning on July 13, 2018. The options are exercisable at CAD$0.28 per share. The options were granted subject to provisions of the Company's stock option plan and are subject to the TSX Venture Exchange policies and applicable securities laws.
About POET Technologies Inc.
POET (Planar Opto-Electronic Technology) and its subsidiaries are developers of opto-electronic and photonic fabrication processes, devices and products. The company's vision is to enable the integration of photonics and electronics through both monolithic and hybrid approaches to design and packaging. Integration is fundamental to increasing functional scaling and lowering the cost of current photonic solutions that drive applications in data communications, consumer products and industrial sensing. Leveraging both Gallium Arsenide (GaAs) and Indium Phosphide (InP) technology platforms, POET believes that its advanced processes for active photonic devices and innovative passive components provide a unique and differentiated combination that will enable substantial improvements in component cost, size and performance over current photonic solutions. More information may be obtained at www.poet-technologies.com.
ON BEHALF OF THE BOARD OF DIRECTORS
(signed) “John F. O’Donnell”, Secretary
For further information:
Brett L. Perry
Leanne K. Sievers
E: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains “forward-looking information” (within the meaning of applicable Canadian securities laws) and “forward-looking statements” (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “potential”, “estimate”, “propose”, “project”, “outlook”, “foresee” or similar words suggesting future outcomes or statements regarding an outlook. Such statements include the Company’s expectations regarding:
- the disruptive potential of its recently introduced hybrid dielectric waveguide platform based on InP; and
- the introduction of photonic transceiver components for the data communications market and the timing of the introduction of samples and products to customers.
They also include the Company’s expectations with respect to the capability, functionality, performance and cost of the Company’s technology.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management’s expectations regarding future growth, plans for and completion of projects by the Company’s third-party relationships, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, operational risks in the completion of the Company’s anticipated projects, delays or changes in plans with respect to the development of the Company’s anticipated projects by the Company’s third-party relationships, risks affecting the Company’s ability to execute projects, the ability to attract key personnel, and the inability to raise additional capital. Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company’s securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law.
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