StockerYale Announces Second Quarter 2002 Financial Results
Revenues and Order Backlog Increase 21% and 70% Respectively Over First Quarter 2002
August 6, 2002
Salem, NH -- StockerYale, Inc., (NASDAQ: STKR), an independent supplier of photonics-based products, today announced financial results for the second quarter of fiscal 2002.
Sequential Quarterly Comparisons
Net revenue for the second quarter of 2002 was $3.5 million, which represents an increase of $.6 million or 21%, over the first quarter of 2002. A significant jump in the Company's laser sales coupled with modest growth in its optical business segment were the key contributing factors to a solid quarterly revenue performance.
The operating loss in the second quarter declined to $3.8 million representing a $.7 million or 15% improvement over the first quarter of 2002. An improved gross margin and a 10% reduction in operating expenses were the principal drivers behind a reduced operating loss. Moreover, second quarter results do not include the favorable impact of future expense savings related to a $5 million cost reduction program initiated during the quarter. The financial benefits of this program will be reflected in the Company's operating performance beginning in the third quarter.
Operating cash flow, excluding capital expenditures and external financing, improved by $1.5 million from the first to the second quarter of 2002.
Fiscal Year Comparisons
The net revenue and operating loss of $3.5 and $3.8 million respectively for the second quarter of 2002 was level with the comparable quarter in fiscal 2001. In comparing revenue performance, a different product mix consisting of increased laser and LED sales offset lower phase masks shipments. The marginal increase in the operating loss was the result of higher manufacturing overhead and the associated gross margin erosion, which was largely mitigated by reduced operating expenses.
Operating cash flow in the second quarter of 2002, excluding capital expenditures and external financing, improved by $.9 million over the second quarter of 2001.
Frank O'Brien, StockerYale's executive vice president and chief financial officer stated, "The illumination sector of our business, particularly lasers, experienced a sharp improvement in both shipments and orders in the second quarter of fiscal 2002. Overall, improved revenues, reduced operating expenses, and a reduction in capital expenditures in the second quarter lowered our operating loss and improved our cash flow when compared to our first quarter performance."
O'Brien continued, "As we enter the second half of 2002, a strong backlog position and new optical product introductions are anticipated to fuel our continued revenue growth. This improved revenue trend coupled with a 20% cost reduction program implemented in the second quarter 2002, are expected to continue to lower our operating losses and reduce our cash requirements."
Commenting on the performance in the second quarter, Mark W. Blodgett, StockerYale's chairman and chief executive officer stated, "We are pleased with the progress we are making on the financial front as operating expenses have decreased while revenues were up in comparison to the first quarter of this year. Clearly, we are benefiting from our diverse, photonics-based product strategy as we have seen sequential revenue growth and a significant increase in orders from new products."
Blodgett continued, "On the product front, we have been very successful selling our lasers into the military, inspection and medical markets where we continue to identify and close on new business opportunities. Our new line of micro-focus lasers has clearly set us apart from many of our competitors. In addition, the Company has been successful in developing and launching new, state-of-the-art, specialized illumination products in the fiber optic, fluorescent, and light-emitting diode (LED) technologies into its worldwide distributor channel along with penetrating niche markets with custom designed products."
"With regards to our acquisition of CIENA's SOF group, the integration of this operation with StockerYale's SOF initiatives has allowed us to accelerate and broaden our specialty optical fiber development efforts and product offerings. In a relatively short period of time following this integration, several new fibers have been introduced to the market. We anticipate improved sales performance in this particular product line as our portfolio of products expands moving into the second half of 2002," Blodgett added.
Following is a review of the key accomplishments and progress made by StockerYale -second quarter to-date:
• Recipient of Technology Award
The Company was the recipient of Fiber Optic Product News' (FPN) 2001 Technology Award for its erbium-doped fiber. The Company's erbium-doped fiber competed within the Cable/Cable Management and Connectorization category and was challenged by products from Corning Cable Systems, Lucent Technologies, Tyco Electronics, and Panduit Corporation.
• Acquisition of CIENA's Specialty Optical Fiber Group
This acquisition called for the transfer of all intellectual property related to proprietary specialty optical fiber (SOF) technology developed at CIENA as well as a fully developed SOF product line. StockerYale will also be the primary supplier of specialty optical fibers to CIENA under a three-year contract. Since this acquisition, the Company has announced the availability of new specialty optical fibers.
• New Model 13 Plus Steady-Lite™ Fluorescent Illuminator Announced
The Company maintained its long-standing dominance in the microscopy market with the launching of its new Model 13 Plus Steady-Lite. The Model 13 is a state-of-the-art laboratory-grade fluorescent lighting system that provides extra bright white, flicker-free illumination and is ideal for inspection, imaging, microscopy and medical applications.
• Quartz Polymer Clad Silica (PCS) Fiber Introduced
StockerYale introduced quartz polymer clad silica (PCS) fiber, which is ideal for the transmission of UV energy used for curing adhesives, UV sensors, chemical analysis, and crack detection using UV-activated dye penetrates. Quartz PCS fiber also delivers 10% more illumination output than glass fibers across the visible range and can transmit whiter illumination over extended distances.
• Three New Specialty Optical Fibers Launched
Most recently, the Company launched three new specialty optical fibers; the 1060 select cut-off single-mode fiber, the first in a family of specialty fiber products, enhances the performance of photonic devices by providing efficient coupling to components. In addition, two new erbium-doped fibers were launched, which are specifically designed to optimize the performance of C-band erbium-doped fiber amplifiers (EDFAs).
Conference Call Information
The company will host a conference call at 11:00 a.m. EDT on Tuesday, August 6, 2002.
Callers from North America can access this teleconference by dialing 800-633-8414. Callers from areas outside of North America can participate by dialing +44 (0) 0800 528 0618.
The teleconference will also be simultaneously webcast and can be accessed through the Company's website, here. The webcast will be archived for 30 days following the call and can be accessed by visiting the above mentioned web address.
About StockerYale
StockerYale, Inc., headquartered in Salem, NH, is an independent designer and manufacturer of phase masks, specialty optical fiber, and advanced optical sub-components as well as structured light lasers, specialized fiber optic, fluorescent, and LED technologies for use in a wide range of markets and industries including the telecommunications, aeronautical, utilities, machine vision, industrial inspection, and medical markets.
StockerYale serves a widely varied, international customer base from its corporate offices in Salem and reinvests a significant percentage of its revenues in R&D to meet the future requirements of its customers. StockerYale has offices and subsidiaries in the U.S., Canada, Europe, and the Pacific Rim.
For more information about StockerYale and its innovative products, contact StockerYale, Inc., 32 Hampshire Rd., Salem, NH, 03079. Call 800-843-8011; Fax 603-893-5604; e-mail , or visit the Company's website at www.stockeryale.com.
Notice to Investors:
This press release contains forward-looking statements that do not give full weight to all the potential risks, but relate to StockerYale's plans, objectives, and expectations, which are dependent upon a number of factors outside of StockerYale's control including, but not limited to: uncertainty that StockerYale's new photonics-based products launched in 2002 will gain market acceptance; the risk that delays and unanticipated expenses in developing new products could delay the commercial release of those products and affect revenue estimates; the risk that one of our competitors could develop and bring to market a technology that is superior to those products that we are currently developing; and StockerYale's ability to capitalize on its significant research and development efforts by successfully marketing those products that the Company develops. You should also refer to the discussion under "Certain Factors Affecting Operating Results" in StockerYale's form 10K for additional matters to be considered in this regard. Thus, actual results may differ materially. All Company, brand, and product names are trademarks or registered trademarks of their respective holders. StockerYale undertakes no duty to update any of these forward-looking statements.
Contact for Press and Analysts:
Fred Pilon, Dir. Investor Relations
StockerYale
603-870-8229
This press release also contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, the Company's future operating results and sales trends. Reliance should not be placed on forward looking statements because they involve known and unknown risks, uncertainties and other factors which are in some cases, beyond the control of StockerYale, which may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward looking statements.
| Consolidated Statements of Operations In thousands (except per share data) |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2002 | 2001 | 2002 | 2001 | ||||
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| Net Sales | $3,523 | $3,602 | $6,431 | $8,529 | ||||
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| Cost of Sales | 2,907 | 2,355 | 5,491 | 5,056 | ||||
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| Gross Profit | 616 | 1,247 | 940 | 3,473 | ||||
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| Research & Development Expenses | 1,987 | 1,139 | 3,751 | 1,675 | ||||
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| Selling, General & Administrative Expenses | 2,314 | 3,538 | 5,203 | 5,712 | ||||
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| Amortization of Goodwill and Intangible Assets | 79 | 169 | 169 | 340 | ||||
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| Operating Income/(Loss) | (3,764) | (3,599) | (8,183) | (4,254) | ||||
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| Interest & Other Income/(Expense) | 180 | (13) | 189 | 225 | ||||
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| Interest Expense | 85 | 178 | 170 | 289 | ||||
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| Pretax Income/(Loss) | (3,669) | (3,790) | (8,164) | (4,318) | ||||
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| Tax Provision/(Benefit) | 0 | (158) | 0 | (64) | ||||
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| Net Income/(Loss) | $(3,669) | $(3,632) | $(8,164) | $(4,254) | ||||
| Earnings/(Loss) per Share | $(0.29) | $(0.34) | $(0.65) | $(0.43) | ||||
| Weighted Average Shares Outstanding | 12,721,153 | 10,598,939 | 12,598,268 | 10,001,750 | ||||
| Assets | June 30, 2002 | December 31, 2001 | ||
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| Cash | $ 5,277 | $ 3,576 | ||
| Accounts Receivable, Net | $ 3,072 | $ 2,091 | ||
| Inventory | $ 5,062 | $ 5,224 | ||
| Total Current Assets | $ 14,363 | $ 11,969 | ||
| Property, Plant & Equipment, Net | $ 26,250 | $ 25,813 | ||
| $ 45,957 | $ 43,360 | |||
| Current Liabilities & Stockholders Equity | ||||
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| Current Liabilities | $ 9,812 | $ 9,281 | ||
| Total Liabilities | $ 13,611 | $ 13,335 | ||
| Stockholders Investment | $ 32,346 | $ 30,025 | ||
| $ 45,957 | $ 43,360 | |||