News

14 August 2008

 

QPC seeks strategic partners while awaiting consumer ramp-up

For second-quarter 2008, QPC Lasers Inc of Sylmar, CA, USA, which manufactures high-power lasers for the consumer electronics, industrial, defense, and medical markets, has reported revenue of $1.3m, down from $1.6m last quarter and $1.8m a year ago. Operating loss has risen from $1.6m a year ago and $3.3m last quarter to $3.5m. Cash reserves have fallen from $6.4m at the end of 2007 to just $463,000 at the end of June.

“Opportunities in the consumer and medical markets position us for growth over the next two years,” says co-founder and chief financial officer George Lintz, citing the firm’s two major consumer electronics contracts: a $12m contract from Taiwan-based Asia Optical Co Inc (AOCI) for laser TV applications (announced last November) which is expect to ramp into production later this summer (with a potential value of up to $230m over its ten-year term); and an initial $3.5m red-green-blue laser contract from a US video gaming customer for 3D laser projection applications (announced in July, to enable the customer to seed the market prior to a full-scale production ramp-up). These orders represent very large potential new contracts, reckons QPC.

“Rapid acceptance of our technology by the consumer electronics market is reflected by our record pipeline of over $14m in signed contracts, which we expect to continue growing based on the number of new customer inquiries we are receiving,” says co-founder and CEO Dr Jeffrey Ungar. “The production phases of our existing contracts are paced by our customers’ product roll-out schedules, and we have not yet realized the full revenue stream available from these contracts,” he adds. “Revenues for the first 6 months were not significantly changed from last year, but we expect this to improve as our customers move their QPC Lasers powered products to the market.

“We continue to make progress in our discussions with a number of potential strategic partners which, if successful, could provide us with the capital, industry expertise and other key resources to help us accelerate growth,” Lintz says.

QPC lists recent progress towards gaining market share for semiconductor chip-based laser technology including:

• receiving three new customer orders for engineering samples from major multi-national consumer electronics companies;
• shipping a 500W BrightLase Ultra-500 laser in June to a North American industrial customer for plastics and materials processing;
• demonstrating a miniature 1-inch x 1-inch integrated red-green-blue laser designed for miniature laser projectors.

“We are particularly pleased to see some of the new and emerging applications of our Generation III technology; our lasers are now enabling more environmentally friendly metals and plastics processing, enhanced MRI medical imaging and new late-stage cancer treatments and surgical applications,” continues Ungar.

“We expect our consumer electronics and medical business segments to continue to be strong growth drivers for us over the next two years as the market continues the adoption of laser solutions and as our customers begin ramping into production,” says Ungar. “Accordingly, in order to ensure we able fully capitalize on this unique opportunity, we have retained two separate financial advisors [international and domestic] to assist us in exploring various strategic opportunities available to us [with the aim of accelerating the capture of market share].”

Lintz adds: “We have also taken aggressive steps in reducing our expenses by over $150,000 per month [by restructuring the workforce and overhead costs] as part of our ongoing cost-management efforts designed to improve our financial footing and to take QPC one step closer towards our target of cash-flow breakeven in 2009”.

See related items:

QPC raises $2m to expand production capacity

QPC’s product revenue and gross margin more than double year-on-year

Search: QPC Lasers

Visit: www.qpclasers.com