News

14 May 2009

 

GigOptix doubles revenue and halves loss year-on-year

For first-quarter 2009 (to 5 April), GigOptix Inc of Palo Alto, CA, USA, which designs optical modulators, drivers and transimpedance amplifier (TIA) ICs based on III-V materials, has reported revenue of $4.1m. This would have slightly exceeded the $4.4m forecast if it had not been for a product order worth $348,000 that was completed and scheduled to ship on Saturday 4 April but, due to a customer-related shipping issue, did not leave the premises until the Monday (missing the Q1 cutoff). Nevertheless, revenue is still up 143% on $1.7m a year ago.

The increase reflects the consolidation of GigOptix’s acquisitions in 2008, including Helix Semiconductors AG of Zurich, Switzerland (which makes transimpedance amplifiers, limiting amplifiers, and VCSEL drivers) in January 2008 and Lumera Corp of Bothell, WA (which makes polymer electro-optic modulators) on 9 December (when GigOptix became a publicly traded company).

However, growth is also due partly due to strong contracts with industry leaders (including US government agencies) as well as continued traction gained by the GX, HX and LX product lines. On a non-GAAP basis (as if the results of GigOptix, Helix and Lumera had been included from the beginning of 2008), Q1/2009 revenue is still up 89% on $2.2m a year ago.

“We also excelled in product development, releasing several new products to the market, and secured new business with leading global corporations,” says Katz. New products and product line updates include the following:

• Sampling of the GX6420 43Gb/s electro-absorption modulated laser (EML) driver.
• Full volume production of the ceramic-packaged GX6155 (now being designed-in by multiple tier-one transponder makers).
• Completion of the 4- and 12-channel 10G parallel lineup and production release of the HXT/R4 family of drivers and receivers, which serve the active optical cable (AOC) market.
• Sampling of the GX6220D, a 28Gb/s electro-absorption (EA) modulator driver targeting the emerging 100GBASE-ER4 Ethernet standard for access network applications.
• Signing of a US Air Force contract worth $2.7m over 12 months.
• Shipment of advanced engineering samples of the DP-QPSK 100G (4-channel 28Gb/s) Mach-Zehnder modulator driver to select partners.
• Initial product shipments of LX products (comprising more than 5% of Q1/2009 revenue).

“We are benefiting from measures that we put in place immediately after the merger [with Lumera] to reduce costs and increase revenues,” says chairman & CEO Dr Avi Katz. “Those measures, among others, included a restructuring of Finance and Administration, workforce reduction, and streamlining operating expenses related to the former Lumera business,” he adds. Overall operating expenses have been cut from 155% of revenue a year ago to just 92%. “Significant operating cost-reduction measures have been deployed during 2008 and the first quarter of 2009, which have dramatically improved our margins, enhanced our cash position and the bottom line.”

Gross margin has risen from 39% a year ago to 58%, due partly to the increased revenue, lower product costs related to operating efficiencies, and a higher-margin product mix.

Net loss has been more than halved from $2.1m (125% of revenue) a year ago to $1m (25% of revenue), due mainly to the cost-containment efforts and leveraging synergies from the acquisitions.

Including a $300,000 gain recorded in February outside normal business activities for the sale of Lumera assets (previously written down to zero book value), cash and cash equivalents were $4.6m as of 5 April. Also, early in second-quarter 2009, the firm paid-off and terminated its loan and security agreement with Silicon Valley Bank, and is now debt free.

“During the quarter we put in place a number of strategic initiatives in order to continue to grow as a company, organically and financially,” says Katz. “We have also implemented additional meaningful cost reduction measures as of 1 April 2009, which we believe will further improve the financial performance of the company in the second quarter of 2009 and beyond,” he adds.

For Q2/2009, GigOptix expects an increase in sales from new products and contracts as well as its move into the Military and Test & Measurement market with the rejuvenation of its broadband RF products.

See related items:

GigOptix re-enters RF broadband power & limiting amplifier markets

GigOptix cuts salaries to save $900,000 annually

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