Financial Summary
Due to the sale of its wholly owned subsidiary, DenseLight Semiconductor Pte Ltd (“DenseLight”), the Company is required to report the activities of DenseLight as a discontinued operation with effect from January 1, 2019. The financial statements filed today reflect this classification. The Company operated as a single integrated entity until November 8, 2019, the Closing Date of the sale transaction. For comparative purposes, all financial data below represent the combined results from both continuing and discontinued operations and is presented on a proforma, non-IFRS basis in the table at the bottom of this press release. The required IFRS presentation of the Company’s Financial Statements can be found in its recent filings on SEDAR.
For the third quarter of 2019, revenue, including contribution from discontinued operations, was US$1.2 million, compared with US$1.4 million in the second quarter of 2019 and US$0.9 million in the third quarter of 2018. The quarterly decrease in revenue resulted from a slowing of device sales from DenseLight resulting from weaker industry-wide demand. Gross margin for the third quarter of 2019 was 71% compared to 70% in the preceding quarter but showed substantial improvement over the 59% recorded in the same quarter last year, due to the higher proportion of NRE in the revenue mix.
Consolidated net loss, including discontinued operations, in the third quarter of 2019 was (US$2.9) million, or ($0.01) per share, compared with a net loss of (US$3.8) million, or ($0.01) per share, in the second quarter of 2019 and a net loss of (US$4.9) million, or ($0.02) per share, in the third quarter of 2018. The net loss in the third quarter of 2019 included non-cash stock-based compensation of US$0.9 million, non-cash depreciation and amortization of US$42,000, compared with non-cash stock-based compensation and non-cash depreciation and amortization of US$0.8 million and US$35,000, respectively, in the preceding quarter. Non-cash stock-based compensation and depreciation and amortization were US$1.1 million and US$0.6 million, respectively, in the third quarter of 2018. The reduction of depreciation and amortization expense in 2019 is a result of the classification of the DenseLight subsidiary as discontinued operations, for which depreciation and amortization expense is not recognized.
During the third quarter of 2019, the Company had non-cash debt-related finance costs of US$235,000 compared to US$164,000 in the second quarter of 2019. There were no debt-related finance costs in the third quarter of 2018. Third quarter 2019 interest paid on funds borrowed amounted to US$209,000 compared to US$137,000 in the second quarter of 2019. No interest was paid in third quarter of 2018.
On a non-IFRS basis, cash operating loss in the third quarter of 2019 was (US$1.9) million compared to (US$2.8) million in the prior quarter and (US$3.0) million during the same quarter in 2018.
The Company intends to continue reporting revenues consolidated with the DenseLight operation through November 8, 2019, since the bulk of its R&D, production and sales activities were conducted there. With the closing now completed, DenseLight is expected to remain a key development partner and supplier to POET.