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Lumera Corporation (NASDAQ: LMRA), a leader in the emerging field of nanotechnology, today reported financial results for the second quarter 2007 and released information regarding its current product development progress.
Revenues totaled $934,000 for the three months ended June 30, 2007 compared with $665,000 for the same period in 2006, a 40 percent increase over the prior year. Lumera's net loss totaled $3.3 million or $0.17 per share for the three months ended June 30, 2007 compared with $3.2 million or $0.19 per share for the same period in 2006.
Revenues totaled $1,794,000 for the six months ended June 30, 2007 compared with $1,168,000 for the same period in 2006, a 54 percent increase over the prior year. Lumera's net loss totaled $6.0 million or $0.30 per share for the six months ended June 30, 2007 compared with $6.3 million or $0.38 per share for the same period in 2006.
"At the six month mark, the Company is on track to meet our 2007 revenue and program objectives for the year," said Lumera Chief Executive Officer Tom Mino. "We have also positioned the company's balance sheet to properly fund our business over the next twelve to eighteen months. Along these lines, during the quarter we announced the formation of our bioscience subsidiary which will provide for greater investment focus and put up a shelf registration statement that gives us important financial planning flexibility in the future although we have no plans to sell shares off the shelf at this time."
Summary Discussion of Product Development
Lumera develops proprietary polymer materials which are used in bioscience products and in electro-optic devices further detailed in the market summaries below.
Plexera Bioscience LLC
Lumera, through its recently formed wholly-owned subsidiary Plexera Bioscience LLC, is developing label free high throughput methods targeted at the biological and medical research markets. As Plexera increases its external activities in anticipation of commercialization in early 2008, establishing a separate branding identity will help to clarify its purpose, business requirements, funding, and market opportunities to customers and prospective partners.
Early in the quarter, Lumera announced that it had extended its collaboration agreement with the Medical University of South Carolina (MUSC). In partnership with Lumera scientists, MUSC researchers intend to develop an antibody array that will measure the levels and modifications of patient mitochondrial proteins which may lead to identifying new biomarkers. Under the agreement, Lumera will retain rights to commercialize all jointly developed intellectual property. Changes in mitochondrial proteins are known to be markers for certain pathologies and many adverse drug effects. The biomarker market opportunity is expected to grow dramatically over the next several years. Business Insights, a market research firm, forecasts the existing $5.4 billion biomarker market that existed in 2005 will quadruple to an estimated $21.1 billion in 2012, fueled by growth in proteomics and metabolomics biomarker discovery.
Also during the quarter, the Company announced it had extended its collaboration agreement with the Institute for Systems Biology (ISB). The goal of the collaboration is to use Lumera's ProteomicProcessor™ to identify biomarkers associated with drug induced liver toxicity and cancer.
Lumera is developing a new generation of electro-optic modulators and other devices for optical networks and systems based on proprietary polymer materials.
During the quarter, the Company announced a purchase order from Fujitsu Laboratories of America (FLA) for its electro-optic polymer modulators. Lumera worked with FLA in the field of optical interconnects to create polymer modulator arrays that can work at data rates of 10 Gbps in circuit boards.
Also during the quarter, the Company met all milestones on its polymer modulators being developed under government contracts. These milestones include lower driving voltage and lower insertion loss.
Summary Financial Discussion
Revenues totaled $934,000 for the three months ended June 30, 2007 compared with $665,000 for the same period in 2006, a 40 percent increase over the prior year. Government contract revenue totaled $928,000 for the current three month period, an increase of $389,000 from $539,000 in 2006 due primarily to billings on our DARPA contract. Product revenues totaled $6,000 for the three months ended June 30, 2007, reflecting sales of electro-optic materials compared with $127,000 for the comparative 2006 period, reflecting sales of beta version Proteomic Processors and electro-optic materials. Backlog on our government contracts totaled $1,119,000 at June 30, 2007.
Revenues totaled $1,794,000 for the six months ended June 30, 2007 compared with $1,168,000 for the same period in 2006, a 54 percent increase over the prior year. Government contract revenue totaled $1,703,000 for the current six month period, an increase of $682,000 from $1,021,000 in 2006 due primarily to billings on our DARPA contract. Product revenues totaled $91,000 for the six months ended June 30, 2007, reflecting sales of electro-optic modulators compared with $147,000 for the comparative 2006 period, primarily reflecting sales of beta version Proteomic Processors.
Operating expenses for the three months ended June 30, 2007, increased by $500,000 to $4,094,000 compared to $3,594,000 for the same period in 2006. Research and Development expense, which totaled $1,380,000 for the three months ended June 30, 2007, decreased by $225,000, or 14 percent, from $1,605,000 for the same period in 2006 due primarily to lower professional fees related to product development in the current period and lower depreciation costs as our asset base becomes more fully depreciated. Marketing, general and administrative expense, which totaled $2,714,000 for the three months ended June 30, 2007, increased by $725,000, or 36 percent, from the same period in 2006 due primarily to increased professional fees related to consulting, legal and accounting fees, increased cash compensation costs associated with additional sales and marketing and administrative personnel and increased non-cash stock-based compensation costs.
Operating expenses for the six months ended June 30, 2007, increased by $361,000 to $7,528,000 compared to $7,167,000 for the same period in 2006. Research and Development expense, which totaled $2,651,000 for the six months ended June 30, 2007, decreased by $532,000, or 17 percent, from $3,183,000 for the same period in 2006 due primarily to lower professional fees related to product development in the current period and lower depreciation costs as our asset base becomes more fully depreciated. Marketing, general and administrative expense, which totaled $4,877,000 for the six months ended June 30, 2007, increased by $893,000, or 22 percent, from the same period in 2006 due primarily to increased professional fees related to consulting, legal and accounting fees, increased cash compensation costs associated with additional sales and marketing and administrative personnel and increased non-cash stock-based compensation costs.
Lumera's net loss totaled $6.0 million or $0.30 per share for the six months ended June 30, 2007 compared with $6.3 million or $0.38 per share for the same period in 2006.
Lumera, which ended the quarter with $21.8 million in cash and investment securities, used $2.2 million in cash to fund operations and working capital requirements during the three months ended June 30, 2007, bringing the six month total cash used in operating expenses to $4.4 million. Capital expenditures, which include leasehold and related capital improvements, totaled $289,000 for the first six months of 2007, down from $588,000 during the same period in 2006.
In July, Lumera announced that it had formed a wholly-owned subsidiary named Plexera Biosciences LLC to hold the assets and operations of its bioscience segment and that it has engaged Robert W. Baird & Co., Inc. to assist in evaluating partnering and financing alternatives over the coming months. Lumera also filed a Shelf Registration for the potential sale of up to $50 million in debt or equity securities. While Lumera has no current plans to issue any securities under the Shelf Registration, the filing enables the Company to act efficiently on future strategic and financial planning alternatives regarding any of its business opportunities.
Lumera will host a conference call to discuss its second quarter of 2007 financial results on Thursday, August 2, at 4:30 p.m. EDT. The call will be broadcast over the Internet and can be accessed from the company's web site at www.lumera.com. Additionally, U.S. participants may join the conference call by dialing 866-356-4281 ten minutes prior to the start of the conference. International participants can dial 617-597-5395. The conference passcode number is 28081021. A telephone replay of the call will be available through August 9, and can be accessed by dialing 888-286-8010 (for U.S. participants) or 617-801-6888 (for international participants). The replay passcode is 65960740. A replay of the conference call will be available on the company's web site.
About Lumera Corporation
Lumera is a leader in the emerging field of nanotechnology. The company designs proprietary molecular structures and polymer compounds for the bioscience and communications industries, both of which represent large market opportunities. The company also has developed proprietary processes for fabricating such devices. For more information, please visit www.lumera.com.
Certain statements contained in this release are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain additional contract awards and to develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products; and other risk factors identified from time to time in the company's SEC reports, including its Annual Report on Form 10-K, and its Quarterly Reports on Form 10-Q.
|June 30,||December 31,|
|Cash and cash equivalents||$||2,931||$||10,521|
|Investment securities, available-for-sale, current||18,857||15,788|
|Accounts receivable, net of allowance||223||380|
|Costs and estimated earnings in excess of billings on uncompleted contracts|
|Other current assets||466||600|
|Total current assets||22,740||27,627|
|Property and equipment, net||2,607||2,759|
|Liabilities and Shareholders' Equity|
|Total current liabilities||1,653||1,832|
|Deferred rent, net of current portion||358||407|
|Commitments and contingencies|
|Common stock, $0.001 par value, 120,000,000 shares authorized; 20,055,352 shares issued and outstanding at June 30, 2007, and 20,055,352 shares issued and outstanding at December 31, 2006|
|Additional Paid-in Capital||90,920||89,690|
|Accumulated other comprehensive (loss) income||(1||)||1|
|Total shareholders' equity||24,082||28,893|
|Total Liabilities and Shareholders' Equity||$||26,093||$||31,132|
|Statements of Operations|
|(In thousands, except earnings per share and share data)|
|Three months ended June 30,||Six months ended June 30,|
|Cost of revenue||484||446||927||704|
|Research and development expense||1,380||1,605||2,651||3,183|
|Marketing, general and administrative expense||2,714||1,989||4,877||3,984|
|Total operating expenses||4,094||3,594||7,528||7,167|
|Loss from operations||(3,644||)||(3,375||)||
|Net Loss per Share Basic and Diluted||$||(0.17||)||$||(0.19||)||$||(0.30||)||$||(0.38||)|
|Weighted Average Shares Outstanding - Basic and Diluted|
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Hélène F. Jaillet, 425-398-6546
The Summit Group Communications
Todd Wolfenbarger, 801-595-1155
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