StockerYale Announces First Quarter Financial Results

„SALEM, N.H.–(BUSINESS WIRE)–May 7, 2002–StockerYale, Inc., (NASDAQ: STKR – news), a leading provider of phase masks, specialty optical fiber, advanced optical technologies, and specialized illumination products, announced financial results for the first quarter of fiscal 2002.\r\n
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\r\n\“While first quarter sales declined 14% when compared to fourth quarter 2001, our first quarter illumination sales managed to rise 4% over the previous quarter, signaling what we believe is a turnaround in that segment of our business,\“ said Mark W. Blodgett, StockerYale’s chairman and chief executive officer. \“We also made significant progress in reducing our overall expenses compared to the previous quarter, as SG&A and R&D expenses declined 18%.\“ Blodgett added.\r\n
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\r\nCommenting on the future, Blodgett said, \“We continue to focus on both innovative product development utilizing our new R&D/ manufacturing facilities and increased efficiencies in our overall operations. As of the end of April, new products resulted in a 22% increase in backlog over the fourth quarter 2001, and we expect this trend to continue as diffraction gratings and optical fibers begin to contribute to sales growth for our optical business. As a result, we expect ongoing improvements in our operating results as we move through 2002.\“\r\n
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\r\nOUTLOOK\r\n
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\r\nFrank O’Brien, StockerYale’s executive vice president and chief financial officer stated; \“StockerYale has implemented various financial controls, management information systems, and cost containment measures that will contribute to improved operating performance for the remainder of 2002. Specifically, the company converted its Salem-based ERP system in Canada during the first quarter, facilitating a $1 million annual cost savings by rationalizing manufacturing, inventory, and purchasing overhead, which will be realized starting in the second quarter.\“\r\n
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\r\nO’Brien continued; \“During the first quarter StockerYale completed a private placement of $9.7 million which will be used to fund general corporate operating programs. The first quarter witnessed a significant reduction in operating losses versus the fourth quarter 2001, and given the recent cost reductions as well as renewed strength in orders, especially for illumination products, revenues and operating results should improve throughout the remainder of 2002.\“\r\n
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\r\nQUARTERLY COMPARISONS\r\n
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\r\nStockerYale’s business and financial model has changed significantly over the past year making quarterly comparisons difficult; however, the discussion below provides a brief analysis of the major comparative data for the first quarters of 2001 and 2002.\r\n
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\r\nREVENUES\r\n
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\r\nFor the quarter ended March 31, 2002, net sales declined $2 million or 41% from $4.9 million in 2001 to $2.9 million. The slowdown in the semiconductor, electronic assembly, and telecommunication industries, which impacted StockerYale beginning in the second quarter of 2001, resulted in revenue declines in the illumination and optical component businesses.\r\n
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\r\nGROSS PROFITS\r\n
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\r\nGross profits declined from 45% to 11% in the first quarter of 2001 compared to the first quarter of 2002 due to unabsorbed overhead costs related to the revenue decline as well as higher depreciation and staffing costs directly associated with our investment in the optical components business.\r\n
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\r\nOPERATING EXPENSES\r\n
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\r\nOperating expenses increased from $2.7 million in the first quarter of 2001 to $4.7 million in the first quarter of 2002 primarily due to salaries, benefits and prototype development costs associated with an increase in headcount and infrastructure to support the R&D efforts in the specialty optical fiber and optical components businesses.\r\n
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\r\nThe net loss was $4,495,000 or $0.36 per share for the first quarter of 2002 compared to a net loss of $625,000 or $0.07 per share for the first quarter of 2001.\r\n
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\r\nLIQUIDITY AND CAPITAL RESOURCES\r\n
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\r\nOur cash position of $8.2 million as of March 31,2002 represented a $4.6 million increase compared to December 31, 2001. The liquidity improvement was the result of the private placement coupled with significantly reduced capital expenditures more than offsetting the first quarter operating loss.\r\n
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\r\nCONFERENCE CALL INFORMATION\r\n
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\r\nThe company will host a conference call at 11:00 a.m. EDT on Tuesday, May 7, 2002. To access the call, dial 800-558-9407. The teleconference will also be simultaneously webcast and can be accessed through the company’s website, http://www.stockeryale.com/investor/earnings.htm. The webcast will be archived for 30 days following the call and can be accessed by visiting the above mentioned web address.\r\n
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