New Focus reduces annual losses

07 Feb 2003

New Focus predicts a rocky road ahead this year despite reporting annual losses almost five times lower than 2001.

US-based New Focus, a maker of photonics equipment, has announced its financial results for the fourth quarter and 2002 fiscal year. Revenue for the fourth quarter was USD 7.4 million, up from USD 6.7 million in the previous quarter, but down USD 9.4 million for the fourth quarter of 2001. Net loss for the fourth quarter was USD 9.7 million, compared with a loss of USD 79.5 million for the same period in 2001.

It seems that in the end, 2002, like 2001, was a year that New Focus would probably like to forget. The company's performance was hit by a further decline in the telecom and semiconductor markets, with revenue falling to USD 33.4 million from USD 92.6 million in 2001. On the upside, major restructuring at the firm last year meant that the net loss for 2002 was reduced to USD 104.8 million versus USD 495.4 million in 2001.

New Focus says that its restructuring program has allowed it to achieve several important goals by the end of 2002.

"We've reduced our quarterly expense structure, defined as operating expenses plus manufacturing overhead, to our targeted level of USD 10 million," said Nic Pignati, the chief executive officer of New Focus. "Our expense structure in the fourth quarter totaled USD 9.6 million, down sharply from USD 16.5 million in the third quarter of 2002 due to the consolidation of almost all of our operations into a single facility."

In addition, the company has dramatically reduced its "cash outflow" from over USD 30 million per quarter in mid-2001 to a current level of just over USD 2 million.

"Near-term improvement in our financial results remains dependent on general economic conditions and, in particular the recovery in the research and semiconductor industries," said Pignati. "Since these markets remain sluggish, we expect limited improvement in our quarterly revenues during the first half of 2003. For the first quarter of 2003 we currently expect that net revenue will be in the range of USD 6-8 million."

The company says that it is now pursuing OEM opportunities for its photonics equipment as well as attempting to expand into new market applications. As of the end of 2002, New Focus had USD 279.4 million of cash and short-term investments.

Author
Oliver Graydon is editor of Optics.org and Opto & Laser Europe magazine.