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Constituent Review
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J. Andrew Braswell, Equity Analyst
Newbridge Institutional Research
Data as of 3-30-07 |
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Nano
Electronics |
Review
1/4/07- LMRA announced that it would showcase its redesigned ProteomicProcessor™ at PepTalk, a protein research conference being held in San Diego. Dr. Joshua LaBaer, of the Harvard Institute of Proteomics, will conduct a company-sponsored luncheon workshop to discuss his research using the ProteomicProcessor. His work was also featured in the Dec. 14 issue of Nature Magazine
3/8/07- After the close, reported results for Q4 and the year ended 12/31/06. Revenue for the quarter was $1.16M (+382% Y/Y), primarily made up of $1.12M (+408% Y/Y) in government contract revenue. Product sales were $40K, doubling Y/Y but still a tiny fraction of total revenue. Total operating expenses were $3.9M (+35% Y/Y), including $2.1M (+27% Y/Y) in R&D and $1.8M (+46% Y/Y) in SG&A. The net loss was $3.1M, or $0.17 per share, steeper than the Q4/05 net loss of $2.6M, or $0.16 per share. LMRA ended the period with $26.3M in cash, having burned $9.6M in 2006. The company cautioned that this burn rate is likely to rise going forward as it invests in product development.
3/12/07- Said that it had received a purchase order from Lockheed Martin for its electro-optic polymer materials. The purchase order runs through 12/31/07, at which point Lockheed is expected to decide if it wishes to license the materials for commercial use. Neither financial terms of the agreement nor the application of the materials were disclosed.
3/20/07- Announced that it was awarded an extension to its U.S. government contract to develop wideband electro-optic polymer modulators. The extension has a term of 12 months and is valued at $1.15M, bringing the cumulative contract value to about $6.9M.
Commentary
Settling into a more normalized range after its dubious 250% gain in Q4, shares of LMRA gave back 18% in Q1. The company’s decision to sell $17M in stock at a $6/share valuation in November is looking like a wise move, despite that fact that it was well below market. Trading volume fell to about 1M shares per day this quarter, following a period during October and November in which several sessions saw more than the entire share float change hands in a single day. The public float now stands at roughly 11M shares, of which 2.8M are held short. This shows that many are betting that LMRA will continue to trend lower, but remember that relatively high short interest helped fuel the original rally, so news-driven volatility should be expected to continue over the near term. The Q1 results were in-line with recent trends: strong revenue growth rate made up largely of contract research, minimal product sales and rising net losses. At a valuation of 30x T12 revenue, we’ll be watching from the sidelines until we see evidence of sustainable product sales.
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