Lumera Corporation (NASDAQ: LMRA), a leader in the emerging field
of nanotechnology, today reported financial results for the third
quarter of 2006 and released information regarding its current
product development progress. Revenues totaled $1,030,000 for the
three months ended September 30, 2006 compared with $681,000 for
the same period in 2005, a 51 percent increase over the prior year.
Lumera�s net loss totaled $2,698,000 or $0.16 per share for the
third quarter of 2006 compared with $2,034,000 or $0.12 per share
for the same period in 2005. Revenues totaled $2,198,000 for the
nine months ended September 30, 2006 compared with $1,269,000 for
the same period in 2005, a 73 percent increase over the prior year.
Lumera�s net loss totaled $8,992,000 or $0.54 per share for the
nine months ended September 30, 2006 compared with $7,838,000 or
$0.47 per share for the same period in 2005. �We continue to make
progress in developing products for what we believe will be large
market opportunities,� said Lumera Chief Executive Officer Tom
Mino. �Our biosciences initiative continues to mature. During the
quarter, we focused our resources on launching a successful
commercial ProteomicProcessor�, instead of making additional beta
units for evaluation with other collaboration partners. We are now
confident that we have the necessary customer feedback on features
and functions to succeed in the marketplace.� �In October, we
successfully completed and tested our initial prototype millimeter
wave communications system,� he continued, �and look forward to the
successful completion and test of the multi-band iteration of this
prototype in the near future.� 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. Bioscience Lumera is
developing label free high throughput methods targeted at the
biological and medical research markets. During the quarter, the
company focused its resources on developing the ProteomicProcessor�
as a commercial ready product. The instrument received favorable
initial responses at a focus group in July attended by eight
pharmaceutical companies. It will be showcased at PepTalk, an
international protein conference being held in San Diego in
January, 2007. Lumera is sponsoring a luncheon event at which Dr.
Josh LaBaer of the Harvard Proteomics Institute will describe his
research using Lumera�s ProteomicProcessor�. In October, the
company released an update on Dr. LaBaer�s work. The research
builds next generation discovery and diagnostics methods by
combining Harvard�s NAPPA (Nucleic Acid Programmable Protein Array)
technology with the ProteomicProcessor��s unique ability to
understand in great detail how proteins interact with each other
and other compounds. Also in October, the Company announced that it
had signed an expanded agreement with the Institute for Systems
Biology (ISB), an internationally renowned non-profit research
institute dedicated to the study and application of systems
biology. The revised collaboration agreement will focus on
detection methods for an array of diagnostic biomarkers aimed at
various types of cancer. The agreement extends a previous agreement
between Lumera and ISB announced in February of 2005. ISB was the
first research institution to test Lumera's ProteomicProcessor�.
Electro-Optics Lumera is developing a new generation of
electro-optic modulators and other devices for optical networks and
systems based on proprietary polymer materials. In October, Lumera
announced the successful testing of its millimeter wave wireless
bridge that will enable government and commercial entities to
transmit very large amounts of data via a variety of high speed
telecommunications networks. The successful test included
transmitting 10 Gbps at 94 GHz, through the use of Gigabit Ethernet
and other standard protocols. The single band wireless
communications system completes the first phase of Lumera's product
development. Potential applications for the wireless bridge include
enterprise campus connectivity, local area network (LAN) extension,
metropolitan area network (MAN), redundant access (network
diversity), storage access (SAN), distribution of high definition
video, teleradiology. Target customers are organizations with vast
amounts of data to transmit, such as large commercial enterprises
and universities. Government agencies have also expressed an
interest in such a high-data-rate wireless bridge for use in
disaster recovery applications. Lumera's wireless bridge offers
high data transmission rates at low cost while avoiding the expense
of digging and laying optical fiber, in an integrated system
solution. The company also supplied sample quantities of 40 and
95GHz modulators to potential customers for evaluation. Summary
Financial Discussion Revenues totaled $1,030,000 for the three
months ended September 30, 2006 compared with $681,000 for the same
period in 2005. Government contract revenue totaled $1,015,000 for
the three months ended September 30, 2006 compared with $624,000
for the same period in 2005. The increase in current quarter
contract revenues was due primarily to work on our recently awarded
DARPA contract. Backlog on government contracts at September 30,
2006 totaled $2,741,000. Product revenues totaled $15,000 for the
three months ended September 30, 2006 consisting primarily of the
sale of NanoCapture� arrays. Revenues totaled $2,198,000 for the
nine months ended September 30, 2006 compared with $1,269,000 for
the same period in 2005. Government contract revenue totaled
$2,036,000 for the nine months ended September 30, 2006 compared
with $1,212,000 for the same period in 2005. The increase in
contract revenues was due primarily to work on our recently awarded
DARPA contract and to work on the millimeter wave detection
contract. Product revenues totaled $162,000 for the nine months
ended September 30, 2006 consisting of the sale of beta versions of
the ProteomicProcessors� and related consumables totaling $119,000
and sales of electro-optics products totaling $43,000. Operating
expenses totaled $3,338,000 for the three months ended September
30, 2006 compared with $2,429,000 for the same period in 2005.
Research and development expense, which totaled $1,440,000 for the
three months ended September 30, 2006, increased by $90,000 from
the same period in 2005. Marketing, general and administrative
expense, which totaled $1,898,000 for the three months ended
September 30, 2006, increased by $819,000 from the same period in
2005 due primarily to additional cash compensation costs associated
with additional sales and marketing and administrative personnel
and severance costs, and non-cash expenses associated with
share-based payments and facilities related costs. Operating
expenses totaled $10,505,000 for the nine months ended September
30, 2006 compared with $8,811,000 for the same period in 2005.
Research and development expense, which totaled $4,623,000 for the
nine months ended September 30, 2006, declined by $261,000 from the
same period in 2005 as we directed resources toward product
commercialization and contract revenue activities. Marketing,
general and administrative expense, which totaled $5,882,000 for
the nine months ended September 30, 2006, increased by $1,955,000
from the same period in 2005 due primarily to additional cash
compensation costs associated with additional sales and marketing
and administrative personnel and severance costs, and non-cash
expenses associated with share-based payments and facilities
related costs. Lumera adopted Financial Accounting Standards Board
(�FASB�) Statement No.�123(R), Share-Based Payment, (�FAS 123R�)
effective January 1, 2006. During the three and nine months ended
September 30, 2006 we recorded non-cash share based compensation
expense of $102,000 and $265,000 to R&D expense and $297,000
and $1,059,000 to G&A expense, respectively. Lumera�s net loss
totaled $2,698,000 or $0.16 per share for the three months ending
September 30, 2006 compared to a net loss of $2,034,000 or $0.12
per share for the same period in 2005. Lumera�s net loss totaled
$8,992,000 or $0.54 per share for the nine months ending September
30, 2006 compared to a net loss of $7,838,000 or $0.47 per share
for the same period in 2005. Lumera ended the quarter with $12.1
million in cash and investment securities. Lumera used $3.6 million
in cash to fund operations and working capital requirements during
the third quarter of 2006, bringing the nine month total cash usage
total to $9.7 million. Capital expenditures, which include
leasehold and related capital improvements totaled $1,341,000 for
the third quarter and $2,082,000 for the first nine months of 2006.
Lumera set aside $700,000 to collateralize our new facilities lease
during the first quarter. Conference Call Lumera will host a
conference call to discuss its third quarter of 2006 financial
results on November 8 at 4:30 p.m. EST. 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 800.798.2796 ten minutes prior to the
start of the conference. International participants can dial
617-614-6204. The conference passcode number is 54143215. A
telephone replay of the call will be available through November 15,
2006, and can be accessed by dialing 888-286-8010 (for U.S.
participants) or 617-801-6888 (for international participants. The
replay passcode is 56976581. A replay of the conference call will
be available on the company's web site. About Lumera Lumera is an
emerging leader in the field of nanotechnology. The company designs
proprietary molecular structures and polymer compounds for the
bioscience and communications/computing 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. � � Lumera Corporation Condensed Balance Sheets (In
thousands) (Unaudited) � September 30, December 31, Assets 2006�
2005� Current assets Cash and cash equivalents $ 6,122� $ 4,885�
Investment securities, available-for-sale 5,939� 16,871� Costs and
estimated earnings in excess of billings on uncompleted contracts
389� 77� Inventories 234� -� Other current assets 674� 551� Total
current assets 13,358� 22,384� � Property and equipment, net 2,688�
1,276� Restricted Investments 700� -� Other Assets 46� 46� Total
assets $ 16,792� $ 23,706� � � Liabilities and Shareholders' equity
� Current liabilities Accounts payable $ 801� $ 493� Accrued
liabilities 915� 1,059� Total current liabilities 1,716� 1,552� �
Other long term liabilities 362� -� Total current liabilities
2,078� 1,552� � Commitments and contingencies � Shareholders'
equity Common stock at par value 17� 17� Additional paid-in capital
72,390� 71,070� Deferred stock-based compensation -� (215)
Accumulated other comprehensive loss (1) (18) Accumulated deficit
(57,692) (48,700) Total shareholders' equity 14,714� 22,154� Total
liabilities and shareholders' equity $ 16,792� $ 23,706� � � Lumera
Corporation Statements of Operations (In thousands, except earnings
per share and share data) (Unaudited) � Three months ended
September 30, Nine months ended September 30, 2006� 2005� 2006�
2005� � Revenue $ 1,030� $ 681� $ 2,198� $ 1,269� Cost of revenue
566� 441� 1,270� 775� Gross profit 464� 240� 928� 494� � Research
and development expense 1,440� 1,350� 4,623� 4,884� Marketing,
general and administrative expense 1,898� 1,079� 5,882� 3,927�
Total operating expenses 3,338� 2,429� 10,505� 8,811� � Loss from
operations (2,874) (2,189) (9,577) (8,317) Interest income 176�
155� 585� 479� Net loss from operations $ (2,698) $ (2,034) $
(8,992) $ (7,838) � Net loss per share-basic and diluted $ (0.16) $
(0.12) $ (0.54) $ (0.47) � Weighted-average shares outstanding -
basic and diluted 16,802,443� 16,600,440� 16,777,363� 16,573,891�
Lumera Corporation (NASDAQ: LMRA), a leader in the emerging field
of nanotechnology, today reported financial results for the third
quarter of 2006 and released information regarding its current
product development progress. Revenues totaled $1,030,000 for the
three months ended September 30, 2006 compared with $681,000 for
the same period in 2005, a 51 percent increase over the prior year.
Lumera's net loss totaled $2,698,000 or $0.16 per share for the
third quarter of 2006 compared with $2,034,000 or $0.12 per share
for the same period in 2005. Revenues totaled $2,198,000 for the
nine months ended September 30, 2006 compared with $1,269,000 for
the same period in 2005, a 73 percent increase over the prior year.
Lumera's net loss totaled $8,992,000 or $0.54 per share for the
nine months ended September 30, 2006 compared with $7,838,000 or
$0.47 per share for the same period in 2005. "We continue to make
progress in developing products for what we believe will be large
market opportunities," said Lumera Chief Executive Officer Tom
Mino. "Our biosciences initiative continues to mature. During the
quarter, we focused our resources on launching a successful
commercial ProteomicProcessor(TM), instead of making additional
beta units for evaluation with other collaboration partners. We are
now confident that we have the necessary customer feedback on
features and functions to succeed in the marketplace." "In October,
we successfully completed and tested our initial prototype
millimeter wave communications system," he continued, "and look
forward to the successful completion and test of the multi-band
iteration of this prototype in the near future." 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. Bioscience Lumera is developing label free high throughput
methods targeted at the biological and medical research markets.
During the quarter, the company focused its resources on developing
the ProteomicProcessor(TM) as a commercial ready product. The
instrument received favorable initial responses at a focus group in
July attended by eight pharmaceutical companies. It will be
showcased at PepTalk, an international protein conference being
held in San Diego in January, 2007. Lumera is sponsoring a luncheon
event at which Dr. Josh LaBaer of the Harvard Proteomics Institute
will describe his research using Lumera's ProteomicProcessor(TM).
In October, the company released an update on Dr. LaBaer's work.
The research builds next generation discovery and diagnostics
methods by combining Harvard's NAPPA (Nucleic Acid Programmable
Protein Array) technology with the ProteomicProcessor(TM)'s unique
ability to understand in great detail how proteins interact with
each other and other compounds. Also in October, the Company
announced that it had signed an expanded agreement with the
Institute for Systems Biology (ISB), an internationally renowned
non-profit research institute dedicated to the study and
application of systems biology. The revised collaboration agreement
will focus on detection methods for an array of diagnostic
biomarkers aimed at various types of cancer. The agreement extends
a previous agreement between Lumera and ISB announced in February
of 2005. ISB was the first research institution to test Lumera's
ProteomicProcessor(TM). Electro-Optics Lumera is developing a new
generation of electro-optic modulators and other devices for
optical networks and systems based on proprietary polymer
materials. In October, Lumera announced the successful testing of
its millimeter wave wireless bridge that will enable government and
commercial entities to transmit very large amounts of data via a
variety of high speed telecommunications networks. The successful
test included transmitting 10 Gbps at 94 GHz, through the use of
Gigabit Ethernet and other standard protocols. The single band
wireless communications system completes the first phase of
Lumera's product development. Potential applications for the
wireless bridge include enterprise campus connectivity, local area
network (LAN) extension, metropolitan area network (MAN), redundant
access (network diversity), storage access (SAN), distribution of
high definition video, teleradiology. Target customers are
organizations with vast amounts of data to transmit, such as large
commercial enterprises and universities. Government agencies have
also expressed an interest in such a high-data-rate wireless bridge
for use in disaster recovery applications. Lumera's wireless bridge
offers high data transmission rates at low cost while avoiding the
expense of digging and laying optical fiber, in an integrated
system solution. The company also supplied sample quantities of 40
and 95GHz modulators to potential customers for evaluation. Summary
Financial Discussion Revenues totaled $1,030,000 for the three
months ended September 30, 2006 compared with $681,000 for the same
period in 2005. Government contract revenue totaled $1,015,000 for
the three months ended September 30, 2006 compared with $624,000
for the same period in 2005. The increase in current quarter
contract revenues was due primarily to work on our recently awarded
DARPA contract. Backlog on government contracts at September 30,
2006 totaled $2,741,000. Product revenues totaled $15,000 for the
three months ended September 30, 2006 consisting primarily of the
sale of NanoCapture(TM) arrays. Revenues totaled $2,198,000 for the
nine months ended September 30, 2006 compared with $1,269,000 for
the same period in 2005. Government contract revenue totaled
$2,036,000 for the nine months ended September 30, 2006 compared
with $1,212,000 for the same period in 2005. The increase in
contract revenues was due primarily to work on our recently awarded
DARPA contract and to work on the millimeter wave detection
contract. Product revenues totaled $162,000 for the nine months
ended September 30, 2006 consisting of the sale of beta versions of
the ProteomicProcessors(TM) and related consumables totaling
$119,000 and sales of electro-optics products totaling $43,000.
Operating expenses totaled $3,338,000 for the three months ended
September 30, 2006 compared with $2,429,000 for the same period in
2005. Research and development expense, which totaled $1,440,000
for the three months ended September 30, 2006, increased by $90,000
from the same period in 2005. Marketing, general and administrative
expense, which totaled $1,898,000 for the three months ended
September 30, 2006, increased by $819,000 from the same period in
2005 due primarily to additional cash compensation costs associated
with additional sales and marketing and administrative personnel
and severance costs, and non-cash expenses associated with
share-based payments and facilities related costs. Operating
expenses totaled $10,505,000 for the nine months ended September
30, 2006 compared with $8,811,000 for the same period in 2005.
Research and development expense, which totaled $4,623,000 for the
nine months ended September 30, 2006, declined by $261,000 from the
same period in 2005 as we directed resources toward product
commercialization and contract revenue activities. Marketing,
general and administrative expense, which totaled $5,882,000 for
the nine months ended September 30, 2006, increased by $1,955,000
from the same period in 2005 due primarily to additional cash
compensation costs associated with additional sales and marketing
and administrative personnel and severance costs, and non-cash
expenses associated with share-based payments and facilities
related costs. Lumera adopted Financial Accounting Standards Board
("FASB") Statement No. 123(R), Share-Based Payment, ("FAS 123R")
effective January 1, 2006. During the three and nine months ended
September 30, 2006 we recorded non-cash share based compensation
expense of $102,000 and $265,000 to R&D expense and $297,000
and $1,059,000 to G&A expense, respectively. Lumera's net loss
totaled $2,698,000 or $0.16 per share for the three months ending
September 30, 2006 compared to a net loss of $2,034,000 or $0.12
per share for the same period in 2005. Lumera's net loss totaled
$8,992,000 or $0.54 per share for the nine months ending September
30, 2006 compared to a net loss of $7,838,000 or $0.47 per share
for the same period in 2005. Lumera ended the quarter with $12.1
million in cash and investment securities. Lumera used $3.6 million
in cash to fund operations and working capital requirements during
the third quarter of 2006, bringing the nine month total cash usage
total to $9.7 million. Capital expenditures, which include
leasehold and related capital improvements totaled $1,341,000 for
the third quarter and $2,082,000 for the first nine months of 2006.
Lumera set aside $700,000 to collateralize our new facilities lease
during the first quarter. Conference Call Lumera will host a
conference call to discuss its third quarter of 2006 financial
results on November 8 at 4:30 p.m. EST. 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 800.798.2796 ten minutes prior to the
start of the conference. International participants can dial
617-614-6204. The conference passcode number is 54143215. A
telephone replay of the call will be available through November 15,
2006, and can be accessed by dialing 888-286-8010 (for U.S.
participants) or 617-801-6888 (for international participants. The
replay passcode is 56976581. A replay of the conference call will
be available on the company's web site. About Lumera Lumera is an
emerging leader in the field of nanotechnology. The company designs
proprietary molecular structures and polymer compounds for the
bioscience and communications/computing 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. -0- *T Lumera Corporation Condensed Balance Sheets
(In thousands) (Unaudited) September December 30, 31, Assets 2006
2005 --------- --------- Current assets Cash and cash equivalents
$6,122 $4,885 Investment securities, available-for-sale 5,939
16,871 Costs and estimated earnings in excess of billings on
uncompleted contracts 389 77 Inventories 234 - Other current assets
674 551 --------- --------- Total current assets 13,358 22,384
Property and equipment, net 2,688 1,276 Restricted Investments 700
- Other Assets 46 46 --------- --------- Total assets $16,792
$23,706 ========= ========= Liabilities and Shareholders' equity
Current liabilities Accounts payable $801 $493 Accrued liabilities
915 1,059 --------- --------- Total current liabilities 1,716 1,552
Other long term liabilities 362 - --------- --------- Total current
liabilities 2,078 1,552 Commitments and contingencies Shareholders'
equity Common stock at par value 17 17 Additional paid-in capital
72,390 71,070 Deferred stock-based compensation - (215) Accumulated
other comprehensive loss (1) (18) Accumulated deficit (57,692)
(48,700) --------- --------- Total shareholders' equity 14,714
22,154 --------- --------- Total liabilities and shareholders'
equity $16,792 $23,706 ========= ========= *T -0- *T Lumera
Corporation Statements of Operations (In thousands, except earnings
per share and share data) (Unaudited) Three months ended Nine
months ended September 30, September 30,
----------------------------------------------- 2006 2005 2006 2005
----------- ----------- ----------- ----------- Revenue $1,030 $681
$2,198 $1,269 Cost of revenue 566 441 1,270 775 -----------
----------- ----------- ----------- Gross profit 464 240 928 494
----------- ----------- ----------- ----------- Research and
development expense 1,440 1,350 4,623 4,884 Marketing, general and
administrative expense 1,898 1,079 5,882 3,927 -----------
----------- ----------- ----------- Total operating expenses 3,338
2,429 10,505 8,811 ----------- ----------- ----------- -----------
Loss from operations (2,874) (2,189) (9,577) (8,317) Interest
income 176 155 585 479 ----------- ----------- -----------
----------- Net loss from operations $(2,698) $(2,034) $(8,992)
$(7,838) =========== =========== =========== =========== Net loss
per share- basic and diluted $(0.16) $(0.12) $(0.54) $(0.47)
=========== =========== =========== =========== Weighted-average
shares outstanding - basic and diluted 16,802,443 16,600,440
16,777,363 16,573,891 =========== =========== ===========
=========== *T
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