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QPC Lasers Announces Third Quarter 2006 Results.

Company Reports Revenue Growth;

Sees Strong Fourth Quarter and Year Ahead

SYLMAR, Calif. -- QPC Lasers, Inc. (OTCBB:QPCI) "QPC" today announced its financial results for the third fiscal quarter and nine months ended September 30, 2006. The Company reported third quarter revenue increased 500 percent to $930,000, while nine-month revenues rose 162 percent to $1.8 million.

QPC revenue growth for both periods was driven by new and upgraded product development contracts for its patented, next generation of high performance laser technology from major customers in medical, industrial and defense sectors.

The Company said its marketing programs, and industry media coverage of QPC's rapidly evolving, next-generation laser technology, are successfully generating demand for its increasingly powerful performance and cost benefits. As a result, QPC expects continuing growth in new and upgraded customer contracts throughout 2007.

Looking ahead, the Company expects revenue for the full year 2006 to increase to between $2.5 million to $3 million, compared with $1.1 million in fiscal 2005.

In the past three months, QPC has:

* Added a veteran laser industry marketing director to expand marketing activities

* Completed a $6 million transaction to secure exclusive rights of its entire intellectual property portfolio

* Achieved ISO 9001:2000 certification of compatibility with international quality standards

* Been awarded several orders from new and existing customers in the medical, industrial and defense markets covering standard and customized laser products and advanced hardware developments

* Shipped its first Generation II prototype modules to a major defense customer for use in military aircraft-mounted targeting and navigational pods.

"QPC has advanced it business substantially in just the past three months -- across sales, marketing, corporate finance, intellectual property, R&D and customer relationships," said George Lintz, Chief Financial Officer, QPC. "The company pace and activity level is only accelerating, as we continue to execute on our business plan and prepare for commercialization of our Gen II and III technologies."

For the third quarter ended September 30, revenue rose 500 percent to $930,000 compared with $153,000 in the year-ago quarter. QPC reported a gross profit in this period of $240,000 for a 26 percent gross margin, as increased operating efficiencies and revenues drove gross margins higher. The Company posted a net loss of $1.2 million compared with $2.1 million a year ago. The net loss included approximately $215,000 in non-cash expenses resulting from issuing securities to employees, consultants and lenders. The quarter's results include other income of approximately $1 million as a result of income related to the revaluation of our embedded derivative liabilities at September 30.

For the nine months ended September 30, revenue increased 162 percent to $1.8 million vs. $677,000 in the year-earlier period. QPC reported a gross profit in this period of $308,000, for a 17 percent gross margin, as increased operating efficiencies and revenues drove gross margins higher. Net loss for the period was $9.0 million vs. $5.8 million a year ago. The net loss included approximately $3.2 million in non-cash expenses resulting from issuing securities to employees, consultants and lenders. Over $300,000 of cash expenses in the period were one-time expenses attributed to the cost of the reverse merger transaction. The period's results also include other income of approximately $719,000 related to the revaluation of our embedded derivative liabilities at September 30.

About Quintessence Photonics Corporation

Quintessence Photonics Corporation (www.qpclasers.com) is a world leader in the development and commercialization of high brightness, high power semiconductor lasers for the industrial, defense, and medical markets. Founded in the year 2000, QPCI is vertically integrated from epitaxy through packaging and performs all critical fabrication processes at its state-of-the-art high-technology facility in the Los Angeles suburb of Sylmar, CA.

Forward-Looking Statements

This release and other materials released by the Company from time to time contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by the Company's management. When used in the materials the words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan" or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the sections of the Company's reports filed with the Securities and Exchange Commission entitled "Risk Factors") relating to the Company's industry, the Company's operations and results of operations and any businesses that may be acquired by the Company. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. The following discussion should be read in conjunction with the Company's reports filed with the Securities and Exchange Commission.

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Publication:Business Wire
Date:Nov 20, 2006
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