Company prepares to launch Chinese joint venture
Enablence Technologies (TSX-V:ENA) saw its quarterly net loss drop 34 per cent despite a decline in revenues, according to preliminary figures released late Monday.
The company has been taking a hit to its bottom line lately through the divestiture of its systems business, which is almost complete. It has stated the systems business was eating into its cash reserves and divesting it will help the company better focus on its optical business.
For the quarter ending Sept. 30, Enablence said a revenue decline to $5.8 million, down from $8.1 million last year, contributed to its $5.5 million net loss. The firm had an $8.3 million loss last year.
"Our challenge continues to be the divestiture of the remaining systems business while preserving as much cash as possible to fund our growth initiatives," stated chief executive Tim Thorsteinson.
"When we have completed the divestiture, our ability to focus on our optical components business will, we believe, provide the most shareholder value."
The company's Chinese joint venture, now called Sunblence Technologies Co. Ltd., will begin producing evaluation "splitter chip" wafers this month, Enablence said.
The firm, which has a 49-per-cent interest in the joint venture, hopes to see customer revenues begin in the coming quarter. Sunblence has $7.7 million in cash on hand, which includes $3.5 million from Enablence.
Most of the systems segment has been sold in two asset sales, which generated about $1.8 million in cash proceeds. Two additional payments of up to $0.5 million in March, and $0.25 million in October, are also expected.
The firm also stated it is continuing "to pursue its alternatives" with Teledata Networks Ltd., a phrase that often means a company is considering a sale.
Enablence bought the Israeli firm in April 2010 for $50 million to raise the Ottawa firm's profile in Russia, China, Brazil and Eastern Europe, where Teledata already had tier-one service providers as customers.