JULY 21--StockerYale (Salem, NH, USA; www.stockeryale.com) announced its financial results for the second quarter ended June 30, 2006. All 2005 and 2006 numbers were adjusted for discontinued operations. Revenues from continuing operations for the second quarter of 2006 were $4.6 million, representing a 13% comparable increase over the second quarter of 2005.
Driving revenue growth was specialty optical fiber (SOF), reflecting increased activity in the telecom and defense sectors. SOF revenue increased 73% over the quarter ended June 30, 2005, and 31% over the quarter ended March 31, 2006. LED revenues increased 37% comparably and 37% sequentially due to the acceptance of the COBRA illuminator in the machine-vision industry. Revenue from lasers increased 6% from stronger OEM sales of laser products into the machine-vision and defense markets.
Gross profit increased 25% to a record $1.7 million in the second quarter versus $1.4 million in the comparable quarter of 2005. Gross margin improved from 34% to 38% primarily attributable to the increase in SOF sales. Improved performance of laser operations after its lean manufacturing initiative at the start of the second quarter also contributed to the improvement. Gross profit was negatively impacted by the decline in the value of the US dollar versus the Canadian dollar.
The operating loss for the second quarter was $0.7 million versus $0.9 million in 2005, excluding stock-based compensation expense of $0.1 million and asset impairment charges in 2005 of $0.6 million, a 17% improvement. R&D expenses of $0.7 million, were 3% lower than the second quarter of 2005. Selling expenses increased 24% to $0.6 million due to increased marketing and sales activities in the USA and Europe and currency exchange impact in Canada. General and administrative expense rose 16% due to the expensing of stock-based compensation resulting from the company's adoption of FAS123R and consulting expenses related to Kaizen implementation in Montreal. EBITDA loss declined 35% to $198,000 in the second quarter 2006 compared to $305,000 in the same period in 2005 and $237,000 in the previous quarter.