OK.... so a pretty muted response to the Annual Report.
Here's my quick take, fwiw......
* You have to go to page 30 of the AR to get a breakdown of the 'actual' revenue earned by the company for FY23, which is as follows - Laser Diode revenue = $47,227, plus Other revenue - foundry revenue recognised at point in time = $1,099,008
* The staggering number, for me, out of the financials is this one - Payments to suppliers and employees FY23 = $16,881,625, compared to FY22 = $10,358,632 (that's a 60% increase.......!!!) Let's hope that number winds back significantly over the next 12 months as the last elements of the manufacturing process are drawn into the FAB.
* We were worried about Gallium supply for BLG, but we should have been more concerned with problems 'in-house', based on this confession - "In-sourcing new manufacturing GaN wafer fab processeswhile simultaneously driving product improvements is a highlycomplex undertaking. Not surprisingly, BluGlass encounteredproduction and repeatability challenges in parts of the internalfabrication process as well as in our external supply chain,temporarily impacting availability of BluGlass’ GaN lasers towardsthe end of the financial year. These challenges, which impactedlaser consistency, were related to photolithography processes,metalisation, packaging processes for non-TO Can packages,and supply chain delays combined with production mishapsfrom our TO-Can supplier. Many of these challenges havenow been resolved, and the Company is implementing qualitycontrol measures and a program of excellence across its entiremanufacturing process to further improve repeatability, productavailability, speed of delivery, and manufacturing yields"
* Interesting new 'focussed' approach to IP and Patents....."While BluGlass continues to protect its intellectual property, the Company has opted to streamline patent filings of select mature patents. Rationalised patents are either no-longer core to BluGlass’ current device and RPCVD hardware or are filed in non-key semiconductor manufacturing jurisdictions. The Company continues to protect core patents including its tunnel junction, LED, and laser device, and RPCVD hardware patents, in important semiconductor manufacturing jurisdictions. This approach will improve the Company’s intellectual property management costs going forward and is part of its long-term device strategy."
* News before the end of this Quarter = a) Notice of payment of the R&D Tax rebate by the ATO (est to be $7.3mil - FY22 received $8.3mil). Interesting foot note to this is the extent of the external audit and the focus of the Auditors on this rebate - "This area is a key audit matter due to the inherentsubjectivity that is involved in the Group makingsignificant judgements in relation to the process tomeasure the amount of expenses to claim andrecognition of the R&D tax incentive income andreceivable." b) New orders in Q1 FY24 - "The Companyexpects to secure new orders in Q1 FY24, which will be shipped inline with industry standard 8–12-week timeframes."
I made the following comment back in July after the last Quarterly about BLG - "Let's hope the 'upward' FY revenue trend continues - but let's face it, its still going to take time." - and I still stand by this comment. With their proposed pipeline of issuing new products, BLG will undoubtedly have to go through the same 'testing, integration and qualifying' process with customers with each new product launch and this will push back sales revenue accordingly. Sales revenue should all catch-up in the end, assuming all goes to plan, however I still believe it will take time for BLG to gain traction.
Whilst I'm quietly confident BLG should easily smash their FY23 Laser Diode revenue number in FY24, I'm sure there will be challenges.
The focus will now squarely be on sales revenue and BLG's efforts in this regard. This also begs the question as to whether BLG will eventually develop an LD 'Sales Team' to promote and accelerate product sales. I know the long termers will recall a similar conversation about BLG many years ago involving RPCVD, and it did not eventuate. Lets hope lightning does not strike twice......
