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Resonant 4Q15 results -3
08:49 24-Mar-16
RESN has risen by about 60% since I put it on the pick list. Last night, Resonant reported an EPS loss of 31 cents for the quarter, 2015 non-GAAP EBIDTA loss of $1.06 per share. Many sources reported the less-relevant $1.36 GAAP figure instead. The more important information is in comments from the press release,
As a result of our work over the course of the last year on single-band filters/duplexers as well as multiplexers, we can confidently state that we can create designs for difficult bands and complex requirements which can be manufactured for approximately half the cost and developed in approximately half the time compared to traditional filter design approaches.Also, the conference call revealed that the MoU payments are not large enough to extend the company's financial runway, and that it will be detailing new financing arrangements in a matter of weeks. In discussion on that point, management would not specify whether such financing would be dilutive or not. It would be prudent to assume there will be dilution, and as always, the actual terms will give us the best indicator of near-term share value.
With regard to actual development within the company, management believes that it could start generating revenue this year. This is credible, despite qualification cycles that take up to half a year, because some of the designs that company is working on are for replacement parts in existing products, rather than new sockets. Management also expects to be able to announce new customers this year.
The conference call seemed to be very lightly attended. Current investors will have to think carefully about whether they want short-term gains or to ride out volatility associated with financing. That is almost certainly a downside risk, but a licensing or other arrangement could be announced at any time.One of the founders, Bob Hammond, was virtually any RF band, and to design single devices that can multiplex multiple radio frequencies. Given the coming wave of carrier aggregation, where devices will be expected to operate on multiple RF bands simultaneously, such capabilities would be of extreme value. Companies like Skyworth and Qorvo will probably be able to assess whether or not Resonant can deliver on its promise long before investors can, making this the most GRoDT of any stock I've mentioned.