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Third Quarter Financial Highlights
Q3 2019 revenues of $188,871, which marked a sequential quarter-on-quarter growth of 47.7% and 802% increase over the same quarter a year earlier:
For the reporting period, we continued to regularly supply our major customer and continue to ramp production capabilities;
Revenue and backlog represent an increase in customer diversity over the previous quarter as we deepened relationships in the Cable Broadband Industry with repeat business received late in the period from existing customers.
Gross Margin of 24.7%, tracking tightly with the 25.9% and 25.5% achieved in the past two quarters confirming our strong focus on cost management. Upon reaching volume production, our target is to achieve 45-50% Gross Margin.
Order backlog of $888,480 which represented increased customer diversity and includes orders received late in the period and in the current period. This illustrates progress in fulfilling orders as well as additions to our order book.
Net loss totaled $813,100 for the quarter compared to $925,896 in the same quarter a year earlier. Adjusting for non-cash charges which were largely represented by compensation expense of $311,749 directly related to our first grant of options to employees, officers and directors since early 2017, this resulted in a cash burn rate in the quarter of $164,450 per month on average compared to $255,870 per month in the same quarter a year earlier.
Q3 Accomplishments
For the reporting period, we worked alongside industry giants and disruptors, developing and implementing software applications designed to drive adoption of our silicon solutions in the global residential and enterprise markets.
Key highlights include:
The resounding success of the Wireless Broadband Alliance (WBA) demonstration featuring Edgewater Wireless technology at the WBA’s Wireless Global Congress: Edgewater Wireless was part of a WBA working group that included Comcast (CMCSA), Nokia (NOKIA.HE), Global Reach and BSG Wireless that demonstrated a world’s first of its type handoff from a mobile network to a WiFi network seamlessly and securely without user intervention.
The latest enhancements to our aera™ Fluid MX controller: Deployed at Wagener Stadium and outside the reporting period, at a major MSO, these enhancements 1) enable the management and control of hundreds or thousands of MCSR™ powered access points, helping to drive adoption of our chipsets in access points for the home and business markets; and 2) enhance our aera™ product line by delivering industry-leading features and functionality.
Initiated the first phase of design improvements to our silicon solutions with a major European vendor: During the reporting period, we completed the first phase of design improvements geared to establishing a platform for scale and creating the foundation for growth in the higher volume residential market.
Increased our focus on industry and corporate communications: Strategically positioned to capture industry momentum post-Consumer Electronics Show (CES) and pre-Mobile World Congress (MWC), we kicked off an ongoing series of webinars and marketing activities designed to raise our profile on the global stage. These efforts create a platform that positions Edgewater Wireless as an industry thought leader in high density WiFi. The first two webinars can be found here.
Strengthening our IP portfolio: Outside the reporting period, we were granted a patent by the United States Patent Office (USPTO) for Automatic Gain Control (AGC) for a multi-channel / wideband communication system. Protecting our unique approach by building a strong family of patents is a key element of our strategy to create a strong foundation for shareholder value.
Selected by Global Invacom: Outside the reporting period, Global Invacom, a worldwide leader in satellite broadcast solutions equipment, contracted Edgewater to further develop of its Broadcast WiFi (Bx-WiFi) technology. First unveiled and successfully live-tested by the BBC and Global Invacom at the Edinburgh Fringe Festival, Bx-WiFi, when run on Edgewater’s MCSR™ technology, will provide a powerful platform for high-quality, large-scale video streaming where traditional, single channel WiFi struggles to perform such as in venues or at festivals.
“This has been a pivotal quarter for our company,” said Andrew Skafel, President and CEO of Edgewater Wireless. “We not only increased revenues and continued our growth trajectory upward, but our activities with customers and industry partners diversified and generated repeat and recurring orders, indicating a heightened level of operational maturity. Our team has done a phenomenal job enhancing our technology, promoting our thought leadership and developing our business to include moving into the residential WiFi sector. We are all eager to keep the momentum going.”
The Financial Statements and Management Discussion & Analysis have been posted on SEDAR.
