Thin Film Electronics Raises $22M For Production Expansion
Edison | Jun 29, 2015 08:15AM ET
$22m raised for production expansion
Thin Film Electronics ASA (OSLO:THIN) has raised $22m from US investors in a private placement priced at NOK5.01/share. The funds will be used for the expansion of production facilities following strong interest in the newly-launched NFC OpenSense platform. Management expects the resulting total capacity to be capable of generating $40m of revenues at 50% gross margin by the end of 2016. No volume orders have been announced for OpenSense yet, so the rate of production ramp-up is difficult to predict, but we expect the new capacity to become fully utilised over the next 12-18 months.
Multiple 50->100m unit opportunities
Management reports multiple-hundred-million unit sales opportunities in the spirits, tobacco and cosmetics industries with a unit price between $0.30 and $0.50. The current line has capacity for 28 million OpenSense units at 27% gross margin and $17.5m of the funds raised from this placing will be used to upgrade the line to achieve capacity of 120 million units at 50% margins. This will be carried out in several steps and management expects to see the first capacity increases six months from now. The remainder of the funds will go towards operating expenditures. The line can be used for Electronic Article Surveillance (EAS), OpenSense and Smart Labels, but unit capacity varies for each product since they have different processes and circuit footprint.
Forecasts unchanged but boost to mid-term earnings
As part of the transaction, 17 million warrants with an exercise price of NOK6.10 and a three-year expiry were issued to investors. We have updated our forecasts to reflect the new capital expenditure and fund-raising, but our revenue and operating cost forecasts remain unchanged apart from marginally higher depreciation as a result of the increased value of assets. Medium term, beyond our forecast period, the additional capacity will mean a larger proportion of labels are produced internally; therefore, revenue and profit will be incrementally higher than if produced externally.
To Read the Entire Report Please Click on the pdf File Below
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.