Fresh off a shakeup that saw Enablence (TSX-V:ENA) install a new CEO and chief financial officer, the struggling optical tech firm announced Thursday it has landed a sizeable new customer.
Ottawa-based Enablence said in a release it has landed a US$4-million contract with a new customer in the United States. The Ottawa-based firm designs, manufactures and sells optical components for use in telecom systems. This latest deal will see Enablence deliver a series of chipsets to the unnamed U.S. customer over the next 14 months.
The sizeable contract will be a much-needed boost to Enablence’s balance sheet. In its most recent earnings report the firm recorded revenues of just $128,000 for the three-month period ending Sept. 30, down from $1.9 million the year before. The company posted a net loss of $2.2 million in the quarter, growing its accumulated deficit to $135.2 million. (All figures in USD.)
The likelihood of Enablence remaining a going concern has been in question for a number of years, with the firm taking on extended loan facilities from Export Development Canada in 2015. While the firm reports in financial filings that it continues to see demand for its products, it says it must continue to raise capital and build out its production capabilities in the coming years. Management also notes that its most recent quarterly earnings were hampered by U.S. trade restrictions placed on one of its major customers in China. Those restrictions have since been lifted and the company expects orders to resume in due course.
Enablence also announced a major shakeup in the C suite on Thursday, with Enablence director Steve Wang replacing Evan Chen as CEO and corporate treasurer Gerald Leahy taking on the role of interim CFO from outgoing financial officer Todd Zhang.
The new chief executive was optimistic about the company’s future in light of the new business.
“The order reflects the significant efforts Enablence has made to reinvigorate our sales momentum. We believe the company is well positioned to execute on additional new business opportunities over the comings months,” Wang said in a statement.