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Sales rising quickly as broadband fibre demand puts Lite Access technology in spotlight

Last updated: 13:09 29 Sep 2016 EDT, First published: 08:09 29 Sep 2016 EDT

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Lite Access proprietary tools at work in the field

The proof was there when financial results for the first nine months of its 2016 business year were released in early September.  Sales up 1,524% year on year to $10.15 million, the ship run tightly between the top and bottom lines to deliver earnings per share of $0.04, compared to a loss of $0.07 for the same period 12 months earlier.

Lite Access Technologies (CSE:LTE) shares are up some 200% over the past year, and clearly there is good reason for that performance.  As the company recognizes revenue and expense on a work-in-progress basis, the fourth quarter has likely seen activity both from contracts announced earlier in 2016, plus some portion of the seven figures in orders announced in the nearly three months since June.

Those more recent orders include $585,000 from certified sales and installation partner Alpha Technologies for a fibre-optic network in Charleston, West Virginia, as well as a $900,000 order from The Confederated Tribes of the Colville Reservation, located in the State of Washington.  This latter order was the second from that customer, following one placed in October of last year.

The nature of the order book, not to mention its size, is the culmination to date of a strategy Lite Access CEO Michael Plotnikoff has been building the company on for years.  “We receive a great variety of orders -- some are small and some are large -- but our recent business shows that once people start to realize the benefits of the technology and how it works, they just continue to build networks,” Plotnikoff explains from the company’s head office in Richmond, British Columbia.

The benefits of Lite Access’ technology are clear to optical-fibre installation companies and firms or municipalities operating broadband networks.  Lite Access and its partners install optical fibre in what they term micro-trenches.  Instead of tearing entire roadways up to access the ground beneath, Lite Access teams fit machinery with special cutting equipment and proprietary blades that have been designed to cut a narrow trench through asphalt or concrete, into which the company’s exclusive “microduct” conduit is installed.  This particular installation process enables teams to complete up to 250 metres of work per day at depths that ensure 12 inches of minimum cover.

With the microduct installed, optical fibre is blown with compressed air from one end to the other.   If the customer decides to replace or add capacity later, there is no need to touch the roadway – microduct is designed to accept additional fibre and accommodate other changes, making it the most future-proof solution on the market.

“Cities don’t like a lot of disturbance to their streets,” explains Plotnikoff.  “Conventional construction takes a long time and is costly, intrusive to people, plus there can be soil remediation and significant environmental impact.  We created our company to address the need for satisfying the construction requirements in a cost-effective and less-invasive manner.”

Another insight from some of the orders announced this year is that sales and installation partners are helping penetrate multiple markets in other parts of the world.  In these cases, companies certified by Lite Access work with local telecommunications groups or municipalities to plan and execute projects for which the Lite Access micro-trenching approach is the best fit.

Partners have placed significant orders for Lite Access equipment after winning business in the United States, the United Kingdom and South Africa, to name just a few locations where over 20 of the groups operate.  These orders generate both product sales for the company and licensing revenue.

Some opportunities abroad the company wants to target directly, and the United Kingdom market is one of them.  In July, Lite Access announced plans to establish a new operations office in Wales.  With the government in the middle of implementing a program to have 95% of the UK hooked up to broadband delivering a blindingly fast 24Mbps speed or higher by 2017, having a local presence is a must.

Other interesting news of late includes an installation to take place in the Yukon’s capital city of Whitehorse with local sales and installation partner Total North Communications.  “Our solution has proven itself in lots of different environments, from those that are frozen for nine months of the year to ones where heat reaches extreme levels in the middle of summer,” says Plotnikoff, dispelling any concern that the Yukon’s harsh climate presents a challenge the company hasn’t seen before.

An installation on the island of Haida Gwaii in British Columbia on behalf of the local GwaiiTel Society involved other firsts for the company.

“Haida Gwaii was special for us in so many ways,” says Plotnikoff.  “It was a project that allowed us to showcase the benefits of our technology and deployment methodologies.  We specialize in adapting installation methods to provide the most cost-effective solution and in this case we were able to install up to 4 kilometres of network in a single day.  And we did so in areas that are considered environmentally as well as archeologically sensitive.”

With opportunities for expansion everywhere it looks, the company announced plans to raise $2.5 million at a price of $1.15 per share on September 12.  Two days later it upped the amount to $3.25 million, and another two days hence increased it to $3.5 million.

Far from pulling the stock down to the issue price, as so often happens with significant corporate financings, Lite Access shares took off, jumping from a close of $1.29 the day after the financing was announced to as high as $1.72 in the weeks that followed.

“The financing proceeds will be used for international growth and a little bit of working capital for some local projects,” says Plotnikoff, referencing recent contract wins in British Columbia and Alberta.

With just a few days left in its fiscal year, which ends September 30, Lite Access is currently putting the finishing touches on what will surely be the best 12-month period in its history.  Plotnikoff believes the company underwent a phase not only of growth during that time, but reached a new level of maturity and status in the marketplace.

“We have done all the pioneering work and today are receiving significant repeat orders,” says Plotnikoff.  “This really makes clear the high level of product acceptance and the satisfaction of our customers.  Lite Access has a global presence now.  We have successfully established ourselves as a world leader in our space.”

Lite Access chief expects consistent growth after strong second quarter

Mike Plotnikoff, chief executive and co-founder of Lite Access Technologies Inc (CNSX:LTE), says the firm’s micro trenching technology is “the most successful means of putting fibre into the ground today”. Last month, the company reported sales for the first three months of 2016 soared to...

on 06/20/2016