The 4DS Memory (ASX:4DS) share price sinks 6% on widened operating loss in FY21

4DS shares finished Thursday's session in the red.

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The 4DS Memory Ltd (ASX: 4DS) share price has slipped into the red on Thursday as the memory technology company reported its FY21 earnings.

4DS Memory shares were exchanging hands at 16 cents apiece at market close, a 5.88% drop.

dissapointed man at falling share price

Image source: Getty Images

What's sinking the 4DS Memory share price today?

Major points from the company's FY21 results today included:

  • Operating loss ballooned to $6.64 million from $5.45 million the year prior
  • Loss before income tax (LBIT) of $6.66 million, a 20% increase into the red from FY20
  • Total comprehensive loss for the year increase 22% year on year to $6.63 million after foreign currency effect
  • Research and development (R&D) costs increased to $4.2 million from $3.78 million last year
  • Other income came in at $213,000, up from $33,511 a year ago.

What happened in FY21 for 4DS Memory?

4DS Memory made "significant progress" in the development of its Interface Switching ReRam technology this year. It also extended two collaborations between Imec and Western Digital Corporation for another 12 months.

In addition, the company was granted 8 more US patents, bringing the total to 31, specific to the company's interface switching ReRam technology.

4DS Memory's second "non-platform lot" was manufactured by Imec and testing was completed by February this year. The data showed that the device was functional and "does what it says on the tin" to an effect.

Furthermore, the company reported that produced second platform lots had arrived at 4DS Memory's facility in Fremont for testing.

4DS Memory recognised other income of $213,000 in FY21, whilst R&D costs increased by about 11% to $4.2 million.

The company's operating loss ballooned from $5.45 million to $6.64 million over the year, which ultimately blew the LBIT out by 20% from FY20 to $6.66 million.

Consequently, 4DS Memory recognised a total comprehensive loss for the year of $6.63 million, a 22% year on year increase in its after-tax loss.

What did management say?

Regarding the impacts of COVID-19 on its business, 4DS Memory noted in the release:

COVID-19 related restrictions did not significantly affect the company's operations. However, for the safety of all employees, only a limited number of employees were allowed be at the Fremont facilities at the same time. Productivity was maintained by scheduling on-site tasks over longer days including weekends and holidays.

Touching on the company's second platform lot, it added:

The results of the analysis of the second platform lot and the third non-platform lot bring 4DS and its partners closer to realising their strategic objective of commercialising the company's technology.

What's next for 4DS Memory?

4Ds Memory advised it was finalising the production date of its third platform lot. This is expected to start late in the third quarter of 2021.

The company is set on advancing its third platform lot while strengthening its joint collaboration with Western Digital's subsidiary HGST, which is a "global storage leader".

Also, 4DS now will continue building its development agreement with Imec, to continue pioneering its "non-volatile memory technology".

The 4DS Memory share price is up 28% year to date, thereby beating the S&P/ASX 200 index (ASX: XJO)'s gain of 14% since January 1.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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