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Spire Corp. has spent the last year successfully pushing its solar equipment manufacturing products. Thanks to that success, the Bedford, Mass. company has gained some wiggle room with its bankers. Earlier this week Spire said it had broken the loan covenants on a line of credit from Silicon Valley Bank, but was saved from default thanks to a bank-issued waiver.
In a 10-K containing its quarterly earnings, the company said it had to pull in a certain quarterly income or maintain a specific ratio of assets (minus inventory) to debt in order to avoid going into default. The company’s quarterly filing doesn’t state which one of the loan covenants Spire broke, but banks are conservative enough about their lending portfolios (especially in the wake of the sub-prime mess), that this technical trouble shouldn’t be read as a disaster for Spire. The firm believes it can continue meeting its financial obligations for at least another year.
Stated openly in a public filing, that’s not incredibly reassuring, but the company’s financials aren’t so grim. It did post a net loss of $508,000 on sales of $14.9 million in the latest three-month period, but it also made considerable sales gains from the same period last year. Its solar division, which has seen its sales rise 197 percent year-over-year, is its fastest-growing business and is now profitable, with its medical and optical electronics divisions hopefully to follow.
Most of the company’s sales come from selling the equipment to make solar panels, and Spire’s positive earnings pushed its stock up by about 25 percent to $17.50 as a high on Wednesday after the filing was issued. The stock has since settled and at last check, was changing hands for $16. The sun is definitely the rising star Spire is trying to bet its future on.