LightPath Technologies Announces Profitable First Quarter

          LightPath Technologies Announces Profitable First Quarter

6% Increase in Revenues Accompanied by 12% Rise in Backlog

Achieves Second Consecutive Profitable Quarter

PR Newswire

ORLANDO, Fla., Nov. 8, 2012

ORLANDO, Fla., Nov. 8, 2012 /PRNewswire/ -- LightPath Technologies, Inc.
(NASDAQ: LPTH) ("LightPath", the "Company" or "we"), a global manufacturer,
distributor and integrator of proprietary optical components and high-level
assemblies, announced today its financial results for the first quarter ended
September 30, 2012.

First Quarter Highlights:

  o Net income was $101,000, or $0.01 per share for the quarter compared to a
    net loss of $198,000, or $0.02 loss per share in the first quarter of
    fiscal 2012.
  o 12-month backlog was $5.46 million as of September 30, 2012, an increase
    of 12% or $566,000 from June 30, 2012.
  o Revenue for the first quarter of fiscal 2013 increased 6% to $2.89 million
    compared to $2.73 million for the first quarter of fiscal 2012.
  o Gross margin for the quarter was 41% as compared to 40% in the first
    quarter of fiscal 2012.
  o EBITDA increased 379% to $341,000 compared to $71,000 in the first quarter
    of fiscal 2012.

Jim Gaynor, President and Chief Executive Officer of LightPath, commented,
"LightPath continues to execute on its business plan with improved bookings,
revenue, gross margin, EBITDA and net income in the first quarter of fiscal
2013 compared to the first quarter last year. The Company's ability to serve
diverse markets has resulted in steady growth in our precision molded optics
business, with higher volumes of both custom lenses and lower-cost lenses. We
see the initial signs of market recovery for our industrial tools, which
posted revenue growth of 30 percent in the quarter, as order volumes and
customer count increased. Gross margin improved as a result of cost reductions
such as glass conversion to lower cost materials and lower material prices. We
committed $171,000 during the quarter in investment to fund our
anti-reflective coating cost reduction project which remains a point of our
differentiation and value proposition. We also continued developing our
infrared product line which we believe will play a material role in the
company's growth in future quarters."

Mr. Gaynor added, "LightPath has continued to grow during a period in which
the markets we participate in have been weak, and have grown our backlog for
three consecutive quarters.  Our product offerings, which serve a diverse
group of end-markets, have found growth opportunities for our core business in
precision molded optics and are building a presence in the infrared market. We
will continue to work hard to ensure that we are positioned to capitalize on
the many opportunities we see ahead for our products and technology.
Subsequent to the quarter's end we announced a new licensing deal in Asia with
New HuaGuang Information Materials Company, Ltd., a major optics supplier in
China for our GRADIUM® product line. This license will broaden the exposure of
our GRADIUM® products in Asia and will continue to expand LightPath's
distribution network."

Financial Results for Three Months Ended September 30, 2012

Revenue for the first quarter of fiscal 2013 totaled approximately $2.89
million compared to approximately $2.73 million for the first quarter of
fiscal 2012, an increase of 6%. This increase was primarily attributable to
increases in sales of custom optics and an increase in our industrial tool
products offset by slightly lower sales volumes in our collimator and GRADIUM®
product lines.  Growth in sales for the next several quarters is expected to
be derived primarily from the precision molded lens product line, with an
initial recovery in low cost lenses being sold in Asia and from new business
with penetration into imaging applications.  Infrared products, now being
designed and introduced are expected to accelerate the Company's growth more
meaningfully beginning in the second half of fiscal 2013 and continuing in
fiscal 2014.

The gross margin percentage in the first quarter of fiscal 2013 was 41%,
compared to 40% for the first quarter of fiscal 2012. Total manufacturing
costs of $1.71 million increased by approximately $63,000 in the first quarter
of fiscal 2013 compared to the same period of the prior fiscal year due to an
increase of $163,000 in direct costs associated with the infrared project
partially offset by lower fixed and tooling costs. Direct costs overall, which
include material, labor and services, were 22% of revenue in the first quarter
of fiscal 2013, as compared to 29% of revenue in the first quarter of fiscal
2012.

During the first quarter of fiscal 2013, total costs and expenses decreased by
approximately $88,000 compared to the same period of the prior year. Selling,
general and administrative expenses were $982,000 for the first quarter of
fiscal 2013. Total operating loss for the first quarter of fiscal 2013
improved to approximately $27,000 compared to $209,000 for the same period in
fiscal 2012.

In the first quarter of fiscal 2013 we recognized a gain of approximately
$96,000 related to the change in the fair value of derivative warrants issued
in our June 2012 private placement. This fair value will be re-measured each
reporting period throughout the five year life of the warrants or until
exercised.

Investment and other income increased by approximately $28,000 to $63,000 in
the first quarter of fiscal 2013 from approximately $35,000 in the first
quarter of fiscal 2012.  In the first quarter of fiscal 2013 we sold a
technology license for our GRADIUM® product line in Asia and recognized the
first milestone of that agreement.

Net income for the first quarter of fiscal 2013 was $101,000 or $0.01 per
basic and diluted common share, compared with a net loss of $198,000 or $0.02
per basic and diluted common share for the same period in fiscal 2012.
Weighted-average basic shares outstanding increased to 11,771,392 in the first
quarter of fiscal 2013 compared to 9,746,107 in the first quarter of fiscal
2012 which is primarily due to the issuance of shares of common stock in the
June 2012 private placement, shares issued for the payment of interest on our
convertible debentures and the shares issued for our employee stock purchase
plan.

Cash and cash equivalents totaled approximately $2.16 million as of September
30, 2012. The current ratio as of September 30, 2012 was 2.26 to 1 compared to
3.59 to 1 as of June 30, 2012. The change was primarily due to our convertible
debt moving from long term to short term debt. Total stockholders' equity as
of September 30, 2012 totaled approximately $4.25 million compared to $4.02
million as of June 30, 2012.

As of September 30, 2012, our 12-month backlog was $5.46 million compared to
$4.89 million as of June 30, 2012. 

Investor Conference Call and Webcast Details:

LightPath will host an audio conference call and webcast on Thursday, November
8th at 4:30 p.m. ET to discuss the Company's financial and operational
performance for the first quarter of fiscal 2013.

Conference Call Details
Date: Thursday, November 8, 2012
Time: 4:30 p.m. (ET)
Dial-in Number: 1-800-860-2442
International Dial-in Number: 1-412-858-4600

It is recommended that participants dial-in approximately 5 to 10 minutes
prior to the start of the 4:30 p.m. call. A transcript archive of the webcast
will be available for viewing or download on the company web site shortly
after the call is concluded.

About LightPath Technologies

LightPath manufactures optical products including precision molded aspheric
optics, GRADIUM® glass products, proprietary collimator assemblies, laser
components utilizing proprietary automation technology, higher-level
assemblies and packing solutions. The Company's products are used in various
markets, including industrial, medical, defense, test and measurement and
telecommunications. LightPath has a strong patent portfolio that has been
granted or licensed to it in these fields. For more information visit
www.lightpath.com.

The discussions of our results as presented in this release include use of
non-GAAP terms "EBITDA" and "gross margin."  Gross margin is determined by
deducting the cost of sales from operating revenue. Cost of sales includes
manufacturing direct and indirect labor, materials, services, fixed costs for
rent, utilities and depreciation, and variable overhead. Gross margin should
not be considered an alternative to operating income or net income, which is
determined in accordance with Generally Accepted Accounting Principles
("GAAP"). We believe that gross margin, although a non-GAAP financial measure
is useful and meaningful to investors as a basis for making investment
decisions. It provides investors with information that demonstrates   our cost
structure and provides funds for our total costs and expenses. We use gross
margin in measuring the performance of our business and have historically
analyzed and reported gross margin information publicly. Other companies may
calculate gross margin in a different manner.

EBITDA is a non-GAAP financial measure used by management, lenders and certain
investors as a supplemental measure in the evaluation of some aspects of a
corporation's financial position and core operating performance. Investors
sometimes use EBITDA as it allows for some level of comparability of
profitability trends between those businesses differing as to capital
structure and capital intensity by removing the impacts of depreciation,
amortization, and loss on extinguishment of debt and interest expense. EBITDA
also does not include changes in major working capital items such as
receivables, inventory and payables, which can also indicate a significant
need for, or source of, cash. Since decisions regarding capital investment and
financing and changes in working capital components can have a significant
impact on cash flow, EBITDA is not a good indicator of a business's cash
flows. We use EBITDA for evaluating the relative underlying performance of the
Company's core operations and for planning purposes. We calculate EBITDA by
adjusting net loss to exclude net interest expense, income tax expense or
benefit, depreciation and amortization, thus the term "Earnings Before
Interest, Taxes, Depreciation and Amortization" and the acronym "EBITDA."

This news release includes statements that constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including statements regarding our
ability to expand our presence in certain markets, future sales growth,
continuing reductions in cash usage and implementation of new distribution
channels. This information may involve risks and uncertainties that could
cause actual results to differ materially from such forward-looking
statements. Factors that could cause or contribute to such differences
include, but are not limited to, factors detailed by LightPath Technologies,
Inc. in its public filings with the Securities and Exchange Commission. Except
as required under the federal securities laws and the rules and regulations of
the Securities and Exchange Commission, we do not have any intention or
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.

 

Contacts:
Jim Gaynor, President &                                    Dorothy Cipolla, CFO
CEO                                       
LightPath Technologies,                                    LightPath Technologies, Inc.
Inc.                                          
Tel:
407-382-4003                                               Tel: 407-382-4003 x305
           
Email: jgaynor@lightpath.com                               Email:
                                                           dcipolla@lightpath.com           
Web: www.lightpath.com                                     Web: www.lightpath.com
             
Brett Maas, Managing Partner           
Hayden IR
Tel: 646-536-7331
Email: Brett@haydenir.com
Web: www.haydenir.com

LIGHTPATH TECHNOLOGIES, INC.
Consolidated Balance Sheets
                                                 (Unaudited)
                                                 September 30,   June 30,
Assets                                           2012            2012
Current assets:
   Cash and cash equivalents                   $ 2,161,729     $ 2,354,087
   Trade accounts receivable, net of allowance   2,082,146       2,133,079
   of $6,596 and $18,214
   Inventories, net                              1,601,001       1,513,384
   Other receivables                             246,021         41,000
   Prepaid interest expense                      72,500          7,250
   Prepaid expenses and other assets             297,185         201,459
                Total current assets             6,460,582       6,250,259
   Property and equipment, net                   1,890,897       1,920,950
   Intangible assets, net                        60,048          68,265
   Debt costs, net                               3,016           3,882
   Other assets                                  27,737          27,737
                       Total assets            $ 8,442,280     $ 8,271,093
         Liabilities and Stockholders' Equity
Current liabilities: 
   Accounts payable                            $ 1,170,915     $ 1,129,708
   Accrued liabilities                           110,611         183,910
   Accrued payroll and benefits                  486,880         386,234
   Deferred revenue                              —               37,750
      8% convertible debentures to related       1,012,500       —
parties
      8% convertible debentures, net of debt     75,000          —
discount
   Capital lease obligation, current portion     3,602           3,602
                Total current liabilities        2,859,508       1,741,204
Capital lease obligation, less current portion   6,003           6,903
Deferred rent                                    333,121         345,726
Derivative liability, warrant                    991,512         1,087,296
8% convertible debentures to related parties     —               1,012,500
8% convertible debentures                        —               75,000
                  Total liabilities              4,190,144       4,268,629
Stockholders' equity:
   Preferred stock: Series D, $.01 par value,
   voting; 
      5,000,000 shares authorized; none issued   —               —
      and outstanding
   Common stock: Class A, $.01 par value,
   voting; 
      40,000,000 shares authorized; 11,801,684
      and 11,711,952
      shares issued and outstanding,             118,017         117,120
      respectively
   Additional paid-in capital                    208,560,927     208,410,216
   Accumulated other comphrehensive income       85,101          88,258
   Accumulated deficit                           (204,511,909)   (204,613,130)
                Total stockholders' equity       4,252,136       4,002,464
                Total liabilities and          $ 8,442,280     $ 8,271,093
                stockholders' equity

 

LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
                                            Three Months ended
                                            September 30,
                                            2012                2011
Product sales, net                          $   2,891,054     $ 2,733,125
Cost of sales                               1,713,742           1,650,501
                         Gross margin       1,177,312           1,082,624
Operating expenses:
     Selling, general and administrative    982,455             995,621
     New product development                212,457             287,719
     Amortization of intangibles            8,217               8,217
     Loss on disposal of property and       702                 —
     equipment
                         Total costs and    1,203,831           1,291,557
                         expenses
                         Operating loss     (26,519)            (208,933)
Other income (expense):
     Interest expense                       (30,440)            (23,420)
     Interest expense - debt costs          (866)               (800)
     Change in fair value of derivative     95,784              —
     warrant
     Other income, net                      63,262              34,706
     Total other expense, net               127,740             10,486
                    Net income (loss)       $      101,221      $ (198,447)
Income (loss) per common share (basic)      $            0.01   (0.02)
Number of shares used in per share          11,771,902          9,746,107
calculation
    (basic)
Income (Loss) per common share (diluted)    $            0.01   $       (0.02)
Number of shares used in per share          12,698,704          9,746,107
calculation
    (diluted)
Foreign currency translation adjustment     (3,157)             11,856
                Comprehensive income (loss) $        98,064     (186,591)

 

LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
 (Unaudited)
                                                  Three Months ended
                                                  September 30,
                                                  2012           2011
Cash flows from operating activities
Net income (loss)                                 $   101,221    $ (198,447)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
       Depreciation and amortization              208,637        245,438
       Interest from amortization of debt costs   866            800
       Loss on disposal of property and equipment 702            —
       Stock based compensation                   60,814         64,546
       Change in provision for doubtful accounts  (623)          —
receivable
       Change in fair value of warrant laibility  (95,784)       —
       Deferred rent                              (12,605)       (28,657)
Changes in operating assets and liabilities:
    Trade accounts receivables                    51,556         (236,935)
    Other receivables                             (205,021)      30,943
    Inventories                                   (87,617)       (195,552)
    Prepaid expenses and other assets             (73,976)       2,746
    Accounts payable and accrued liabilities      68,554         432,467
    Deferred revenue                              (37,750)       —
                  Net cash provided by (used in)  (21,026)       117,349
operating activities
Cash flows from investing activities
   Purchase of property and equipment             (171,069)      (347,228)
                  Net cash used in investing      (171,069)      (347,228)
activities
Cash flows from financing activities
    Proceeds from sale of common stock from       3,794          7,871
employee stock purchase plan
    Deferred costs associated with equity         —              (25,000)
financing
    Payments on capital lease obligation          (900)          —
                 Net cash provided by financing   2,894          (17,129)
activities
Effect of exchange rate on cash and cash          (3,157)        11,856
equivalents
Decrease in cash and cash equivalents             (192,358)      (235,152)
Cash and cash equivalents, beginning of period    2,354,087      928,900
Cash and cash equivalents, end of period          $2,161,729     $  693,748
Supplemental disclosure of cash flow information:
    Interest paid in cash                         $       1,380  $          —
    Income taxes paid                             1,736          1,755
 Supplemental disclosure of non-cash investing &
financing activities: 
      Accrued deferred costs associated with      —              32,139
equity financing 
      Prepaid interest on convertible debentures  87,000         87,000
through the issuance of common stock 

 

 LIGHTPATH TECHNOLOGIES, INC.
 Consolidated Statement of Stockholders' Equity
 Three Months ended September 30, 2012 

 (Unaudited)
                                              Accumulated
             Class A             Additional   Other                       Total
             Common Stock        Paid-in      Comprehensive Accumulated   Stockholders'
             Shares     Amount   Capital      Income        Deficit       Equity
Balance at                                    $             $             $          
June 30,     11,711,952 $117,120 $208,410,216 88,258        (204,613,130) 4,002,464
2012
Issuance of
common stock
for:
 Employee
 stock       5,261      53       3,741        —             —             3,794
 purchase
 plan
 Interest
 payment on  84,471     844      86,156       —             —             87,000
 convertible
 debentures
Stock based
compensation
on stock 
 options and
 restricted  —          —        60,814       —             —             60,814
 stock units
Net income   —          —        —            —             101,221       101,221
Foreign
currency     —          —        —            (3,157)       —             (3,157)
translation
adjustment
Balance at                                    $             $             $          
September    11,801,684 $118,017 $208,560,927 85,101        (204,511,909) 4,252,136
30, 2012

 

                                                  LIGHTPATH TECHNOLOGIES, INC.
                                                                      EBITDA
                                    (Unaudited)
                                    Three months ended
                                    September 30,
                                    2012                    2011
   Net income (loss)                $  101,221              $ (198,447)
   Depreciation and amortization    208,637                 245,438
   Interest expense                 31,306                  24,220
          EBITDA                    $  341,164              $    71,211

SOURCE LightPath Technologies, Inc.

Website: http://www.lightpath.com