LightPath Technologies Announces Profitable Second Quarter
LightPath Technologies Announces Profitable Second Quarter
Q2 FY 2013 Revenues Increased 9% over Q2 FY2012
Cost Reductions Drive Increases in EBITDA and Gross Margin
PR Newswire
ORLANDO, Fla., Jan. 30, 2013
ORLANDO, Fla., Jan. 30, 2013 /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 second quarter ended
December 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20130122/FL45558LOGO )
Second Quarter Highlights:
o Revenue for the second quarter of fiscal 2013 increased 9% to $2.92
million compared to $2.67 million for the second quarter of fiscal 2012.
o 12-month backlog increased 21% to $4.64 million as of December 31, 2012
compared to $3.82 as of December 31, 2011.
o Gross margin for the quarter was 43%, the highest level since the fourth
quarter of fiscal 2010, compared to 32% in the second quarter of fiscal
2012.
o EBITDA increased to $356,000, or 12% of revenues, compared to $6,000, in
the second quarter of fiscal 2012.
o Net income was $141,000, or $0.01 per share for the quarter compared to a
net loss of $343,000, or $0.04 loss per share in the second quarter of
fiscal 2012.
Jim Gaynor, President and Chief Executive Officer of LightPath, commented,
"LightPath continued to make financial progress in the quarter. Revenue
continues to grow, and gross margin improved significantly over the prior
year, driving increased EBITDA and resulting in another profitable quarter.
Gross margin, in fact, reached the highest level since the fourth quarter of
fiscal 2010. Improvement in gross margin resulted from productivity gains,
lower tooling costs and continued benefit from our ongoing cost reduction
programs. Our revenue growth was led by the telecommunications sector,
specifically the need for expanded infrastructure to support mobile internet
demand, our industrial tool business which benefited from improving Chinese
market, and our entry into the digital projection market, which is highlighted
by the initial $1.1 million order we received from a new customer in
November."
Mr. Gaynor added, "Our goal is to accelerate our top line growth and we are
rigorously pursuing opportunities to further proliferate with our current
accounts and penetrate new ones. We believe the themes of mobile internet
growth, recovery of the Chinese industrial tool market and new product
applications bode well for our long term growth, though overall markets are
still weak and somewhat choppy as was indicated by our lower booking rate in
the second quarter. To take advantage of these emerging opportunities in the
marketplace, we have implemented some changes to our sales organization.
Specifically we are changing our sales approach to a product centered focus.
We expect these changes will enable us to move more rapidly towards our growth
objectives. In addition, we continue to develop new products in order to keep
our product offerings current and in line with the latest technology relevant
to our customers, as is demonstrated by our recent announcement for the new
products to be released at the upcoming Photonics West Trade Show. 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. "
Financial Results for Three Months Ended December 31, 2012
Revenue for the second quarter of fiscal 2013 totaled approximately $2.92
million compared to approximately $2.67 million for the second quarter of
fiscal 2012, an increase of 9%. 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, isolator
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 increase 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 fourth quarter of fiscal 2013 and continuing in
fiscal 2014.
The gross margin percentage in the second quarter of fiscal 2013 was 43%,
compared to 32% for the second quarter of fiscal 2012. Total manufacturing
costs of $1.65 million decreased by approximately $178,000 in the second
quarter of fiscal 2013 compared to the same period of the prior fiscal year
due to an decrease of $123,000 in wages $116,000 in tooling costs and $40,000
in freight costs offset by a $100,000 increase in direct costs associated
with the infrared project. Direct costs, which include material, labor and
services, were 23% of revenue in the second quarter of fiscal 2013, as
compared to 26% of revenue in the second quarter of fiscal 2012.
During the second quarter of fiscal 2013, total costs and expenses increased
by approximately $128,000 compared to the same period of the prior year.
Selling, general and administrative expenses were $1.02 million for the second
quarter of fiscal 2013. Total operating loss for the second quarter of fiscal
2013 improved to approximately $25,000 compared to $320,000 for the same
period in fiscal 2012.
In the second quarter of fiscal 2013, we recognized a gain of approximately
$170,000 related to the change in the fair value of derivative warrants issued
in connection with 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.
Other income increased by approximately $13,000 to $12,000 in the second
quarter of fiscal 2013 from approximately ($1,000) in the second quarter of
fiscal 2012.
Net income for the second quarter of fiscal 2013 was $141,000 or $0.01 per
basic and diluted common share, compared with a net loss of $343,000 or $0.04
per basic and diluted common share for the same period in fiscal 2012.
Weighted-average basic shares outstanding increased to 11,801,684 in the
second quarter of fiscal 2013 compared to 9,761,129 in the second 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.
Financial Results for Six Months Ended December 31, 2012
Revenue for the first half of fiscal 2013 totaled approximately $5.81 million
compared to approximately $5.41 million for the first half of fiscal 2012, an
increase of 7%. This increase was primarily attributable to increases in sales
of custom optics, an increase in our industrial tool products and our entry in
the digital projection market offset by slightly lower sales volumes in our
collimator, isolator 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 increase in low cost lenses being sold in Asia and
from new business with penetration into imaging applications.
The gross margin percentage in the first half of fiscal 2013 was 42%, compared
to 36% for the first half of fiscal 2012. Total manufacturing costs of $3.36
million decreased by approximately $115,000 in the first half of fiscal 2013
compared to the same period of the prior fiscal year due to a decrease of
$244,000 in wages offset by and increase of $130,000 in direct costs
associated with higher revenues. Direct costs, which include material, labor
and services, were 24% of revenue in the first half of fiscal 2013, as
compared to 26% of revenue in the first half of fiscal 2012.
During the first half of fiscal 2013, total costs and expenses increased by
approximately $40,000 compared to the same period of the prior year. Selling,
general and administrative expenses were $2.00 million for the first half of
fiscal 2013. Total operating loss for the first half of fiscal 2013 improved
to approximately $52,000 compared to $529,000 for the same period in fiscal
2012.
In the first half of fiscal 2013 we recognized a gain of approximately
$265,000 related to the change in the fair value of derivative warrants issued
in connection with 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.
Other income increased by approximately $41,000 to $75,000 in the first half
of fiscal 2013 from approximately $34,000 in the first half of fiscal 2012.
In the first half of fiscal 2013 we sold a technology license for our GRADIUM®
product line in Asia and recognized $50,000 in income associated with the
license agreement.
Net income for the first half of fiscal 2013 was $242,000 or $0.02 per basic
and diluted common share, compared with a net loss of $542,000 or ($0.06) per
basic and diluted common share for the same period in fiscal 2012.
Weighted-average basic shares outstanding increased to 11,786,793 in the first
half of fiscal 2013 compared to 9,753,618 in the first half 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 $1.78 million as of December
31, 2012. The current ratio as of December 30, 2012 was 2.18 to 1 compared to
3.59 to 1 as of June 30, 2012. The change was primarily due to our convertible
debt moving from a long term to a current liability. Total stockholders'
equity as of December 31, 2012 was approximately $4.48 million compared to
$4.00 million as of June 30, 2012.
As of December 31, 2012, our 12-month backlog was $4.64 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 Wednesday, January
30th at 4:30 p.m. (ET) to discuss the Company's financial and operational
performance for the second quarter of fiscal 2013.
Conference Call Details
Date: Wednesday, January 30, 2013
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 & CEO Dorothy Cipolla, CFO
LightPath Technologies, Inc. LightPath Technologies,
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)
December 31, June 30,
Assets 2012 2012
Current assets:
Cash and cash equivalents $ 1,777,530 $ 2,354,087
Trade accounts receivable, net of allowance of $3,003 and $18,214 2,409,606 2,133,079
Inventories, net 1,729,227 1,513,384
Other receivables 287,057 41,000
Prepaid interest expense 50,750 7,250
Current debt costs, net 2,132 —
Prepaid expenses and other assets 229,083 201,459
Total current assets 6,485,385 6,250,259
Property and equipment, net 2,016,565 1,920,950
Intangible assets, net 51,831 68,265
Debt costs, net — 3,882
Other assets 27,737 27,737
Total assets $ 8,581,518 $ 8,271,093
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,339,508 $ 1,129,708
Accrued liabilities 77,904 183,910
Accrued payroll and benefits 469,807 386,234
Deferred revenue 1,966 37,750
8% convertible debentures to related parties 1,012,500 —
8% convertible debentures, net of debt discount 75,000 —
Capital lease obligation, current portion 3,602 3,602
Total current liabilities 2,980,287 1,741,204
Capital lease obligation, less current portion 5,102 6,903
Deferred rent 297,138 345,726
Derivative liability, warrant 821,960 1,087,296
8% convertible debentures to related parties — 1,012,500
8% convertible debentures — 75,000
Total liabilities 4,104,487 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, respectively 118,017 117,120
Additional paid-in capital 208,641,399 208,410,216
Accumulated other comprehensive income 88,752 88,258
Accumulated deficit (204,371,137) (204,613,130)
Total stockholders' equity 4,477,031 4,002,464
Total liabilities and stockholders' $ 8,581,518 $ 8,271,093
equity
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations and
Comprehensive Income
(Unaudited)
Three months ended Six months ended
December 31, December 31,
2012 2011 2012 2011
Product sales, net $ $ 2,672,138 $ 5,807,835 $ 5,405,263
2,916,781
Cost of sales 1,650,461 1,828,368 3,364,203 3,478,869
Gross margin 1,266,320 843,770 2,443,632 1,926,394
Operating expenses:
Selling, general and 1,018,367 883,882 2,000,822 1,879,503
administrative
New product development 264,311 271,532 476,768 559,251
Amortization of 8,217 8,217 16,434 16,434
intangibles
Loss on disposal of 545 — 1,247 —
property and equipment
Total costs 1,291,440 1,163,631 2,495,271 2,455,188
and expenses
Operating (25,120) (319,861) (51,639) (528,794)
loss
Other income (expense):
Interest expense (14,616) (21,750) (45,056) (45,170)
Interest expense - debt (884) (816) (1,750) (1,616)
costs
Change in fair value of 169,552 — 265,336 —
derivative warrant
Other income (expense), 11,840 (872) 75,102 33,834
net
Total other income 165,892 (23,438) 293,632 (12,952)
(expense), net
Net income $ $ (343,299) $ 241,993 $ (541,746)
(loss) 140,772
Income (loss) per common $ $ (0.04) $ 0.02 (0.06)
share (basic) 0.01
Number of shares used in per 11,801,684 9,761,129 11,786,793 9,753,618
share calculation
(basic)
Income (Loss) per common $ $ (0.04) $ 0.02 $ (0.06)
share (diluted) 0.01
Number of shares used in per 12,728,486 9,761,129 12,738,595 9,753,618
share calculation
(diluted)
Foreign currency translation 3,651 9,278 494 21,134
adjustment
Comprehensive $ $ (334,021) $ 242,487 $ (520,612)
income (loss) 144,423
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
Six months ended
December 31,
2012 2011
Cash flows from operating activities
Net income (loss) $ 241,993 $ (541,746)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 408,295 571,707
Interest from amortization of debt 1,750 1,616
costs
Loss on disposal of property and 1,247 —
equipment
Stock based compensation 128,286 137,976
Change in provision for doubtful (4,216) 8,557
accounts receivable
Change in fair value of warrant (265,336) —
liability
Deferred rent (48,588) (59,859)
Changes in operating assets and
liabilities:
Trade accounts receivables (272,311) (8,871)
Other receivables (246,057) 30,943
Inventories (215,843) (170,059)
Prepaid expenses and other assets 28,876 (30,764)
Accounts payable and accrued 187,367 317,107
liabilities
Deferred revenue (35,784) —
Net cash provided by (90,321) 256,607
(used in) operating activities
Cash flows from investing activities
Purchase of property and equipment (488,723) (542,597)
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 — (76,527)
financing
Payments on capital lease obligation (1,801) —
Net cash provided by (used 1,993 (68,656)
in) financing activities
Effect of exchange rate on cash and cash 494 21,134
equivalents
Decrease in cash and cash equivalents (576,557) (333,512)
Cash and cash equivalents, beginning of 2,354,087 928,900
period
Cash and cash equivalents, end of period $ 1,777,530 $ 595,388
-
Supplemental disclosure of cash flow
information:
Interest paid in cash $ 1,555 $ —
Income taxes paid $ 1,736 $ 3,694
Supplemental disclosure of non-cash
investing & financing activities:
Accrued deferred costs associated $ — $ 144,070
with equity financing
Prepaid interest on convertible
debentures through the issuance of common $ 87,000 $ 87,000
stock
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statement of Stockholders' Equity
Six months ended December 31, 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 88,258 (204,613,130) 4,002,464
2012 208,410,216
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
Warrant
issued for — — 13,000 — — 13,000
consulting
services
Stock based
compensation
on stock
options and
restricted — — 128,286 — — 128,286
stock units
Net income — — — — 241,993 241,993
Foreign
currency — — — 494 — 494
translation
adjustment
Balance at $ $ $ $ $
December 31, 11,801,684 118,017 88,752 (204,371,137) 4,477,031
2012 208,641,399
LIGHTPATH TECHNOLOGIES, INC.
EBITDA
(Unaudited)
(Unaudited)
Three months ended Six months ended
December 31, December 31,
2012 2011 2012 2011
Net income (loss) $ 140,772 $ (343,299) $ 241,993 $ (541,746)
Depreciation and 199,658 326,269 408,295 571,707
amortization
Interest expense 15,500 22,566 46,806 46,786
EBITDA $ 355,930 $ 5,536 $ 697,094 $ 76,747
SOURCE LightPath Technologies, Inc.
Website: http://www.lightpath.com
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