LightPath Technologies Announces Profitable Third Quarter

          LightPath Technologies Announces Profitable Third Quarter

Backlog Grows to Greater Than $5 Million

Cost Reductions Drive Increases in EBITDA and Gross Margin

PR Newswire

ORLANDO, Fla., May 2, 2013

ORLANDO, Fla., May 2, 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 third quarter ended
March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20130122/FL45558LOGO)

Third Quarter Highlights:

  oRevenue for the third quarter of fiscal 2013 increased 3% to $2.85 million
    compared to $2.78 million for the third quarter of fiscal 2012.
  o12-month backlog increased 14% to $5.01 million as of March 31, 2013
    compared to $4.39 million as of March 31, 2012.
  oGross margin for the quarter was 47%, compared to 32% for the same quarter
    of fiscal 2012.
  oEBITDA increased to $463,000, or 16% of revenues, compared to a loss of
    $211,000, in the same quarter of fiscal 2012.
  oNet income was $217,000, or $0.02 per share for the quarter compared to a
    net loss of $519,000 or $0.05 loss per share in the same quarter of fiscal
    2012.

Jim Gaynor, President and Chief Executive Officer of LightPath, commented, "We
are very pleased with the results we achieved this quarter with bookings over
$3 million, shipments of $2.85 million and gross margin of 47%. The 15
percentage point improvement in gross margin as compared to the third quarter
of fiscal 2012, was a result of cost reductions from our glass conversion
program, lower tooling costs, yield improvement and direct labor productivity
improvement. We also benefited from improved overhead absorption as we
continued to increase our manufacturing volume. Our revenue growth continues
to be driven by the telecommunications sector, specifically the need for
expanded infrastructure to support mobile internet demand; our industrial tool
business which benefited from an improving Chinese market; demand for fiber
laser delivery systems; and our entry into the digital projection market."

Mr. Gaynor added, "Our goal is to accelerate our top line growth and we are
rigorously pursuing opportunities to further expand our current accounts and
develop 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. Even though overall markets are still weak and somewhat
choppy, we have been able to grow our business 51% from 2009 to 2012. Our
product offerings, which serve a diverse group of end-markets, have found
growth opportunities for our core business in precision molded optics. We are
also 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 March 31, 2013

Revenue for the third quarter of fiscal 2013 totaled approximately $2.85
million compared to approximately $2.78 million for the third quarter of
fiscal 2012, an increase of 3%. This increase was primarily attributable to
increases in sales of our custom optics, our industrial tool and our GRADIUM®
product lines. Growth in sales for the next several quarters is expected to be
derived primarily from the precision molded lens product line, driven by the
telecommunications sector's need for expanded infrastructure to support mobile
internet demand; our industrial tool business, which benefited from an
improving Chinese market demand; fiber laser delivery systems; and our entry
into the digital projection market. Infrared products, now being designed and
introduced to the market 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 third quarter of fiscal 2013 was 47%,
compared to 32% for the third quarter of fiscal 2012. Total manufacturing
costs of $1.52 million decreased by approximately $373,000 in the third
quarter of fiscal 2013 compared to the same period of the prior fiscal year.
The decrease in manufacturing costs, as compared to the same period of the
prior fiscal year, is a result of an increase in precision molded optics
products utilizing lower cost glass, lower tooling costs and better
utilization of fixed costs due to higher unit volumes. Direct costs, which
include material, labor and services, were 23% of revenue in the third quarter
of fiscal 2013, as compared to 24% of revenue in the third quarter of fiscal
2012.

During the third quarter of fiscal 2013, total costs and expenses decreased by
approximately $118,000 compared to the same period of the prior year. Selling,
general and administrative expenses were $1.04 million for the third quarter
of fiscal 2013 compared to $1.14 million for the third quarter of fiscal 2012.
Total operating income for the third quarter of fiscal 2013 improved to
approximately $56,000 compared to a loss of $506,000 for the same period in
fiscal 2012.

In the third quarter of fiscal 2013, we recognized a gain of approximately
$223,000 related to the change in the fair value of derivative warrants issued
in connection with our June 2012 private placement. The warrants have a five
year life and this fair value will be re-measured each reporting period until
the warrants are exercised or expire.

Other income was a loss of $8,500 in the third quarter of fiscal 2013 compared
to a gain of approximately $10,000 in the third quarter of fiscal 2012 due to
the effect of foreign currency rate adjustments. Net income for the third
quarter of fiscal 2013 was $217,000 or $0.02 per basic and diluted common
share, compared with a net loss of $519,000 or $0.05 per basic and diluted
common share for the same period in fiscal 2012. Weighted-average basic shares
outstanding increased to 11,883,042 in the third quarter of fiscal 2013
compared to 9,767,640 in the third quarter of fiscal 2012 which was 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, shares issued in connection with the conversion of our debentures
and the shares issued under our employee stock purchase plan.

Financial Results for Nine Months Ended March 31, 2013

Revenue for the first nine months of fiscal 2013 totaled approximately $8.65
million compared to approximately $8.18 million for the first nine months of
fiscal 2012, an increase of 6%. This increase was primarily attributable to an
increase in the sales of custom optics, an increase in the sales of our
industrial tool products and our entry in the digital projection market offset
by slightly lower sales volumes in our collimator and isolator product lines.
Growth in sales for the next several quarters is expected to be derived
primarily from the precision molded lens product line, driven by the
telecommunications sector's need for expanded infrastructure to support mobile
internet demand; our industrial tool business which benefited from an
improving Chinese market; demand for fiber laser delivery systems; and our
entry into the digital projection market.

The gross margin percentage in the first nine months of fiscal 2013 was 44%,
compared to 34% for the first nine months of fiscal 2012. Total manufacturing
costs of $4.89 million decreased by approximately $487,000 in the first nine
months of fiscal 2013 compared to the same period of the prior fiscal year.
This decrease in manufacturing costs, as compared to the same period of the
prior fiscal year, is a result of a decrease of $271,000 in wages and a
decrease of $268,000 in material and tooling costs offset by an increase of
$38,000 in repairs and an increase of $33,000 in depreciation. Direct costs,
which include material, labor and services, were 23% of revenue in the first
nine months of fiscal 2013, as compared to 26% of revenue in the first nine
months of fiscal 2012.

During the first nine months of fiscal 2013, total costs and expenses
decreased by approximately $78,000 compared to the same period of the prior
year. Selling, general and administrative expenses were $3.04 million for the
first nine months of fiscal 2013 compared to $3.02 million for the same period
in fiscal 2012. Total operating income for the first nine months of fiscal
2013 improved to approximately $4,000 compared to a loss of $1.04 million for
the same period in fiscal 2012.

In the first nine months of fiscal 2013 we recognized a gain of approximately
$488,000 related to the change in the fair value of derivative warrants issued
in connection with our June 2012 private placement. The warrants have a five
year life and this fair value will be re-measured each reporting period until
the warrants are exercised or expire.

Other income increased by approximately $23,000 to $67,000 in the first nine
months of fiscal 2013 from approximately $44,000 in the first nine months of
fiscal 2012. In the first nine months of fiscal 2013 we entered into license
agreement in which we granted a license for our GRADIUM® product line to NHG
for a $150,000 fee. We recognized $50,000 in income, in accordance with ASC
605-10.

Net income for the first nine months of fiscal 2013 was $459,000 or $0.04 per
basic and diluted common share, compared with a net loss of $1.06 million or
($0.11) per basic and diluted common share for the same period in fiscal 2012.
Weighted-average basic shares outstanding increased to 11,818,408 in the first
nine months of fiscal 2013 compared to 9,758,233 in the first nine months of
fiscal 2012 which was 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 8% convertible debentures, shares issued in connection with the
conversion of our debentures and the shares issued under our employee stock
purchase plan.

Cash and cash equivalents totaled approximately $1.40 million as of March 31,
2013. The current ratio as of March 31, 2013 was 3.57 to 1.00 compared to 3.59
to 1.00 as of June 30, 2012. Total stockholders' equity as of March 31, 2013
was approximately $5.64 million compared to $4.00 million as of June 30, 2012.

As of March 31, 2013, our 12-month backlog was $5.01 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, May 2nd
at 4:30 p.m. (ET) to discuss the Company's financial and operational
performance for the third quarter of fiscal 2013.

Conference Call Details
Date: Thursday, May 2, 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 &                                    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






LIGHTPATH TECHNOLOGIES, INC.
Consolidated Balance Sheets
                                                 (Unaudited)
                                                 March 31,       June 30,
Assets                                           2013            2012
Current assets:
  Cash and cash equivalents                    $ 1,403,490     $ 2,354,087
  Trade accounts receivable, net of allowance    2,234,361       2,133,079
  of $27,600 and $18,214
  Inventories, net                               1,828,368       1,513,384
  Other receivables                              323,500         41,000
  Prepaid interest expense                       —               7,250
  Prepaid expenses and other assets              341,786         201,459
                Total current assets             6,131,505       6,250,259
  Property and equipment, net                   2,013,214       1,920,950
  Intangible assets, net                        43,614          68,265
  Debt costs, net                                —               3,882
  Other assets                                   27,737          27,737
                Total assets                   $ 8,216,070     $ 8,271,093
 Liabilities and Stockholders'
Equity
Current liabilities:
  Accounts payable                            $ 1,048,555     $ 1,129,708
  Accrued liabilities                           167,942         183,910
  Accrued payroll and benefits                   496,793         386,234
  Deferred revenue                               1,966           37,750
  Capital lease obligation, current portion      3,602           3,602
                Total current liabilities        1,718,858       1,741,204
Capital lease obligation, less current portion   4,202           6,903
Deferred rent                                    258,280         345,726
Warrant liability                                599,194         1,087,296
8% convertible debentures to related parties     —               1,012,500
8% convertible debentures                        —               75,000
            Total liabilities              2,580,534       4,268,629
Stockholders' equity:
  Preferred stock: Series D, $.01 par value,
  voting;
     5,000,000 shares authorized; none issued    —               —
     and outstanding
  Common stock: ClassA, $.01 par value,
  voting;
     40,000,000 shares authorized; 12,955,728
     and 11,711,952
     shares issued and outstanding,              129,557         117,120
     respectively
  Additional paid-in capital                     209,571,539     208,410,216
  Accumulated other comprehensive income         88,483          88,258
  Accumulated deficit                            (204,154,043)   (204,613,130)
                Total stockholders' equity       5,635,536       4,002,464
                Total liabilities and          $ 8,216,070     $ 8,271,093
                stockholders' equity

LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
                             Three months ended       Nine months ended
                             March 31,                March 31,
                             2013          2012       2013         2012
Product sales, net           $        $ 2,775,486  8,654,553  $ 8,180,749
                             2,846,718
Cost of sales               1,522,901     1,895,724  4,887,104    5,374,593
            Gross margin     1,323,817     879,762    3,767,449    2,806,156
Operating expenses:
  Selling, general and       1,042,067     1,141,366  3,042,889    3,020,869
  administrative
  New product development    216,626       236,643    693,394      795,894
  Amortization of            8,217         8,217      24,651       24,651
  intangibles
  Loss on disposal of        1,026         —          2,273        —
  property and equipment
            Total costs and  1,267,936     1,386,226  3,763,207    3,841,414
            expenses
            Operating income 55,881        (506,464)  4,242        (1,035,258)
            (loss)
Other income (expense):
  Interest expense           (50,951)      (21,750)   (96,007)     (66,920)
  Interest expense - debt    (2,132)       (832)      (3,882)      (2,448)
  costs
  Change in fair value of    222,766       —          488,102      —
  warrant liability
  Other income (expense),    (8,470)       10,061     66,632       43,895
  net
  Total other income         161,213       (12,521)   454,845      (25,473)
  (expense), net
          Net income (loss)  $        $          $           $
                             217,094       (518,985)  459,087     (1,060,731)
Income (loss) per common     $        $       $        $    
share (basic)                   0.02    (0.05)     0.04        (0.11)
Number of shares used in per 11,883,042    9,767,640  11,818,408   9,758,233
share calculation (basic)
Income (loss) per common     $        $       $        $    
share (diluted)                0.02    (0.05)     0.04        (0.11)
Number of shares used in per 12,717,742    9,767,640  12,671,472   9,758,233
share calculation (diluted)
Foreign currency translation (269)         9,883      225          31,017
adjustment
              $        $          $           $
Comprehensive income (loss)  216,825       (509,102)  459,312     (1,029,714)

LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
                                           Nine months ended
                                           March 31,
                                           2013            2012
Cash flows from operating activities
Net income (loss)                          $  459,087    $  (1,060,731)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
 Depreciation and amortization       601,334         857,721
 Interest from amortization of debt  3,882           2,448
costs
 Loss on disposal of property and    2,273           —
equipment
 Stock based compensation            197,198         202,802
 Change in provision for doubtful    9,386           7,946
accounts receivable
 Change in fair value of warrant     (488,102)       —
liability
 Deferred rent                       (87,446)        (92,753)
Changes in operating assets and
liabilities:
Trade accounts receivables                 (110,668)       (571,541)
Other receivables                          (282,500)       10,289
Inventories                                (314,984)       59,196
 Prepaid expenses and other assets      (33,077)        45,022
 Accounts payable and accrued           13,438          354,169
liabilities
 Deferred revenue                       (35,784)        282,000
 Net cash provided by     (65,963)        96,568
(used in) operating activities
Cash flows from investing activities
 Purchase of property and equipment     (671,220)       (580,575)
 Net cash used in         (671,220)       (580,575)
investing activities
Cash flows from financing activities
 Proceeds from sale of common stock from 8,981           14,145
employee stock purchase plan
 Costs associated with conversion of     (39,919)        —
debentures
 Repayments of debentures                (180,000)       —
 Payments on capital lease obligation   (2,701)         —
 Net cash provided by      (213,639)       14,145
(used in) financing activities
Effect of exchange rate on cash and cash   225             31,017
equivalents
Decrease in cash and cash equivalents      (950,597)       (438,845)
Cash and cash equivalents, beginning of    2,354,087       928,900
period
Cash and cash equivalents, end of period   $ 1,403,490     $     490,055
Supplemental disclosure of cash flow
information:
 Interest paid in cash                 $    1,757  $       1,670
 Income taxes paid                     $    2,350  $       3,694
Supplemental disclosure of non-cash
investing & financing activities:
 Prepaid interest on convertible
debentures through the issuance of common  $   87,000   $      87,000
stock
 Issuance of common stock through the $  907,500    —
conversion of 8% debentures

 LIGHTPATH TECHNOLOGIES, INC.
 Consolidated Statement of Stockholders' Equity
 Nine months ended March 31, 2013
 (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       10,567     106      8,875        —             —              8,981
 purchase
 plan
 Conversion
 of
 debentures, 1,148,738  11,487   856,094      —             —              867,581
 net of
 costs
 Cashless
 exercise of -          -        -            —             —              —
 warrants
 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  —          —        197,198      —             —              197,198
 stock units
Net income   —          —        —            —             459,087        459,087
Foreign
currency     —          —        —            225           —              225
translation
adjustment
Balance at              $        $                                        $  
March 31,    12,955,728 129,557 209,571,539 $  88,483   $(204,154,043) 5,635,536
2013



LIGHTPATH TECHNOLOGIES, INC.
EBITDA
                                                  
                         (Unaudited)
                                                  (Unaudited)
                         Three months ended       Nine months ended
                         March 31,                March 31,
                         2013        2012         2013          2012
Net income (loss)        $ 217,094  $ (518,985)  $  459,087  $ (1,060,731)
Depreciation and         193,039     286,014      601,334       857,721
amortization
Interest expense         53,083      22,582       99,889        69,368
          EBITDA         $ 463,216  $ (210,389)  $ 1,160,310   $  (133,642)



SOURCE LightPath Technologies, Inc.

Website: http://www.lightpath.com