LightPath Technologies Announces Fiscal 2014 First Quarter Financial Results

 LightPath Technologies Announces Fiscal 2014 First Quarter Financial Results

PR Newswire

ORLANDO, Fla., Nov. 7, 2013

ORLANDO, Fla., Nov. 7, 2013 /PRNewswire/ --LightPath Technologies, Inc.
("LightPath", the "Company" or "we") (NASDAQ: LPTH), a global manufacturer,
distributor and integrator of proprietary optical components and high-level
assemblies, announced today the financial results for its fiscal year 2014
first quarter ended September 30, 2013.

First Quarter Highlights:

  oRevenue for the first quarter of fiscal 2014 was $2.81 million compared to
    $2.89 million for the first quarter of fiscal 2013. Revenue first quarter
    of fiscal 2013 benefited from a large purchase order related to work under
    the Defense Advanced Research Projects Agency's ("DARPA") development
    program.
  oRevenue for our precision molded optics increased 6% from the first
    quarter of 2013.
  oGross margin for the quarter increased to 47% as compared to 41% for the
    first quarter of fiscal 2013.
  oCash on hand as of September 30, 2013 was $2.88 million as compared to
    $1.57 million on June 30, 2013.
  oNet loss was $80,000 or $0.01 per common share, basic and diluted, for the
    first quarter of fiscal 2014 compared to net income of $101,000 or $0.01,
    basic and diluted, for the first quarter of fiscal 2013.
  oAdjusted earnings before interest, taxes, depreciation, amortization and
    change in fair value of warrant liability ("Adjusted EBITDA") was
    approximately $168,000 for the first quarter of fiscal 2014.
  oBacklog increased by 7% from June 30, 2013 to approximately $4.42 million
    as of September 30, 2013.

Jim Gaynor, President and Chief Executive Officer of LightPath, commented, "We
continue to experience robust demand for and interest in our two primary
business lines – precision molded optics and infrared products. The first
quarter is representative of the improvements we have made and continue to
make in our business. Adjusting our operating results to look at our
underlying on-going performance by removing the revenue from the DARPA project
and the effects from the change in the fair value of warrants issued in our
June 2012 private placement, we see a strong and improving business. Revenue
grew 6% for our precision molded optics from the first quarter of fiscal
2013."

"Other areas of progress include measures to improve profitability. Gross
margin has consistently improved, with an increase of 31% from the gross
margin for fiscal 2012 compared to our most recently completed quarter. The
gross margin in the first quarter of fiscal 2014 was 47%, a substantial
improvement from 36% for fiscal 2012 and 44% for fiscal 2013."

"The combination of higher top line performance and improved profitability has
led to an increase in cash flow generation. As compared with the average cash
generated by operations of approximately $101,000 per quarter in fiscal 2012
and approximately $140,000 per quarter in fiscal 2013, we generated cash flow
from operations of approximately $251,000 in the first quarter of fiscal 2014.
Sales volume of precision molded optics was 530,000 lenses in the fist quarter
of fiscal 2014, as compared to an average of 408,000 lenses per quarter in
fiscal 2012, and an average of 550,000 lenses per quarter in fiscal 2013."

"These improvements have been partially offset by the lower prices associated
with our shift to high volume applications, albeit at very good margins. As
the low-cost, high volume business segment becomes a larger percentage of our
overall business, the average selling prices, which are on average
approximately 13% lower, impacts our rate of revenue growth. In the first
quarter of fiscal 2014, our improved cash flow allowed us to further invest in
the expansion of our global sales and marketing efforts, increase our
production capacity, and broaden our precision molded optics and infrared
product lines. These investments better position the Company to take advantage
of anticipated sales growth."

"As a result, our expenses were approximately $176,000, or 15%, higher in the
first quarter of fiscal 2014 as compared to the first quarter last year. One
half of this increase was due to a reclassification of several members of the
R&D staff whose salaries were charged to cost of goods sold while working on
the DARPA project last year and an increase in fees and sales tax on capital
purchases for investments increasing our capacity to support current and
anticipated growth. The remainder of the increase was for continued investment
in our infrared business. These investments in our future, which led to a
modest loss in the first quarter, are a necessary trade-off such that we may
be positioned to capitalize on numerous market expansion opportunities that we
believe will lead to meaningful returns on investment going forward."

"New orders received in the first quarter of fiscal 2014 recovered from the
fourth quarter of fiscal 2013 to $3.5 million, but a de-booking of $300,000
from one of our digital projector customers, who cancelled the order due to
technical issues unrelated to the optics, brought net bookings to $3.2
million. This strong order performance increased our 12-month backlog as of
September 30, 2013 to $4.42 million, an increase of 7% as compared to June 30,
2013."

"In our fourth quarter of fiscal 2013 we outlined the major market drivers for
our business which primarily revolve around optical network expansion to
support increasing bandwidth demand. We continue to see this growth in our
business, particularly in China and other Asia/Pacific markets. New orders
from China sales increased 33% in the first quarter of fiscal 2014 as compared
to last year's quarterly average and we anticipate this to continue to grow
during the balance of this fiscal year. We remain confident in our growth
prospects going forward with burgeoning demand for our precision molded optics
and increasing interest in our infrared product line."

Financial Results for Three Months Ended September 30, 2013

Revenue for the first quarter of fiscal 2014 totaled approximately $2.81
million compared to approximately $2.89 million for the first quarter of
fiscal 2013, a decrease of 3%. The decrease from the first quarter of the
prior fiscal year was attributable to revenue in the prior period of $253,000
for a large purchase order from a customer in connection with the DARPA Low
Cost Thermal Imaging Manufacturing Program, partially offset by an increase in
sales for the Company's precision molded lenses for the telecommunications
market.

Revenue for precision molded optics increased 6% compared to the first quarter
of fiscal 2013. 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; the industrial tool sector, which is benefiting from
an improving Chinese market; demand for fiber laser delivery systems; and
entry into the digital projection market. Infrared products, now being
designed and introduced, are expected to accelerate the Company's growth more
meaningfully during the balance of fiscal 2014.

The gross margin as a percentage of revenue in the first quarter of fiscal
2014 was 47%, up from 41% in the first quarter of fiscal 2013 and an
improvement from 45% in the fourth quarter of fiscal 2013. Total manufacturing
costs of $1.49 million decreased by approximately $223,000 in the first
quarter of fiscal 2014 as compared to the same period of the prior fiscal year
due to a decrease of $166,000 in direct costs associated with the DARPA
related purchase order and lower coating costs for molded optics.

Selling, general and administrative expenses were $1.08 million for the first
quarter of fiscal 2014, an increase of approximately 10% from the prior
quarter. Total costs and expenses were $1.38 million in the first quarter of
fiscal 2014, an increase of $177,000, or nearly 15%, from $1.20 million in the
same period of the prior year. The increase in expenses reflects the Company's
growth strategies that include a global sales and marketing expansion, as well
as new product development expenses which increased 39% year-over-year. New
products for the infrared business include lines for thermal imaging cameras,
gas sensing devices, night vision systems, automotive driver awareness
systems, thermal weapon gun sights and infrared counter measure systems, among
others. Total operating loss for the first quarter of fiscal 2014 was
approximately $62,000 as compared to a loss of $27,000 for the same period in
fiscal 2013.

In the first quarter of fiscal 2014, the Company recognized a non-cash expense
of approximately $19,000 related to the change in the fair value of derivative
warrants issued in connection with a private placement of securities in June
2012. In the first quarter of fiscal 2013, the Company recognized non-cash
income of $96,000 for the change in fair value of these warrants. 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.

Net loss for the first quarter of fiscal 2014 was $(80,000) (including the
$19,000 non-cash expense for the change in the fair value of the warrant
liability) or $(0.01) per basic and diluted common share, compared with net
income of $101,000 (including the $96,000 non-cash income for the change in
the fair value of the warrant liability) or $0.01 per basic and diluted common
share for the same period in fiscal 2013. Non-GAAP net loss, excluding the
change in the fair value of the warrant liability, for the first quarter of
fiscal 2014 was $(61,000) or $0.00 per share compared to non-GAAP net income
of $5,000 or $0.00 per share in the first quarter of fiscal 2013.

Weighted-average basic shares outstanding increased to 13,567,712 in the first
quarter of fiscal 2014 from 11,771,902 in the first quarter of fiscal 2013.
The increase in weighted-average shares outstanding was primarily due the
issuance of shares of common stock related the conversion of debentures to
common stock, exercises of warrants, and shares issued for the Company's
employee stock purchase plan.

Cash and cash equivalents totaled approximately $2.88 million as of September
30, 2013 from $1.57 million at the beginning of the fiscal year. The increased
cash balance led to an improvement in the Company's current ratio as of
September 30, 2013 which was 4.06:1 as compared to 3.75:1 as of June 30,
2013. Total stockholders' equity as of September 30, 2013 was approximately
$6.99 million compared to $5.43 million as of June 30, 2013.

As of September 30, 2013, the Company's 12-month backlog was $4.42 million
compared to $4.14 million as of June 30, 2013.

Investor Conference Call and Webcast Details:

LightPath will host an audio conference call and webcast on Thursday, November
7, at 4:30 p.m. EST to discuss the Company's financial and operational
performance for the first quarter of fiscal 2014.

Conference Call Details
Date: Thursday, November 7, 2013
Time: 4:30 p.m. EST
Dial-in Number: 1-800-870-4263
International Dial-in Number: 1-412-317-0790
Webcast: http://www.videonewswire.com/event.asp?id=96605

It is recommended that participants dial-in approximately 5 to 10 minutes
prior to the start of the call. A transcript archive of the conference call
will be available for viewing or download from the Company's website at
www.lightpath.com 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 patent portfolio that has been granted or
licensed to it in these fields. For more information visit www.lightpath.com.

LightPath prepares its financial statements in accordance with generally
accepted accounting principles for the United States (GAAP). The discussions
of the Company's results as presented in this release include use of non-GAAP
measures "EBITDA" and "gross margin," as well as an adjusted Non-GAAP net
income. 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 GAAP.
The Company believes 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 the
Company's cost structure and provides funds for our total costs and expenses.
The Company uses gross margin in measuring the performance of its business and
has 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, loss on extinguishment of debt, change in fair value of warrants
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. The Company uses EBITDA for evaluating the relative
underlying performance of its core operations and for planning purposes. The
Company calculates 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." EBITDA calculations can be found at the end of the
tables that follow.

Non-GAAP net income excludes the non-cash impact from mark-to-market
adjustments related to the Company's warrants issued in connection with the
Company's private placement in June of 2012. The Company believes that this
non-GAAP measure is helpful in understanding the Company's underlying
operating results. Non-GAAP net income is not in accordance with, or an
alternative to GAAP net income (net loss) and may not be comparable to
information provided by other companies.

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.
407-382-4003  407-382-4003
                                              x305
jgaynor@lightpath.com      dcipolla@lightpath.com
www.lightpath.com      www.lightpath.com
Jordan Darrow
Darrow Associates, Inc.
631-367-1866
jdarrow@darrowir.com
www.darrowir.com




LIGHTPATH TECHNOLOGIES, INC.

Consolidated Balance Sheets
                                                                        (Unaudited)
                                                                        September 30,    June 30,
Assets                                                                  2013             2013
Current assets:
    Cash and cash equivalents                                        $  2,879,201      $ 1,565,215
    Trade accounts receivable, net of allowance of $10,659 and          1,997,143        2,126,907
    $20,617
    Inventories, net                                                    2,091,063        1,770,681
    Other receivables                                                   253,530          353,530
    Prepaid expenses and other assets                                   356,504          262,236
                                    Total current assets                7,577,441        6,078,569
    Property and equipment, net                                        2,257,479        2,235,781
    Intangible assets, net                                             27,180           35,397
    Other assets                                                        27,737           27,737
                                     Total assets              $  9,889,837      $ 8,377,484
Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable                                                $  1,236,020      $ 1,065,651
    Accrued liabilities                                                64,564           110,628
    Accrued payroll and benefits                                        557,762          440,462
    Deferred revenue                                                    1,966            1,966
    Capital lease obligation, current portion                           6,196            3,602
                                    Total current liabilities           1,866,508        1,622,309
Capital lease obligation, less current portion                          10,618           3,302
Deferred rent                                                           180,971          220,216
Warrant liability                                                       843,903          1,102,021
                         Total liabilities                        2,902,000        2,947,848
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; 13,794,114 and 12,958,239
           shares issued and outstanding, respectively                  137,941          129,582
    Additional paid-in capital                                          211,265,624      209,645,126
    Accumulated other comprehensive income                              62,425           52,736
    Accumulated deficit                                                 (204,478,153)    (204,397,808)
                                    Total stockholders' equity          6,987,837        5,429,636
                                    Total liabilities and            $  9,889,837      $ 8,377,484
                                    stockholders' equity





LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations and Comprehensive Income
                                          (Unaudited)
                                          Three months ended
                                          September 30,
                                          2013                   2012
Product sales, net                        $   2,809,712     $ 2,891,054
Cost of sales                            1,490,642              1,713,742
                        Gross margin      1,319,070              1,177,312
Operating expenses:
     Selling, general and administrative 1,076,622              982,455
     New product development              294,955                212,457
     Amortization of intangibles          8,217                  8,217
     Loss on disposal of property and     1,058                  702
     equipment
                        Total costs and   1,380,852              1,203,831
                        expenses
                        Operating loss    (61,782)               (26,519)
Other income (expense):
     Interest expense                     (172)                  (30,440)
     Interest expense - debt costs        (5,050)                (866)
     Change in fair value of warrant      (18,952)               95,784
     liability
     Other income (expense), net          5,611                  63,262
     Total other income (expense), net    (18,563)               127,740
                    Net income (loss)     $     (80,345)     $ 101,221
Income (loss) per common share (basic)    $       (0.01)   $    0.01
Number of shares used in per share        13,567,712             11,771,902
calculation
 (basic)
Income (loss) per common share (diluted) $       (0.01)   $    0.01
Number of shares used in per share        13,567,712             12,698,704
calculation
 (diluted)
Foreign currency translation adjustment   9,689                  (3,157)
 Comprehensive income      $     (70,656)     $  98,064
(loss)





LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
                                                 Three Months Ended
                                                 September 30,
                                                 2013            2012
Cash flows from operating activities
Net income (loss)                                $  (80,345)   $  101,221
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
 Depreciation and amortization             223,948         208,637
 Loss on disposal of property and          1,058           702
equipment
 Stock based compensation                  69,828          60,814
 Provision for doubtful accounts           5,849           (623)
receivable
 Change in fair value of warrant liability 18,952          (95,784)
 Deferred rent                             (39,245)        (12,605)
Changes in operating assets and liabilities:
Trade accounts receivables                       123,915         51,556
Other receivables                                100,000         (205,021)
Inventories                                      (320,382)       (87,617)
 Prepaid expenses and other assets            (94,268)        (73,976)
 Accounts payable and accrued liabilities     241,605         68,554
 Deferred revenue                             —               (37,750)
 Net cash provided by (used in) 250,915         (21,026)
operating activities
Cash flows from investing activities
 Purchase of property and equipment           (225,515)       (171,069)
Cash flows from financing activities
Proceeds from sale of common stock from employee 2,512           3,794
stock purchase plan
Proceeds from exercise of warrants, net of costs 1,279,447       —
 Payments on capital lease obligations        (3,062)         (900)
 Net cash provided by financing  1,278,897       2,894
activities
Effect of exchange rate on cash and cash         9,689           (3,157)
equivalents
Change in cash and cash equivalents              1,313,986       (192,358)
Cash and cash equivalents, beginning of period   1,565,215       2,354,087
Cash and cash equivalents, end of period         $2,879,201      $2,161,729
Supplemental disclosure of cash flow
information:
 Interest paid in cash                       $     175  $    1,380
 Income taxes paid                           2,166           1,736
Supplemental disclosure of non-cash investing &
financing activities:
 Prepaid interest on convertible debentures   —               87,000
through the issuance of common stock
 Purchase of equipment through capital lease 12,972          —
arrangement





   LIGHTPATH TECHNOLOGIES, INC.
   Consolidated Statement of Stockholders' Equity
   Three Months ended September 30, 2013
                            
                            (Unaudited)
                                                 Accumulated
                 Class A             Additional  Other                        Total
                 Common Stock        Paid-in     Comprehensive Accumulated    Stockholders'
                 Shares     Amount   Capital     Income        Deficit        Equity
Balance at June  12,958,239 $        $           $       $(204,397,808) $ 5,429,636
30, 2013                    129,582 209,645,126 52,736
Issuance of
common stock
for:
   Employee
   stock         3,539      35       2,477       —             —              2,512
   purchase plan
   Exercise of
   warrants, net 832,336    8,324    1,271,123   —             —              1,279,447
   of costs
Reclassification
of warrant
liability
 upon     —          —        277,070     —             —              277,070
warrant exercise
Stock based
compensation on
stock
   options and
   restricted    —          —        69,828      —             —              69,828
   stock units
Net loss         —          —        —           —             (80,345)       (80,345)
Foreign currency
translation      —          —        —           9,689         —              9,689
adjustment
Balance at                  $        $           $      
September 30,    13,794,114 137,941 211,265,624 62,425        $(204,478,153) $ 6,987,837
2013





          LIGHTPATH TECHNOLOGIES, INC.
         
         EBITDA
                                        (Unaudited)
                                        Three months ended
                                        September 30,
                                        2013                         2012
Net income (loss)                       $  (80,345)                 $
                                                                     101,221
Depreciation and amortization           223,948                      208,637
Interest expense                        5,222                        31,306
         EBITDA                         $ 148,825                   $
                                                                     341,164
Change in fair value of warrant         18,952                       (95,784)
liability
         Adjusted EBITDA                $ 167,777                   $
                                                                     245,380





SOURCE LightPath Technologies, Inc.

Website: http://www.lightpath.com