LightPath Technologies Announces Profitable First Quarter
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:
- 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.
- 12-month backlog was $5.46 million as of September 30, 2012, an increase of 12% or $566,000 from June 30, 2012.
- 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.
- Gross margin for the quarter was 41% as compared to 40% in the first quarter of fiscal 2012.
- 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 & 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)
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 of $6,596
and $18,214 2,082,146 2,133,079
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 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 2,859,508 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,
respectively 118,017 117,120
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
stockholders' equity $8,442,280 $8,271,093
========== ==========
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
equipment 702 -
Total costs and expenses 1,203,831 1,291,557
--------- ---------
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
warrant 95,784 -
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 calculation 11,771,902 9,746,107
========== =========
(basic)
Income (Loss) per common share (diluted) $0.01 $(0.02)
===== ======
Number of shares used in per share calculation 12,698,704 9,746,107
========== =========
(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
receivable (623) -
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)
operating
activities (21,026) 117,349
------- -------
Cash flows from investing
activities
Purchase
of
property
and
equipment (171,069) (347,228)
Net
cash
used
in
investing
activities (171,069) (347,228)
-------- --------
Cash flows from financing
activities
Proceeds
from
sale
of
common
stock
from
employee
stock
purchase
plan 3,794 7,871
Deferred
costs
associated
with
equity
financing - (25,000)
Payments
on
capital
lease
obligation (900) -
---- ---
Net
cash
provided
by
financing
activities 2,894 (17,129)
Effect
of
exchange
rate
on
cash
and
cash
equivalents (3,157) 11,856
------ ------
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
equity
financing - 32,139
Prepaid
interest
on
convertible
debentures
through
the
issuance
of
common
stock 87,000 87,000
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, 2012 11,711,952 $117,120 $208,410,216 $88,258 $(204,613,130) $4,002,464
Issuance of common stock for:
Employee stock purchase plan 5,261 53 3,741 - - 3,794
Interest payment on convertible debentures 84,471 844 86,156 - - 87,000
Stock based compensation on stock
options and restricted stock units - - 60,814 - - 60,814
Net income - - - - 101,221 101,221
Foreign currency translation adjustment - - - (3,157) - (3,157)
Balance at September 30, 2012 11,801,684 $118,017 $208,560,927 $85,101 $(204,511,909) $4,252,136
========== ======== ============ ======= ============= ==========
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.
