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Last updated on April 19, 2014 at 5:20 EDT

LightPath Technologies Announces Profitable Second Quarter

January 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:

  • 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.
  • 12-month backlog increased 21% to $4.64 million as of December 31, 2012 compared to $3.82 as of December 31, 2011.
  • 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.
  • EBITDA increased to $356,000, or 12% of revenues, compared to $6,000, in the second quarter of fiscal 2012.
  • 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'
                                                         equity                                                                       $8,581,518                                          $8,271,093
                                                                                                                                      ==========                                          ==========
                     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                                              $2,916,781                                                                            $2,672,138                   $5,807,835               $5,405,263
    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 administrative                                                          1,018,367                      883,882                2,000,822                 1,879,503
                                                                    New product development                                                                 264,311                      271,532                  476,768                   559,251
                                                                    Amortization of intangibles                                                               8,217                        8,217                   16,434                    16,434
                                                                     Loss on disposal of property and
                                                                     equipment                                                                                  545                                        -                     1,247                        -
                                                                                                                                                                 ---
                                                                                                   Total costs and expenses                                                 1,291,440                1,163,631                 2,495,271                2,455,188
                                                                                                                                                                            ---------                ---------                 ---------                ---------
                                                                                                   Operating loss                                                             (25,120)                (319,861)                  (51,639)                (528,794)
    Other income (expense):
                                                                    Interest expense                                                                        (14,616)                     (21,750)                 (45,056)                  (45,170)
                                                                    Interest expense - debt costs                                                               (884)                        (816)                  (1,750)                   (1,616)
                                                                     Change in fair value of derivative
                                                                     warrant                                                                                169,552                                        -                   265,336                        -
                                                                    Other income (expense), net                                                              11,840                         (872)                  75,102                    33,834
                                                                                                                                                              ------
                                                                    Total other income (expense), net                                                            165,892                      (23,438)                 293,632                   (12,952)
                                                                                                                                                             -------
                                                                                Net income (loss)                                                           $140,772                    $(343,299)                $241,993                 $(541,746)
                                                                                                                                                            ========                    =========                 ========                 =========
    Income (loss) per common share (basic)                               $0.01                                                                                $(0.04)                       $0.02                    (0.06)
                                                                         =====                                                                                ======                        =====                    =====
    Number of shares used in per share calculation                                                                                                                         11,801,684                9,761,129                11,786,793                9,753,618
                                                                                                                                                                           ==========                =========                ==========                =========
        (basic)
    Income (Loss) per common share (diluted)                             $0.01                                                                                $(0.04)                       $0.02                   $(0.06)
                                                                         =====                                                                                ======                        =====                   ======
    Number of shares used in per share calculation                                                                                                                         12,728,486                9,761,129                12,738,595                9,753,618
                                                                                                                                                                           ==========                =========                ==========                =========
        (diluted)
    Foreign currency translation adjustment                                                                                                                                     3,651                    9,278                       494                   21,134
                                                                                                                                                                                                         -----                       ---                   ------
                    Comprehensive income (loss)                       $144,423                                                                             $(334,021)                    $242,487                $(520,612)
                                                                      ========                                                                             =========                     ========                =========

                                                                                             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 costs                                                                                     1,750             1,616
           Loss on disposal of property and equipment                                                                                   1,247                 -
           Stock based compensation                                                                                                   128,286           137,976
           Change in provision for doubtful accounts receivable                                                                        (4,216)            8,557
           Change in fair value of warrant liability                                                                                 (265,336)                -
           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 liabilities                                                                                      187,367           317,107
        Deferred revenue                                                                                                              (35,784)                -
                                                                                                                                      -------
                      Net cash provided by (used in) operating activities                                                             (90,321)          256,607
                                                                                                                                      -------           -------
    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 employee stock purchase plan                                                                3,794             7,871
    Deferred costs associated with equity financing                                                                                         -           (76,527)
        Payments on capital lease obligation                                                                                           (1,801)                -
                                                                                                                                       ------               ---
                     Net cash provided by (used in) financing activities                                                                1,993           (68,656)
    Effect of exchange rate on cash and cash equivalents                                                                                  494            21,134
                                                                                                                                          ---            ------
    Decrease in cash and cash equivalents                                                                                            (576,557)         (333,512)
    Cash and cash equivalents, beginning of period                                                                                  2,354,087           928,900
                                                                                                                                    ---------           -------
    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 with equity financing                                                              $            -          $144,070
          Prepaid interest on convertible debentures through the issuance of common stock                                             $87,000           $87,000
                                                               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, 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
    Warrant issued for consulting services  -                                                                               -    13,000               -               -              13,000
    Stock based compensation on stock
                                            options and restricted stock units                                              -         -         128,286               -                   -     128,286
    Net income                              -                                                                               -         -               -         241,993             241,993
    Foreign currency translation adjustment -                                                                               -         -             494               -                 494
    Balance at December 31, 2012                                                                                   11,801,684  $118,017    $208,641,399         $88,752       $(204,371,137) $4,477,031
                                                                                                                   ==========  ========    ============         =======       =============  ==========

                                 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 amortization                                           199,658                 326,269    408,295     571,707
    Interest expense                                                         15,500                  22,566     46,806      46,786
                       EBITDA                                              $355,930                  $5,536   $697,094     $76,747
                                                                             ======

SOURCE LightPath Technologies, Inc.


Source: PR Newswire