LightPath Technologies, Inc. (NASDAQ: LPTH), a manufacturer and
integrator of families of precision molded aspheric optics,
GRADIUM� glass products, and high-performance fiber-optic
collimators and isolators, today announced financial results for
the third quarter and first nine months of fiscal 2009 ended March
31, 2009.
Third Quarter Highlights:
-- Disclosure backlog scheduled to ship within the next twelve months is
$3.4 million.
-- Third quarter fiscal 2009 gross margin improves to 25% compared to 20%
for the same period in the previous fiscal year.
-- The third quarter EBITDA improved to a loss of $460,000 compared to a
loss of $1.1 million in the same period last year and $704,000 from the
second quarter of fiscal 2009.
-- Cash usage was reduced to $143,000 in the third quarter of fiscal 2009
from a usage of $1.1 million in the same quarter in the prior year and
$631,000 from the second quarter of fiscal 2009.
Mr. Jim Gaynor, Chief Executive Officer of LightPath, commented,
"During the third quarter of fiscal 2009 we continued to address
the financial challenges presented by the current market economy.
During this quarter we continued to experience the weakness in the
market demand but we believe we are near the bottom and expect to
see slightly stronger demand over the next several quarters. We
have been working diligently to penetrate new markets for LightPath
and have made significant progress with our efforts in the laser
tool market, particularly in Asia. These efforts have produced
significant orders that we anticipate to be in production over the
next 3 to 6 months subject to customer qualifications.
"I am pleased that we were able to continue to manage our costs
and increase our gross margins year over year. We have continued to
find ways to reduce our costs and continue to efficiently operate
our business. Our gross margin for the third quarter of fiscal 2009
improved from 20% to 25% compared to the third quarter of fiscal
2008, and to 26% for the first nine months of fiscal 2009, compared
to 10% the first nine months of fiscal 2008. This margin
improvement has been accomplished in spite of lower sales and
competitive price pressures.
"During the third quarter of fiscal year 2009, over 95% of our
precision molded optics were produced at our Shanghai facility
where our direct labor productivity has improved 66%. Our improved
efficiency, combined with the high percentage of our product now
produced in the Shanghai facility has significantly reduced our
labor cost. Production yields for the first nine months of fiscal
2009 averaged 87% compared to an average of 67% for the fiscal year
2008. We are also continuing to convert to high temperature, lower
cost glass materials, when combined with the 20 percentage point
improvement in yield has lowered our material costs. We have also
implemented new programs to reduce our service costs aimed at
tooling and our anti-reflective coating processes. As these
programs come on line we expect to see continued improvement in our
direct costs in future quarters."
"Additionally we have implemented a series of overhead cost
reductions. With the transfer of the majority of our manufacturing
operations to Shanghai, workforce in Orlando has been reduced by
42% since December 2007. As a result of the productivity
improvements in Shanghai, we have reduced the workforce there by
20% since December 2008. In addition we implemented a 20% salary
reduction for the majority of our US based personnel in March 2009.
All of these changes has resulted in a reduction of our cash used
in operations by 94% from the first fiscal quarter of 2009 compared
to the third fiscal quarter of 2009 and 81% from the second fiscal
quarter of 2009 compared to the third fiscal quarter of 2009. As
the full impact of these improvements are realized and our
forecasted revenues are achieved, we believe we will see continued
reductions of cash used in operations."
Financial Results for Three Months Ended March 31, 2009
Revenue for the third quarter of fiscal 2009 ended March 31,
2009 totaled $1.66 million compared to $2.11 million for the third
quarter of fiscal 2008, a decrease of 22%. The decrease from the
third quarter of last year was primarily attributable to lower
sales volumes of molded optics products and isolators. Growth in
sales going forward is expected to be derived primarily from the
precision molded optics product line driven by low cost lenses in
Asia and our infrared lenses.
Our gross margin percentage in the third quarter of fiscal 2009
compared to third quarter fiscal 2008 increased to 25% from 20%.
Total manufacturing cost of $1.2 million was $0.5 million lower in
the third quarter of fiscal 2009 compared to the same period of the
prior fiscal year. Direct costs, which include material, labor and
services, were reduced 3% points to 21% of revenue in the third
quarter of fiscal 2009, as compared to 24% of revenue in the third
quarter of fiscal 2008. Gross margins improved as a result of the
cost reduction programs the Company has implemented.
During the third quarter of fiscal 2009 total costs and expenses
decreased $591,000 to $1.0 million compared to $1.6 million for the
same period in fiscal 2008. Included in total costs and expenses
for fiscal 2009 were $817,000 in selling, general and
administrative expenses which for the third quarter of fiscal 2009
decreased $455,000 or 36% from $1.3 million for the same period in
the prior year. As a result, total operating loss for the third
quarter of fiscal 2009 improved to $0.6 million compared to a loss
of $1.2 million for the same period in fiscal 2008.
Net loss for the third quarter of fiscal 2009 ended March 31,
2009 was $756,000 or $0.11 per basic and diluted share, compared
with a net loss of $1.2 million or $0.22 per basic and diluted
share for the same period in fiscal 2008. This compared to a net
loss of $1.7 million or $0.29 per basic and diluted share for the
second quarter of fiscal 2009 ended December 31, 2008. This
represents a $969,000 decrease in net loss. The net loss for the
quarter ended December 31, 2008 included $641,000 in charges
related to fees, debt costs, and debt discount write-offs
associated with the conversion of 25% of outstanding debentures
into common stock.
Weighted-average shares outstanding increased in the third
quarter of fiscal 2009 compared to the third quarter in fiscal 2008
primarily due to the issuance of common shares related to the
debenture conversion and the prepayment of interest in common
shares.
Financial Results for the Nine Months Ended March 31, 2009
Revenue for the nine months ended March 31, 2009 totaled $5.9
million compared to $6.4 million for the first nine months of
fiscal 2008, a decrease of 8%. The decrease from the prior fiscal
year was primarily attributable to lower sales volumes of molded
optics, collimators and gradium. Growth in sales going forward is
expected to be derived primarily from the precision molded optics
driven by low cost lenses in Asia and infrared lenses.
Our gross margin percentage in the first nine months of fiscal
2009 compared to first nine months of fiscal 2008 increased to 26%
from 10%. Total cost of sales was $4.4 million which represents a
$1.4 million decrease in the first nine months half of fiscal 2009
compared to $5.8 million in the same period of the prior fiscal
year. Direct costs, which include material, labor and services,
remain stable at 23% of revenue in the first nine months of fiscal
2009, as compared to 23% in the first nine months of fiscal 2008.
Gross margins improved as a result of the cost reduction programs
the Company has implemented. In addition, we incurred a one-time
inventory valuation adjustment of approximately $374,000 for the
nine months ended March 31, 2008 that was not incurred during the
nine months ended March 31, 2009.
During the first nine months of fiscal 2009 total costs and
expenses decreased approximately $1.2 million to $3.9 million
compared to $5.0 million for the same period in fiscal 2008.
Included in total costs and expenses for the first nine months of
fiscal 2009 were $3.2 million in selling, general and
administrative expenses which decreased $908,000 from the same
period in the previous fiscal year. As a result, total operating
loss for the first nine months of fiscal 2009 improved to $2.3
million compared to $4.4 million for the same period in fiscal
2008.
Net loss for the nine months ended March 31, 2009 totaled $3.5
million or $0.58 per basic and diluted share, compared with a net
loss of $4.3 million or $0.81 per basic and diluted share for the
same period in fiscal 2008. This represents an $831,000 decrease in
net loss. The net loss for the first nine months includes $641,000
in charges related to fees, debt costs, and debt discount
write-offs associated with the conversion of 25% of the outstanding
debentures. Weighted-average shares outstanding increased in the
first nine months of fiscal 2009 compared to the first nine months
of fiscal 2008 primarily due to the issuance of common shares
related to the conversion of the debentures.
On the balance sheet, cash and cash equivalents totaled $380,068
at March 31, 2009. Total current assets and total assets at March
31, 2009 were $3.2 million and $5.5 million, respectively, compared
to $3.3 million and $5.5 million at June 30, 2008, respectively.
Total current liabilities and total liabilities at March 31, 2009
were $2.0 million and $3.5 million, respectively, compared to $3.0
million and $3.3 million, respectively, for June 30, 2008. As a
result, the current ratio as of March 31, 2009 improved to 1.65 to
1 compared to 1.10 to 1 for the year end June 30, 2008. Total
stockholders' equity at March 31, 2009 totaled $1.9 million
compared to $2.2 million at June 30, 2008.
As of March 31, 2009 the Company's backlog of orders to be
filled in less than one year, was $3.4 million compared to $3.0
million as of December 31, 2008.
Jim Gaynor concluded, "Our results for the first nine months of
this year are a positive reflection of much hard work and effort by
the team at LightPath, to control cost and mitigate expenses.
Despite a decrease in our revenues we managed to dramatically
enhance our gross margins and decrease our loss over the previous
year. We expect the full effect of the efficiencies we have
implemented to lower cash usage going forward compared to the third
quarter of fiscal 2009. Our cash balance at March 31, 2009 was
$380,000. We have taken certain actions to conserve our cash
including extending payment terms with certain of our suppliers. We
have negotiated payment plans with some key vendors and are working
with other vendors to develop payment plans.
"We believe LightPath currently has sufficient cash to fund its
operations through October 31, 2009 assuming our revenue stays at
current levels and no additional sources of capital are used. This
quarter we expect to receive approximately $276,000 for a D&O
insurance settlement from a claim filed in 2007. These funds should
provide additional flexibility in sustaining operations.
"The extent to which we can sustain our operations beyond this
timeframe will depend on our ability to increase revenues from low
cost and infrared lenses or a sale of non-strategic assets or from
future equity or debt financing. Recent booking trends have been
slower than planned given the current economic condition. However,
we believe that taking the current booking rate combined with the
existing order backlog that we will be able to generate increased
revenues.
"We remain confident that the changes we have made over the past
year will reap positive rewards as we generate more sales and build
our pipeline of business. We remain encouraged by our disclosure
backlog at $3.4 million and the number of new product proposals we
have undertaken in the past nine months. Our efforts to penetrate
high volume lower cost commercial markets in Asia show tremendous
promise for the remainder of our fiscal year. Going forward we will
continue to focus on the lower cost higher volume market
opportunities and broaden our exposure in the Asian precision optic
lens market."
Investor Conference Call and Webcast Details:
LightPath will host an audio conference call and webcast on
Thursday, May 14th at 4:15 p.m. EDT to discuss the Company's
financial and operational performance for the third quarter and
first nine months of fiscal 2009.
Conference Call Details
Date: Thursday, May 14, 2009
Time: 4:15 p.m. (EDT)
Dial-in Number: 1-877-941-6009
International Dial-in Number: 1-480-629-9770
It is recommended that participants dial-in approximately 5 to
10 minutes prior to the start of the 4:15 p.m. call. The call is
also being webcast and may be accessed at LightPath's website at
www.lightpath.com. A transcript archive of the webcast will be
available for viewing or download on the company web site shortly
after the call is concluded.
A replay of the conference call will be available approximately
3 hours after the completion of the call for 7 days, until May 21,
2009. To listen to the replay, dial 1-800-406-7325 if calling
within the U.S. and 1-303-590-3030 if calling internationally and
enter the pass code 4068699.
The call is also being webcast and may be accessed at the call
organizer website of ViaVid at www.viavid.net. The webcast will be
archived and accessible on the Company website.
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. LightPath has a strong patent portfolio that has been
granted or licensed to us in these fields. LightPath common stock
trades on the NASDAQ Capital Market under the stock symbol LPTH.
For more information visit www.lightpath.com
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 and
amortization. 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.
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.
LightPath Technologies
EBITDA Comparison
Actual Actual Actual Actual
Q1 2008 Q2 2008 Q3 2008 Q4 2008
----------- ----------- ----------- -----------
Revenue 2,308,753 2,021,566 2,114,196 2,381,956
Cost of sales 2,070,042 2,016,257 1,694,679 1,814,420
----------- ----------- ----------- -----------
Gross margin 238,711 5,309 419,517 567,536
10% 0% 20% 24%
----------- ----------- ----------- -----------
Total operating costs
and expenses 1,753,554 1,669,438 1,602,495 1,665,083
----------- ----------- ----------- -----------
Operating loss (1,514,843) (1,664,129) (1,182,978) (1,097,547)
Other income (expense) 11,795 20,978 (7,291) (33,754)
----------- ----------- ----------- -----------
Net Loss (1,503,048) (1,643,151) (1,190,269) (1,131,301)
=========== =========== =========== ===========
----------- ----------- ----------- -----------
EBITDA (1,381,348) (1,522,452) (1,053,747) (964,070)
=========== =========== =========== ===========
Actual Actual Actual
Q1 2009 Q2 2009 Q3 2009
----------- ----------- -----------
Revenue 2,337,762 1,905,202 1,656,889
Cost of sales 1,706,758 1,438,234 1,242,291
----------- ----------- -----------
Gross margin 631,004 466,968 414,598
27% 25% 25%
----------- ----------- -----------
Total operating costs
and expenses 1,505,922 1,343,723 1,011,596
----------- ----------- -----------
Operating loss (874,918) (876,755) (596,998)
Other income (expense) (148,891) (848,753) (159,177)
----------- ----------- -----------
Net Loss (1,023,809) (1,725,508) (756,175)
=========== =========== ===========
----------- ----------- -----------
EBITDA (688,434) (727,717) (483,258)
=========== =========== ===========
LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
Unaudited
March 31, June 30,
Assets 2009 2008
------------ ------------
Current assets:
Cash and cash equivalents $ 380,068 $ 358,457
Trade accounts receivable, net of allowance
of $44,304 and $44,862 1,052,949 1,334,856
Inventories, net 1,207,970 1,323,555
Prepaid expenses and other assets 581,801 277,359
------------ ------------
Total current assets 3,222,788 3,294,227
Property and equipment - net 1,666,410 1,937,741
Intangible assets - net 175,086 199,737
Debt costs, net 331,744 --
Other assets 57,306 57,306
------------ ------------
Total assets $ 5,453,334 $ 5,489,011
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,342,987 $ 1,827,461
Accrued liabilities 178,693 196,125
Accrued severance -- 97,401
Accrued payroll and benefits 271,696 423,222
Secured note payable -- 260,828
Note payable, current portion 152,624 166,645
Capital lease obligation, current portion 9,936 18,603
------------ ------------
Total current liabilities 1,955,936 2,990,285
------------ ------------
Deferred rent 220,066 222,818
Capital lease obligation, excluding current
portion -- 5,050
Note payable, excluding current portion -- 111,097
8% convertible debentures to related parties,
net of debt discount 120,891 --
8% convertible debentures, net of debt discount 1,243,093 --
------------ ------------
Total liabilities 3,539,986 3,329,250
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;
6,676,453 and 5,331,664 shares issued
and outstanding, respectively 66,765 53,317
Additional paid-in capital 203,089,544 199,847,356
Foreign currency translation adjustment 24,812 21,369
Accumulated deficit (201,267,773) (197,762,281)
------------ ------------
Total stockholders' equity 1,913,348 2,159,761
------------ ------------
Total liabilities and stockholders'
equity $ 5,453,334 $ 5,489,011
============ ============
LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
Unaudited Unaudited
Three months ended Nine months ended
March 31, March 31,
2009 2008 2009 2008
----------- ------------ ------------ ------------
Product sales, net $ 1,656,889 $ 2,114,196 $ 5,899,853 $ 6,444,515
Cost of sales 1,242,291 1,694,679 4,387,283 5,780,978
----------- ------------ ------------ ------------
Gross margin 414,598 419,517 1,512,570 663,537
Operating expenses:
Selling, general
and
administrative 816,805 1,272,269 3,155,255 4,063,080
New product
development 184,111 308,302 686,579 924,049
Amortization of
intangibles 8,217 8,217 24,651 24,651
Loss (Gain) on
sale of
property &
equipment 2,463 13,707 (5,244) 13,707
----------- ------------ ------------ ------------
Total
costs and
expenses 1,011,596 1,602,495 3,861,241 5,025,487
----------- ------------ ------------ ------------
Operating loss (596,998) (1,182,978) (2,348,671) (4,361,950)
Other income
(expense):
Interest expense (161,330) (19,357) (1,173,578) (48,285)
Investment and
other income 2,153 12,066 16,757 73,767
----------- ------------ ------------ ------------
Net loss $ (756,175) $ (1,190,269) $ (3,505,492) $ (4,336,468)
=========== ============ ============ ============
Foreign currency
translation
adjustment 3,061 9,771 3,443 51,181
----------- ------------ ------------ ------------
Comprehensive
loss $ (753,114) $ (1,180,498) $ (3,502,049) $ (4,285,287)
=========== ============ ============ ============
Loss per share
(basic and diluted) $ (0.11) $ (0.22) $ (0.58) $ (0.81)
=========== ============ ============ ============
Number of shares
used in per share
calculation 6,674,453 5,332,655 5,993,114 5,326,003
=========== ============ ============ ============
LIGHTPATH TECHNOLOGIES, INC. Unaudited
Condensed Consolidated Statements of Cash Flows Nine Months Ended
March 31,
--------------------------
2009 2008
------------ ------------
Cash flows from operating activities
Net loss $ (3,505,492) $ (4,336,468)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 432,505 330,636
Foreign exchange translation adjustment 3,443 51,181
Interest from amortization of debt discount 558,699 -
Fair value of warrants issued to induce
debenture conversion 215,975 -
Amortization of debt costs 222,564 -
Issuance of common stock for interest on
convertible debentures 97,633 -
Gain on sale of property and equipment (5,244) (7,000)
Stock based compensation 106,241 280,525
Provision for doubtful accounts receivable (558) 17,901
Loss on abandonment of fixed assets - 20,707
Deferred rent (2,752) -
Common stock issued for payment of consulting
services 49,800 -
Changes in operating assets and liabilities:
Trade accounts receivables 282,465 3,743
Inventories 115,585 400,431
Prepaid expenses and other assets 686 (93,734)
Accounts payable and accrued liabilities (750,833) 213,762
------------ ------------
Net cash used in operating activities (2,179,283) (3,118,316)
------------ ------------
Cash flows from investing activities
Purchase of property and equipment (123,884) (646,020)
Proceeds from sale of equipment 37,791 7,000
------------ ------------
Net cash used in investing activities (86,093) (639,020)
Cash flows from financing activities
Proceeds from sale of common stock, net of
costs - 2,978,544
Proceeds from sale of common stock from
employee stock purchase plan 14,220 44,548
Borrowings on 8% convertible debenture, net
of issuance costs 2,672,430 -
Payments on secured note payable (260,828) -
Payments on capital lease obligation (13,717) (12,008)
Payments on note payable (125,118) (124,983)
------------ ------------
Net cash provided by financing activities 2,286,987 2,886,101
------------ ------------
Increase in cash and cash equivalents 21,611 (871,235)
Cash and cash equivalents, beginning of period 358,457 1,291,364
------------ ------------
Cash and cash equivalents, end of period $ 380,068 $ 420,129
============ ============
Supplemental disclosure of cash flow
information:
Interest paid in cash $ 31,568 $ 29,993
Supplemental disclosure of non-cash investing
& financing activities:
Landlord credits for leasehold improvements $ - $ 161,678
Convertible debentures exchanged into
common stock $ 732,250 $ -
Fair value of warrants issued to broker of
debt financing $ 194,057 $ -
Fair value of warrants & incentive shares
issued to debenture holders $ 790,830 $ -
Intrinsic value of beneficial conversion
feature underlying convertible debentures $ 600,635 $ -
LIGHTPATH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine months ended March 31, 2009
Unaudited
Class A Additional
Common Stock Paid-in
Shares Amount Capital
-------------- -------------- -------------
Balances at June 30, 2008 5,331,664 $ 53,317 $ 199,847,356
Issuance of common stock for:
Current interest on
convertible debentures 103,971 1,040 96,593
Incentive to participate in
convertible debenture
placement, recorded as
debt discount 73,228 732 74,399
Prepayment of interest on
convertible debentures 589,614 5,896 448,099
Conversion of 25% of
debentures 475,496 4,755 727,495
Payment on consulting
service arrangements 60,000 600 49,200
Vested restricted stock units 27,700 277 (277)
Employee Stock Purchase Plan 14,780 148 14,072
Issuance of warrants to
private placement agent
recorded as debt costs 194,057
Debt discount and beneficial
conversion feature
on convertible debentures 1,316,334
Issuance of warrants as
inducement to convert
debentures 215,975
Stock based compensation on
stock options and restricted
stock units 106,241
Foreign currency adjustment
Net loss
-------------- -------------- -------------
Balances at March 31, 2009 6,676,453 $ 66,765 $ 203,089,544
============== ============== =============
Foreign
Currency Total
Translation Accumulated Stockholders'
Adjustment Deficit Equity
-------------- ------------- -------------
Balances at June 30, 2008 $ 21,369 $(197,762,281) $ 2,159,761
Issuance of common stock for:
Current interest on
convertible debentures 97,633
Incentive to participate in
convertible debenture
placement, recorded as
debt discount 75,131
Prepayment of interest on
convertible debentures 453,995
Conversion of 25% of
debentures 732,250
Payment on consulting
service arrangements 49,800
Vested restricted stock units -
Employee Stock Purchase Plan 14,220
Issuance of warrants to
private placement agent
recorded as debt costs 194,057
Debt discount and beneficial
conversion feature
on convertible debentures 1,316,334
Issuance of warrants as
inducement to convert
debentures 215,975
Stock based compensation on
stock options and restricted
stock units 106,241
Foreign currency adjustment 3,443 3,443
Net loss (3,505,492) (3,505,492)
-------------- ------------- -------------
Balances at March 31, 2009 $ 24,812 $(201,267,773) $ 1,913,348
============== ============= =============
Contacts: LightPath Technologies, Inc. Jim Gaynor President
& CEO or Dorothy Cipolla CFO +1 (407) 382-4003 Email Contact
Alliance Advisors, LLC Mark McPartland +1 (910) 686-0455 Email
Contact or Valter Pinto +1 (914) 669-0222 Email Contact
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