LightPath Technologies, Inc. (NASDAQ: LPTH) (the "Company,"
"LightPath," or "we"), a global manufacturer, distributor and
integrator of patented optical components and high-level
assemblies, announced today its financial results for the first
quarter ended September 30, 2011. Full details are available in the
Company's Quarterly Report on Form 10-Q filed today with the SEC at
www.sec.gov.
Highlights:
- Backlog scheduled to ship within the next 12 months was $4.20
million as of September 30, 2011, an increase of approximately
$1.02 million from September 30, 2010 and $330,000 from June 30,
2011.
- Revenue for the first quarter of fiscal 2012 was $2.73 million
as compared to $2.25 million in the first quarter of fiscal
2011.
- Gross margin was 40% for the first quarter of fiscal 2012 as
compared to 37% for the first quarter of fiscal 2011.
- EBITDA for the first quarter of fiscal 2012 was income of
approximately $71,000 compared to a loss of approximately $261,000
in the first quarter of fiscal 2011.
- Net loss for the first quarter of fiscal 2012 was approximately
$198,000 compared to a net loss of approximately $853,000 for the
first quarter of fiscal 2011.
- Unit shipment volume in precision molded optics was up 80% in
the first quarter of fiscal 2012 compared to the first quarter of
fiscal 2011.
Jim Gaynor, President and Chief Executive Officer of LightPath,
commented, "LightPath continued to improve its performance in the
first quarter of fiscal 2012 as indicated by the revenue growth of
21%, backlog increase of 32% and a 3 percentage points improvement
in gross margin. These improvements are due to our diverse
products, which include newly developed products, allowing us to
address new applications and serve multiple markets. While our
traditional telecom revenue and industrial tool revenue were below
our first quarter forecast, we offset this revenue shortfall by
increased sales of our products in the defense and high speed
telecom industries, particularity with our collimator and custom
optics lines. We currently have more than 25 new lenses in
development or customer qualification."
Mr. Gaynor continued, "Our backlog has continued to increase
with first quarter bookings of $3.47 million and the first quarter
was the third consecutive quarter of bookings greater than $3
million. Gross margin for the first quarter of fiscal 2012 was 40%,
which is comparable to recent quarters and a 3 percentage point
increase as compared to the first quarter of fiscal 2011. We used
$235,000 of cash during the first quarter as we accelerated capital
expenditures to ensure that we maintain our growth. Cash provided
by operations was approximately $117,000."
Mr. Gaynor concluded, "Our focus is on growth. The first quarter
of 2012 had the highest revenue level for any fiscal first quarter
since fiscal 2007. We have multiple new lens developments in
process that address applications across multiple markets including
infrared applications. As we look forward, we believe we have
positioned the Company for continued growth and success."
Financial Results for Three Months Ended
September 30, 2011
Revenue for the first quarter of fiscal 2012 totaled $2.73
million compared to $2.25 million for the first quarter of fiscal
2011, an increase of 21%. The increase from the first quarter of
the prior fiscal year was primarily attributable to higher sales
volumes in precision molded optics, which accounted for 77% of our
revenues. Our precision molded optics sales units were higher and
our average selling price was higher due to the product mix change
in the quarter's sales. Growth in sales going forward is expected
to be derived primarily from the precision molded optics product
line, particularly our low cost lenses being sold in Asia, infrared
lenses and collimators.
Our gross margin percentage in the first quarter of fiscal 2012
compared to the first quarter of fiscal 2011 increased to 40% from
37%. Total manufacturing cost of $1.65 million was approximately
$220,000 higher in the first quarter of fiscal 2012 compared to the
same period of the prior fiscal year. This was due to higher sales
volumes and higher labor costs related to higher sales volumes.
Unit shipment volume in precision molded optics was up 80% in the
first quarter of fiscal 2012 compared to the same period of the
prior fiscal year. In the first quarter of fiscal 2012, 41% of our
precision molded optics sales in units were of more expensive glass
types, compared to 26% in the same period last year.
Direct costs, which include material, labor and services,
increased to 29% of revenue in the first quarter of fiscal 2012, as
compared to 27% of revenue in the first quarter of fiscal 2011,
primarily due to labor costs. Labor costs at our Shanghai facility
increased due to increases in the minimum wage and higher benefit
costs. Overtime expense in Orlando and Shanghai was also higher
during the quarter due to unexpected tool shortages caused by
machine repairs combined with a planned machine conversion. The
machine repairs and conversion are completed which has reduced the
need for the overtime going forward. Product mix changes including
increased sales of infrared lenses and collimators which have a
higher material cost also contributed to the increase in direct
costs.
During the first quarter of fiscal 2012, total operating costs
and expenses decreased by approximately $10,000 to $1.29 million
compared to $1.30 million for the same period in fiscal 2011.
Selling, general and administrative expenses decreased by
approximately $76,000 to $996,000 in the first quarter of 2012
compared to the first quarter of 2011. This decrease was due to
lower investor relations expenses. We intend to maintain SG&A
costs generally at current levels, with some increases expected for
sales and marketing.
The net result of the higher cost of goods sold and lower total
operating costs and expenses is a net operating loss of
approximately $209,000 for the first quarter of fiscal 2012.
Interest expense was approximately $24,000 in the first quarter
of fiscal 2012 as compared to $380,000 in the first quarter of
fiscal 2011. This higher interest expense last year resulted from
the accelerated conversion by certain investors of their debentures
into common stock in the first quarter of 2011 which reduced the
Company's debt obligation by $732,500. As the interest and debt
issuance cost was amortized over the full life of the debenture,
with the accelerated conversion approximately $200,000 of cost
associated with the amount converted was expensed during the first
quarter of fiscal 2011. The debentures issued in August 1, 2008
accounted for approximately all of the interest which accrues at 8%
per annum, during the quarter ended September 30, 2011.
Net loss for the first quarter of fiscal 2012 was approximately
$198,000 or $0.02 per basic and diluted common share, compared with
to approximately $853,000 or $0.09 per basic and diluted per common
share for the same period in fiscal 2011. Weighted-average basic
shares outstanding increased to 9,746,107 in the first quarter of
fiscal 2012 compared to 9,011,214 in the first quarter in fiscal
2011 primarily due to the issuance of shares of common stock
related to the conversion of debentures in fiscal 2011.
Cash and cash equivalents totaled approximately $694,000 at
September 30, 2011. Total current assets and total assets at
September 30, 2011 were $4.89 million and $7.50 million compared to
$4.61 million and $7.12 million, respectively, at June 30, 2011.
Total current liabilities and total liabilities at September 30,
2011 were $1.97 million and $3.49 million compared to $1.53 million
and $3.09 million, respectively, for June 30, 2011. As a result,
the current ratio as of September 30, 2011 decreased to 2.49 to 1
compared to 3.01 to 1 as of June 30, 2011. Total stockholders'
equity at September 30, 2011 totaled $4.00 million compared to
$4.03 million at June 30, 2011.
As of September 30, 2011 our backlog of orders scheduled to ship
in the next 12 months, was $4.20 million compared to $3.87 million
as of June 30, 2011.
Investor Conference Call and Webcast
Details:
LightPath will host an audio conference call and webcast on
Thursday, November 10th at 4:00 p.m. ET to discuss the Company's
financial and operational performance for the first quarter and
fiscal year 2012.
Conference Call Details Date: Thursday,
November 10, 2011 Time: 4:00 p.m. (ET) Dial-in Number:
1-877-407-8033 International Dial-in Number: 1-201-689-8033
It is recommended that participants dial-in approximately 5 to
10 minutes prior to the start of the 4:00 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 & 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
are 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 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.
LIGHTPATH TECHNOLOGIES, INC.
EBITDA
(Unaudited)
Three months ended
September 30,
2011 2010
-------------- --------------
Net Loss $ (198,447) $ (852,950)
Depreciation and amortization 245,438 211,543
Interest expense 24,220 380,510
-------------- --------------
EBITDA $ 71,211 $ (260,897)
============== ==============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Balance Sheets
(unaudited)
September 30, June 30,
Assets 2011 2011
-------------- --------------
Current assets:
Cash and cash equivalents $ 693,748 $ 928,900
Trade accounts receivable, net of allowance
of $7,245 and $7,245 2,069,979 1,833,044
Inventories, net 1,818,189 1,622,637
Other receivables -- 30,943
Prepaid interest expense 72,500 7,250
Prepaid expenses and other assets 233,634 189,630
-------------- --------------
Total current assets 4,888,050 4,612,404
Property and equipment, net 2,483,029 2,373,022
Intangible assets, net 92,916 101,133
Debt costs, net 6,380 7,180
Other assets 27,737 27,737
-------------- --------------
Total assets $ 7,498,112 $ 7,121,476
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,332,500 $ 928,790
Accrued liabilities 136,634 123,705
Accrued payroll and benefits 497,146 481,318
-------------- --------------
Total current liabilities 1,966,280 1,533,813
Deferred rent 435,605 464,262
8% convertible debentures to related parties 1,012,500 1,012,500
8% convertible debentures 75,000 75,000
-------------- --------------
Total liabilities 3,489,385 3,085,575
-------------- --------------
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;
9,761,129 and 9,713,099 shares issued and
outstanding, respectively 97,611 97,131
Additional paid-in capital 207,795,377 207,636,440
Foreign currency translation adjustment 62,449 50,593
Accumulated deficit (203,946,710) (203,748,263)
-------------- --------------
Total stockholders' equity 4,008,727 4,035,901
-------------- --------------
Total liabilities and stockholders'
equity $ 7,498,112 $ 7,121,476
============== ==============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations
(Unaudited)
Three months ended
September 30,
2011 2010
---------------- ----------------
Product sales, net $ 2,733,125 $ 2,253,922
Cost of sales 1,650,501 1,427,474
---------------- ----------------
Gross margin 1,082,624 826,448
Operating expenses:
Selling, general and administrative 995,621 1,071,198
New product development 287,719 222,585
Amortization of intangibles 8,217 8,217
Gain on sale of property and equipment -- (540)
---------------- ----------------
Total costs and expenses 1,291,557 1,301,460
---------------- ----------------
Operating loss (208,933) (475,012)
Other income (expense):
Interest expense (23,420) (87,322)
Interest expense - debt discount -- (209,666)
Interest expense - debt costs (800) (83,522)
Other income (expense), net 34,706 2,572
---------------- ----------------
Total other income (expense), net 10,486 (377,938)
---------------- ----------------
Net loss $ (198,447) $ (852,950)
================ ================
Loss per common share (basic and
diluted) $ (0.02) $ (0.09)
================ ================
Number of shares used in per share
calculation (basic and diluted) 9,746,107 9,011,214
================ ================
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(unaudited)
Three Months ended
September 30,
----------------------------------
2011 2010
---------------- ----------------
Cash flows from operating activities
Net loss $ (198,447) $ (852,950)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 245,438 211,543
Interest from amortization of debt
discount -- 209,666
Interest from amortization of debt
costs 800 83,522
Gain on sale of property and equipment -- (540)
Stock based compensation 64,546 50,387
Change in provision for doubtful
accounts receivable -- 3,291
Deferred rent (28,657) (23,537)
Changes in operating assets and
liabilities:
Trade accounts receivables (236,935) 36,797
Other receivables 30,943 --
Inventories (195,552) (83,364)
Prepaid expenses and other assets 2,746 108,261
Accounts payable and accrued
liabilities 432,467 214,637
---------------- ----------------
Net cash provided by (used in)
operating activities 117,349 (42,287)
---------------- ----------------
Cash flows from investing activities
Purchase of property and equipment (347,228) (288,616)
Proceeds from sale of equipment -- 540
---------------- ----------------
Net cash used in investing activities (347,228) (288,076)
---------------- ----------------
Cash flows from financing activities
Proceeds from exercise of stock options -- 5,653
Proceeds from sale of common stock from
employee stock purchase plan 7,871 4,888
Deferred costs associated with equity
financing (25,000) --
Costs associated with conversion of
debentures -- (6,098)
Exercise of warrants -- 231,659
---------------- ----------------
Net cash provided by (used in) financing
activities (17,129) 236,102
Effect of exchange rate on cash and cash
equivalents 11,856 (22,840)
---------------- ----------------
Decrease in cash and cash equivalents (235,152) (117,101)
Cash and cash equivalents, beginning of
period 928,900 1,464,351
---------------- ----------------
Cash and cash equivalents, end of period $ 693,748 $ 1,347,250
================ ================
Supplemental disclosure of cash flow
information:
Interest paid in cash $ -- $ 80
Income taxes paid 1,755 110
Supplemental disclosure of non-cash
investing & financing activities:
Convertible debentures converted into
common stock $ -- $ 732,500
Accrued deferred costs associated with
equity financing $ 32,139 $ --
Prepaid interest on convertible
debentures through the issuance of
common stock $ 87,000 $ --
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statement of Stockholders' Equity
Three months ended September 30, 2011
(unaudited)
Class A Additional
Common Stock Paid-in
Shares Amount Capital
------------ ------------- ---------------
Balance at June 30, 2011 9,713,099 $ 97,131 $ 207,636,440
Issuance of common stock for:
Employee stock purchase plan 6,198 62 7,809
Interest payment on convertible
debentures 41,832 418 86,582
Stock based compensation on stock
options and restricted stock
units -- -- 64,546
Net loss -- -- --
Foreign currency translation
adjustment -- -- --
Comprehensive loss
------------ ------------- ---------------
Balance at September 30, 2011 9,761,129 $ 97,611 $ 207,795,377
============ ============= ===============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statement of Stockholders' Equity
Three months ended September 30, 2011
(unaudited)
Foreign
Currency Total
Translation Accumulated Stockholders'
Adjustment Deficit Equity
------------- ------------- -------------
Balance at June 30, 2011 $ 50,593 $(203,748,263) $ 4,035,901
Issuance of common stock for:
Employee stock purchase plan -- -- 7,871
Interest payment on convertible
debentures -- -- 87,000
Stock based compensation on stock
options and restricted stock
units -- -- 64,546
Net loss -- (198,447) (198,447)
Foreign currency translation
adjustment 11,856 -- 11,856
-------------
Comprehensive loss (186,591)
------------- ------------- -------------
Balance at September 30, 2011 $ 62,449 $(203,946,710) $ 4,008,727
============= ============= =============
Contacts: LightPath Technologies, Inc. Jim Gaynor President
& CEO or Dorothy Cipolla CFO +1 (407) 382-4003
dcipolla@lightpath.com
Lightpath Technologies (NASDAQ:LPTH)
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