-- Disclosure backlog scheduled to ship within fiscal 2010 is $2.3
million.
-- Gross margin for the fourth quarter fiscal 2009 improved to 33%
compared to 24% for the same period last fiscal year.
-- EBITDA for the fourth quarter of fiscal 2009 improved to a loss of
$21,000 compared to a loss of $964,000 in the same period last year and
$483,000 from the third quarter of fiscal 2009.
-- Net cash generated was a positive $200,000 in the fourth quarter of
fiscal 2009, an improvement from a usage of $86,000 in the fourth quarter
of the prior year and a usage of $143,000 in the third quarter of fiscal
2009.
-- Revenue for the fourth quarter of fiscal 2009 was $1.6 million for
fiscal 2009 compared to $2.4 million for the same period in fiscal 2008, a
decrease of 33%.
Mr. Jim Gaynor, Chief Executive Officer of LightPath, commented, "During
the fourth quarter of fiscal 2009 we continued to address the financial
challenges presented by the current market economy. Even though our revenue
remained flat compared to the previous quarter and is down compared to the
fourth quarter of fiscal 2008, our cost performance has continued to
improve. We believe the worst of the market declines are behind us and
expect to see stronger bookings 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
have now completed customer qualification and are in production.
"I am pleased to report that we have again increased our gross margins
during the fourth quarter of fiscal 2009 and we have continued to reduce
our operating costs. Our gross margin for the fourth quarter of fiscal 2009
improved to 33% from 24% compared to the fourth quarter of fiscal 2008, and
to 27% for the fiscal year 2009 compared to 14% for the fiscal year 2008.
This margin improvement has been accomplished in the face of lower sales
and competitive price pressure.
"During the fourth quarter of fiscal year 2009, over 95% of our precision
molded optics were produced at our Shanghai facility. Direct labor
productivity has improved 71% in the fourth quarter of fiscal 2009 compared
to the average for fiscal 2008 in our Shanghai factory. This efficiency
improvement combined with the high percentage of product now produced in
this facility has significantly reduced our labor cost. Production yields
for the fourth quarter of fiscal 2009 averaged 92% and for the entire
fiscal year 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 and this conversion 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 already low direct costs in
future quarters.
"In the fourth quarter of fiscal 2009 we saw the full impact of our direct
cost reductions and of the previously implemented overhead reductions
resulting in a reduction of our cash used in operations by $737,000
compared to the third quarter of fiscal 2009. For the fiscal year 2009
compared to fiscal 2008, there was a $1.9 million reduction in cash used in
operations.
"These cost improvements along with aggressive cash management which has
resulted from the above detailed actions have positioned LightPath so that
with modest increases in volume LightPath can become cash positive and
reach its goal of profitability."
Financial Results for Three Months Ended June 30, 2009
Revenue for the fourth quarter of fiscal 2009 ended June 30, 2009 totaled
$1.6 million compared to $2.4 million for the fourth quarter of fiscal
2008, a decrease of 33%. The decrease from the fourth quarter of last year
was primarily attributable to lower sales volumes across all product lines.
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.
Our gross margin percentage in the fourth quarter of fiscal 2009 compared
to fourth quarter of fiscal 2008 increased to 33% from 24%. Total
manufacturing cost of $1.1 million was $755,000 lower in the fourth 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% to 23%
of revenue in the fourth quarter of fiscal 2009, as compared to 26% of
revenue in the fourth quarter of fiscal 2008. Gross margins improved as a
result of the cost reduction programs we have implemented.
During the fourth quarter of fiscal 2009 total costs and expenses decreased
$975,000 to $690,000 compared to $1.7 million for the same period in fiscal
2008. Included in total costs and expenses for the fourth quarter of fiscal
2009 were $481,000 in selling, general and administrative expenses, which
decreased $896,000 or 65% from $1.4 million for the same period in the
prior fiscal year. In the fourth quarter of fiscal 2009, LightPath
benefited from two one time events: receipt of $186,000 from our D&O
insurance carrier as a refund for legal expenses and receipt of $181,000
gain on funds received from the Chinese government related to the move of
our manufacturing facility in Shanghai. Other items creating the reduction
are salaries and benefits which were lower by $226,000 comparing the fourth
quarter of fiscal 2009 to fiscal 2008 due to reduced headcount and salary
reductions and stock compensation was $90,000 lower and rent & utilities
were $52,000 lower. As a result, total operating loss for the fourth
quarter of fiscal 2009 improved to $159,000 compared to a loss of $1.1
million for the same period in fiscal 2008.
Net loss for the fourth quarter of fiscal 2009 was $318,000 or $0.05 per
basic and diluted share, compared with a net loss of $1.1 million or $0.21
basic and diluted per share for the same period in fiscal 2008. This
compared to a net loss of $756,000 or $0.11 per basic and diluted share for
the third quarter of fiscal 2009. This represents an $814,000 decrease in
net loss from the fourth quarter of fiscal 2008 compared to the fourth
quarter of fiscal 2009. Weighted-average shares outstanding increased in
the fourth quarter of fiscal 2009 compared to the fourth quarter in fiscal
2008 primarily due to the issuance of common shares related to the partial
conversion of debenture.
Financial Results for the Year Ended June 30, 2009
Revenue for the fiscal year ended June 30, 2009 totaled $7.5 million
compared to $8.8 million for the fiscal year 2008, a decrease of 15%. 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, particularly our low cost lenses being sold in Asia.
Our gross margin percentage in the fiscal year 2009 compared to fiscal year
2008 increased to 27% from 14%. Total cost of sales was $5.4 million which
represents a $2.1 million decrease in the fiscal year 2009 compared to $7.6
million in the prior fiscal year. Direct costs, which include material,
labor and services, were 23% of revenue in fiscal year 2009, as compared to
24% in fiscal year 2008. Gross margins improved as a result of the cost
reduction programs the Company has implemented.
During the fiscal year 2009 total costs and expenses decreased
approximately $2.1 million to $4.6 million compared to $6.7 million for
fiscal year 2008. Included in total costs and expenses for fiscal year 2009
were $3.7 million in selling, general and administrative expenses which
decreased $1.8 million from the same period in the previous fiscal year. In
the fourth quarter of fiscal 2009 LightPath benefited from two one time
events: receipt of $186,000 from our D&O insurance carrier as a refund of
legal expenses and receipt of $181,000 from the Chinese government related
to the move of our manufacturing facility in Shanghai. Overhead expenses
were reduced $894,000 from fiscal 2008 due to headcount reductions and
salary reductions and reduced rent and utilities due to reducing space in
Orlando. Total operating loss for the fiscal year 2009 improved to $2.5
million compared to $5.5 million for fiscal year 2008.
Net loss for the fiscal year ended June 30, 2009 totaled $3.8 million or
$0.62 per basic and diluted share, compared with a net loss of $5.5 million
or $1.03 basic and diluted per share for fiscal year 2008. This represents
a $1.7 million decrease in net loss. The net loss for the fiscal year 2009
includes $641,000 in charges related to fees, debt costs write offs, and
debt discount write-offs associated with the conversion of 25% of the
outstanding debentures. Weighted-average shares outstanding increased in
fiscal year 2009 compared to fiscal year 2008 primarily due to the issuance
of common shares related to the partial conversion of the debentures.
On the balance sheet, cash and cash equivalents totaled $579,949 at June
30, 2009. Total current assets and total assets at June 30, 2009 were $3.3
million and $5.8 million compared to $3.3 million and $5.5 million at June
30, 2008, respectively. Total current liabilities and total liabilities at
June 30, 2009 were $2.0 million and $4.1 million compared to $3.0 million
and $3.3 million, respectively, for June 30, 2008. As a result, the current
ratio as of June 30, 2009 improved to 1.61 to 1 compared to 1.10 to 1 for
the year end June 30, 2008. Total stockholders' equity at June 30, 2009
totaled $1.7 million compared to $2.2 million at June 30, 2008.
As of June 30, 2009 the Company's backlog of orders to be filled in less
than one year was $2.3 million compared to $3.4 million as of March 31,
2009.
Jim Gaynor concluded, "Our results for the fiscal year are a positive
reflection of much hard work and effort by the team at LightPath, to
control costs 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 will continue to reduce cash usage in operations going
forward. With the operating efficiencies and low cost structure we have now
put in place our focus going forward will be growth. 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 backlog scheduled to ship within the next 12 months of
$2.3 million, and the number of new product proposals we have undertaken in
the past year. We currently have over 15 new lenses in development for new
customer programs and to fill out our portfolio of lenses addressing our
targeted markets. Our efforts to penetrate high volume lower cost
commercial markets in Asia show tremendous promise for next fiscal year.
Going forward we will continue our focus on the lower cost higher volume
market opportunities and implementing channels to 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,
September 24th at 4:00 p.m. EDT to discuss the Company's financial and
operational performance for the fourth quarter and fiscal year 2009.
Conference Call Details Date: Thursday, September 24, 2009 Time: 4:00 p.m. (EDT) Dial-in Number: 1-877-407-0778 International Dial-in Number: 1-201-689-8566It 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. 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 Actual
Q1 2009 Q2 2009 Q3 2009 Q4 2009
Revenue 2,337,762 1,905,202 1,656,889 1,589,692
Cost of sales 1,706,758 1,438,234 1,242,291 1,059,235
----------- ----------- ----------- -----------
Gross margin 631,004 466,968 414,598 530,457
27% 25% 25% 33%
----------- ----------- ----------- -----------
Total operating costs
and expenses 1,505,922 1,343,723 1,011,596 689,876
----------- ----------- ----------- -----------
Operating loss (874,918) (876,755) (596,998) (159,419)
Other income (expense) (148,891) (848,753) (159,177) (158,149)
----------- ----------- ----------- -----------
Net Loss (1,023,809) (1,725,508) (756,175) (317,568)
=========== =========== =========== ===========
----------- ----------- ----------- -----------
EBITDA (688,434) (727,717) (483,258) (21,143)
=========== =========== =========== ===========
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Balance Sheets
June 30, June 30,
Assets 2009 2008
------------ ------------
Current assets:
Cash and cash equivalents $ 579,949 $ 358,457
Trade accounts receivable, net of allowance
of $26,131 and $44,862 973,634 1,334,856
Other receivables 183,413 --
Inventories, net 983,278 1,323,555
Prepaid interest 366,219 --
Prepaid expenses and other assets 206,625 277,359
------------ ------------
Total current assets 3,293,118 3,294,227
Property and equipment - net 1,991,828 1,937,741
Intangible assets - net 166,869 199,737
Debt costs, net 299,080 --
Other assets 78,701 57,306
------------ ------------
Total assets $ 5,829,596 $ 5,489,011
============ ============
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 1,376,599 $ 1,827,461
Accrued liabilities 181,318 196,125
Accrued severance -- 97,401
Accrued payroll and benefits 332,609 423,222
Secured note payable -- 260,828
Note payable, current portion 152,758 166,645
Capital lease obligation, current portion 5,050 18,603
------------ ------------
Total current liabilities 2,048,334 2,990,285
------------ ------------
Deferred rent 644,056 222,818
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 174,568 --
8% convertible debentures, net of debt discount 1,271,412 --
------------ ------------
Total liabilities 4,138,370 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;
6,696,992 and 5,331,664 shares issued
and outstanding 66,970 53,317
Additional paid-in capital 203,151,364 199,847,356
Foreign currency translation adjustment 58,233 21,369
Accumulated deficit (201,585,341) (197,762,281)
------------ ------------
Total stockholders' equity 1,691,226 2,159,761
------------ ------------
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations
Unaudited
Three months ended Twelve months ended
June 30, June 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Product sales, net $ 1,589,692 $ 2,381,956 $ 7,489,545 $ 8,826,471
Cost of sales 1,059,235 1,814,420 5,446,518 7,595,398
------------ ------------ ------------ ------------
Gross margin 530,457 567,536 2,043,027 1,231,073
Operating expenses:
Selling, general and
administrative 480,838 1,377,286 3,636,093 5,440,366
New product
development 200,821 290,220 887,400 1,214,269
Amortization of
intangibles 8,217 8,217 32,868 32,868
Loss (Gain) on
sale of
property &
equipment - (10,640) (5,244) 3,067
------------ ------------ ------------ ------------
Total costs
and expenses 689,876 1,665,083 4,551,117 6,690,570
------------ ------------ ------------ ------------
Operating loss (159,419) (1,097,547) (2,508,090) (5,459,497)
Other income
(expense):
Interest expense (162,942) (38,516) (1,336,520) (86,801)
Investment and
other income 4,793 4,762 21,550 78,529
------------ ------------ ------------ ------------
Net loss $ (317,568) $ (1,131,301) $ (3,823,060) $ (5,467,769)
============ ============ ============ ============
Loss per share
(basic and
diluted) $ (0.05) $ (0.21) $ (0.62) $ (1.03)
============ ============ ============ ============
Number of shares
used in per share
calculation 6,691,966 5,331,664 6,167,827 5,327,419
============ ============ ============ ============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
Years Ended
June 30,
--------------------------
2009 2008
------------ ------------
Cash flows from operating activities
Net loss $ (3,823,060) $ (5,467,769)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 565,988 459,351
Interest from amortization of debt discount 640,695 -
Fair value of warrants issued to induce
debenture conversion 215,975 -
Interest from amortization of debt costs 255,228 -
Issuance of common stock for interest on
convertible debentures 97,633 -
Gain (Loss) on disposal of equipment (5,244) 3,067
Stock based compensation 156,267 415,238
Provision for doubtful accounts receivable (18,731) 15,894
Deferred rent 421,238 61,140
Common stock issued for payment of consulting
services 61,799 -
Changes in operating assets and liabilities:
Trade accounts receivables 379,953 58,065
Inventories 340,277 529,769
Prepaid expenses and other current assets (102,288) (56,499)
Accounts payable and accrued liabilities (653,683) 525,780
------------ ------------
Net cash used in operating activities (1,467,953) (3,455,964)
------------ ------------
Cash flows from investing activities
Purchase of property and equipment (563,764) (660,003)
Proceeds from sale of equipment 37,791 17,640
------------ ------------
Net cash used in investing activities (525,973) (642,363)
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 44,549
Borrowings on 8% convertible debenture, net of
issuance costs 2,568,749 -
Payments on secured note payable (260,828) 260,828
Payments on capital lease obligation (18,603) (16,285)
Payments on note payable (124,984) (166,644)
------------ ------------
Net cash provided by financing activities 2,178,554 3,100,992
------------ ------------
Effect of exchange rate on cash and cash
equivalents 36,864 64,428
Increase in cash and cash equivalents 184,628 (997,335)
Cash and cash equivalents, beginning of period 358,457 1,291,364
------------ ------------
Cash and cash equivalents, end of period $ 579,949 $ 358,457
============ ============
Supplemental disclosure of cash flow
information:
Interest paid in cash $ 34,817 $ 86,801
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
Year ended June 30, 2008 and 2009
Class A Additional
Common Stock Paid-in
Shares Amount Capital
-------------- -------------- -------------
Balances at June 30, 2007 4,512,543 $ 45,125 $ 196,417,217
Private placement of
common stock 800,000 8,000 2,970,544
Issuance of common stock
under the Employee
Stock Purchase Plan 14,121 142 44,407
Issuance of restricted
stock awards, net of
vesting and forfeitures 5,000 50 (50)
Stock based compensation - - 415,238
Comprehensive loss:
Foreign currency
translation
adjustment
Net Loss
Comprehensive loss
-------------- -------------- -------------
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 future
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 74,839 748 61,051
Vested restricted stock
units 33,400 334 (334)
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 - - 156,267
Foreign currency translation
adjustment
Net loss - - -
Comprehensive loss
-------------- -------------- -------------
Balances at June 30, 2009 6,696,992 $ 66,970 $ 203,151,364
-------------- -------------- -------------
Foreign
Currency Total
Translation Accumulated Stockholders’
Adjustment Deficit Equity
------------- ------------- -------------
Balances at June 30, 2007 $ (43,059) $(192,294,512) $ 4,124,771
Private placement of
common stock - - 2,978,544
Issuance of common stock
under the Employee
Stock Purchase Plan - - 44,549
Issuance of restricted
stock awards, net of
vesting and forfeitures - - -
Stock based compensation - - 415,238
Comprehensive loss:
Foreign currency
translation
adjustment 64,428 64,248
Net Loss (5,467,769) (5,467,769)
-------------
Comprehensive loss (5,403,521)
------------- ------------- -------------
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 future
interest on convertible
debentures - - 453,995
Conversion of 25% of
debentures - - 732,250
Payment on consulting
service arrangements - - 61,799
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 - - 156,267
Foreign currency translation
adjustment 36,864 36,864
Net loss - (3,823,060) (3,823,060)
-------------
Comprehensive loss (3,786,196)
------------- ------------- -------------
Balances at June 30, 2009 $ 58,233 $(201,585,341) $ 1,691,226
------------- ------------- -------------
Contact Information: Contacts: LightPath Technologies, Inc. Jim Gaynor President & CEO or Dorothy Cipolla CFO +1 (407) 382-4003