SOLON, Ohio, Nov. 19, 2002 (PRIMEZONE) -- Advanced Lighting Technologies, Inc. (Nasdaq:ADLT) today announced sales of $34.3 million for the quarter ended September 30, 2002, compared with $51.9 million for the comparable year-ago quarter. The decrease in the first quarter sales was primarily due to the previously announced sale of the Company's fixture subsidiaries in fiscal 2002. The net loss for fiscal 2003 first quarter was $1.5 million compared with a loss of $86.9 million for the same period last year. The diluted net loss per share, after preferred share accretion and the impact of the warrant to be issued to General Electric Company as previously announced, was $.18 for the fiscal 2003 first quarter as compared to a net loss per share after preferred share accretion of $3.75 for the same period last year.
Wayne R. Hellman, Chairman and Chief Executive Officer of Advanced Lighting Technologies, said, "The benefits of the transfer of power supply manufacturing to India from the U.K. and other restructuring measures in fiscal 2002 are beginning to be realized. Our gross margin has risen to 39% and our income from operations for this quarter was $1.5 million. In fiscal 2003, the Company expects to achieve its third consecutive year of positive cash flow from operating activities."
Fiscal 2003 first quarter metal halide sales increased 7 percent to $26.0 million, compared with $24.2 million for the same period a year ago, excluding sales made by the fixture subsidiaries that were sold in fiscal 2002. First quarter sales of Advanced Lighting's second-generation metal halide lighting product line, Uni-Form(R) Pulse Start, increased 14 percent to $8.4 million from $7.4 million in the comparable year-ago quarter. These increases are mainly due to sales to the former fixture subsidiaries that are now part of the Company's external sales and to growth in metal halide material sales. Mr. Hellman stated, "Although the economy and the lighting industry remain weak, we continue to be encouraged by increases in sales that are occurring at our metal halide materials operation and we are working toward a profitable fiscal 2003."
Special Charges, Asset Impairment and Accounting Change
The quarter ended September 30, 2001 included special charges and asset impairments of $14.3 million ($8.9 million of which were non-cash items) and a gain on a lawsuit settlement of $554,000. The special charges related principally to the restructuring of the Company's power supply operations and reduction of overall staffing levels. Further, the Company recorded a $4.6 million reserve for the impairment of an officer loan. Fiscal 2002 results also included a non-cash cumulative effect of accounting change of $71.2 million resulting from the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Intangible Assets.
Financing of Future Operations
As previously reported, the Company is in default under its existing bank credit facility and entered into an agreement with its bank group allowing it access to its revolving credit facility at least through March 31, 2003. As part of this agreement, the Company did not make its $4 million interest payment on its Senior Notes, which was due September 16, 2002. As a result, the Company is in default under the Senior Notes Indenture. Unless this Event of Default is waived, the Indenture trustee may, and at the request of the holders of 25% of the Senior Notes must, declare the entire principal amount of the Senior Notes to be immediately due and payable, and may take certain actions to enforce the terms of the Senior Notes. Management is in negotiations with its existing banks, Senior Note holders, investment bankers and other stakeholders on various alternatives available to the Company. However, the Company's ability to enter into a new lending arrangement or re-negotiate the terms of its 8% Senior Notes is uncertain as of this time.
Conference Call on the Web
The Company will host a conference call with the investment community on November 21 at 1:00 p.m. Eastern to discuss the results of the quarter. Interested parties may access the live conference call via telephone or the Internet.
Telephone: 877-567-5754 Pass Code: 6739474
Internet: Live webcast at www.adlt.com
A replay of the call will begin at 5:00 p.m. Eastern and will conclude at midnight on November 29, 2002.
Telephone: 800-642-1687 Pass code: 6739474 International: 706-645-9291 Pass code: 6739474
Please refer to the attached financial statements for additional information on the first quarter results.
About Advanced Lighting Technologies
Advanced Lighting Technologies, Inc. is an innovation-driven designer, manufacturer and marketer of metal halide lighting products, including materials, system components, systems and equipment. The Company also develops, manufactures and markets passive optical telecommunications devices, components and equipment based on the optical coating technology of its wholly owned subsidiary, Deposition Sciences, Inc.
Except for historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. The Company currently has an agreement with the banks under the Company's Bank Credit Facility to continue to provide financing until March 31, 2003 despite an existing Event of Default under the facility. The agreement will remain in place so long as there are no further defaults and the Company's other lenders do not take certain actions adverse to the Company. The Company is currently seeking alternative financing sources. The holders of the Company's 8% Senior Notes have the right to accelerate the $100 million principal amount of the 8% Senior Notes. If the Company is unable to negotiate agreements with existing or replacement lenders and Note holders, which permit it to continue to execute its operating plans, the Company may be forced to seek protection under the bankruptcy laws. As discussed in the Company's SEC filings, covenants in the Company's bank credit facility, the indenture relating to the Company's 8% Senior Notes and the Company's agreements with General Electric Company limit certain corporate actions. As a result, implementation of certain strategic alternatives may require consent or require replacement of these ADLT financing sources. The Company has no assurance that such consents or replacement financing can be obtained in a manner to permit timely implementation of these strategic alternatives. Other risks and uncertainties include the strength of the recovery of the U.S. economy, timely development and market acceptance of new products, including production equipment, the ability to provide adequate incentives to retain and attract key employees, the impact of competitive products and pricing, and other risks detailed from time-to-time in the Company's EDGAR filings with the Securities and Exchange Commission. In particular, see "Risk Factors" in the Company's Form 10-K for the fiscal year ended June 30, 2002. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects" and similar expressions are intended to identify forward-looking statements. The Company's actual results could differ materially from those anticipated in these forward-looking statements.
Advanced Lighting Technologies, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share dollar amounts)
Three Months Ended
September 30,
---------------------
2002 2001
--------- ---------
Net sales $ 34,292 $ 51,890
Costs and expenses:
Cost of sales 20,965 33,990
Marketing and selling 6,166 10,090
Research and development 2,382 2,837
General and administrative 3,233 4,345
Provision for loan impairment - 4,600
Gain on settlement of lawsuit - (554)
Gain on sale of property (62) -
Special charges - 9,009
Amortization of intangible assets 85 84
--------- ---------
Income (loss) from operations 1,523 (12,511)
Other income (expense):
Interest expense (2,789) (3,093)
Interest income 138 26
Income (loss) from investments 1 (66)
--------- ---------
Income (loss) before income taxes, minority
interest and cumulative effect of
accounting change (1,127) (15,644)
Income tax expense (benefit) 277 (26)
--------- ---------
Income (loss) before minority interest
and cumulative effect of accounting change (1,404) (15,618)
Minority interest in income of
consolidated subsidiary (77) (39)
--------- ---------
Income (loss) before cumulative effect of
accounting change (1,481) (15,657)
Cumulative effect of accounting change - (71,171)
--------- ---------
Net income (loss) $ (1,481) $(86,828)
========= =========
Earnings (loss) per share - basic and diluted:
Income (loss) before cumulative
effect of accounting change $ (.18) $ (.70)
Cumulative effect of accounting change - (3.05)
--------- ---------
Net income (loss) $ (.18) $ (3.75)
========= =========
Weighted average shares outstanding:
Basic and diluted 23,628 23,306
========= =========
Advanced Lighting Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited) (Audited)
September 30, June 30,
2002 2002
-------- --------
Assets
Current assets:
Cash and cash equivalents $ 3,730 $ 2,874
Trade receivables, net 28,964 29,124
Inventories 24,856 26,691
Prepaid expenses 2,674 1,975
-------- --------
Total current assets 60,224 60,664
Property, plant and equipment, net 99,679 101,499
Other noncurrent assets 31,542 31,537
-------- --------
$191,445 $193,700
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Short-term debt and current
portion of long-term debt $ 3,866 $ 4,113
Accounts payable 15,085 15,937
Employee-related liabilities 3,197 2,788
Other current liabilities 12,259 9,081
Senior unsecured 8% notes, due
March 2008, in default 100,000 100,000
Bank Credit Facility, in default 25,959 28,218
-------- --------
Total current liabilities 160,366 160,137
Long-term debt 6,665 7,356
Minority interest 712 635
Preferred stock 22,989 22,290
Common shareholders' equity 713 3,282
-------- --------
$191,445 $193,700
======== ========
Advanced Lighting Technologies, Inc.
Supplemental Information - Unaudited
(in thousands)
Three Months Ended
September 30,
---------------------
2002 2001
-------- --------
Net cash provided by (used in)
operating activities $ 3,391 $ (3,245)
Depreciation 1,586 2,187
Amortization 85 84
Capital expenditures 1,188 4,266