Financial Quick Reference
(In millions, except
for per share data) Three Months Ended Nine Months Ended
March 31, March 31,
------------------------ ------------------------
2007 2006 2007 2006
Unaudited ----------- ----------- ----------- -----------
Total revenues $ 2.90 $ 3.11 $ 11.08 $ 8.76
Total costs and
expenses $ 3.42 $ 4.23 $ 12.40 $ 11.30
Net loss $ (0.52) $ (1.12) $ (1.32) $ (2.54)
Net loss per basic
and diluted share $ (0.12) $ (0.29) $ (0.29) $ (0.68)
Decrease in cash
and cash
equivalents $ (0.55) $ 2.11 $ (1.88) $ 1.28
(In millions) March 31, June 30,
2007 2006
-------- --------
Cash and cash equivalents $ 1.88 $ 3.76
Detailed comments about the third quarter of fiscal 2007: For the quarter
ended March 31, 2007, the Company reported total revenues of $2.90 million
compared to $3.11 million for the same quarter of the previous fiscal year,
for a decrease of 7%. Net loss for the quarter was $0.52 million, or $0.12
per basic and diluted share. Our gross margin percentage in the third
quarter of fiscal 2007 improved to 25%, compared to the same quarter of
fiscal 2006 when it was 10%. While we are experiencing improved margins due
primarily to lower material costs and better utilization of our Shanghai
manufacturing plant, our efforts to improve margins remain a major focus.
SG&A expenses decreased from $1.18 million in the third quarter of fiscal
2006 to $0.95 million in the third quarter of fiscal 2007, largely due to
lower bad debt expense and lower commissions due to lower sales, legal fees
and depreciation. New Product Development expenses increased to $0.29
million in the third quarter of fiscal 2007 compared to the third quarter
of fiscal 2006 when it was $0.26 million, a result of slightly higher
personnel and new product materials costs.
Detailed comments about the first nine months of fiscal 2007: For the first
nine months of fiscal 2007, ended March 31, 2007, the Company reported
total revenues of $11.08 million compared to $8.76 million for the
comparable period of the previous fiscal year, for an increase of 26%. Net
loss for the first nine months of fiscal 2007 was $1.32 million, or $0.29
per basic and diluted share, an improvement of $1.22 million over the loss
of $2.54 million in last fiscal year's comparable period. Gross margin in
the first nine months of fiscal 2007 increased $1.39 million, to 27%, up
from 18% in the comparable prior period. While we have seen margin
improvements over the past five years, due to higher sales volumes that
have increased plant utilization rates, we still have the challenge of
improving our process yields to further improve margins. SG&A expenses
increased from $3.39 million in the first nine months of fiscal 2006 to
$3.50 million in the first nine months of fiscal 2007 due to increases in
commissions resulting from higher sales, as well as higher accounting fees
due to the annual audit. New Product Development expenses increased from
$0.76 million during the first nine months of fiscal 2006 to $0.83 million
in the first nine months of fiscal 2007. This increase was due primarily to
increased wages and relocation expenses.
SG&A Expense: The Company is reducing its SG&A expense and will reduce the
number of personnel and expenses in this area. Also, the company's
executives and board members began taking a temporary reduction in
compensation in April 2007 as part of this move towards better bottom line
results.
Cash Status: The Company is continuing to invest in equipment and
facilities for its Shanghai location which management believes will achieve
both cost reductions and growth opportunities. For the quarter ended March
31, 2007, net cash declined by $0.55 million compared to an increase of
$2.11 million in the comparable quarter of the prior year. The Company
raised $3.6 million in a private placement in March 2006, some of which is
being used for working capital needs and investments in new capital
equipment. For the nine months ended March 31, 2007 net cash declined $1.88
million of which $0.7 million was used for capital equipment purchases,
compared to the same period during fiscal 2006 where cash declined by $2.3
million of which $0.5 million was used for capital equipment. These capital
equipment investments were made to improve production efficiencies
resulting in an increase in our gross margin to 27% for the nine months
ended March 31, 2007 from 18% for the same period in the prior fiscal year.
Comments: Ken Brizel, President and CEO of LightPath, stated, "As we stated
in our preliminary release, our shipments decreased by 7% this quarter over
last fiscal year, primarily due to the Communications market short fall.
While the communications orders slowed during this quarter, which reduced
disclosure backlog from the prior quarter, we continue to grow other new
market opportunities. We believe that revenues from the Communications
market will continue to be a smaller part of our business. Communications
products are the lowest gross margin products produced today and going
forward, our focus towards growth in non-communications markets will
produce higher gross margins."
Mr. Brizel went on to state, "The manufacturing team shifted more than 70%
of our molding production to our Shanghai location, which helped reduce
costs and increase production capacity during this period. Primarily as a
result of these efforts we have increased our gross margin from 10% during
third quarter fiscal 2006 to 25% during third quarter fiscal 2007. Also, we
improved SG&A as a percentage of sales from 38% in third quarter fiscal
2006 to 33% for third quarter fiscal 2007. To accelerate the overall
profitability of the business we are reducing our SG&A expense and will be
reducing the number of personnel and expenses in this area. Also, our
executives and board members have began taking a temporary reduction in
compensation in April 2007 as part of this move towards better bottom line
results."
"As a result of establishing a launching point for new products and
production in Shanghai, the Company is now engaging in new growth
opportunities in Asia. This includes hiring additional personnel in sales,
marketing and engineering to support the business. We expect these efforts
to deliver results within fiscal 2008," Mr. Brizel concluded.
Additional information concerning the Company and its products can be found
at the Company's web site at www.lightpath.com.
Webcast Details:
LightPath plans to hold an audio webcast at 3:00 p.m. EDT on May 15, 2007
to discuss details regarding the company's performance for the third
quarter and nine months of fiscal 2007. The session may be accessed at
www.lightpath.com. A transcript archive of the webcast will be available
for viewing or download on our web site shortly after the call is
concluded.
LightPath manufactures optical products, including precision molded
aspheric optics, precision molded infrared optics, GRADIUM® glass products,
proprietary collimator assemblies, isolators 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 symbol "LPTH." Investors are encouraged to go to
LightPath's website for additional financial information.
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.
LIGHTPATH TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(unaudited)
March 31, June 30,
Assets 2007 2006
------------ ------------
Current assets:
Cash and cash equivalents $ 1,882,030 $ 3,763,013
Trade accounts receivable, net of allowance
of $48,240 at March 31, 2007 and $85,800 at
June 30, 2006 1,868,386 1,891,024
Inventories 1,712,932 1,876,793
Prepaid expenses and other assets 283,879 145,349
------------ ------------
Total current assets 5,747,227 7,676,179
Property and equipment - net 1,535,490 1,172,651
Intangible assets - net 240,822 265,473
Other assets 62,109 59,731
------------ ------------
Total assets $ 7,585,648 $ 9,174,034
============ ============
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 1,056,753 $ 1,668,683
Accrued liabilities 280,472 236,501
Accrued payroll and benefits 335,934 514,424
Notes Payable, current portion 166,645 270,710
Capital lease obligations, current portion 15,752 14,255
------------ ------------
Total current liabilities 1,855,556 2,704,573
------------ ------------
Capital lease obligation, excluding current
portion 27,929 39,937
Notes payable, excluding current portion 319,402 --
------------ ------------
Total liabilities 2,202,887 2,744,510
Stockholders’ equity:
Common stock: Class A, $.01 par value,
voting; 34,500,000 shares authorized;
4,511,980 and 4,468,588 shares issued and
outstanding at March 31, 2007 and
June 30, 2006, respectively 45,120 44,686
Additional paid-in capital 196,336,324 196,064,721
Accumulated deficit (190,998,683) (189,679,883)
------------ ------------
Total stockholders’ equity 5,382,761 6,429,524
------------ ------------
Total liabilities and stockholders’
equity $ 7,585,648 $ 9,174,034
============ ============
LIGHTPATH TECHNOLOGIES, INC.
Unaudited Condensed Consolidated Statements of Operations
Three months ended Nine months ended
March 31, March 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Product sales, net $ 2,899,602 $ 3,106,674 $ 11,075,237 $ 8,762,956
Cost of sales 2,177,375 2,798,070 8,079,957 7,158,826
------------ ------------ ------------ ------------
Gross margin 722,227 308,604 2,995,280 1,604,130
Operating expenses:
Selling, general
and administrative 945,021 1,183,390 3,504,196 3,386,073
New product
development 289,254 261,858 830,733 761,681
Amortization of
intangibles 8,217 8,216 24,651 51,318
Gain on sales of
assets - - - (9,134)
------------ ------------ ------------ ------------
Total costs
and expenses 1,242,492 1,453,464 4,359,580 4,189,938
------------ ------------ ------------ ------------
Operating loss (520,265) (1,144,860) (1,364,300) (2,585,808)
Other income
Interest expense (11,041) (6,555) (33,957) (12,739)
Other 11,708 33,670 79,457 55,036
------------ ------------ ------------ ------------
Net loss $ (519,598) $ (1,117,745) $ (1,318,800) $ (2,543,511)
============ ============ ============ ============
Loss per share
(basic and
diluted) $ (0.12) $ (0.29) $ (0.29) $ (0.68)
============ ============ ============ ============
Number of shares
used in per share
calculation 4,506,230 3,826,560 4,497,081 3,739,283
============ ============ ============ ============
Contact Information: Contact: Dorothy Cipolla CFO LightPath Technologies, Inc. (407) 382-4003 Internet: www.lightpath.com