-- Revenues for fiscal year 2007 increased 10%, or $1.2 million
-- Gross margin increased by $993,000
-- Gross margin percentage increased from 17% in 2006 to 23% in 2007
-- Operating and other costs below the gross profit line increased by
$199,000 from 2006 to 2007
-- These factors combined to contribute to lower net loss per share of
$(0.58) vs. $(0.86) and an increase in total cash used from $2.28 million
in 2006 to $2.47 million in 2007, excluding the $3.6 million of cash
received from the private placement of common stock in fiscal 2006.
Fourth Quarter 2007: Our net loss and cash flow have increased on lower
revenue in our fourth quarter compared to 2006 -
-- Revenues for the fourth quarter decreased 33%, or $1.1 million
-- Gross margin decreased by approximately $398,000, the fourth quarter
included one time charges of $341,000 due to glass yield issues, overtime
for direct labor, travel for engineering and management to resolve issues,
and freight and duty expenses
-- Gross margin percentage decreased to 2% of sales from 13% of sales in
the prior year's fourth quarter
-- Operating and other costs below the gross margin line increased by
$29,000 from the prior year to the current year fourth quarter
-- These factors combined to contribute to a higher net loss of $1.3
million or $(0.29) per share vs. $825,000 or $(0.18) per share in the
fourth quarter of 2006 and a decline in cash flow from operations when
compared to the same period last year (see below).
Quick Reference (unaudited):
In millions, except earnings per share data
Three months ended Year ended
June 30, June 30,
2007 2006 2007 2006
Revenues $ 2.28 $ 3.41 $ 13.35 $ 12.17
Gross Profit $ 0.05 $ 0.45 $ 3.05 $ 2.05
Net Loss $ (1.30) $ (0.83) $ (2.61) $ (3.37)
Loss per share $ (0.29) $ (0.18) $ (0.58) $ (0.86)
Cash provided by (used by)
operations $ (418) $ 74 $ (1,857) $ (1,987)
June 30, March 31, June 30,
2007 2007 2006
Cash and cash equivalents $ 1.29 $ 1.88 $ 3.76
Discussion:
Fiscal Year Ended 2007:
For the fiscal year ended June 30, 2007, we reported total revenues of
$13.35 million compared to $12.17 million for the previous fiscal year, an
increase of 10%. Net loss for fiscal 2007 was $2.61 million, or $0.58 per
share. For fiscal 2006, we reported a net loss of $3.37 million, or $0.86
per share.
The revenue increase for the year was primarily attributable to increases
in sales of aspheric lenses which was partially offset by decreases in
products sold to the telecommunications industry.
Gross margin for the full fiscal year 2007 was $3.05 million (gross margin
percentage of 23%) vs. gross margin from the prior fiscal year of $2.05
million (gross margin percentage of 17%). The primary reason for these
improved gross margins is the increased production at our China
manufacturing facility. The China facility contributed more than 75% of the
production of molded optics in the fourth quarter of fiscal 2007.
Fourth Quarter 2007:
For the quarter ended June 30, 2007, we reported total revenues of $2.28
million compared to $3.41 million for the 2006 fourth quarter, a decrease
of 33%. Net loss for the quarter was $1.30 million, or $0.29 per share,
compared to a net loss of $0.83 million, or $0.18 per share. Starting in
the second quarter of fiscal 2007, new orders from our telecommunications
customers slowed down resulting in lower revenues in the fourth quarter of
fiscal 2007. Gross margin decreased in the fourth quarter vs. the same
period last year. Gross margin for the quarter ended June 30, 2007 was
approximately $51,000, or 2% vs. $449,000, or 13% as compared to the prior
year fourth quarter. The decrease in gross margin in the fourth quarter of
fiscal 2007 was mainly attributable to the decreased revenue, and $341,000
of one time expense relating to production issues at our China facility.
Other business expenses were generally the same contributing to an increase
in our net loss to $1.30 million for the fourth quarter of 2007 compared to
a net loss of $0.83 million in the fourth quarter of 2006.
Cash Status:
For the quarter ended June 30, 2007, net cash decreased by $0.59 million,
compared to an increase of $25,000 in the fourth quarter of 2006. For the
fiscal year of 2007, cash used was $2.47 million. In contrast, fiscal 2006
net cash used was $2.28 million, excluding the third quarter cash inflows
from a private placement of common stock ($3.58 million). Our cash usage
increase reflects the lower revenue levels in the second half of the fiscal
years and our inability to decrease fixed costs in line with the revenue
decline.
CEO's Comments:
Jim Gaynor, Interim CEO of LightPath, stated, "In Q4 we experienced some
extraordinary and isolated operational issues, which negatively impacted
our gross margin by $341,000 or 15 percentage points of gross margin.
These one time charges were attributed to glass yield issues, increased
direct labor, inventory adjustment associated with the China operation
startup and travel for engineering to train operators and upgrade molding
equipment to accept the new RoHS compliant glass system.
As part of our strategy to diversify our served markets and position the
company to be able to participate in lower cost, higher volume
opportunities, we have continued to expand our China manufacturing
capability. Our China facility is now producing 75% of our aspheric
production volume and 85% of our manufactured preforms.
In addition, we have just completed upgrading all of the existing press
stations to the new computerized atmospheric controlled press in Orlando
and China. This change allows us to fully implement the RoHS compliant
glass systems and also allows us the flexibility to take advantage of other
lower cost glass materials in support of our strategy.
We will continue to leverage our Shanghai facility with the transfer of our
isolator product line from our Orlando facility to our China facility over
the next few months.
As a result of the management actions taken, we are seeing positive results
in yield improvement, production rates and cost reductions.
While we are not satisfied with the financial performance of the fourth
quarter, we have made significant progress in diversifying our markets,
reducing costs and positioning LightPath to participate in higher volume
market opportunities."
Additional information concerning the Company and its products can be found
at the Company's web site at www.lightpath.com.
About LightPath:
LightPath manufactures optical products including precision molded aspheric
optics, GRADIUM® glass products, proprietary collimator assemblies, laser
components utilizing proprietary automation technology. 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.
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 Income Statements
Unaudited Audited
Three months ended Twelve months ended
June 30, June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Product sales, net $ 2,276,811 $ 3,409,631 $ 13,352,048 $ 12,172,587
Cost of sales 2,226,089 2,960,632 10,306,046 10,119,458
------------ ------------ ------------ ------------
Gross margin 50,722 449,000 3,046,002 2,053,129
Operating expenses:
Selling, general
and
administrative 1,011,383 1,048,631 4,515,579 4,434,704
New product
development 343,399 276,709 1,174,132 1,038,390
Amortization of
intangibles 8,217 8,217 32,868 59,535
Gain on sales of
assets - - - (9,134)
------------ ------------ ------------ ------------
Total costs
and expenses 1,362,999 1,333,557 5,722,579 5,523,495
------------ ------------ ------------ ------------
Operating loss (1,312,277) (884,557) (2,676,577) (3,470,366)
Other income
Interest expense (24,485) (9,553) (58,442) (22,292)
Investment and
other income 40,933 68,741 120,390 123,777
------------ ------------ ------------ ------------
Net loss $ (1,295,829) $ (825,369) $ (2,614,629) $ (3,368,881)
============ ============ ============ ============
Loss per share
(basic and
diluted) $ (0.29) $ (0.18) $ (0.58) $ (0.86)
============ ============ ============ ============
Number of shares
used in per share
calculation 4,506,230 4,463,542 4,500,853 3,929,132
============ ============ ============ ============
LightPath Technologies, Inc.
Condensed Consolidated Balance Sheets
(Audited)
June 30, June 30,
2007 2006
Assets ------------ ------------
Current assets:
Cash and cash equivalents $ 1,291,364 $ 3,763,013
Trade accounts receivable, net of allowance
of $28,968 and $85,800 1,408,815 1,891,024
Inventories, net 1,853,324 1,876,793
Prepaid expenses and other assets 220,860 145,349
------------ ------------
Total current assets 4,774,363 7,676,179
Property and equipment - net 1,563,250 1,172,651
Intangible assets - net 232,605 265,473
Other assets 57,306 59,731
------------ ------------
Total assets $ 6,627,524 $ 9,174,034
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,278,328 $ 1,668,683
Accrued liabilities 326,525 236,501
Accrued payroll and benefits 413,576 514,424
Note Payable, current portion 166,645 270,710
Capital lease obligation, current portion 16,285 14,255
------------ ------------
Total current liabilities 2,201,359 2,704,573
------------ ------------
Capital lease obligation, excluding current
portion 23,653 39,937
Note payable, excluding current portion 277,741 --
------------ ------------
Total liabilities 2,502,753 2,744,510
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; 34,500,000 shares authorized;
4,512,543 and 4,468,588 shares issued
and outstanding 45,125 44,686
Additional paid-in capital 196,417,217 196,064,721
Foreign currency translation adjustment (43,059) -
Accumulated deficit (192,294,512) (189,679,883)
Unearned compensation - -
------------ ------------
Total stockholders' equity 4,124,771 6,429,524
------------ ------------
Total liabilities and stockholders'
equity $ 6,627,524 $ 9,174,034
============ ============
Contact Information: Contacts: Jim Gaynor Interim CEO Dorothy Cipolla CFO LightPath Technologies, Inc. (407) 382-4003 Internet: www.lightpath.com