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LightPath Technologies Announces Financial Results for the Quarter and Year Ended June 30, 2008 ORLANDO, FL--(MARKET WIRE)--Sep 25, 2008 -- LightPath Technologies, Inc. (LPTH - News), a
manufacturer and integrator of families of precision molded
aspheric
optics, GRADIUM® glass products, and high-performance
fiber-optic
collimators and isolators, today announced financial results
for the fourth
quarter and fiscal year ended June 30, 2008.
2008 Fourth Quarter Financial Results Total revenues for the fourth quarter ended June 30, 2008 totaled $2.38 million, an increase of 5% compared to $2.28 million for the same period ended June 30, 2007. Gross margin for the fourth quarter of 2008 totaled $567,000 or 24% compared to a gross margin of $51,000 or 2% for the fourth quarter of 2007. The increase year over year in gross margin was mainly attributable to higher expenses in the fourth quarter of 2007 as compared to 2008 relating to glass yield issues, increased direct labor costs, inventory adjustment associated with the China operation startup and travel to train operators and upgrade molding equipment to accept the new RoHS compliant glass system. Net loss for the fourth quarter of fiscal 2008 totaled $1.1 million, or $0.21 per share, compared to $1.3 million, or $0.29 per share, for the fourth quarter of fiscal 2007. The decrease in net loss for the fourth quarter of fiscal 2008 as compared to the same period in 2007 was mainly attributable to higher gross margin as discussed above which was partially offset by other business expenses which included higher legal fees and stock compensation expense incurred in the fourth quarter of fiscal 2008. Jim Gaynor, Chief Executive Officer of LightPath, commented, "On a comparable basis we are pleased with our fourth quarter of fiscal 2008. Our sales were up marginally, but more importantly we are starting to realize the margin benefits of shifting our manufacturing processes to China. In the fourth quarter of fiscal 2007 we experienced higher expenses mainly attributed to the ramping up of our manufacturing facility in Shanghai. Our gross margin increased to 24% for this fourth quarter of fiscal 2008 as compared to 2% in the fourth quarter of fiscal 2007. We are pleased with this increase which we believe illustrates the opportunity we have if our sales increase in fiscal 2009, as we anticipate. We opened the facility in China to implement our business strategy of gaining exposure to the high growth Asian markets and to position the Company to be able to participate in lower cost, higher volume opportunities. Today our facility in China is producing 90% of our aspheric production volume and 85% of our total manufactured production. We have the capacity in our China facility to dramatically ramp production with minimal to no additional capital expenditure costs." Fiscal 2008 Audited Financial Results Revenue for fiscal 2008 totaled $8.8 million, a decrease of 34% compared to $13.4 million for fiscal 2007. This decrease was primarily attributable to the decreases in sales of aspheric lenses, collimator and isolator product sales. Sales from telecommunication customers also decreased $4.9 million in fiscal 2008 compared to fiscal 2007. During fiscal year 2009, revenue from aspheric lenses is expected to increase while collimator and isolator sales are expected to remain the same. Cost of sales for fiscal year 2008 totaled $7.6 million or 86% of revenues compared to $10.3 million or 77% of revenues for fiscal 2007. The sales backlog, defined as sales which are requested by customers for delivery within one year, as of June 30, 2008 totaled approximately $3 million. Selling, general, and administrative expenses increased by approximately $925,000 to $5.4 million in fiscal 2008 compared to $4.5 million in fiscal 2007. SG&A increased due to several factors including increased stock compensation and severance. For fiscal 2009, the Company's budget projects a decrease in SG&A resulting from the actions implemented in fiscal 2008 for the leased space in Orlando and headcount reductions. Net loss for fiscal 2008 was approximately $5.5 million compared to a net loss of $2.6 million for fiscal 2007. The increase in net loss was attributable to several factors including a reduction in gross margin of $1.8 million, an increase in stock compensation expense of $153,000, severance and search fees related to the replacement of the former CEO of $446,000, and increased legal fees of $283,000. On the balance sheet, total current assets and total assets at June 30, 2008 were $3.3 million and $5.5 million, respectively. Total current liabilities and total liabilities at June 30, 2008 were $2.9 million and $3.3 million, respectively. Total stockholders' equity as of June 30, 2008 was $2.2 million. Mr. Gaynor stated, "During fiscal 2008 we implemented a new business strategy which will allow us to increase sales, maintain a strong gross margin, and earn a profit in the future. As a result of this strategy, we have seen positive results in yield improvement, production rates and cost reductions. During the year we were successful in shifting a higher percentage of production of molded optics to China, reducing materials cost by incorporating lower cost glass into our products and manufacturing lens holders in-house at a reduced cost, all of which we anticipate will result in continued improvements to our margins. Additionally, we have just completed upgrading all of the existing press stations in China to new computerized atmospheric controlled presses. This change will allow us to fully implement the 'RoHS' (RoHS is a European Union Standard that restricts the use of certain hazardous materials such as lead and mercury) compliant glass systems and also allow us the flexibility to take advantage of other lower cost glass materials to support our new strategy. These factors have helped us gain steady traction in the market as shown in our backlog as of June 30, 2008, of approximately $3 million." Mr. Gaynor continued, "During fiscal 2008 we incurred more than $1.3M of expenses related to severance and CEO search fees, legal fees, stock compensation expenses and inventory charges for standard reevaluations which affected our bottom line. We do not anticipate this level or type of expenses to continue in fiscal 2009. We are now focused on growing our revenues in new markets and with new products while continuing to streamline our business and maintaining high quality products and excellent service to our customers." Investor Conference Call and Webcast Details: LightPath will host an audio conference call and webcast on September 29, 2008 at 4:15 pm EDT to discuss the company's financial and operational performance for the fourth quarter and full year of fiscal 2008. Dial-in information for the session is 877-407-9210 or 201-689-8049 if dialing internationally. It is recommended that participants dial-in approximately 5 to 10 minutes prior to the start of the 4:15 p.m. call. The call is also being webcast and may be accessed at LightPath's website at www.lightpath.com. 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 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, INC.
Consolidated Balance Sheets
June 30, June 30,
Assets 2008 2007
------------ ------------
Current assets:
Cash and cash equivalents $ 358,457 $ 1,291,364
Trade accounts receivable, net of allowance
of $44,862 and $28,968 1,334,856 1,408,815
Inventories, net 1,323,555 1,853,324
Prepaid expenses and other assets 277,359 220,860
------------ ------------
Total current assets 3,294,227 4,774,363
Property and equipment - net 1,937,741 1,563,250
Intangible assets - net 199,737 232,605
Other assets 57,306 57,306
------------ ------------
Total assets $ 5,489,011 $ 6,627,524
============ ============
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 1,827,461 $ 1,278,328
Accrued liabilities 196,125 326,525
Accrued severance 97,401 -
Accrued payroll and benefits 423,222 413,576
Secured note payable 260,828 -
Note payable, current portion 166,645 166,645
Capital lease obligation, current portion 18,603 16,285
------------ ------------
Total current liabilities 2,990,285 2,201,359
------------ ------------
Deferred rent 222,818 -
Capital lease obligation, excluding current
portion 5,050 23,653
Note payable, excluding current portion 111,097 277,741
------------ ------------
Total liabilities 3,329,250 2,502,753
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;
5,331,664 and 4,512,543 shares issued and
outstanding 53,317 45,125
Additional paid-in capital 199,847,356 196,417,217
Foreign currency translation adjustment 21,369 (43,059)
Accumulated deficit (197,762,281) (192,294,512)
------------ ------------
Total stockholders’ equity 2,159,761 4,124,771
------------ ------------
Total liabilities and stockholders’
equity $ 5,489,011 $ 6,627,524
============ ============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Operations
Unaudited
Three months ended Twelve months ended
June 30, June 30,
2008 2007 2008 2007
------------ ------------ ------------ ------------
Product sales, net $ 2,381,956 $ 2,276,811 $ 8,826,471 $ 13,352,048
Cost of sales 1,814,420 2,226,089 7,595,398 10,306,046
------------ ------------ ------------ ------------
Gross margin 567,536 50,722 1,231,073 3,046,002
Operating expenses:
Selling, general
and
administrative 1,377,286 1,011,383 5,440,366 4,515,579
New product
development 290,220 343,399 1,214,269 1,174,132
Amortization of
intangibles 8,217 8,217 32,868 32,868
(Gain) Loss on
disposal of
assets (10,640) - 3,067 -
------------ ------------ ------------ ------------
Total costs and
expenses 1,665,083 1,362,999 6,690,570 5,722,579
------------ ------------ ------------ ------------
Operating loss (1,097,547) (1,312,277) (5,459,497) (2,676,577)
Other income
(expense)
Interest expense (38,516) (24,485) (86,801) (58,442)
Investment and
other income 4,762 40,933 78,529 120,390
------------ ------------ ------------ ------------
Net loss $ (1,131,301) $ (1,295,829) $ (5,467,769) $ (2,614,629)
============ ============ ============ ============
Loss per share
(basic and
diluted) $ (0.21) $ (0.29) $ (1.03) $ (0.58)
============ ============ ============ ============
Number of shares
used in per share
calculation 5,331,664 4,506,230 5,327,419 4,500,853
============ ============ ============ ============
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
Year Ended
June 30,
--------------------------
2008 2007
------------ ------------
Cash flows from operating activities
Net loss $ (5,467,769) $ (2,614,629)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 459,351 472,222
Foreign exchange translation adjustment 64,428 (43,059)
Gain on sale of fixed assets 3,067 -
Stock based compensation 415,238 296,749
Provision for doubtful accounts receivable 15,894 (56,832)
Changes in operating assets and liabilities:
Trade receivables 58,065 539,041
Inventories 529,769 23,469
Prepaid expenses and other assets (56,499) (73,086)
Accounts payable and accrued expenses 586,920 (401,179)
------------ ------------
Net cash used in operating activities (3,391,536) (1,857,304)
------------ ------------
Cash flows from investing activities
Purchase of property and equipment (660,003) (829,953)
Proceeds from sale of equipment 17,640 -
------------ ------------
Net cash used in investing activities (642,363) (829,953)
Cash flows from financing activities
Proceeds from exercise of stock options - 12,809
Proceeds from sale of common stock, net of
costs 2,978,545 43,377
Proceeds from sale of common stock from
employee stock purchase 44,548 -
Borrowings on line of credit - 229,224
Borrowings on secured note payable 260,828 -
Payments on capital lease obligation (16,285) (14,254)
Payments on note payable (166,644) (55,548)
------------ ------------
Net cash provided by financing activities 3,100,992 215,608
------------ ------------
Decrease in cash and cash equivalents (932,907) (2,471,649)
Cash and cash equivalents, beginning of period 1,291,364 3,763,013
------------ ------------
Cash and cash equivalents, end of period $ 358,457 $ 1,291,364
============ ============
Supplemental disclosure of cash flow
information:
Interest paid $ 86,801 $ 21,157
Supplemental disclosure of non-cash investing
activity:
Landlord payments for leasehold improvements $ 161,678 $ -Contact: Contacts:
LightPath Technologies, Inc.
Jim Gaynor
President & CEO
or
Dorothy Cipolla
CFO
+1 (407) 382-4003
Email Contact
Alliance Advisors, LLC
Alan Sheinwald
President
+1 (914) 669-0222
Email Contact
Source: LightPath Technologies
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