Advanced Photonix, Inc. Reports 28% Increase in Third Quarter Revenues

ANN ARBOR, Mich., Feb. 10, 2014 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API) (the Company, we, us or our) today reported results for the third quarter ended December 27, 2013.

(Logo: http://photos.prnewswire.com/prnh/20130304/LA69982LOGO)

Financial Highlights for the Third Quarter Ended December 27, 2013

  • Net sales for the quarter were $7.5 million, an increase of $1.6 million or 28% from the third quarter ended December 28, 2012. Sequentially, revenues were flat with the second quarter of fiscal 2014.
  • Gross profit margin for Q3 2014 was 25.3% of sales compared to 42.0% for the same quarter of fiscal 2013 due primarily to a one-time accelerated depreciation charge related to shutdown of silicon photodiode production.
  • Current quarter net loss was $1,618,000 or $0.05 per diluted share, as compared to a quarterly loss of $1,026,000, or $0.03 per diluted share for the quarter ended December 28, 2012.
  • The Non-GAAP net loss for the third quarter of fiscal 2014 was $517,000 or $0.02 per diluted share, as compared to a Non-GAAP net loss of $700,000, or $.02 per diluted share, for the third quarter last year.
  • Adjusted EBITDA (which is defined as GAAP earnings before interest, taxes, depreciation, amortization and stock compensation), was a negative $205,000 for the third quarter of fiscal 2014 as compared to a negative adjusted EBITDA of $485,000 for the quarter ended December 28, 2012.

Operating Expenses
The Company's total operating expenses for the quarter were $3.2 million, comparable to the $3.5 million reported for the third quarter last year. As a percent of revenue, total operating expenses for the third quarter of 2014 relative to the third quarter of 2013 were 43% and 59% respectively.

Richard Kurtz, Chief Executive Officer, commented, "While we are disappointed in the pause we saw this quarter in our revenue growth, we are encouraged by the traction we are getting in the 100G transmission market and the large funnel of potential sales developing for Terahertz. We are actively assessing strategic options to shore up our liquidity to fund the expected future growth for these opportunities. We are still anticipating significant year-over-year growth this year, however due to the government sequestration that impacted our development contracts and pushed out the timing of the expected revenue, we have lowered our revenue growth for fiscal 2014 to be approximately 25% relative to the prior year."

Conference Call
Participating in the call will be Richard Kurtz (CEO and Director), Rob Risser (COO and Director), and Jeff Anderson (CFO). The live audio webcast will be accessible at http://www.videonewswire.com/event.asp?id=97974 and will last approximately one hour. The conference call will end with a question and answer period. To access the conference call dial 877.870.4263 (412.317.0790 for international and 855.669.9657 for Canada).

Alternatively, an archived version of the conference call will be available shortly following the conclusion of the live call in the Investors section of API's website at www.advancedphotonix.com.

Forward-looking Statements:
The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products; and the risk factors listed from time to time in the Company's' Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any subsequent SEC filings. The Company assumes no obligation to update forward-looking statements contained in this release to reflect new information or future events or developments.

 


CONDENSED CONSOLIDATED BALANCE SHEET




ASSETS

December 27, 2013

March 31, 2013

Current assets



Cash and cash equivalents

$             116,000

$             619,000

Receivables, net

5,377,000

4,988,000

Inventories

4,664,000

3,905,000

Prepaid expenses and other current assets

565,000

795,000

Total current assets

10,722,000

10,307,000

Equipment and leasehold improvements, net

2,309,000

3,415,000

Goodwill

4,579,000

4,579,000

Intangibles and patents, net

3,094,000

3,686,000

Other assets

151,000

229,000

Total Assets

$        20,855,000

$        22,216,000




LIABILITIES AND SHAREHOLDERS' EQUITY



Current liabilities



Accounts payable and accrued expenses

$          4,051,000

$          3,127,000

Accrued compensation

991,000

729,000

Current portion of long-term debt – bank term loan

417,000

333,000

Current portion of long-term debt – bank line of credit

1,128,000

--

Current portion of long-term debt – PFG, net of discount

1,642,000

714,000

Current portion of long-term debt – MEDC/MSF

654,000

553,000

Current portion of capital lease

8,000

--

Total current liabilities

8,891,000

5,456,000

Long term debt, less current portion – bank term loan

--

334,000

Long term debt, net of debt discount and current portion – PFG

--

1,322,000

Long term debt, less current portion – MEDC/MSF

--

377,000

Long-term debt, capital lease

37,000

--

Warrant liability

505,000

292,000

Total liabilities

9,433,000

7,781,000




Shareholders' equity



Class A common stock, $.001 par value, 100,000,000 shares authorized; December 27, 2013 – 31,240,740 shares issued and outstanding; March 31, 2013 – 31,158,347 shares issued and outstanding

31,000

31,000

Additional paid-in capital

58,724,000

58,616,000

Accumulated deficit

(47,333,000)

(44,212,000)

Total shareholders' equity

11,422,000

14,435,000

Total liabilities and shareholders' equity

$        20,855,000

$        22,216,000






 


CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



Three months ended


Nine months ended


Dec 28, 2012


Dec 27, 2013


Dec 28, 2012


Dec 27, 2013

Sales, net

$

5,834,000


$

7,450,000


$

17,636,000


$

22,064,000

Cost of products sold


3,381,000



5,562,000



10,965,000



14,460,000

Gross profit


2,453,000



1,888,000



6,671,000



7,604,000













Operating expenses












Research, development and engineering


1,558,000



1,164,000



4,271,000



3,890,000

Sales and marketing


527,000



640,000



1,528,000



1,867,000

General and administrative


1,087,000



1,135,000



3,259,000



3,461,000

Amortization expense


293,000



260,000



876,000



769,000

Total operating expenses


3,465,000



3,199,000



9,934,000



9,987,000

Loss from operations


(1,012,000)



(1,311,000)



(3,263,000)



(2,383,000)













Other income (expense)












Net interest expense


(27,000)



(153,000)



(90,000)



(478,000)

Change in fair value of warrant liability


13,000



(124,000)



26,000



(213,000)

Other income (expense)


--



(30,000)



22,000



(47,000)

Total other (expense)


(14,000)



(307,000)



(42,000)



(738,000)

Loss before benefit from income taxes


(1,026,000)



(1,618,000)



(3,305,000)



(3,121,000)













Benefit from income taxes


--



--



--



--













Net loss

$

(1,026,000)


$

(1,618,000)


$

(3,305,000)


$

(3,121,000)













Basic and diluted loss per share

$

(0.03)


$

(0.05)


$

(0.11)


$

(0.10)













Weighted average common shares outstanding


31,161,000



31,243,000



31,161,000



31,223,000

 

Non-GAAP Financial Measures
The Company provides Non-GAAP Net Income, EBITDA and adjusted EBITDA as supplemental financial information regarding the Company's operational performance. These Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP Net Income, EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from similar measures used by other companies. Reconciliation of Non-GAAP Net Income, EBITDA and adjusted EBITDA to GAAP net income and loss are set forth in the financial schedule section below.

 


RECONCILIATION OF NON-GAAP LOSS TO GAAP LOSS



Three months ended


Nine months ended


Dec 28, 2012


Dec 27, 2013


Dec 28, 2012


Dec 27, 2013

Net (loss)

$

(1,026,000)


$

(1,618,000)


$

(3,305,000)


$

(3,121,000)

Adjustments:












Change in warrant fair value


(13,000)



124,000



(26,000)



213,000

Amortization - intangibles/patents


293,000



260,000



876,000



769,000

Accelerated depreciation on fab shutdown


--



608,000



--



608,000

Non-cash interest expense


--



69,000



--



201,000

Stock option compensation expense


46,000



40,000



124,000



110,000

Subtotal


326,000



1,101,000



974,000



1,901,000

Non-GAAP (loss)

$

(700,000)


$

(517,000)


$

(2,331,000)


$

(1,220,000)













Basic and diluted loss per share

$

(0.02)


$

(0.02)


$

(0.07)


$

(0.04)













Weighted average common shares outstanding


31,161,000



31,243,000



31,161,000



31,223,000

 


RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO GAAP LOSS



Three months ended


Nine months ended


Dec 28, 2012


Dec 27, 2013


Dec 28, 2012


Dec 27, 2013

Net income (loss)

$

(1,026,000)


$

(1,618,000)


$

(3,305,000)


$

(3,121,000)

Adjustments:












Net interest expense (income)


27,000



154,000



90,000



478,000

Warrant fair value adjustment


(13,000)



124,000



(26,000)



213,000

Depreciation expense


188,000



835,000



583,000



1,298,000

Amortization


293,000



260,000



876,000



769,000

Subtotal


495,000



1,373,000



1,523,000



2,758,000

EBITDA

$

(531,000)


$

(245,000)


$

(1,782,000)


$

(363,000)

Stock compensation


46,000



40,000



124,000



110,000

Adjusted EBITDA

$

(485,000)


$

(205,000)


$

(1,658,000)


$

(253,000)

 

About Advanced Photonix, Inc.
Advanced Photonix, Inc.® (NYSE MKT: API) is a leading supplier of optoelectronic sensors, devices and instruments used by Test and Measurement, Process Control, Medical, Telecommunication and Homeland Security markets. The company has three product lines: Optosolutions focuses on enabling manufacturers to measure physical properties, including temperature, particular counting, color, and fluorescence for Medical, Homeland Security and Process Control applications. The Terahertz sensor product line is targeted to the Process Control, to enable quality control, and Security markets through nondestructive testing. The T-Gauge® sensor can measure subsurface physical properties, like multi-layers thicknesses, density, moisture content, anomaly detection and some chemical features, online and in real time. High-Speed Optical Receiver (HSOR) products are used by the telecommunication market in both telecommunication equipment and in test and measurement equipment utilized in the manufacturing of telecommunication equipment. For more information visit us on the web at www.advancedphotonix.com.

CONTACT: Torrey Hills Capital
Jim Macdonald
(858) 456-7300
jim@sdthc.com

SOURCE Advanced Photonix, Inc.



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