Advanced Photonix, Inc. Reports 35% Increase in Second Quarter Revenues

ANN ARBOR, Mich., Nov. 12, 2013 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API) (the Company, we, us or our) today reported improved results for the second quarter ended September 27, 2013.

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

Financial Highlights for the Second Quarter Ended September 27, 2013

  • Net sales for the quarter were $7.5 million, an increase of $2.0 million or 35% from the second quarter ended September 28, 2012. Sequentially, revenues were up 6% relative to the first quarter of fiscal 2014. Sales growth due to the March acquisition of the Silonex net assets by Advanced Photonix Canada (APC) and telecommunication transmission and test revenues have lead the way.
  • Gross profit margin for Q1 FY2014 was 37.0% of sales compared to 35.3% for the second quarter ended September 28, 2012. Cost reduction efforts and improved volumes helped improve the rate. 
  • Current quarter net loss was $578,000 or $0.02 per diluted share, as compared to a quarterly net loss of $1,287,000, or $0.04 per diluted share for the quarter ended September 28, 2012. Increased sales and related gross margin explain the 55% reduction in the net loss.
  • The Non-GAAP net loss for the second quarter of fiscal 2014 was $300,000 or $0.01 per diluted share, as compared to a Non-GAAP loss of $943,000, or $.03 per diluted share, for the second quarter last year. Increased sales and related gross margin explain the 68% reduction in the net loss.
  • Adjusted EBITDA (which is defined as GAAP earnings before interest, taxes, depreciation, amortization and stock compensation), was a positive $20,000 for the second quarter of fiscal 2014 as compared to negative adjusted EBITDA of $718,000 for the quarter ended September 28, 2012.

Operating Expenses

The Company's total operating expenses for the quarter were $3.3 million, up approximately $87,000 from the prior year quarter due primarily to the operating expenses assumed with the APC acquisition. Total operating expenses were 44.3% of sales compared to 58.1% for the second quarter last year.

Balance Sheet

The Company finished the quarter with $371,000 in cash compared to $619,000 as of March 31, 2013. Approximately $1.3 million was drawn on the Company's line of credit. Net working capital as of September 27, 2013 was $3.6 million.

Richard Kurtz, Chief Executive Officer commented, "The second quarter came in pretty much as we expected continuing the trajectory of having a 35% year over year improvement in sales. The most recent government shutdown and the effects of sequestration have interrupted the continuity of several Terahertz development contracts and the normal flow of our military/aerospace business. Near term demand in our test and measurement and telecommunications transmission products have the opportunity to mitigate these recent headwinds. This quarter test and measurement sales represented 62% of our total revenues as we continue to solve our customer's need to quantify and evaluate key elements in their applications that can only be done through optical sensing. We look forward to continued success in the test and measurement market, as well as overall growth for the Company."

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=96854 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

September 27, 2013

March 31, 2013

Current assets



Cash and cash equivalents

$             371,000

$             619,000

Receivables, net

5,662,000

4,988,000

Inventories

4,617,000

3,905,000

Prepaid expenses and other current assets

815,000

795,000

   Total current assets

11,465,000

10,307,000

Equipment and leasehold improvements, net

3,111,000

3,415,000

Goodwill

4,579,000

4,579,000

Intangibles and patents, net

3,304,000

3,686,000

Other assets

178,000

229,000

   Total Assets

$        22,637,000

$        22,216,000




LIABILITIES AND SHAREHOLDERS' EQUITY



Current liabilities



Accounts payable and accrued expenses

$          3,726,000

$          3,127,000

Accrued compensation

1,302,000

729,000

Current portion of long-term debt – bank term loan

333,000

333,000

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

1,251,000

--

Current portion of long-term debt – PFG

714,000

714,000

Current portion of long-term debt – MEDC/MSF

564,000

553,000

Current portion of capital lease

8,000

--

   Total current liabilities

7,898,000

5,456,000

Long term debt, less current portion – bank term loan

167,000

334,000

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

1,061,000

1,322,000

Long term debt, less current portion – MEDC/MSF

90,000

377,000

Long-term debt, capital lease

39,000

--

Warrant liability

381,000

292,000

   Total liabilities

9,636,000

7,781,000




Shareholders' equity



Class A common stock, $.001 par value, 100,000,000 shares authorized; September 27, 2013 – 31,244,740 shares issued and outstanding; March 31, 2013 – 31,158,347 shares issued and outstanding

31,000

31,000

Additional paid-in capital

58,685,000

58,616,000

Accumulated deficit

(45,715,000)

(44,212,000)

   Total shareholders' equity

13,001,000

14,435,000

Total liabilities and shareholders' equity

$        22,637,000

$        22,216,000

 

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)



Three months ended


Six months ended


Sept 28, 2012


Sept 27, 2013


Sept 28, 2012


Sept 27, 2013

Sales, net

$

5,586,000


$

7,536,000


$

11,802,000


$

14,614,000

Cost of products sold


3,612,000



4,747,000



7,584,000



8,898,000

Gross profit


1,974,000



2,789,000



4,218,000



5,716,000

Operating expenses












Research, development and engineering


1,342,000



1,234,000



2,713,000



2,726,000

Sales and marketing


496,000



640,000



1,001,000



1,227,000

General and administrative


1,119,000



1,202,000



2,172,000



2,326,000

Amortization expense


291,000



259,000



583,000



509,000

   Total operating expenses


3,248,000



3,335,000



6,469,000



6,788,000

Loss from operations


(1,274,000)



(546,000)



(2,251,000)



(1,072,000)













Other income (expense)












Net interest expense


(30,000)



(165,000)



(63,000)



(325,000)

Change in fair value of warrant liability


(4,000)



107,000



13,000



(89,000)

Other income (expense)


21,000



26,000



21,000



(17,000)

   Total other (expense)


(13,000)



(32,000)



(29,000)



(431,000)

Loss before benefit from income taxes


(1,287,000)



(578,000)



(2,280,000)



(1,503,000)













Benefit from income taxes


--



--



--



--













Net loss

$

(1,287,000)


$

(578,000)


$

(2,280,000)


$

(1,503,000)













Basic and diluted loss per share

$

(0.04)


$

(0.02)


$

(0.07)


$

(0.05)













Weighted average common shares outstanding


31,161,000



31,229,000



31,161,000



31,213,000

 

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


Six months ended


Sept 28, 2012


Sept 27, 2013


Sept 28, 2012


Sept 27, 2013

Net (loss)

$

(1,287,000)


$

(578,000)


$

(2,280,000)


$

(1,503,000)

Adjustments:












Change in warrant fair value


4,000



(107,000)



(13,000)



89,000

Amortization - intangibles/patents


291,000



259,000



583,000



509,000

Acquisition related expenses


--



--



--



--

Non-cash interest expense


--



85,000



--



132,000

Stock option compensation expense


49,000



41,000



78,000



70,000

   Subtotal


344,000



278,000



648,000



800,000

Non-GAAP (loss)

$

(943,000)


$

(300,000)


$

(1,632,000)


$

(703,000)













Basic and diluted loss per share

$

(0.03)


$

(0.01)


$

(0.05)


$

(0.02)













Weighted average common shares outstanding


31,161,000



31,229,000



31,161,000



31,213,000

 

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO GAAP LOSS



Three months ended


Six months ended


Sept 28, 2012


Sept 27, 2013


Sept 28, 2012


Sept 27, 2013

Net income (loss)

$

(1,287,000)


$

(578,000)


$

(2,280,000)


$

(1,503,000)

Adjustments:












Net interest expense (income)


30,000



164,000



63,000



324,000

Warrant (fair value) adjustment


4,000



(107,000)



(13,000)



89,000

Depreciation expense


195,000



241,000



395,000



463,000

Amortization


291,000



259,000



583,000



509,000

   Subtotal


520,000



557,000



1,028,000



1,385,000

EBITDA

$

(767,000)


$

(21,000)


$

(1,252,000)


$

(118,000)

Stock compensation


49,000



41,000



78,000



70,000

Adjusted EBITDA

$

(718,000)


$

20,000


$

(1,174,000)


$

(48,000)

 

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

RELATED LINKS: http://www.advancedphotonix.com

SOURCE Advanced Photonix, Inc.



RELATED LINKS
http://www.advancedphotonix.com

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