Advanced Photonix, Inc. Reports Third Quarter 2015 Results
ANN ARBOR, Mich., Feb. 9, 2015 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API) (the "Company") today reported results for the third quarter ended December 26, 2014.
Financial Highlights for the Third Quarter Ended December 26, 2014
- Net sales for the quarter were $5.8 million, a decrease of $1.6 million or 22% from the third quarter ended December 27, 2013. Sequentially, revenues were down 25% relative to the second quarter of fiscal 2015 given weak Telecommunication and Comtest sales.
- Gross profit margin for Q3 FY2015 was 32.2% of sales compared to 25.3% for the third quarter ended December 27, 2013.
- Current quarter net loss was $701,000 or $0.02 per fully diluted share, as compared to a quarterly net loss of $1.6 million, or $0.05 per fully diluted share for the quarter ended December 27, 2013. Cost reductions in all operating expense lines and the absence of restructuring costs in the current quarter were the main reason for the reduced loss.
- The Non-GAAP net loss for the third quarter of fiscal 2015 was $602,000 or $0.02 per fully diluted share, as compared to a Non-GAAP loss of $517,000, or $0.02 per fully diluted share, for the third quarter last year. The positive effect of cost reductions in all operating expense lines were essentially offset by the weaker sales volume.
- Adjusted EBITDA (which is defined as GAAP earnings before interest, taxes, depreciation, amortization and stock compensation), was a negative $437,000 for the third quarter of fiscal 2015 as compared to a negative adjusted EBITDA of $205,000 for the quarter ended December 27, 2013.
Operating Expenses
The Company's total operating expenses for the quarter were $2.6 million, down approximately $624,000 from the prior year quarter due to cost reduction measures taken during the last 12 months. Total operating expenses were 44.4% of sales compared to 42.9% for the third quarter last year.
Balance Sheet
The Company finished the quarter with $110,000 in cash compared to $120,000 as of March 31, 2014. At the end of the quarter the Company had $630,000 to draw on its line of credit. As a result, on February 5, 2015, we obtained further covenant relief from our lenders by reducing the rolling six month adjusted EBITDA requirement for January through June 2015 to a negative $1,250,000, $1 of adjusted EBITDA required in July 2015 and $100,000 each month thereafter until maturity with up to $150,000 in transaction costs carved out of the calculation. The parties also agreed to reduce the minimum liquidity ratio to 1.30 to 1.00 from January 2015 until the maturity of each party's respective debt.
Richard Kurtz, President and Chief Executive Officer, commented, "The third quarter was lower than expected given weakness in telecommunication revenues which has also spilled over into our fourth quarter. This is a temporary condition as the backlog is currently growing again. We have landed several recent awards from Telecommunication customers that lead us to believe that fiscal 2016 growth could be very robust given the large infrastructure upgrade going on in China. Further, we were given the long awaited $1.4 million Terahertz development contract that will commercialize a Terahertz system for F-35 maintenance purposes. We do believe that the combination of new products in the pipeline today, a return to normalized capital expenditures by service providers, and the infrastructure build out in China will lead to a resumption of growth in fiscal 2016."
"Finally, I wanted to express our excitement in teaming up with Luna Innovations Inc. given their complementary capabilities and strong balance sheet. The cost of being a small public company is high and the combination offers many positive synergies. While the merger is still subject to shareholder approval, we believe it provides a path to significant long-term shareholder value."
Conference Call
Participating in the call will be Richard Kurtz (CEO and Director), Rob Risser (COO and Director), and Jeff Anderson (CFO). The conference call will be webcast live and will be accessible at http://www.videonewswire.com/event.asp?id=101553. Participants can dial into the conference call at 866.362.4443 (412.902.4205 for international and 855.669.9657 for Canada). The conference call will last approximately one hour and will end with a question and answer period. A press release announcing the financial results will be released after the close of the market on the same day.
An audio replay of the call will be available shortly thereafter on the same day and will remain on-line until March 9, 2015. The replay will be available in the investors section of API's website at www.advancedphotonix.com.
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.
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 |
March 31, 2014 |
December 26, 2014 |
|
| Current assets |
|||
| Cash and cash equivalents |
$ 120,000 |
$ 110,000 |
|
| Receivables, net |
5,085,000 |
3,814,000 |
|
| Inventories |
4,749,000 |
4,987,000 |
|
| Prepaid expenses and other current assets |
444,000 |
725,000 |
|
| Total current assets |
10,398,000 |
9,636,000 |
|
| Net equipment and leasehold improvements, net |
2,144,000 |
1,769,000 |
|
| Goodwill |
4,579,000 |
4,579,000 |
|
| Net intangible assets including patents |
2,942,000 |
2,678,000 |
|
| Other assets |
138,000 |
160,000 |
|
| Total assets |
$ 20,201,000 |
$ 18,822,000 |
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
| Current liabilities |
|||
| Accounts payable and accrued expenses |
$ 4,113,000 |
$ 2,519,000 |
|
| Accrued compensation |
701,000 |
790,000 |
|
| Current portion of long-term debt – bank term loan |
306,000 |
83,000 |
|
| Current portion of long-term debt – bank line of credit |
2,147,000 |
1,546,000 |
|
| Current portion of long-term debt – PFG |
714,000 |
714,000 |
|
| Current portion of long-term debt – MEDC |
654,000 |
116,000 |
|
| Current portion of capital leases |
20,000 |
8,000 |
|
| Total current liabilities |
8,655,000 |
5,776,000 |
|
| Long term debt, net of debt discount and current – PFG |
794,000 |
365,000 |
|
| Long term debt – MEDC |
-- |
538,000 |
|
| Long term debt, capital lease |
36,000 |
29,000 |
|
| Warrant liability |
409,000 |
178,000 |
|
| Total liabilities |
9,894,000 |
6,886,000 |
|
| Shareholders' equity |
|||
| Class A common stock, $.001 par value, 100,000,000 shares authorized; March 31, 2014 – 31,203,213 shares issued and outstanding; December 26, 2014– 37,381,413 shares issued and outstanding |
31,000 |
37,000 |
|
| Additional paid-in capital |
58,752,000 |
61,712,000 |
|
| Accumulated deficit |
(48,476,000) |
(49,813,000) |
|
| Total shareholders' equity |
10,307,000 |
11,936,000 |
|
| Total liabilities and shareholders' equity |
$ 20,201,000 |
$ 18,822,000 |
|
| CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) |
||||||||||||
| Three months ended |
Nine months ended |
|||||||||||
| Dec 27, 2013 |
Dec 26, 2014 |
Dec 27, 2013 |
Dec 26, 2014 |
|||||||||
| Sales, net |
$ 7,450,000 |
$ 5,805,000 |
$ 22,064,000 |
$ 21,257,000 |
||||||||
| Cost of products sold |
5,562,000 |
3,936,000 |
14,460,000 |
13,845,000 |
||||||||
| Gross profit |
1,888,000 |
1,869,000 |
7,604,000 |
7,412,000 |
||||||||
| Operating expenses |
||||||||||||
| Research, development and engineering |
1,164,000 |
959,000 |
3,890,000 |
3,019,000 |
||||||||
| Sales and marketing |
640,000 |
535,000 |
1,867,000 |
1,682,000 |
||||||||
| General and administrative |
1,135,000 |
928,000 |
3,461,000 |
3,291,000 |
||||||||
| Amortization expense |
260,000 |
153,000 |
769,000 |
539,000 |
||||||||
| Total operating expenses |
3,199,000 |
2,575,000 |
9,987,000 |
8,531,000 |
||||||||
| Loss from operations |
(1,311,000) |
(706,000) |
(2,383,000) |
(1,119,000) |
||||||||
| Other income (expense) |
||||||||||||
| Net interest expense |
(153,000) |
(124,000) |
(478,000) |
(434,000) |
||||||||
| Change in fair value of warrant liability |
(124,000) |
140,000 |
(213,000) |
231,000 |
||||||||
| Other income (expense) |
(30,000) |
(11,000) |
(47,000) |
(15,000) |
||||||||
| Total other income (expense) |
(307,000) |
5,000 |
(738,000) |
(218,000) |
||||||||
| Loss before benefit from income taxes |
(1,618,000) |
(701,000) |
(3,121,000) |
(1,337,000) |
||||||||
| Benefit for income taxes |
-- |
-- |
-- |
-- |
||||||||
| Net loss |
$ (1,618,000) |
$ (701,000) |
$ (3,121,000) |
$ (1,337,000) |
||||||||
| Basic and diluted loss per share |
$ (0.05) |
$ (0.02) |
$ (0.10) |
$ (0.04) |
||||||||
| Weighted average common shares outstanding |
31,243,000 |
37,381,000 |
31,223,000 |
35,860,000 |
||||||||
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 27, 2013 |
Dec 26, 2014 |
Dec 27, 2013 |
Dec 26, 2014 |
||||||||
| Net (loss) |
$ |
(1,618,000) |
$ |
(701,000) |
$ |
(3,121,000) |
$ |
(1,337,000) |
|||
| Adjustments: |
|||||||||||
| Change in warrant fair value |
124,000 |
(140,000) |
213,000 |
(231,000) |
|||||||
| Amortization - intangibles/patents |
260,000 |
153,000 |
769,000 |
539,000 |
|||||||
| Accelerated depreciation on fab shutdown |
608,000 |
-- |
608,000 |
-- |
|||||||
| Non-cash interest expense |
69,000 |
71,000 |
201,000 |
220,000 |
|||||||
| Stock option compensation expense |
40,000 |
15,000 |
110,000 |
52,000 |
|||||||
| Subtotal |
1,101,000 |
99,000 |
1,901,000 |
481,000 |
|||||||
| Non-GAAP (loss) |
$ |
(517,000) |
$ |
(602,000) |
$ |
(1,220,000) |
$ |
(757,000) |
|||
| Basic and diluted loss per share |
$ |
(0.02) |
$ |
(0.02) |
$ |
(0.04) |
$ |
(0.02) |
|||
| Weighted average common shares outstanding |
31,243,000 |
37,381,000 |
31,223,000 |
35,860,000 |
|||||||
| RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO GAAP LOSS |
|||||||||||
| Three months ended |
Nine months ended |
||||||||||
| Dec 27, 2013 |
Dec 26, 2014 |
Dec 27, 2013 |
Dec 26, 2014 |
||||||||
| Net income (loss) |
$ |
(1,618,000) |
$ |
(701,000) |
$ |
(3,121,000) |
$ |
(1,337,000) |
|||
| Adjustments: |
|||||||||||
| Net interest expense (income) |
154,000 |
124,000 |
478,000 |
434,000 |
|||||||
| Warrant (fair value) adjustment |
124,000 |
(140,000) |
213,000 |
(231,000) |
|||||||
| Depreciation expense |
835,000 |
112,000 |
1,298,000 |
448,000 |
|||||||
| Amortization |
260,000 |
153,000 |
769,000 |
539,000 |
|||||||
| Subtotal |
1,373,000 |
249,000 |
2,758,000 |
1,190,000 |
|||||||
| EBITDA |
$ |
(245,000) |
$ |
(452,000) |
$ |
(363,000) |
$ |
(147,000) |
|||
| Stock compensation |
40,000 |
15,000 |
110,000 |
52,000 |
|||||||
| Adjusted EBITDA |
$ |
(205,000) |
$ |
(437,000) |
$ |
(253,000) |
$ |
(95,000) |
|||
CONTACT: Porter, LeVay & Rose, Inc.
Mike Porter
(212) 564-4700
[email protected]
Logo - http://photos.prnewswire.com/prnh/20130304/LA69982LOGO
SOURCE Advanced Photonix, Inc.
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