ANN ARBOR, Mich., Nov. 10, 2014 /PRNewswire/ -- Advanced
Photonix® (NYSE MKT: API) (the "Company") today
reported results for the second quarter ended September 26, 2014.
Financial Highlights for the Second Quarter Ended
September 26, 2014
- Net sales for the quarter were $7.8
million, an increase of $253,000 or 3% from the second quarter ended
September 27, 2013. Sequentially,
revenues were up 2% relative to the first quarter of fiscal 2015.
Telecommunication sales picked up $268,000 from last year but slowed sequentially
by $477,000. Sequential growth in
Test and Measurement, Medical and Military sales more than offset
the weak Telecommunication market thereby allowing for the 2%
sequential improvement.
- Gross profit margin for Q2 FY2015 was 33.7% of sales compared
to 37.0% for the second quarter ended September 27, 2013. The lower gross profit
percentage has been driven by the growing mix of 100G HSOR product
sales at competitively priced levels and a decline in Terahertz
revenue.
- Current quarter net loss was $368,000 or $0.01
per diluted share, as compared to a quarterly net loss of
$578,000, or $0.02 per diluted share for the quarter ended
September 27, 2013. Cost reductions
in all operating expense lines were the main reason for the reduced
loss.
- The Non-GAAP net loss for the second quarter of fiscal 2015 was
$152,000 or $0.00 per diluted share, as compared to a
Non-GAAP loss of $300,000, or
$.01 per diluted share, for the
second quarter last year. Cost reductions in all operating expense
lines were the main reason for the reduced loss.
- Adjusted EBITDA (which is defined as GAAP earnings before
interest, taxes, depreciation, amortization and stock
compensation), was a positive $74,000
for the second quarter of fiscal 2015 as compared to a positive
adjusted EBITDA of $20,000 for the
quarter ended September 27,
2013.
Operating Expenses
The Company's total operating
expenses for the quarter were $2.9
million, down approximately $439,000 from the prior year quarter due to cost
reduction measures taken during last years' second quarter. Total
operating expenses were 37.2% of sales compared to 44.3% for the
second quarter last year.
Balance Sheet
The Company finished the quarter with
$1.1 million in cash compared to
$120,000 as of March 31, 2014 given the receipt in June 2014 of $2.9
million in net proceeds from a firm underwritten placement
of 6.2 million shares by B Riley and Co. In addition to the cash on
hand, the Company had access to approximately $2.6 million in additional funds available on the
Company's line of credit at quarter end. Approximately $1.2 million was drawn on the Company's line of
credit. Net working capital as of September
26, 2014 was $4.2 million.
Richard Kurtz, President and
Chief Executive Officer, commented, "The second quarter was lower
than expected due to a combination of a slowdown in
telecommunication revenues and the continuing push out of F-35
contract activity. Our major customers for 100G transmission
products are seeing a pause by domestic service providers in
capital expenditures. This is simply a temporary situation and we
expect to see a return in ordering later in our fiscal year. As
previously mentioned during the quarter, we received a $1.6 million contract for the Rolling Airframe
Missile or RAM program. This award will grow our military revenues
for the remaining balance of the year. On the terahertz side, we
have expanded our Valued-Added Reseller (VAR) distribution chain
with the addition of Seltek Ltd. This privately held company is
located in Turkey, but has systems
installed around the world. We have completed their VAR training
and shipped the first system last month.
We are also in the process of launching a new Terahertz product
designated as the Single Point Gauge or SPG, targeted at off-line
inspection for thickness measurements. While we cannot disclose the
near term market opportunity, due to department of defense
restrictions, we will have more news about the SPG product and
market opportunities in our 4th quarter earnings call.
On our HSOR product development roadmap, we have started to sample
our new 10G APD Receiver Optical Sub Assembly or ROSA product for
the fiber to the home market. We are expecting to see revenues from
this new product next fiscal year.
The recent pause in telecommunication and contract revenues has
caused us to revaluate the year over year growth projections for
this year. We are now positioning ourselves for flat growth year
over year. We do believe that the combination of new products in
the pipeline today, the release of the F-35 contract and a return
to normalized capital expenditures by service providers, will
happen in our 4th quarter and lead to a resumption of
growth."
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=100879. 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 December 10, 2014. 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,
2013
|
September 26,
2014
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
120,000
|
$
1,146,000
|
|
|
Receivables,
net
|
5,085,000
|
4,462,000
|
|
|
Inventories
|
4,749,000
|
4,800,000
|
|
|
Prepaid expenses and
other current assets
|
444,000
|
719,000
|
|
|
Total current
assets
|
10,398,000
|
11,127,000
|
|
|
Net equipment and
leasehold improvements, net
|
2,144,000
|
1,815,000
|
|
|
Goodwill
|
4,579,000
|
4,579,000
|
|
|
Net intangible assets
including patents
|
2,942,000
|
2,686,000
|
|
|
Other
assets
|
138,000
|
179,000
|
|
|
Total
assets
|
$
20,201,000
|
$
20,386,000
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
4,113,000
|
$
3,196,000
|
|
|
Accrued
compensation
|
701,000
|
956,000
|
|
|
Current portion of
long-term debt – bank term loan
|
306,000
|
167,000
|
|
|
Current portion of
long-term debt – bank line of credit
|
2,147,000
|
1,201,000
|
|
|
Current portion of
long-term debt – PFG
|
714,000
|
714,000
|
|
|
Current portion of
long-term debt – MEDC
|
654,000
|
654,000
|
|
|
Current portion of
capital leases
|
20,000
|
15,000
|
|
|
Total current
liabilities
|
8,655,000
|
6,903,000
|
|
|
Long term debt, net of
debt discount and current – PFG
|
794,000
|
511,000
|
|
|
Long term debt,
capital lease
|
36,000
|
32,000
|
|
|
Warrant
liability
|
409,000
|
318,000
|
|
|
Total
liabilities
|
9,894,000
|
7,764,000
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Class A common stock,
$.001 par value, 100,000,000 shares authorized; March 31, 2014 –
31,203,213 shares issued and outstanding; September 26, 2014–
37,381,413 shares issued and outstanding
|
31,000
|
37,000
|
|
|
Additional paid-in
capital
|
58,752,000
|
61,697,000
|
|
|
Accumulated
deficit
|
(48,476,000)
|
(49,112,000)
|
|
|
Total shareholders'
equity
|
10,307,000
|
12,622,000
|
|
|
Total liabilities
and shareholders' equity
|
$
20,201,000
|
$
20,386,000
|
|
|
CONSOLIDATED
STATEMENT OF OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
Sept 27,
2013
|
|
Sept 26,
2014
|
|
Sept 27,
2013
|
|
Sept 26,
2014
|
|
Sales,
net
|
$
7,536,000
|
|
$
7,789,000
|
|
$ 14,614,000
|
|
$ 15,452,000
|
|
Cost of products
sold
|
4,747,000
|
|
5,165,000
|
|
8,898,000
|
|
9,909,000
|
|
Gross
profit
|
2,789,000
|
|
2,624,000
|
|
5,716,000
|
|
5,543,000
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Research, development
and engineering
|
1,234,000
|
|
1,051,000
|
|
2,726,000
|
|
2,060,000
|
|
Sales and
marketing
|
640,000
|
|
577,000
|
|
1,227,000
|
|
1,147,000
|
|
General and
administrative
|
1,202,000
|
|
1,087,000
|
|
2,326,000
|
|
2,363,000
|
|
Amortization
expense
|
259,000
|
|
181,000
|
|
509,000
|
|
386,000
|
|
Total operating
expenses
|
3,335,000
|
|
2,896,000
|
|
6,788,000
|
|
5,956,000
|
|
Loss from
operations
|
(546,000)
|
|
(272,000)
|
|
(1,072,000)
|
|
(413,000)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Net interest
expense
|
(165,000)
|
|
(129,000)
|
|
(325,000)
|
|
(310,000)
|
|
Change in fair value
of warrant liability
|
107,000
|
|
46,000
|
|
(89,000)
|
|
91,000
|
|
Other income
(expense)
|
26,000
|
|
(13,000)
|
|
(17,000)
|
|
(4,000)
|
|
Total other income
(expense)
|
(32,000)
|
|
(96,000)
|
|
(431,000)
|
|
(223,000)
|
|
Loss before
benefit from income taxes
|
(578,000)
|
|
(368,000)
|
|
(1,503,000)
|
|
(636,000)
|
|
|
|
|
|
|
|
|
|
Benefit for income
taxes
|
--
|
|
--
|
|
--
|
|
--
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$ (578,000)
|
|
$ (368,000)
|
|
$ (1,503,000)
|
|
$ (636,000)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
(0.02)
|
|
$
(0.01)
|
|
$
(0.05)
|
|
$
(0.02)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares
outstanding
|
31,229,000
|
|
37,381,000
|
|
31,213,000
|
|
35,051,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 27,
2013
|
|
Sept 26,
2014
|
|
Sept 27,
2013
|
|
Sept 26,
2014
|
|
Net
(loss)
|
$
|
(578,000)
|
|
$
|
(368,000)
|
|
$
|
(1,503,000)
|
|
$
|
(636,000)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in warrant fair
value
|
|
(107,000)
|
|
|
(46,000)
|
|
|
89,000
|
|
|
(91,000)
|
|
Amortization -
intangibles/patents
|
|
259,000
|
|
|
181,000
|
|
|
509,000
|
|
|
386,000
|
|
Non-cash interest
expense
|
|
85,000
|
|
|
65,000
|
|
|
132,000
|
|
|
149,000
|
|
Stock option
compensation expense
|
|
41,000
|
|
|
16,000
|
|
|
70,000
|
|
|
37,000
|
|
Subtotal
|
|
278,000
|
|
|
216,000
|
|
|
800,000
|
|
|
481,000
|
|
Non-GAAP
(loss)
|
$
|
(300,000)
|
|
$
|
(152,000)
|
|
$
|
(703,000)
|
|
$
|
(155,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.01)
|
|
$
|
(0.00)
|
|
$
|
(0.02)
|
|
$
|
(0.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
31,229,000
|
|
|
37,381,000
|
|
|
31,213,000
|
|
|
35,051,000
|
|
RECONCILIATION OF
EBITDA AND ADJUSTED EBITDA TO GAAP LOSS
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
Sept 27,
2013
|
|
Sept 26,
2014
|
|
Sept 27,
2013
|
|
Sept 26,
2014
|
|
Net income
(loss)
|
$
|
(578,000)
|
|
$
|
(368,000)
|
|
$
|
(1,503,000)
|
|
$
|
(636,000)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest expense
(income)
|
|
164,000
|
|
|
129,000
|
|
|
324,000
|
|
|
310,000
|
|
Warrant (fair value)
adjustment
|
|
(107,000)
|
|
|
(46,000)
|
|
|
89,000
|
|
|
(91,000)
|
|
Depreciation
expense
|
|
241,000
|
|
|
162,000
|
|
|
463,000
|
|
|
336,000
|
|
Amortization
|
|
259,000
|
|
|
181,000
|
|
|
509,000
|
|
|
386,000
|
|
Subtotal
|
|
557,000
|
|
|
426,000
|
|
|
1,385,000
|
|
|
941,000
|
|
EBITDA
|
$
|
(21,000)
|
|
$
|
58,000
|
|
$
|
(118,000)
|
|
$
|
305,000
|
|
Stock
compensation
|
|
41,000
|
|
|
16,000
|
|
|
70,000
|
|
|
37,000
|
|
Adjusted
EBITDA
|
$
|
20,000
|
|
$
|
74,000
|
|
$
|
(48,000)
|
|
$
|
342,000
|
CONTACT: Porter, LeVay & Rose, Inc.
Mike Porter
(212) 564-4700
Mike@plrinvest.com
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SOURCE Advanced Photonix, Inc.