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
Mike@plrinvest.com
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SOURCE Advanced Photonix, Inc.