UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 

 

 

Date of Report (Date of earliest event reported):

      November 10, 2014

 

 

Advanced Photonix, Inc.

(Exact Name of Registrant as specified in its Charter) 

 

 

Delaware

1-11056

33-0325826

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

 

 

2925 Boardwalk Drive, Ann Arbor, Michigan

48104

(Address of principal executive offices)

(Zip Code)

 

 

 

Registrant's telephone number, including area code:

(734) 864-5600

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

The information in this Item 2.02 of this Current Report is also being furnished under Item 7.01 - “Regulation FD Disclosure” of Form 8-K. Such information, including the exhibits attached hereto, is furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.

 

On November 10, 2014, Advanced Photonix, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 26, 2014. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

Item 7.01. Regulation FD Disclosure.

 

The information in this Item 7.01 of this Current Report is also being furnished under Item 2.02 - “Results of Operations and Financial Condition” of Form 8-K. Such information, including the exhibits attached hereto, is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

 

On November 10, 2014, the Company issued a press release announcing its financial results for the quarter ended September 26, 2014. The text of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
Number

  

Exhibit

     

99.1

  

Advanced Photonix, Inc. press release issued November 10, 2014.*

     

*This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Exchange Act.

 

 

 

 
 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ADVANCED PHOTONIX, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jeff Anderson

 

 

 

Jeff Anderson, Chief Financial Officer

 

 

 

 

 

 

Dated:  November 10, 2014

 

 

 
 
 

 

EXHIBIT INDEX

 

Exhibit
Number

  

Exhibit

     

99.1

  

Advanced Photonix, Inc. press release issued November 10, 2014.*

     

*This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Exchange Act.

 

 



Exhibit 99.1

 

Advanced Photonix, Inc. Reports Continued Revenue Growth and Positive EBITDA

ANN ARBOR, Mich, November 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.

 

 

 
 2925 Boardwalk ●  Ann Arbor, MI 48104 ● (734) 864-5600 ● Fax (734) 998-3474
 

 

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 atwww.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 atwww.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.

 

 
2925 Boardwalk ●  Ann Arbor, MI 48104 ● (734) 864-5600 ● Fax (734) 998-3474 
 

 

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  

  

 
2925 Boardwalk ●  Ann Arbor, MI 48104 ● (734) 864-5600 ● Fax (734) 998-3474 
 

 

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.

 

 
2925 Boardwalk ●  Ann Arbor, MI 48104 ● (734) 864-5600 ● Fax (734) 998-3474 
 

 

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

 

SOURCE: Advanced Photonix, Inc.

 

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

 

 


2925 Boardwalk ●  Ann Arbor, MI 48104 ● (734) 864-5600 ● Fax (734) 998-3474