Exhibit
99.1
LightPath
Technologies Reports Financial Results for
Fiscal 2020
Second Quarter
Achieves Record Revenue and Backlog; Higher Sales and Reduced
Operating Expenses Drive Margin Growth
ORLANDO, FL – February 6,
2020 – LightPath
Technologies, Inc. (NASDAQ: LPTH) (“LightPath,”
the “Company,” or “we”), a leading
vertically integrated global manufacturer,
distributor and
integrator of
proprietary optical and
infrared components and high-level assemblies, today
announced financial results for its fiscal 2020 second quarter
ended December 31, 2019.
Fiscal 2020
Second Quarter Highlights:
●
Revenue for the second quarter of
fiscal 2020 was a record $9.6 million, compared to $8.5 million in
the second quarter of fiscal 2019.
●
12-month backlog reached a record
of $19.1 million at December 31, 2019.
●
Operating expenses decreased to
$2.9 million for the second quarter of fiscal 2020, compared to
$3.3 million in the same quarter of the prior
year.
●
Net
income for the second quarter of fiscal 2020 was $769,000, compared
to $16,000 for the second quarter of fiscal
2019.
●
EBITDA* for the second quarter of
fiscal 2020 was $2.0 million, compared to $968,000 in the second
quarter of fiscal 2019.
●
Capital expenditures, including
equipment financed through leases, were $1.2 million for the first
half of fiscal 2020, down from $1.6 million in the first half of
fiscal 2019.
●
Total
debt, including finance leases, was reduced by nearly $500,000, or
7%, in the first half of fiscal 2020 from June 30,
2019.
●
Cash
balance at December 31, 2019 was $4.3 million, compared to $4.6
million at June 30, 2019.
* This press release includes
references to non-GAAP financial measures. Please see the heading
“Use of Non-GAAP Financial Measures” below for a more
complete explanation.
Management
Comments
Jim Gaynor, President and Chief
Executive Officer of LightPath, stated, “We are very pleased
with our fiscal 2020 second quarter results. Our performance
reflects a rebound from the last several quarters during which time
we implemented several transitional strategies. Second quarter
fiscal 2020 revenue reached a record level for the Company for any
quarter. In the previous quarter, we mentioned that some shipments
had been delayed by a customer due to a supply issue with another
component for the assemblies that our products go into.
Approximately $500,000 of the previously delayed shipments were
completed in the second quarter. Even after adjusting for the
revenue generated from this previously delayed order, sales in the
fiscal 2020 second quarter still reached a record level. Revenue
for the first half of fiscal 2020 was ahead of the first half of
fiscal 2019, and our backlog has continued to grow. Backlog reached
a record $19.1 million at the end of the second quarter, up from
$17.1 million at the beginning of the fiscal
year.”
“We also saw significant
gross margin improvement in comparison to the first quarter of
fiscal 2020, as the issues that were negatively impacting our gross
margin were largely mitigated in the second quarter. This includes,
in part, the mitigation of the increase in tariffs, the resolution
of the Black
DiamondTM (“BD6”)
annealing yields, and increases in capacity for our BD6 processes.
These improvements, coupled with continued management of operating
expenses, resulted in EBITDA of 21% of revenue in the second
quarter of fiscal 2020, which demonstrates the improved leverage in
our business when compared to 11% in the prior year
period.”
“Unit volumes sold were up
35% as compared to the first quarter of fiscal 2020, and 23% as
compared to the second quarter of the prior fiscal year. Growth in
precision molded optics (“PMO”) products continues to
be driven by 5G demand. Although our average selling price for the
PMO product group is lower in comparison to prior periods, this is
really driven by the volume increase in lower price point products.
In fact, we did not experience price erosion for any product group
in the second quarter, with the change in average selling prices
solely reflecting revenue product mix, which shifts from quarter to
quarter.”
“We also continue to see
significant growth in BD6-based infrared (“IR”)
products, where we experienced a 215% increase in units sold
quarter-over-quarter. Average selling price for this product group
was lower than in previous periods due to a higher mix of products
with lower price points and higher production volumes. BD6-based IR
products now represent just over 10% of our total revenue, and
approximately 20% of our IR revenue, and continue to experience
strong demand.”
“The yield issue relating to
our BD6 products, which we experienced in the first quarter of
fiscal 2020, was substantially mitigated during the second quarter.
We identified the root cause of the yield issue early in the second
quarter and began implementing corrective actions. We continue to
make process improvements that we believe will further improve our
BD6 yields and margins going forward. Our first quarter gross
margin was also impacted by tariff increases resulting from U.S.
and China trade negotiations, the majority of which went into
effect in June 2019. As we had anticipated, the net impact of these
tariff increases was significantly reduced beginning in the second
quarter, as the mitigating actions we took were in effect for the
full quarter. As a result of our tariff mitigation efforts, the net
increase in tariff expenses quarter-over-quarter was negligible.
Our gross margins also continue to benefit from the reduction in
overhead expenses associated with the relocation of our New York
facility.”
“Capital investments were
modestly higher in the second quarter of fiscal 2020 than in the
previous quarter, due to the timing of completion of certain
projects that were initiated at the end of fiscal 2019, and in
response to the growth in market acceptance for our products. We
continue to invest in our IR glass production, coating, and molding
capacity to meet the increasing demand for both telecommunications
products and BD6-based IR products. Based on the visibility
provided by our customers, we expect the demand for increased
telecommunications volumes to continue for at least the next two to
three quarters.”
“We continue to benefit from
the significant improvement in operating costs following the
relocation of our New York facility and implementation of other
cost saving measures. We do have a few vacant positions in sales
and other areas, so expenses will increase somewhat as those
positions are filled. We also made some investments in patents
during the second quarter fiscal 2020, as part of our strategy is
to leverage technology as a differentiator. We recently received
one patent approval, and there are several others
in-process.”
“Net income benefited from
the increase in revenue and gross margin coupled with reduced
expenses. EBITDA for the second quarter of fiscal 2020 was 21% of
revenue, up from 11% in the same quarter of fiscal 2019. Although
we used approximately $300,000 in cash during the first half of
fiscal 2020, our cash flow from operations has been positive while
we continue to make strategic capital investments and pay down
debt. Total debt, including finance leases, was reduced by 7% in
the first half of fiscal 2020, following an 11% reduction during
fiscal 2019. Overall, our fiscal 2020 second quarter results
reflect our ability to create demand for differentiated products in
our key target markets of IR and visible optical components. We
have demonstrated operating leverage, which has been gained through
top line growth and disciplined cost management. It has taken us
time to get here but we are now in a stronger position both
financially and operationally, and more optimized to deliver value
for our stockholders.”
Financial
Results for the Three Months Ended December 31, 2019, Compared to
the Three Months Ended December 31, 2018
Revenue for the second quarter of
fiscal 2020 was approximately $9.6 million, an increase of
approximately $1.1 million, or 12%, as compared to the same period
of the prior fiscal year. Sales of IR products comprised 52% of the
Company’s consolidated revenue in the fiscal 2020 second
quarter, as compared to 44% of total sales in the same period of
the prior fiscal year. Visible precision molded optics
(“PMO”) product sales represented 39% of consolidated
revenues in the second quarter of fiscal 2020, as compared to 48%
in the same period of the prior fiscal year. Specialty products
continue to be a small component of the Company’s business,
representing 9% of the revenue in the second quarter of fiscal
2020, as compared to 8% in the same quarter of last
year.
Revenue generated by IR products
was approximately $5.0 million in the second quarter of fiscal
2020, an increase of approximately $1.3 million, or 34%, compared
to approximately $3.7 million in the same period of the prior
fiscal year. This increase is primarily due to the timing of order
shipments against a large-volume annual contract for diamond-turned
IR products. During the second quarter of fiscal 2019, revenue from
this contract was lower, as the Company had shipped the balance of
the existing contract before the renewal was finalized. In the
second quarter of fiscal 2020, the customer requested the
acceleration of shipments that the customer had previously delayed
in the preceding quarter because of delays it experienced for other
components in the supply chain; thus, order shipments related to
this large contract were higher in the second quarter of fiscal
2020, as compared to the second quarter of fiscal 2019. According
to the terms of the contract, these orders cannot be delayed beyond
March 31, 2020 and, therefore, the balance of this order must be
shipped in the Company’s fiscal 2020 third
quarter.
Revenue generated by PMO products
was approximately $3.7 million for the second quarter of fiscal
2020, as compared to $4.1 million in the same period of the prior
fiscal year, a decrease of approximately $416,000, or 10%. The
decrease in revenue is primarily attributed to decreases in sales
to customers in the commercial market, as well as the defense and
medical markets, partially offset by continued strength in the
telecommunications market. PMO revenue in the second quarter of
fiscal 2020 was the second highest of the last eight quarters, with
the second quarter of 2019 being the highest.
Revenue generated by specialty
products was approximately $885,000 in the second quarter of fiscal
2020, an increase of approximately $193,000, or 28%, compared to
$693,000 in the same period of the prior fiscal year. This increase
is primarily related to new non-recurring engineering
(“NRE”) projects for customers in the medical and
commercial markets.
Gross margin in the second quarter
of fiscal 2020 was approximately $3.9 million, an increase of 11%,
as compared to approximately $3.5 million in same quarter of the
prior fiscal year. Total cost of sales was approximately $5.7
million for the second quarter of fiscal 2020, compared to $5.0
million for the same period of the prior fiscal year. The increases
in gross margin and cost of sales primarily reflect the increase in
sales. Gross margin as a percentage of revenue was 41% in the
second quarter of fiscal 2020, consistent with the second quarter
of fiscal 2019. Given the shift in revenue toward IR products,
which typically have lower margins than PMO products, this actually
represents an overall improvement in gross margins due to the
Company’s improved cost structure and operating performance
following the completion of the New York facility relocation in
June 2019.
During the second quarter of fiscal
2020, total operating expenses were approximately $2.9 million, a
decrease of $475,000, or 14%, as compared to $3.3 million in the
same period of the prior fiscal year. Selling, general and
administrative (“SG&A”) costs decreased by
approximately $320,000, or 13%, as compared to the same period of
the prior fiscal year. SG&A for the second quarter of fiscal
2019 included approximately $200,000 of non-recurring expenses
related to the relocation of the New York facility to the
Company’s existing facilities in Orlando, Florida and Riga,
Latvia. The second quarter of fiscal 2020 reflects savings from the
absence of these non-recurring costs, as well as reduced personnel
and overhead costs from the restructuring associated with the
relocation. New product development costs decreased by
approximately $50,000, or 10%, due to the restructuring of
personnel from product development to the newly created product
management functions, which is included in SG&A. This decrease
in personnel costs for new product development was partially offset
by an increase in patent application filing expenses incurred
during the second quarter of fiscal 2020. In addition to the
decreases in SG&A and new product development, total operating
expenses were further reduced by decreases in the amortization of
intangibles and gains on disposals of
equipment.
Interest expense, net, was
approximately $89,000 in the second quarter of fiscal 2020, as
compared to approximately $153,000 in the same period of the prior
fiscal year. The decrease in interest expense is primarily due to
more favorable terms associated with the term loan payable to
BankUnited N.A., entered into during the third quarter of fiscal
2019.
During the second quarter of fiscal
2020, the Company recorded income tax expense of $322,000,
primarily related to income taxes from operations in China and
Chinese withholding taxes associated with the intercompany dividend
declared by LightPath Optical Instrumentation (Zhenjiang) Co., Ltd.
(“LPOIZ”), one of the Company’s Chinese
subsidiaries, during the quarter, which dividend was payable to the
Company as the U.S. parent company. While this repatriation
transaction resulted in some additional Chinese withholding taxes,
LPOIZ currently qualifies for a reduced Chinese income tax rate;
therefore, the total tax on those earnings was still below the
normal income tax rate. This compares to a net income tax benefit
of approximately $23,000 recorded for the second quarter of fiscal
2019, which was comprised of a tax benefit on losses in the U.S.
jurisdiction, offset by tax expense on income generated in China.
LightPath has net operating loss (“NOL”) carry-forward
benefits of approximately $74 million against net income as
reported on a consolidated basis in the U.S. The NOL does not apply
to taxable income from foreign subsidiaries. Outside of the U.S.,
income taxes are attributable to the Company’s wholly-owned
subsidiaries in China. Income generated by the Company’s
wholly-owned subsidiary in Latvia is subject to distribution tax,
however, the Company currently does not intend to distribute
earnings subject to this tax and, therefore, no taxes have been
accrued on these earnings. Instead profits are allocated to
investments in future IR business activity
growth.
LightPath recognized net foreign
currency transaction gains due to changes in the value of the
Chinese Yuan and Euro
against the U.S. Dollar in the amount of approximately $119,000,
compared to net foreign currency transaction losses of $50,000 for
the same period of the prior fiscal year. These foreign currency
transaction gains and losses had no impact on basic and diluted
loss per share for the second quarter of fiscal 2020 or the second
quarter of fiscal 2019.
Net income for the second quarter
of fiscal 2020 was approximately $769,000, or $0.03 basic and
diluted earnings per share, compared to net income of approximately
$16,000, or $0.00 basic and diluted earnings per share for the
second quarter of fiscal 2019.
Weighted-average common stock
shares outstanding were 25,837,903 and 27,361,273 basic and
diluted, respectively, in the second quarter of fiscal 2020,
compared to 25,781,941 and 27,397,239 basic and diluted,
respectively, in the second quarter of fiscal 2019. The increase in
the weighted-average shares of common stock outstanding was due to
shares of Class A common stock issued under the Employee Stock
Purchase Plan and upon the exercises of stock options and
restricted stock units.
EBITDA* for the second quarter of
fiscal 2020 was approximately $2.0 million, as compared to
approximately $968,000 for the second quarter of fiscal 2019. The
increase in EBITDA in the second quarter of fiscal 2020 was due to
higher revenue and gross margin, and lower operating
expenses.
Financial
Results for the Six Months Ended December 31, 2019, Compared to the
Six Months Ended December 31, 2018
Revenue for the first half of
fiscal 2020 was approximately $17.1 million, an increase of less
than 1% as compared to the same period of the prior fiscal year.
Sales of IR products comprised 52% of the Company’s
consolidated revenue in the fiscal 2020 first half, as compared to
51% of total sales in the same period of the prior fiscal year. PMO
product sales represented 40% of consolidated revenues in the first
half of fiscal 2020, as compared to 42% in the same period of the
prior fiscal year. Specialty products continue to be a small
component of the Company’s business, increasing slightly from
7% of consolidated revenue in the first half of fiscal 2019 to 8%
of consolidated revenue in the first half of fiscal
2020.
Revenue generated by IR products
was approximately $9.0 million in the first half of fiscal 2020, an
increase of 3%, as compared to approximately $8.7 million in the
same period of the prior fiscal year. The increase in IR product
revenue is primarily attributable to sales of molded IR products,
including products made with the Company’s new BD6 material.
Revenues from shipments against the large-volume annual contract
for diamond-turned IR products during the first half of fiscal 2020
were similar to the first half of fiscal 2019 at approximately $2.7
million.
Revenue generated by PMO products
was approximately $6.9 million for the first half of fiscal 2020, a
decrease of 5% as compared to $7.2 million in the same period of
the prior fiscal year. The decrease in revenue is primarily
attributed to decreases in sales to customers in the commercial and
defense markets, partially offset by increases in sales to
customers in the medical and telecommunications
markets.
Revenue generated by specialty
products was approximately $1.3 million in the first half of fiscal
2020, an increase of approximately 11% as compared to $1.2 million
in the same period of the prior fiscal year. This increase is
primarily related to new NRE projects for customers in the medical
and commercial markets, partially offset by a decrease in sales of
specialty products to a medical customer due to timing of
orders.
Gross margin in the first half of
fiscal 2020 was approximately $6.3 million, a decrease of 4% as
compared to approximately $6.6 million in the same period of the
prior fiscal year. Total cost of sales was approximately $10.8
million for the first half of fiscal 2020, compared to $10.5
million for the same period of the prior fiscal year. Gross margin
as a percentage of revenue was 37% for the first half of fiscal
2020, compared to 39% for the first half of fiscal 2019. The
increase in cost of sales and decrease in gross margin as a
percentage of revenue are due to several factors that impacted the
first quarter 2020, which were substantially mitigated during the
second quarter of fiscal 2020. First, gross margins for PMO
products were negatively impacted by higher duties and freight
charges resulting from increased tariffs beginning in June 2019.
These additional costs increased cost of sales for the first
quarter of fiscal 2020; however, these costs were mitigated in the
second quarter by the strategies implemented during the first
quarter. Second, gross margins for IR products were impacted by
yield issues on BD6 products, which contributed to higher costs
during the first quarter of fiscal 2020. Yields improved
significantly during the second quarter of fiscal 2020 as a result
of actions taken during the first quarter. Volumes continue to
increase for our BD6-based IR molded products, and the Company
continues to work toward converting germanium-based diamond-turned
IR products to BD6 material, which are expected to continue to
improve IR margins over time.
During the first half of fiscal
2020, total operating expenses were approximately $5.9 million, a
decrease of $793,000, or 12%, as compared to $6.7 million in the
same period of the prior fiscal year. SG&A costs decreased by
approximately $442,000, or 9%, as compared to the same period of
the prior fiscal year. SG&A for the first half of fiscal 2019
included approximately $291,000 of non-recurring expenses related
to the relocation of the New York facility to the Company’s
existing facilities in Orlando, Florida and Riga, Latvia. The first
half of fiscal 2020 reflects savings from the absence of these
non-recurring costs, as well as reduced personnel and overhead
costs resulting from the restructuring associated with the facility
relocation. New product development costs decreased by
approximately $92,000, or 9%, due to the restructuring of personnel
from product development to the newly created product management
functions, which is included in SG&A. This decrease in
personnel costs for new product development was partially offset by
an increase in patent application filing expenses incurred during
the second quarter of fiscal 2020. In addition to the decreases in
SG&A and new product development, total operating expenses were
further reduced by decreases in the amortization of intangibles,
and gains on disposals of equipment.
Interest expense, net, was
approximately $188,000 in the first half of fiscal 2020, as
compared to approximately $298,000 in the same period of the prior
fiscal year. The decrease in interest expense is primarily due to
more favorable terms associated with the term loan payable to
BankUnited N.A., entered into during the third quarter of fiscal
2019.
During the first half of fiscal
2020, the Company recorded income tax expense of $470,000,
primarily related to income taxes from operations in China and
Chinese withholding taxes associated with the intercompany dividend
declared by LPOIZ during the quarter. This compares to a net income
tax benefit of approximately $202,000 recorded for the first half
of fiscal 2019, which was comprised of a tax benefit on losses in
the U.S. jurisdiction, offset by tax expense on income generated in
China.
LightPath recognized net foreign
currency transaction losses due to changes in the value of the
Chinese Yuan and Euro
against the U.S. Dollar in the amount of approximately $376,000,
compared to $388,000 for the same period of the prior fiscal year.
These foreign currency transaction losses had a $0.01 unfavorable
impact on basic and diluted loss per share for the first half of
fiscal 2020, and a $0.02 unfavorable impact on basic and diluted
loss per share for the first half of fiscal
2019.
Net loss for the first half of
fiscal 2020 was approximately $606,000, or $0.02 basic and diluted
loss per share, compared to approximately $567,000, or $0.02 basic
and diluted loss per share for the first half of fiscal
2019.
Weighted-average common stock
shares outstanding were 25,832,337, basic and diluted, in the first
half of fiscal 2020, compared to 25,777,330, basic and diluted, in
the first half of fiscal 2019. The increase in the weighted-average
shares of common stock outstanding was due to shares of Class A
common stock issued under the Employee Stock Purchase Plan and upon
the exercises of stock options and restricted stock
units.
EBITDA* for the first half of
fiscal 2020 was approximately $1.8 million, as compared to
approximately $1.2 million for the first half of fiscal 2019. The
increase in EBITDA in the first half of fiscal 2020 was due to
lower operating expenses as compared to the prior year period and
overall improved operating performance.
Cash and cash equivalents totaled
approximately $4.3 million as of December 31, 2019, compared to
approximately $4.6 million as of June 30, 2019. Cash provided by
operations was approximately $938,000 for the first half of fiscal
2020, as compared with cash used in operations of approximately
$398,000 in the same period of the prior fiscal year. The increase
in cash flow from operations for the first six months of fiscal
2020 was primarily due to a reduction in inventory, compared to an
increase in inventory during the same period of the prior fiscal
year, as well as collections on other receivables during the first
six months of fiscal 2020. The Company expended approximately $1.2
million in investments in capital equipment during the first half
of fiscal 2020, compared to approximately $1.6 million, including
equipment financed through capital leases, in the first half of
fiscal 2019.
The current ratio as of December
31, 2019 was 2.8 to 1, compared to 3.1 to 1 as of June 30, 2019.
Total stockholders’ equity as of December 31, 2019 was
approximately $33.3 million, compared to approximately $33.5
million as of June 30, 2019. The net decrease is primarily due to
the net loss for the six months ended December 31, 2019, partially
offset by foreign currency translation adjustments and an increase
in additional paid-in capital due to stock-based
compensation.
As of December 31, 2019,
LightPath’s 12-month backlog reached another record high at
$19.1 million, as compared to $18.1 million as of December 31, 2018
and $15.4 million as of September 30, 2019. During the three months
ended December 31, 2019, a large annual contract for diamond-turned
infrared products was renewed. The timing and amount of this
renewal were similar to the prior fiscal year. There are other
annual contracts expected to renew during the balance of the
Company's fiscal year, which may substantially increase backlog
levels at the time the orders are received, and backlog will
subsequently be drawn down as shipments are made against these
orders.
*Use of Non-GAAP
Financial Measures
To provide investors with
additional information regarding financial results, this press
release includes references to EBITDA, and gross margin, both of
which are non-GAAP financial measures. For a reconciliation of
these non-GAAP financial measures to the most directly comparable
financial measures calculated in accordance with GAAP, see the
tables provided in this press release.
A “non-GAAP financial
measure” is generally defined as a numerical measure of a
company’s historical or future performance that excludes or
includes amounts, or is subject to adjustments, so as to be
different from the most directly comparable measure calculated and
presented in accordance with GAAP. The Company’s management
believes that these non-GAAP financial measures, when considered
together with the GAAP financial measures, provide information that
is useful to investors in understanding period-over-period
operating results separate and apart from items that may, or could,
have a disproportionately positive or negative impact on results in
any particular period. Management also believes that these non-GAAP
financial measures enhance the ability of investors to analyze
underlying business operations and understand performance. In
addition, management may utilize these non-GAAP financial measures
as guides in forecasting, budgeting, and planning. Non-GAAP
financial measures should be considered in addition to, and not as
a substitute for, or superior to, financial measures presented in
accordance with GAAP.
The Company calculates EBITDA by
adjusting net income to exclude net interest expense, income tax
expense or benefit, depreciation, and
amortization.
The Company calculates gross margin
by deducting the cost of sales from operating revenue. Cost of
sales includes manufacturing direct and indirect labor, materials,
services, fixed costs for rent, utilities and depreciation, and
variable overhead. Gross margin should not be considered an
alternative to operating income or net income, which is determined
in accordance with GAAP. The Company believes that gross margin,
although a non-GAAP financial measure, is useful and meaningful to
investors as a basis for making investment decisions. It provides
investors with information that demonstrates cost structure and
provides funds for total costs and expenses. The Company uses gross
margin in measuring the performance of its business and has
historically analyzed and reported gross margin information
publicly. Other companies may calculate gross margin in a different
manner.
Investor
Conference Call and Webcast Details
LightPath will host an audio
conference call and webcast on Thursday, February 6th, at 4:30 p.m.
ET to discuss its financial and operational performance for the
fiscal 2020 second quarter ended December 31,
2019.
Date: Thursday, February 6,
2020
Time: 4:30 PM
(ET)
Dial-in Number:
1-877-317-2514
International Dial-in Number:
1-412-317-2514
Webcast: https://services.choruscall.com/links/lpth200206.html
Participants should dial-in or
log-on approximately 10 minutes prior to the start of the event. A
replay of the call will be available approximately one hour after
completion through February 20, 2020. To listen to the replay, dial
1-877-344-7529 (domestic) or 1-412-317-0088 (international), and
enter conference ID #10138800.
About LightPath
Technologies
LightPath Technologies, Inc.
(NASDAQ: LPTH) is a leading global, vertically integrated provider
of optics, photonics and infrared solutions for the industrial,
commercial, defense, telecommunications, and medical industries.
LightPath designs, manufactures, and distributes proprietary
optical and infrared components including molded glass aspheric
lenses and assemblies, infrared lenses and thermal imaging
assemblies, fused fiber collimators, and proprietary Black DiamondTM chalcogenide-based
glass lenses. LightPath also offers custom optical assemblies,
including full engineering design support. The Company is
headquartered in Orlando, Florida, with manufacturing and sales
offices in Latvia and China.
LightPath’s wholly-owned
subsidiary, ISP Optics
Corporation (“ISP”),
manufactures a full range of infrared products from high
performance MWIR and LWIR lenses and lens assemblies. ISP’s
infrared lens assembly product line includes athermal lens systems
used in cooled and un-cooled thermal imaging cameras. Manufacturing
is performed in-house to provide precision optical components
including spherical, aspherical and diffractive coated infrared
lenses. ISP’s optics processes allow it to manufacture its
products from all important types of infrared materials and
crystals. Manufacturing processes include CNC grinding and CNC
polishing, diamond turning, continuous and conventional polishing,
optical contacting and advanced coating
technologies.
For more information on LightPath
and its businesses, please visit www.lightpath.com.
Forward-Looking
Statements
This news
release includes statements that constitute forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including
statements regarding our ability to expand our presence in certain
markets, future sales growth, continued improvements in our
financial results,and implementation of new distribution channels.
This information may involve risks and uncertainties that could
cause actual results to differ materially from such forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, factors detailed by
LightPath Technologies, Inc. in its public filings with the
Securities and Exchange Commission, including its most recent
Annual Report on Form 10-K. Except as required under the federal
securities laws and the rules and regulations of the Securities and
Exchange Commission, we do not have any intention or obligation to
update publicly any forward-looking statements, whether as a result
of new information, future events or otherwise.
Contacts:
|
Jim Gaynor, President &
CEO
|
Donald O. Retreage, Jr.,
CFO
|
Jordan Darrow
|
|
LightPath Technologies,
Inc.
|
LightPath Technologies,
Inc.
|
Darrow
Associates
|
|
Tel:
407-382-4003
|
Tel: 407-382-4003
x329
|
Tel:
512-551-9296
|
|
|
|
|
(tables follow)
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Balance Sheets
(unaudited)
|
|
|
|
|
Assets
|
|
|
|
Current assets:
|
|
|
|
Cash and cash
equivalents
|
$4,277,607
|
$4,604,701
|
|
Trade accounts receivable, net of
allowance of $20,780 and $29,406
|
7,401,375
|
6,210,831
|
|
Inventories, net
|
7,542,329
|
7,684,527
|
|
Other
receivables
|
-
|
353,695
|
Prepaid expenses and other
assets
|
415,897
|
754,640
|
|
Total current
assets
|
19,637,208
|
19,608,394
|
|
|
|
|
|
Property and equipment,
net
|
11,640,542
|
11,731,084
|
|
Operating lease right-of-use
assets
|
1,488,126
|
—
|
|
Intangible assets,
net
|
7,270,506
|
7,837,306
|
|
Goodwill
|
5,854,905
|
5,854,905
|
|
Deferred tax assets,
net
|
652,000
|
652,000
|
|
Other assets
|
290,200
|
289,491
|
|
Total assets
|
$46,833,487
|
$45,973,180
|
|
Liabilities and
Stockholders’ Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$2,699,115
|
$2,227,768
|
|
Accrued
liabilities
|
1,261,584
|
1,338,912
|
|
Accrued payroll and
benefits
|
1,467,675
|
1,730,658
|
|
Operating lease liabilities,
current
|
749,399
|
—
|
|
Deferred rent, current
portion
|
—
|
72,151
|
|
Loans payable, current
portion
|
581,350
|
581,350
|
|
Finance lease obligation, current
portion
|
378,095
|
404,424
|
|
Total current
liabilities
|
7,137,218
|
6,355,263
|
|
|
|
|
|
Finance lease obligation, less
current portion
|
456,388
|
640,284
|
|
Operating lease liabilities,
noncurrent
|
1,265,152
|
—
|
|
Deferred rent,
noncurrent
|
—
|
518,364
|
Loans payable, less current
portion
|
4,718,754
|
5,000,143
|
|
Total
liabilities
|
13,577,512
|
12,514,054
|
|
|
|
|
|
Stockholders’
equity:
|
|
|
|
Preferred stock: Series D, $.01 par
value, voting;
|
|
|
|
500,000 shares authorized; none
issued and outstanding
|
—
|
—
|
|
Common stock: Class A, $.01 par
value, voting;
|
|
|
|
44,500,000 shares authorized;
25,840,362 and 25,813,895
|
|
|
|
shares issued and
outstanding
|
258,404
|
258,139
|
|
Additional paid-in
capital
|
230,527,126
|
230,321,324
|
|
Accumulated other comprehensive
income
|
1,005,340
|
808,518
|
|
|
(198,534,895)
|
(197,928,855)
|
|
Total stockholders’
equity
|
33,255,975
|
33,459,126
|
|
Total liabilities and
stockholders’ equity
|
$46,833,487
|
$45,973,180
|
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Comprehensive Income
(Loss)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, net
|
$9,599,912
|
$8,548,507
|
$17,151,842
|
$17,098,228
|
|
Cost of sales
|
5,670,632
|
5,007,364
|
10,831,744
|
10,513,912
|
|
Gross margin
|
3,929,280
|
3,541,143
|
6,320,098
|
6,584,316
|
|
Operating
expenses:
|
|
|
|
|
|
Selling, general and
administrative
|
2,199,133
|
2,518,853
|
4,540,911
|
4,982,731
|
|
New product
development
|
468,646
|
518,793
|
897,057
|
988,776
|
|
Amortization of
intangibles
|
283,279
|
324,351
|
566,800
|
653,622
|
|
Loss (gain) on disposal of property
and equipment
|
(79,224)
|
(15,500)
|
(129,224)
|
43,257
|
|
Total operating
expenses
|
2,871,834
|
3,346,497
|
5,875,544
|
6,668,386
|
|
Operating income
(loss)
|
1,057,446
|
194,646
|
444,554
|
(84,070)
|
|
Other income
(expense):
|
|
|
|
|
|
Interest expense,
net
|
(89,257)
|
(153,289)
|
(187,798)
|
(298,302)
|
|
Other income (expense),
net
|
122,797
|
(48,484)
|
(392,609)
|
(386,606)
|
|
Total other income (expense),
net
|
33,540
|
(201,773)
|
(580,407)
|
(684,908)
|
|
Income (loss) before income
taxes
|
1,090,986
|
(7,127)
|
(135,853)
|
(768,978)
|
Income tax provision
(benefit)
|
321,869
|
(23,403)
|
470,187
|
(202,363)
|
|
Net income
(loss)
|
$769,117
|
$16,276
|
$(606,040)
|
$(566,615)
|
|
Foreign currency translation
adjustment
|
143,056
|
52,793
|
196,822
|
225,840
|
|
Comprehensive income
(loss)
|
$912,173
|
$69,069
|
$(409,218)
|
$(340,775)
|
|
|
|
|
|
|
|
Earnings (loss) per common share
(basic)
|
$0.03
|
$0.00
|
$(0.02)
|
$(0.02)
|
|
Number of shares used in per share
calculation (basic)
|
25,837,903
|
25,781,941
|
25,832,337
|
25,777,330
|
|
Earnings (loss) per common share
(diluted)
|
$0.03
|
$0.00
|
$(0.02)
|
$(0.02)
|
|
Number of shares used in per share
calculation (diluted)
|
27,361,273
|
27,397,239
|
25,832,337
|
25,777,330
|
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Changes in Stockholders'
Equity
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at June
30, 2019
|
25,813,895
|
$258,139
|
$230,321,324
|
$808,518
|
$(197,928,855)
|
$33,459,126
|
|
Issuance of common stock
for:
|
|
|
|
|
|
|
|
Employee Stock Purchase
Plan
|
13,370
|
134
|
12,033
|
—
|
—
|
12,167
|
|
Exercise of RSUs,
net
|
4,394
|
44
|
(44)
|
—
|
—
|
—
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
98,459
|
—
|
—
|
98,459
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
53,766
|
—
|
53,766
|
|
Net loss
|
—
|
—
|
—
|
—
|
(1,375,157)
|
(1,375,157)
|
|
Balances at
September 30, 2019
|
25,831,659
|
$258,317
|
$230,431,772
|
$862,284
|
$(199,304,012)
|
$32,248,361
|
|
Issuance of common stock
for:
|
|
|
|
|
|
|
|
Exercise of RSUs,
net
|
8,703
|
87
|
(87)
|
—
|
—
|
—
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
95,441
|
—
|
—
|
95,441
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
143,056
|
—
|
143,056
|
|
Net income
|
—
|
—
|
—
|
—
|
769,117
|
769,117
|
|
Balances at
December 31, 2019
|
25,840,362
|
$258,404
|
$230,527,126
|
$1,005,340
|
$(198,534,895)
|
$33,255,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at June
30, 2018
|
25,764,544
|
$257,645
|
$229,874,823
|
$473,508
|
$(195,248,532)
|
$35,357,444
|
|
Issuance of common stock
for:
|
|
|
|
|
|
|
|
Employee Stock Purchase
Plan
|
9,061
|
91
|
20,750
|
—
|
—
|
20,841
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
93,910
|
—
|
—
|
93,910
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
173,047
|
—
|
173,047
|
|
Net loss
|
—
|
—
|
—
|
—
|
(582,891)
|
(582,891)
|
|
Balances at
September 30, 2018
|
25,773,605
|
$257,736
|
$229,989,483
|
$646,555
|
$(195,831,423)
|
$35,062,351
|
|
Issuance of common stock
for:
|
|
|
|
|
|
|
|
Exercise of Stock Options &
RSUs, net
|
15,667
|
157
|
4,104
|
—
|
—
|
4,261
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
103,905
|
—
|
—
|
103,905
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
52,793
|
—
|
52,793
|
|
Net income
|
—
|
—
|
—
|
—
|
16,276
|
16,276
|
|
Balances at
December 31, 2018
|
25,789,272
|
$257,893
|
$230,097,492
|
$699,348
|
$(195,815,147)
|
$35,239,586
|
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
Net loss
|
$(606,040)
|
(566,615)
|
|
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
1,760,220
|
1,683,676
|
|
Interest from amortization of debt
costs
|
9,286
|
11,962
|
|
(Gain) loss on disposal of property
and equipment
|
(129,224)
|
43,257
|
|
Stock-based compensation on stock
options & RSUs, net
|
178,389
|
197,815
|
|
Provision for doubtful accounts
receivable
|
9,147
|
1,469
|
|
Change in operating lease
liabilities
|
(64,090)
|
(27,096)
|
|
Inventory write-offs to
reserve
|
—
|
2,114
|
|
Deferred tax
benefit
|
—
|
(406,000)
|
|
Changes in operating assets and
liabilities:
|
|
|
|
Trade accounts
receivable
|
(1,199,691)
|
(849,007)
|
|
Other
receivables
|
353,695
|
(22,858)
|
|
Inventories
|
142,198
|
(594,141)
|
|
Prepaid
expenses and other assets
|
338,034
|
214,960
|
|
Accounts
payable and accrued liabilities
|
146,547
|
(87,707)
|
|
Net cash provided by (used in)
operating activities
|
938,471
|
(398,171)
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
Purchase of property and
equipment
|
(1,153,227)
|
(1,180,184)
|
|
Proceeds from sale of
equipment
|
179,573
|
110,500
|
|
Net cash used in investing
activities
|
(973,654)
|
(1,069,684)
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
Proceeds from exercise of stock
options
|
—
|
4,261
|
|
Proceeds from sale of common stock
from Employee Stock Purchase Plan
|
12,167
|
20,841
|
|
Payments on loan
payable
|
(290,675)
|
(729,399)
|
|
Repayment of finance lease
obligations
|
(210,225)
|
—
|
|
Payments on capital lease
obligations
|
—
|
(167,626)
|
|
Net cash used in financing
activities
|
(488,733)
|
(871,923)
|
|
Effect of exchange rate on cash and
cash equivalents and restricted cash
|
196,822
|
472,547
|
|
Change in cash and cash equivalents
and restricted cash
|
(327,094)
|
(1,867,231)
|
|
Cash and cash equivalents and
restricted cash, beginning of period
|
4,604,701
|
6,508,620
|
|
Cash and cash equivalents and
restricted cash, end of period
|
$4,277,607
|
$4,641,389
|
|
|
|
|
|
Supplemental disclosure of cash flow
information:
|
|
|
|
Interest paid in
cash
|
$182,241
|
$267,065
|
|
Income taxes
paid
|
$249,777
|
$247,664
|
|
Supplemental disclosure of non-cash
investing & financing activities:
|
|
|
|
Purchase of equipment through
capital lease arrangements
|
—
|
$411,750
|
To supplement our consolidated
financial statements presented in accordance with U.S. GAAP, we
provide additional non-GAAP financial measures. Our management
believes these non-GAAP financial measures, when considered
together with the GAAP financial measures, provide information that
is useful to investors in understanding period-over-period
operating results separate and apart from items that may or could,
have a disproportionally positive or negative impact on results in
any particular period. Our management also believes that these
non-GAAP financial measures enhance the ability of investors to
analyze our underlying business operations and understand our
performance. In addition, our management may utilize these non-GAAP
financial measures as guides in forecasting, budgeting, and
planning. Any analysis on non-GAAP financial measures should be
used in conjunction with results presented in accordance with GAAP.
A reconciliation of these non-GAAP financial measures with the most
directly comparable financial measures calculated in accordance
with GAAP is presented in the tables below.
LIGHTPATH
TECHNOLOGIES, INC.
Reconciliation of Non-GAAP
Financial Measures and Regulation G Disclosure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$769,117
|
$16,276
|
$(606,040)
|
$(566,615)
|
|
Depreciation and
amortization
|
868,148
|
821,530
|
1,760,220
|
1,683,676
|
|
Income tax provision
(benefit)
|
321,869
|
(23,403)
|
470,187
|
(202,363)
|
|
Interest expense
|
89,257
|
153,289
|
187,798
|
298,302
|
|
EBITDA
|
$2,048,931
|
$967,692
|
$1,812,165
|
$1,213,000
|
|
% of revenue
|
21%
|
11%
|
11%
|
7%
|