Lightpath Technologies Inc 8-K, filed Sep 10, 2020
Lightpath Technologies Inc (LPTH)
8-K
2020-09-10
For: 2020-09-10
View Original
Added on
April 10, 2026
About this 8-K
Lightpath Technologies Inc filed this 8-K on September 10, 2020.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
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
September 10, 2020
Date of Report (Date of earliest event reported)
LIGHTPATH TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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000-27548
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86-0708398
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(State or other jurisdiction of incorporation or
organization)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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2603 Challenger Tech Court, Suite 100
Orlando, Florida 32826
(Address of principal executive office, including zip
code)
(407) 382-4003
(Registrant’s telephone number, including area
code)
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:
☐ 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))
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Class A
Common Stock, par value $0.01
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LPTH
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The
Nasdaq Stock Market, LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of
the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this
chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards providing
pursuant to Section 13(a) of the Exchange Act. ☐
LightPath
Technologies, Inc.
Form
8-K
Item 2.02. Results of Operations and
Financial Condition
On September 10, 2020, LightPath Technologies, Inc. issued a press
release announcing the results for the fourth quarter and fiscal
year ended June 30, 2020. A copy of the Press Release is attached
as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d)
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Exhibit No.
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Description
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Press Release of LightPath Technologies, Inc., dated September 10,
2020 for the Fourth Quarter and Fiscal Year Ended June 30,
2020.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Report to be signed in
its behalf by the undersigned, thereunto duly
authorized.
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LIGHTPATH
TECHNOLOGIES, INC.
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Dated:
September 10, 2020
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By:
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/s/
Donald O. Retreage, Jr.
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Donald O. Retreage, Jr., Chief
Financial Officer
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3
Exhibit 99.1
LightPath Technologies Reports Financial Results for
Fourth Quarter and Fiscal Year 2020
Growth in Key Financial Indicators Despite Impact of
COVID-19
New CEO Provides Strategic Imperatives Intended to Further
Accelerate Growth and Improve Competitive Position
ORLANDO,
FL – September 10, 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 its financial results for the
fourth quarter and full fiscal year ended June 30,
2020.
Fiscal 2020 Fourth Quarter and Full Year Highlights:
●
Revenue for the
fourth quarter of fiscal 2020 was $9.1 million, an increase of 4%,
as compared to $8.7 million in the fourth quarter of fiscal 2019.
Revenue for the full year was $35.0 million for fiscal 2020, an
increase of 4%, as compared to $33.7 million in fiscal
2019.
●
12-month backlog
increased 11% to $19.1 million at June 30, 2020 compared to $17.1
million at June 30, 2019.
●
Gross margin as a
percentage of revenue for the fourth quarter of fiscal 2020 was
39%, compared to 32% in the fourth quarter of fiscal 2019. Gross
margin as a percentage of revenue for the full year was 40% for
fiscal 2020, compared to 37% in fiscal 2019.
●
Operating expenses
decreased to $2.9 million for the fourth quarter of fiscal 2020,
compared to $3.9 million in the same quarter of the prior fiscal
year. Operating expenses for the full fiscal year decreased to
$11.7 million for fiscal 2020, compared to $13.7 million in fiscal
2019.
●
Net income for the
fourth quarter of fiscal 2020 was $657,000, compared to a net loss
of $1.8 million in the fourth quarter of fiscal 2019. Net income
for fiscal 2020 was $867,000, compared to a net loss of $2.7
million in fiscal 2019.
●
EBITDA* for the
fourth quarter of fiscal 2020 was $1.7 million, compared to an
EBITDA loss of $219,000 in the fourth quarter of fiscal 2019.
EBITDA for the full fiscal year was $5.4 million for fiscal 2020,
compared to $1.9 million in fiscal 2019.
●
Capital
expenditures were approximately $938,000 for the fourth quarter of
fiscal 2020, compared to $326,000 for the fourth quarter of fiscal
2019, which included equipment purchased through finance leases.
Capital expenditures for the full fiscal year were approximately
$2.4 million for fiscal 2020, compared to $2.5 million for fiscal
2019, which included equipment purchased through finance
leases.
●
Total debt,
including finance leases, was reduced by approximately $650,000, or
10%, in fiscal 2020, from June 30, 2019.
●
Cash and cash
equivalents of approximately $5.4 million as of June 30, 2020, as
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
Sam
Rubin, President and Chief Executive Officer of LightPath, stated,
“Our fiscal 2020 fourth quarter and full year results reflect
the continuing improvement and growth of our business, while at the
same time navigating the dynamic and changing conditions caused by
the effects of the coronavirus (“COVID-19”) pandemic on
both our customers and our own supply chain.
“Our
improved quarter-over-quarter results included an increase in our
gross margin percentage from 32% to 39%, and EBITDA from a loss of
3% to 18%, both of which reflect the continuous improvements in the
business, including the consolidation of our two U.S. facilities,
as well as the favorable product mix within the precision molded
optics (“PMO”) part of the business. While the revenue
growth of 4% year-over-year is definitely a positive outcome,
especially given the economic environment throughout the second
half of our fiscal year, we believe this increase is understated
relative to the expansion of our backlog and the pent up demand
that we see among customers in certain industries.
“As
discussed previously, the growth in demand for lenses used in 5G
telecom together with the newfound interest in lenses used in
contactless temperature measurement had created a capacity
constraint in our organization. We began addressing this through,
among other things, the temporary use of overtime hours and
accelerating investments in capital equipment. However, the
benefits of our increased capacity were offset by the negative
impact COVID-19 had on certain of our customers, which led those
customers to request a temporary hold on their shipments. The
timing and advance notice we receive for such requests can impact
our scheduling and planning of the use of our resources, leading to
lower conversion of production output to shipments, as well as an
increase in our inventory levels.
“While
navigating the impacts from COVID-19 on the economy and our supply
chain, I worked with our leadership team to develop a new strategic
direction for LightPath following my appointment as CEO in March
2020. This strategy is one that is based on our strengths and our
core capabilities to address the largest and fastest growing trends
in our industry for visible and infrared optical solutions. I look
forward to sharing our plan in more detail on our earnings
conference call today but the major tenets include:
●
Capitalizing on
optics as an enabling technology that is increasingly pervasive
among various industries and markets;
●
Prioritizing our
key differentiators, including our deep design and manufacturing
expertise, coupled with key optical technologies and low cost,
vertically integrated global manufacturing;
●
Continuous
improvement through operational excellence;
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Engaging in a
solutions-oriented approach for high value customers;
and
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Investing in our
people to enable execution of our strategy, as we elevate our
design and engineering talent and continue to build a sales force
that can focus and prioritize customer opportunities that align
with our strategic goals.
“We
have already begun to implement elements of this strategic
direction. Shortly after I joined the Company, we identified
certain opportunities for improvements in our operations. One such
area includes our cash management, where through the implementation
of better processes and controls, we have been able to increase our
cash position to $5.4 million, while at the same time continuing to
invest in capacity expansion. We utilized our line of credit for
financial flexibility and reduced our total debt and finance lease
obligations. As we continue to implement operational improvements
throughout our organization and execute upon the outcomes of our
comprehensive strategic review, we expect both near term and longer
term impacts toward further improving our growth, our performance
in the eyes of our customers, and key financial indicators beyond
what we have achieved to date.”
Mr.
Rubin continued, "On behalf of the Board of Directors of LightPath
and our management team, I also want to express our appreciation
for Jim Gaynor's 13 years of service to the Company. His
dedication, commitment, and contributions have significantly added
to the success of the Company. Our best wishes for him and his
family on his retirement."
2
Financial Results for the Three Months Ended June 30, 2020,
Compared to the Three Months Ended June 30, 2019
Revenue
for the fourth quarter of fiscal 2020 was approximately $9.1
million, an increase of $362,000, or 4%, as compared to the fourth
quarter of fiscal 2019. Sales of infrared (“IR”)
products comprised 53% of the Company’s consolidated revenue
in the fourth quarter of fiscal 2020, as compared to 54% of
consolidated revenue in the same period of the prior fiscal year.
Visible PMO product sales represented 43% of consolidated revenues
in the fourth quarter of fiscal 2020, as compared to 40% in the
same period of the prior fiscal year. Specialty products continue
to be a small component of the Company’s business,
representing 5% of revenue in the fourth quarter of fiscal 2020, as
compared to 6% in the same quarter of last year.
Revenue
generated by IR products was approximately $4.8 million in the
fourth quarter of fiscal 2020, an increase of 1%, compared to $4.7
million in the same period of the prior fiscal year. The increase
is primarily due to increased sales of molded IR products,
including products made with LightPath’s new BD6 material.
The increased demand for molded IR products has recently been
driven by medical applications, particularly fever detection
products immediately following the COVID-19 outbreak, which demand
has since leveled off, in addition to continued demand for
industrial applications, firefighting and other public safety
applications. This increase was offset by a decrease in sales of
diamond-turned infrared products, particularly in the defense
market. The decrease in sales of diamond-turned infrared products
was also partially due to the timing of order shipments against a
large-volume annual contract, for which shipments were higher in
the fourth quarter of the prior fiscal year.
Revenue
generated by PMO products was approximately $3.9 million for the
fourth quarter of fiscal 2020, an increase of $385,000, or 11%,
compared to $3.5 million in the same period of the prior fiscal
year. The increase in revenue is primarily attributed to increases
in sales to customers in the telecommunications market, with higher
volumes and lower unit prices than many of our other products,
partially offset by a decrease in sales through catalog and
distributors, which products have lower volumes and higher unit
prices. The decrease in catalog and distribution sales is primarily
due to the impact of COVID-19 on colleges and
universities.
Revenue
generated by specialty products was approximately $421,000 in the
fourth quarter of fiscal 2020, a decrease of $70,000, or 14%,
compared to $490,000 in the same period of the prior fiscal year.
This decrease is primarily related to the timing of orders for
custom products in the fourth quarter of the prior fiscal year,
which did not recur in the fourth quarter of fiscal
2020.
Gross
margin in the fourth quarter of fiscal 2020 was approximately $3.5
million, an increase of 24%, as compared to $2.8 million in the
same quarter of the prior fiscal year. Total cost of sales was
approximately $5.6 million for the fourth quarter of fiscal 2020,
compared to $5.9 million for the same period of the prior fiscal
year. The lower total cost of sales and increase in gross margin is
primarily driven by the increase in sales and the elimination of
elevated costs including labor, manufacturing inefficiencies, and
increased overhead expenses associated with the relocation of the
Company’s facility in Irvington, New York in the prior year
period. Gross margin as a percentage of revenue was 39% for the
fourth quarter of fiscal 2020, as compared to 32% in the same
period of the prior fiscal year. The increase in gross margin as a
percentage of revenue reflects the improved cost structure and
operating performance following the completion of the New York
facility relocation in June 2019, as well as a more favorable
revenue mix among our product groups. Revenue was comprised of a
slightly higher mix of PMO product sales during the fourth quarter
of fiscal 2020, which typically have the highest margins among
LightPath’s product groups.
3
During the fourth quarter of fiscal 2020, total operating expenses
were approximately $2.9 million, a decrease of $1.0 million, or
26%, as compared to $3.9 million in the same period of the prior
fiscal year. Selling, general and administrative
(“SG&A”) costs decreased by approximately $919,000,
or 30%, as compared to the same period of the prior fiscal year.
SG&A for the fourth quarter of fiscal 2019 included
approximately $845,000 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 fourth 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. Travel
expenses were also reduced as a result of the COVID-19 travel
restrictions. New product development costs decreased by
approximately $118,000, or 23%, due to the shifting of personnel
from product development to the newly created product management
function, which is included in SG&A.
Interest
expense, net, was approximately $66,000 in the fourth quarter of
fiscal 2020, as compared to approximately $123,000 in the same
period of the prior fiscal year. The decrease in interest expense
is primarily due to the paydown of principal and lower interest
rates compared to the fourth quarter of fiscal 2019.
During
the fourth quarter of fiscal 2020, the Company recorded income tax
expense of $90,000, as compared to $496,000 in the same period of
the prior fiscal year. For the fourth quarter of fiscal 2020,
income tax expense is primarily comprised of income taxes on the
income generated by one of the Company’s Chinese
subsidiaries, LightPath Optical Instrumentation (Zhenjiang) Co.,
Ltd (“LPOIZ”). Income tax expense for the fourth
quarter of fiscal 2019 includes the reversal of $406,000 of income
tax benefits recorded in the first half of fiscal 2019, due to a
change in the Company’s estimated utilization of U.S. net
operating loss (“NOL”) carryforward benefits for fiscal
2019. The remainder of the income tax expense for the fourth
quarter of fiscal 2019 is attributable to income taxes on income
generated in China. LightPath has NOL carry-forward benefits of
approximately $74 million available to apply against taxable income
as reported on a consolidated basis in the U.S. 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 $149,000 in the fourth quarter of
fiscal 2020, compared to net foreign currency transaction losses of
$113,000 for the fourth quarter of fiscal 2019. These foreign
currency transaction gains and losses had a $0.01 favorable impact
on basic and diluted earnings per share for the fourth quarter of
fiscal 2020, and no impact on the basic and diluted loss per share
for the fourth quarter of fiscal 2019.
Net
income for the fourth quarter of fiscal 2020 was approximately
$657,000, or $0.03 basic and $0.02 diluted earnings per share,
compared to a net loss of approximately $1.8 million, or $0.07
basic and diluted loss per share for the fourth quarter of fiscal
2019.
Weighted-average
shares of common stock outstanding were 25,875,127 basic and
28,182,614 diluted in the fourth quarter of fiscal 2020, compared
to 25,813,895 basic and diluted shares in the fourth 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 fourth quarter of fiscal 2020 was approximately $1.7
million, as compared to an EBITDA loss of approximately $219,000
for the fourth quarter of fiscal 2019. The increase in EBITDA in
the fourth quarter of fiscal 2020 was due to higher revenue and
gross margin, and lower operating expenses.
Financial Results for the Fiscal Year Ended June 30, 2020, Compared
to the Fiscal Year Ended June 30, 2019
Revenue
for fiscal 2020 was approximately $35.0 million, an increase of 4%,
as compared to $33.7 million in fiscal 2019. Sales of IR products
comprised 52% of the Company’s consolidated revenue in fiscal
2020, as compared to 51% of total sales in fiscal 2019. PMO product
sales represented 42% of consolidated revenues in both fiscal 2020
and fiscal 2019. Specialty products continue to be a small
component of the Company’s business, decreasing slightly from
7% of consolidated revenue in fiscal 2019 to 6% of consolidated
revenue in fiscal 2020.
4
Revenue
generated by infrared products was approximately $18.1 million in
fiscal 2020, an increase of 5%, as compared to fiscal 2019. The
increase in infrared product revenue is primarily attributable to
sales of BD6-based infrared products for both thermal imaging and
temperature sensing products. In the second half of fiscal 2020,
demand for temperature sensing and fever detection applications was
accelerated by COVID-19. These increases were partially offset by
decreases in other areas, such as the defense market.
Revenue
generated by PMO products was approximately $14.6 million for
fiscal 2020, an increase of 4%, as compared to fiscal 2019. The
increase in revenue is primarily attributable to a significant
increase in sales to customers in the telecommunications market, as
well as the medical market. These increases were partially offset
decreases in sales to customers in the commercial market and also a
decrease in sales through catalog and distributors. The decrease in
catalog and distribution sales is primarily due to the impact of
COVID-19 on colleges and universities.
Revenue
generated by specialty products was approximately $2.3 million in
fiscal 2020, a decrease of approximately 4%, as compared to fiscal
2019. This decrease is primarily related to orders for custom
products in fiscal 2019 that did not recur in fiscal 2020,
partially offset by an increase in NRE revenue during fiscal 2020
related to new projects for customers in the medical and commercial
markets.
Gross
margin for fiscal 2020 was approximately $13.8 million, an increase
of 11%, as compared to approximately $12.5 million in fiscal 2019.
Total cost of sales was approximately $21.1 million for fiscal
2020, compared to $21.2 million for fiscal 2019, a decrease of less
than 1%. This decrease in cost of sales was achieved amid a 4%
increase in revenue. Gross margin as a percentage of revenue was
40% for fiscal 2020, compared to 37% for fiscal 2019. The increase
in gross margin reflects improvements made in the second, third and
fourth quarters of fiscal 2020, after several factors negatively
impacted the first quarter of fiscal 2020.
During fiscal 2020, total operating expenses were approximately
$11.7 million, a decrease of approximately $1 million, or 14%, as
compared to $13.7 million in fiscal 2019. SG&A costs decreased
by approximately $1.5 million, or 15%, as compared to the prior
fiscal year. SG&A for fiscal 2019 included approximately $1.2
million 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. SG&A for 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 $303,000, or 15%,
primarily due to the shift of personnel from product development to
the newly created product management functions, which is included
in SG&A. 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.
Interest
expense, net, was approximately $339,000 in fiscal 2020, as
compared to approximately $697,000 in fiscal 2019. The decrease in
interest expense is primarily due to the paydown of principal and
more favorable terms associated with the term loan payable to
BankUnited N.A., entered into during the third quarter of fiscal
2019. Interest expense for the third quarter of fiscal 2019 also
includes non-recurring costs associated with the previous term loan
upon refinancing, including the write-off of previously unamortized
debt costs.
During
the fiscal 2020, the Company recorded income tax expense of
$764,000, primarily related to income taxes from operations in
China and Chinese withholding taxes associated with the
intercompany dividend declared by LPOIZ, one of the Company’s
Chinese subsidiaries, during the second quarter of fiscal 2020,
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 income tax expense of approximately $455,000 for fiscal
2019, which was primarily related to 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 $214,000 for fiscal 2020, compared
to $436,000 for fiscal 2019. These foreign currency transaction
losses had a $0.01 unfavorable impact on basic and diluted earnings
per share for fiscal 2020, and a $0.02 unfavorable impact on the
basic and diluted loss per share for fiscal
2019.
5
Net
income for fiscal 2020 was approximately $867,000, or $0.03 basic
and diluted earnings per share, compared to a net loss of
approximately $2.7 million or $0.10 basic and diluted loss per
share for fiscal 2019.
Weighted-average
shares of common stock outstanding were 25,853,419 basic and
27,469,845 diluted in fiscal 2020, compared to 25,794,669 basic and
diluted shares in 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 fiscal 2020 was approximately $5.4 million, as compared to
approximately $1.9 million for fiscal 2019. The increase in EBITDA
in fiscal 2020 was due to higher revenue and gross margin, coupled
with lower operating expenses as compared to the prior fiscal
year.
Cash
and cash equivalents totaled approximately $5.4 million as of June
30, 2020, compared to approximately $4.6 million as of June 30,
2019. Cash provided by operations was approximately $3.7 million
for fiscal 2020, as compared to approximately $411,000 in the prior
fiscal year. The increase in cash flow from operations for fiscal
2020 was primarily due to the improvement in net income driven by
higher sales and gross margins along with reduced ongoing and
non-recurring expenses. The Company expended approximately $2.4
million for investments in capital equipment during fiscal 2020,
compared to approximately $2.5 million in the prior fiscal year,
which included equipment purchased through finance
leases.
The
current ratio as of June 30, 2020 was 2.9 to 1, compared to 3.1 to
1 as of June 30, 2019. This decrease is primarily due to the
addition of operating lease liabilities to the balance sheet
following the adoption of the new lease accounting guidance during
fiscal 2020, of which a portion is included in current liabilities
as of June 30, 2020. The current ratio also reflects the temporary
usage of our revolving credit line, which is included in the
current portion of loans payable as of June 30, 2020. Total
stockholders’ equity as of June 30, 2020 was approximately
$34.5 million, compared to $33.5 million as of June 30, 2019. The
net increase over the prior period is primarily due to the higher
net income contribution coupled with adjustments for stock-based
compensation, for which the expense is offset in additional paid-in
capital.
As of
June 30, 2020, LightPath’s 12-month backlog was $19.1
million, an increase of 11% from $17.1 million as of June 30, 2019.
During the third quarter of fiscal 2020, the Company announced
several new purchase orders for thermal imaging lens assemblies
used in medical and sensing applications in the Asian market.
Shipments against these orders began during the quarter ended June
30, 2020. In addition, more long-term orders, including annual
contracts, continue to be added to the backlog. The timing of
long-term orders and annual contract renewals 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. The Company also has sales backlog beyond
12-months.
*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.
6
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,
September 10, 2020 at 4:30 p.m. ET to discuss its financial and
operational performance for the fourth quarter and fiscal year
ended June 30, 2020.
Date:
Thursday, September 10, 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/lpth200910.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 September 24, 2020.
To listen to the replay, dial 1-877-344-7529 (domestic) or
1-412-317-0088 (international), and enter conference ID
#10147020.
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 (“BD6”)
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.
7
LightPath’s
wholly-owned subsidiary, ISP Optics
Corporation, 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 press release includes statements that constitute
forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as “forecast,” “guidance,”
“plan,” “estimate,” “will,”
“would,” “project,” “maintain,”
“intend,” “expect,”
“anticipate,” “prospect,”
“strategy,” “future,” “likely,”
“may,” “should,” “believe,”
“continue,” “opportunity,”
“potential,” and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters, and include, for example, statements related to
the expected effects on the Company’s business from the
COVID-19 pandemic. These forward-looking statements are based on
information available at the time the statements are made and/or
management’s good faith belief as of that time with respect
to future events, and are subject to risks and uncertainties that
could cause actual results to differ materially from those
expressed in or suggested by the forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to, the duration and scope of the COVID-19
pandemic and impact on the demand for the Company products; the
ability of the Company to obtain needed raw materials and
components from its suppliers; actions governments, businesses, and
individuals take in response to the pandemic, including mandatory
business closures and restrictions on onsite commercial
interactions; the impact of the pandemic and actions taken in
response to the pandemic on global and regional economies and
economic activity; the pace of recovery when the COVID-19 pandemic
subsides; general economic uncertainty in key global markets and a
worsening of global economic conditions or low levels of economic
growth; the effects of steps that the Company could take to reduce
operating costs; the inability of the Company to sustain profitable
sales growth, convert inventory to cash, or reduce its costs to
maintain competitive prices for its products; circumstances or
developments that may make the Company unable to implement or
realize the anticipated benefits, or that may increase the costs,
of its current and planned business initiatives; and those factors
detailed by LightPath Technologies, Inc. in its public filings with
the Securities and Exchange Commission, including its Annual Report
on Form 10-K for the year ended June 30, 2020. Should one or more
of these risks, uncertainties, or facts materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those indicated or anticipated by the
forward-looking statements contained herein. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date they are made.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved. 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:
|
||
|
Sam Rubin, President & CEO
|
Don
Retreage, Jr. CFO
|
Jordan
Darrow
|
|
LightPath Technologies, Inc.
|
LightPath
Technologies, Inc.
|
Darrow
Associates, Inc.
|
|
Tel: 407-382-4003
|
Tel:
407-382-4003
|
Tel:
512-551-9296
|
|
srubin@lightpath.com
|
dretreage@lightpath.com
|
jdarrow@darrowir.com
|
(tables
follow)
8
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Balance Sheets
(unaudited)
|
|
June
30,
|
June
30,
|
|
Assets
|
2020
|
2019
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$5,387,388
|
$4,604,701
|
|
Trade accounts
receivable, net of allowance of $9,917 and $29,406
|
6,188,726
|
6,210,831
|
|
Inventories,
net
|
8,984,482
|
7,684,527
|
|
Other
receivables
|
132,051
|
353,695
|
|
Prepaid expenses
and other assets
|
565,181
|
754,640
|
|
Total current
assets
|
21,257,828
|
19,608,394
|
|
|
|
|
|
Property and
equipment, net
|
11,799,061
|
11,731,084
|
|
Operating lease
right-of-use assets
|
1,220,430
|
—
|
|
Intangible assets,
net
|
6,707,964
|
7,837,306
|
|
Goodwill
|
5,854,905
|
5,854,905
|
|
Deferred tax
assets, net
|
659,000
|
652,000
|
|
Other
assets
|
75,730
|
289,491
|
|
Total
assets
|
$47,574,918
|
$45,973,180
|
|
Liabilities
and Stockholders’ Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$2,558,638
|
$2,227,768
|
|
Accrued
liabilities
|
992,221
|
1,338,912
|
|
Accrued payroll and
benefits
|
1,827,740
|
1,730,658
|
|
Operating lease
liabilities, current
|
765,422
|
—
|
|
Deferred rent,
current portion
|
—
|
72,151
|
|
Loans payable,
current portion
|
981,350
|
581,350
|
|
Finance lease
obligation, current portion
|
278,040
|
404,424
|
|
Total current
liabilities
|
7,403,411
|
6,355,263
|
|
|
|
|
|
Finance lease
obligation, less current portion
|
279,435
|
640,284
|
|
Operating lease
liabilities, noncurrent
|
887,766
|
—
|
|
Deferred rent,
noncurrent
|
—
|
518,364
|
|
Loans payable, less
current portion
|
4,437,365
|
5,000,143
|
|
Total
liabilities
|
13,007,977
|
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; 25,891,885 and 25,813,895
|
|
|
|
shares issued and
outstanding
|
258,919
|
258,139
|
|
Additional paid-in
capital
|
230,634,056
|
230,321,324
|
|
Accumulated other
comprehensive income
|
735,892
|
808,518
|
|
Accumulated
deficit
|
(197,061,926)
|
(197,928,855)
|
|
Total
stockholders’ equity
|
34,566,941
|
33,459,126
|
|
Total liabilities
and stockholders’ equity
|
$47,574,918
|
$45,973,180
|
9
Condensed
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
|
|
Three Months Ended
|
Year Ended
|
||
|
|
June 30,
|
June 30,
|
||
|
|
2020
|
2019
|
2020
|
2019
|
|
Revenue,
net
|
$9,107,140
|
$8,745,278
|
$34,967,963
|
$33,749,088
|
|
Cost
of sales
|
5,596,915
|
5,916,343
|
21,125,464
|
21,230,168
|
|
Gross
margin
|
3,510,225
|
2,828,935
|
13,842,499
|
12,518,920
|
|
Operating
expenses:
|
|
|
|
|
|
Selling,
general and administrative
|
2,164,614
|
3,084,101
|
8,961,150
|
10,498,651
|
|
New
product development
|
404,694
|
522,203
|
1,714,077
|
2,016,615
|
|
Amortization
of intangibles
|
281,270
|
283,521
|
1,129,341
|
1,220,664
|
|
Loss
(gain) on disposal of property and equipment
|
21,802
|
15,821
|
(107,280)
|
(77,047)
|
|
Total
operating expenses
|
2,872,380
|
3,905,646
|
11,697,288
|
13,658,883
|
|
Operating
income (loss)
|
637,845
|
(1,076,711)
|
2,145,211
|
(1,139,963)
|
|
Other
income (expense):
|
|
|
|
|
|
Interest
expense, net
|
(66,184)
|
(123,578)
|
(339,446)
|
(697,113)
|
|
Other
income (expense), net
|
175,733
|
(65,702)
|
(174,838)
|
(388,041)
|
|
Total
other income (expense), net
|
109,549
|
(189,280)
|
(514,284)
|
(1,085,154)
|
|
Income
(loss) before income taxes
|
747,394
|
(1,265,991)
|
1,630,927
|
(2,225,117)
|
|
Income
tax provision
|
90,442
|
495,699
|
763,998
|
455,206
|
|
Net
income (loss)
|
$656,952
|
$(1,761,690)
|
$866,929
|
$(2,680,323)
|
|
Foreign
currency translation adjustment
|
(24,928)
|
55,843
|
(72,626)
|
335,010
|
|
Comprehensive
income (loss)
|
$632,024
|
$(1,705,847)
|
$794,303
|
$(2,345,313)
|
|
Earnings
(loss) per common share (basic)
|
$0.03
|
$(0.07)
|
$0.03
|
$(0.10)
|
|
Number
of shares used in per share calculation (basic)
|
25,875,127
|
25,810,681
|
25,853,419
|
25,794,669
|
|
Earnings
(loss) per common share (diluted)
|
$0.02
|
$(0.07)
|
$0.03
|
$(0.10)
|
|
Number
of shares used in per share calculation (diluted)
|
28,182,614
|
25,810,681
|
27,469,845
|
25,794,669
|
10
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Changes in Stockholders'
Equity
(unaudited)
|
|
|
|
|
Accumulated
|
|
|
|
|
Class
A
|
|
Additional
|
Other
|
|
Total
|
|
|
Common
Stock
|
|
Paid-in
|
Comphrehensive
|
Accumulated
|
Stockholders’
|
|
|
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Equity
|
|
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
|
20,871
|
209
|
38,229
|
—
|
—
|
38,438
|
|
Exercise of stock options,
net
|
28,480
|
285
|
13,482
|
—
|
—
|
13,767
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
394,790
|
—
|
—
|
394,790
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
335,010
|
—
|
335,010
|
|
Net loss
|
—
|
—
|
—
|
—
|
(2,680,323)
|
(2,680,323)
|
|
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
|
30,537
|
305
|
24,307
|
—
|
—
|
24,612
|
|
Exercise of Stock Options &
RSUs, net
|
42,453
|
425
|
21,838
|
—
|
—
|
22,263
|
|
Shares issued as
compensation
|
5,000
|
50
|
6,100
|
—
|
—
|
6,150
|
|
Stock-based compensation on stock
options & RSUs
|
—
|
—
|
260,487
|
—
|
—
|
260,487
|
|
Foreign currency translation
adjustment
|
—
|
—
|
—
|
(72,626)
|
—
|
(72,626)
|
|
Net income
|
—
|
—
|
—
|
—
|
866,929
|
866,929
|
|
Balances at June
30, 2020
|
25,891,885
|
$258,919
|
$230,634,056
|
$735,892
|
$(197,061,926)
|
$34,566,941
|
11
LIGHTPATH
TECHNOLOGIES, INC.
Condensed
Consolidated Statements of Cash Flows
(unaudited)
|
|
Year Ended June
30,
|
|
|
|
2020
|
2019
|
|
Cash flows from
operating activities
|
|
|
|
Net income
(loss)
|
$866,929
|
$(2,680,323)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
3,424,438
|
3,464,156
|
|
Interest from
amortization of debt costs
|
18,572
|
117,261
|
|
Gain on disposal of
property and equipment
|
(107,280)
|
(77,047)
|
|
Stock-based
compensation on stock options & RSUs, net
|
250,737
|
394,790
|
|
Provision for
doubtful accounts receivable
|
18,826
|
(6,658)
|
|
Change in operating
lease liabilities
|
(157,757)
|
370,701
|
|
Inventory
write-offs to allowance
|
127,872
|
125,234
|
|
Deferred tax
benefit
|
(7,000)
|
(28,000)
|
|
Changes in
operating assets and liabilities:
|
|
|
|
Trade accounts
receivable
|
3,279
|
(833,665)
|
|
Other
receivables
|
221,644
|
(306,348)
|
|
Inventories
|
(1,427,827)
|
(1,405,020)
|
|
Prepaid expenses
and other assets
|
403,220
|
392,925
|
|
Accounts payable
and accrued liabilities
|
97,160
|
883,179
|
|
Net cash provided
by operating activities
|
3,732,813
|
411,185
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchase of
property and equipment
|
(2,442,779)
|
(1,931,835)
|
|
Proceeds from sale
of equipment
|
186,986
|
683,250
|
|
Net cash used in
investing activities
|
(2,255,793)
|
(1,248,585)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
exercise of stock options
|
22,263
|
13,767
|
|
Proceeds from sale
of common stock from Employee Stock Purchase Plan
|
24,612
|
38,438
|
|
Loan
costs
|
—
|
(92,860)
|
|
Borrowings on loan
payable
|
400,000
|
5,813,500
|
|
Payments on loan
payable
|
(581,350)
|
(6,831,503)
|
|
Repayment of
finance lease obligations
|
(487,233)
|
—
|
|
Payments on capital
lease obligations
|
—
|
(342,871)
|
|
Net cash used in
financing activities
|
(621,708)
|
(1,401,529)
|
|
Effect of exchange
rate on cash and cash equivalents and restricted cash
|
(72,625)
|
335,010
|
|
Change in cash and
cash equivalents and restricted cash
|
782,687
|
(1,903,919)
|
|
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
|
$5,387,388
|
$4,604,701
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
Interest paid
in cash
|
$330,910
|
$500,985
|
|
Income taxes
paid
|
$526,225
|
$406,526
|
|
Supplemental
disclosure of non-cash investing & financing
activities:
|
|
|
|
Purchase of
equipment through capital lease arrangements
|
—
|
$530,253
|
|
Landlord
credits for leasehold improvements
|
|
$309,450
|
12
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
(unaudited)
|
|
Quarter
Ended:
|
Year
Ended:
|
||
|
|
June 30,
2020
|
June 30,
2019
|
June 30,
2020
|
June 30,
2019
|
|
Net income
(loss)
|
$656,952
|
$(1,761,690)
|
$866,929
|
$(2,680,323)
|
|
Depreciation and
amortization
|
837,123
|
923,195
|
3,424,438
|
3,464,156
|
|
Income tax
provision
|
90,442
|
495,699
|
763,998
|
455,206
|
|
Interest
expense
|
66,184
|
123,578
|
339,446
|
697,113
|
|
EBITDA
|
$1,650,701
|
$(219,218)
|
$5,394,811
|
$1,936,152
|
|
% of
revenue
|
18%
|
-3%
|
15%
|
6%
|
13