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Advanced Photonix, Inc. Reports Third Quarter 2015 Results

ANN ARBOR, Mich., Feb. 9, 2015 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API) (the "Company") today reported results for the third quarter ended December 26, 2014.

Advanced Photonix, Inc.

Financial Highlights for the Third Quarter Ended December 26, 2014

  • Net sales for the quarter were $5.8 million, a decrease of $1.6 million or 22% from the third quarter ended December 27, 2013. Sequentially, revenues were down 25% relative to the second quarter of fiscal 2015 given weak Telecommunication and Comtest sales.
  • Gross profit margin for Q3 FY2015 was 32.2% of sales compared to 25.3% for the third quarter ended December 27, 2013.
  • Current quarter net loss was $701,000 or $0.02 per fully diluted share, as compared to a quarterly net loss of $1.6 million, or $0.05 per fully diluted share for the quarter ended December 27, 2013. Cost reductions in all operating expense lines and the absence of restructuring costs in the current quarter were the main reason for the reduced loss.
  • The Non-GAAP net loss for the third quarter of fiscal 2015 was $602,000 or $0.02 per fully diluted share, as compared to a Non-GAAP loss of $517,000, or $0.02 per fully diluted share, for the third quarter last year. The positive effect of cost reductions in all operating expense lines were essentially offset by the weaker sales volume.
  • Adjusted EBITDA (which is defined as GAAP earnings before interest, taxes, depreciation, amortization and stock compensation), was a negative $437,000 for the third quarter of fiscal 2015 as compared to a negative adjusted EBITDA of $205,000 for the quarter ended December 27, 2013.

Operating Expenses
The Company's total operating expenses for the quarter were $2.6 million, down approximately $624,000 from the prior year quarter due to cost reduction measures taken during the last 12 months. Total operating expenses were 44.4% of sales compared to 42.9% for the third quarter last year.

Balance Sheet
The Company finished the quarter with $110,000 in cash compared to $120,000 as of March 31, 2014. At the end of the quarter the Company had $630,000 to draw on its line of credit. As a result, on February 5, 2015, we obtained further covenant relief from our lenders by reducing the rolling six month adjusted EBITDA requirement for January through June 2015 to a negative $1,250,000, $1 of adjusted EBITDA required in July 2015 and $100,000 each month thereafter until maturity with up to $150,000 in transaction costs carved out of the calculation. The parties also agreed to reduce the minimum liquidity ratio to 1.30 to 1.00 from January 2015 until the maturity of each party's respective debt.

Richard Kurtz, President and Chief Executive Officer, commented, "The third quarter was lower than expected given weakness in telecommunication revenues which has also spilled over into our fourth quarter. This is a temporary condition as the backlog is currently growing again. We have landed several recent awards from Telecommunication customers that lead us to believe that fiscal 2016 growth could be very robust given the large infrastructure upgrade going on in China. Further, we were given the long awaited $1.4 million Terahertz development contract that will commercialize a Terahertz system for F-35 maintenance purposes. We do believe that the combination of new products in the pipeline today, a return to normalized capital expenditures by service providers, and the infrastructure build out in China will lead to a resumption of growth in fiscal 2016."

"Finally, I wanted to express our excitement in teaming up with Luna Innovations Inc. given their complementary capabilities and strong balance sheet. The cost of being a small public company is high and the combination offers many positive synergies. While the merger is still subject to shareholder approval, we believe it provides a path to significant long-term shareholder value."

Conference Call
Participating in the call will be Richard Kurtz (CEO and Director), Rob Risser (COO and Director), and Jeff Anderson (CFO). The conference call will be webcast live and will be accessible at http://www.videonewswire.com/event.asp?id=101553. Participants can dial into the conference call at 866.362.4443 (412.902.4205 for international and 855.669.9657 for Canada). The conference call will last approximately one hour and will end with a question and answer period. A press release announcing the financial results will be released after the close of the market on the same day.

An audio replay of the call will be available shortly thereafter on the same day and will remain on-line until March 9, 2015. The replay will be available in the investors section of API's website at www.advancedphotonix.com.

About Advanced Photonix, Inc.
Advanced Photonix, Inc.® (NYSE MKT: API) is a leading supplier of optoelectronic sensors, devices and instruments used by Test and Measurement, Process Control, Medical, Telecommunication and Homeland Security markets. The company has three product lines: Optosolutions focuses on enabling manufacturers to measure physical properties, including temperature, particular counting, color, and fluorescence for Medical, Homeland Security and Process Control applications. The Terahertz sensor product line is targeted to the Process Control, to enable quality control, and Security markets through nondestructive testing. The T-Gauge® sensor can measure subsurface physical properties, like multi-layers thicknesses, density, moisture content, anomaly detection and some chemical features, online and in real time. High-Speed Optical Receiver (HSOR) products are used by the telecommunication market in both telecommunication equipment and in test and measurement equipment utilized in the manufacturing of telecommunication equipment. For more information visit us on the web at www.advancedphotonix.com.

Forward-looking Statements:
The information contained herein includes forward looking statements that are based on assumptions that management believes to be reasonable but are subject to inherent uncertainties and risks including, but not limited to, unforeseen technological obstacles which may prevent or slow the development and/or manufacture of new products; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products; and the risk factors listed from time to time in the Company's' Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any subsequent SEC filings. The Company assumes no obligation to update forward-looking statements contained in this release to reflect new information or future events or developments.

 

CONDENSED CONSOLIDATED BALANCE SHEET





ASSETS

March 31, 2014

December 26, 2014


Current assets




Cash and cash equivalents

$             120,000

$             110,000


Receivables, net

5,085,000

3,814,000


Inventories

4,749,000

4,987,000


Prepaid expenses and other current assets

444,000

725,000


Total current assets

10,398,000

9,636,000


Net equipment and leasehold improvements, net

2,144,000

1,769,000


Goodwill

4,579,000

4,579,000


Net intangible assets including patents

2,942,000

2,678,000


Other assets

138,000

160,000


Total assets

$        20,201,000

$        18,822,000






LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities




Accounts payable and accrued expenses

$          4,113,000

$          2,519,000


Accrued compensation

701,000

790,000


Current portion of long-term debt – bank term loan

306,000

83,000


Current portion of long-term debt – bank line of credit

2,147,000

1,546,000


Current portion of long-term debt – PFG

714,000

714,000


Current portion of long-term debt – MEDC

654,000

116,000


Current portion of capital leases

20,000

8,000


Total current liabilities

8,655,000

5,776,000


Long term debt, net of debt discount and current – PFG

794,000

365,000


Long term debt – MEDC

--

538,000


Long term debt, capital lease

36,000

29,000


Warrant liability

409,000

178,000


Total liabilities

9,894,000

6,886,000






Shareholders' equity




Class A common stock, $.001 par value, 100,000,000 shares authorized; March 31, 2014 – 31,203,213 shares issued and outstanding; December 26, 2014– 37,381,413 shares issued and outstanding

31,000

37,000


Additional paid-in capital

58,752,000

61,712,000


Accumulated deficit

(48,476,000)

(49,813,000)


Total shareholders' equity

10,307,000

11,936,000


Total liabilities and shareholders' equity

$        20,201,000

$        18,822,000


   

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)






Three months ended



Nine months ended


Dec 27, 2013


Dec 26, 2014


Dec 27, 2013


Dec 26, 2014

Sales, net

$        7,450,000


$        5,805,000


$      22,064,000


$     21,257,000

Cost of products sold

5,562,000


3,936,000


14,460,000


13,845,000

Gross profit

1,888,000


1,869,000


7,604,000


7,412,000









Operating expenses








Research, development and engineering

1,164,000


959,000


3,890,000


3,019,000

Sales and marketing

640,000


535,000


1,867,000


1,682,000

General and administrative

1,135,000


928,000


3,461,000


3,291,000

Amortization expense

260,000


153,000


769,000


539,000

Total operating expenses

3,199,000


2,575,000


9,987,000


8,531,000

Loss from operations

(1,311,000)


(706,000)


(2,383,000)


(1,119,000)









Other income (expense)








Net interest expense

(153,000)


(124,000)


(478,000)


(434,000)

Change in fair value of warrant liability

(124,000)


140,000


(213,000)


231,000

Other income (expense)

(30,000)


(11,000)


(47,000)


(15,000)

Total other income (expense)

(307,000)


5,000


(738,000)


(218,000)

Loss before benefit from income taxes

(1,618,000)


(701,000)


(3,121,000)


(1,337,000)









Benefit for income taxes

--


--


--


--









Net loss

$    (1,618,000)


$      (701,000)


$     (3,121,000)


$     (1,337,000)









Basic and diluted loss per share

$            (0.05)


$            (0.02)


$              (0.10)


$              (0.04)









Weighted average common shares

outstanding

31,243,000


37,381,000


31,223,000


35,860,000














Non-GAAP Financial Measures
The Company provides Non-GAAP Net Income, EBITDA and adjusted EBITDA as supplemental financial information regarding the Company's operational performance. These Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP Net Income, EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from similar measures used by other companies. Reconciliation of Non-GAAP Net Income, EBITDA and adjusted EBITDA to GAAP net income and loss are set forth in the financial schedule section below.

RECONCILIATION OF NON-GAAP LOSS TO GAAP LOSS



Three months ended


Nine months ended


Dec 27, 2013


Dec 26, 2014


Dec 27, 2013


Dec 26, 2014

Net (loss)

$

(1,618,000)


$

(701,000)


$

(3,121,000)


$

(1,337,000)

Adjustments:












Change in warrant fair value


124,000



(140,000)



213,000



(231,000)

Amortization - intangibles/patents


260,000



153,000



769,000



539,000

Accelerated depreciation on fab shutdown


608,000



--



608,000



--

Non-cash interest expense


69,000



71,000



201,000



220,000

Stock option compensation expense


40,000



15,000



110,000



52,000

Subtotal


1,101,000



99,000



1,901,000



481,000

Non-GAAP (loss)

$

(517,000)


$

(602,000)


$

(1,220,000)


$

(757,000)













Basic and diluted loss per share

$

(0.02)


$

(0.02)


$

(0.04)


$

(0.02)













Weighted average common shares outstanding


31,243,000



37,381,000



31,223,000



35,860,000

RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO GAAP LOSS



Three months ended


Nine months ended


Dec 27, 2013


Dec 26, 2014


Dec 27, 2013


Dec 26, 2014

Net income (loss)

$

(1,618,000)


$

(701,000)


$

(3,121,000)


$

(1,337,000)

Adjustments:












Net interest expense (income)


154,000



124,000



478,000



434,000

Warrant (fair value) adjustment


124,000



(140,000)



213,000



(231,000)

Depreciation expense


835,000



112,000



1,298,000



448,000

Amortization


260,000



153,000



769,000



539,000

Subtotal


1,373,000



249,000



2,758,000



1,190,000

EBITDA

$

(245,000)


$

(452,000)


$

(363,000)


$

(147,000)

Stock compensation


40,000



15,000



110,000



52,000

Adjusted EBITDA

$

(205,000)


$

(437,000)


$

(253,000)


$

(95,000)

CONTACT: Porter, LeVay & Rose, Inc.

Mike Porter
(212) 564-4700
Mike@plrinvest.com

Logo - http://photos.prnewswire.com/prnh/20130304/LA69982LOGO

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/advanced-photonix-inc-reports-third-quarter-2015-results-300032822.html

SOURCE Advanced Photonix, Inc.

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