lpth_ex991
Exhibit 99.1
LightPath Technologies Reports Financial Results for
Fiscal 2020 Third Quarter
Backlog at $20 Million Sets Another Record; Improved Financial
Performance Despite the Ongoing COVID-19 Pandemic
ORLANDO,
FL – May 7, 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 third quarter ended March 31, 2020.
Fiscal 2020 Third Quarter Highlights:
●
Revenue for the
third quarter of fiscal 2020 was $8.7 million, up 10%, as compared
to $7.9 million in the third quarter of fiscal 2019.
●
12-month backlog
reached another record of $20.0 million at March 31, 2019, compared
to $19.1 million at December 31, 2019 and $17.1 million at March
31, 2019.
●
Gross margin as a
percentage of revenue for the third quarter of fiscal 2020 was 46%,
up from 39% in the same period of the prior fiscal
year.
●
Operating expenses
decreased to $2.9 million for the third quarter of fiscal 2020,
compared to $3.1 million in the same quarter of the prior fiscal
year.
●
Net income for the
third quarter of fiscal 2020 was $816,000, compared to a net loss
of $352,000 for the third quarter of fiscal 2019.
●
EBITDA* for the
third quarter of fiscal 2020 was $1.9 million, compared to $942,000
in the third quarter of fiscal 2019.
●
Capital
expenditures, including equipment financed through leases, were
$1.5 million for the first nine months of fiscal 2020, compared to
$2.1 million in the first nine months of fiscal 2019.
●
Total debt,
including finance leases, was reduced by nearly $737,000, or 11%,
in the first nine months of fiscal 2020 from June 30,
2019.
●
Cash balance at
March 31, 2020 was $4.4 million, compared to $4.3 million at
December 31, 2019 and $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 third quarter results showed consistent
improvement in many areas, as compared to the prior year period,
and from most performance measurements as compared to the second
quarter of this fiscal year. All things considered, we find the
results to be satisfactory, given the global economic conditions,
and the challenges some of our customers, employees, and suppliers
have been facing as a result of the novel coronavirus
(“COVID-19”) pandemic. Presiding over LightPath for my
first quarterly reporting cycle, I am pleased to report that our
global workforce has risen to the occasion to deliver solid
financial results, while continuing to support our customers
– new and recurring alike – while keeping our
workplaces, and their communities and families safe.
“We
are proud to be able to be part of the fight against the spread of
COVID-19 as we are considered an essential business because of the
products we supply to the medical industry. During the third
quarter, we announced many important contract awards, including a
contract award totaling more than $1.7 million for thermal imaging
lens assemblies used in medical and sensing applications, many of
which are being utilized to combat the spread of COVID-19.
Fortunately, all of our manufacturing facilities in China, Latvia
and the U.S. remain open to handle these and other orders.
Consolidated revenue for the third quarter of fiscal 2020 was $8.7
million, an increase of more than 10%, as compared to the third
quarter of fiscal 2019. Growth was driven by demand for our new
line of BD6 infrared lenses by the medical industry and precision
molded visible light lenses for 5G and other telecom-related
applications. The strength of those markets more than offset the
decline in sales to academic institutions that are temporarily
closed and to other sectors experiencing weakness, such as the
consumer goods markets.
“We
are pleased to report also that none of our employees have
contracted COVID-19. We continue to take all precautions to ensure
that our employees remain safe and that our business operations can
continue despite the ongoing COVID-19 pandemic. While stay-at-home
orders may ultimately delay some long-term projects and our
research and development efforts, we have not encountered any
meaningful business interruptions to date. Moreover, there has been
no material or negative sustainable impact to our business to
report, but we recognize that the situation is fluid and we must
remain vigilant with the preparation of contingency
plans.
“LightPath
entered the crisis in a position of strength that has enabled us to
navigate the present challenges by taking advantage of certain
opportunities. We completed the transition out of New York with the
consolidation of our facilities, which removed a lot of additional
costs and one-time expenses incurred in the prior fiscal year.
Ongoing cost reduction and expense management initiatives, along
with a favorable revenue mix, led to achieving gross margin as a
percentage of revenue of 46%, which is 7% higher than in the same
quarter of the prior fiscal year and above our low to mid 40%
target range.
“Meanwhile,
during the third quarter, we have continued to invest in product
line expansions and increasing manufacturing capacity where needed.
There is significant interest in our technological innovations for
contactless thermal imaging applications, among other products.
Strong demand and order execution led to our setting another record
for our 12-month backlog at March 31, 2020 of $20.0 million, with
additional backlog beyond the next 12 months, providing further
visibility. This is a result of the successful execution of our
strategy for developing customer relationships with proprietary
products and entering into long-term supply agreements. Based on
our order book, which may vary depending on how the economy
recovers, and the backlog at the end of the fiscal third quarter,
we may need even more incremental production capacity. We are
evaluating our capital expenditure plans for the remainder of
fiscal 2020 and for fiscal 2021 in consideration of these volume
increases.
“With
our expanding product portfolio addressing several secular growth
markets, a globally diversified sales distribution platform, our
manufacturing capabilities in three countries around the world, and
our solid financial condition, LightPath is well positioned to
provide high quality, competitively priced optical components at a
time when others in our industry may be suffering. We look forward
to building upon the success achieved thus far in fiscal 2020,
while remaining grounded in the realities that face all businesses
amid the present environment.”
Financial Results for the Three Months Ended March 31, 2020,
Compared to the Three Months Ended March 31, 2019
Revenue
for the third quarter of fiscal 2020 was approximately $8.7
million, an increase of approximately $803,000, or 10%, as compared
to the same period of the prior fiscal year. Sales of infrared
(“IR”) products comprised 50% of the Company’s
consolidated revenue in the fiscal 2020 third quarter, as compared
to 49% of total sales in the same period of the prior fiscal year.
Visible precision molded optics (“PMO”) product sales
represented 44% of consolidated revenues in the third quarter 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, representing 6% of revenue in the
third quarter of fiscal 2020, as compared to 9% in the same quarter
of last year.
Revenue
generated by IR products was approximately $4.3 million in the
third quarter of fiscal 2020, an increase of approximately
$462,000, or 12%, compared to approximately $3.8 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, in addition to
continued demand for industrial applications, firefighting and
other public safety applications.
Revenue
generated by PMO products was approximately $3.9 million for the
third quarter of fiscal 2020, an increase of approximately
$500,000, or 15%, compared to $3.4 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 medical and
telecommunications markets.
Revenue
generated by specialty products was approximately $561,000 in the
third quarter of fiscal 2020, a decrease of approximately $158,000,
or 22%, compared to $720,000 in the same period of the prior fiscal
year. This decrease is primarily related to the timing of orders
for custom products in the third quarter of the prior fiscal year,
which orders did not recur in the third quarter of fiscal
2020.
Gross
margin in the third quarter of fiscal 2020 was approximately $4.0
million, an increase of 29%, as compared to approximately $3.1
million in the same quarter of the prior fiscal year. Total cost of
sales was approximately $4.7 million for the third quarter of
fiscal 2020, compared to $4.8 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 46% for the third quarter of fiscal 2020, as compared to 39% in
the same period of the prior fiscal year. The increase in gross
margin as a percentage of revenue reflects the revenue mix and the
improved cost structure and operating performance following the
completion of the New York facility relocation in June 2019.
Revenue was comprised of a slightly higher mix of PMO product sales
during the third quarter of fiscal 2020, which typically have the
highest margins among LightPath’s product
groups.
During the third quarter of fiscal 2020, total operating expenses
were approximately $2.9 million, a decrease of $135,000, or 4%, as
compared to $3.1 million in the same period of the prior fiscal
year. Selling, general and administrative (“SG&A”)
costs decreased by approximately $176,000, or 7%, as compared to
the same period of the prior fiscal year. SG&A for the third
quarter of fiscal 2019 included approximately $103,000 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 third 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 $93,000, or 18%, due to the shifting of
personnel from product development to the newly created product
management functions, which is included in SG&A. The decreases
in SG&A and new product development in the current quarter were
partially offset by the absence of gains on disposals of equipment
of approximately $136,000 during the third quarter of fiscal
2019.
Interest
expense, net, was approximately $85,000 in the third quarter of
fiscal 2020, as compared to approximately $275,000 in the same
period of the prior fiscal year. 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 included
non-recurring costs associated with the previous term loan upon
refinancing, including the write-off of previously unamortized debt
costs.
During
the third quarter of fiscal 2020, the Company recorded income tax
expense of $203,000, as compared to $162,000 in the same period of
the prior fiscal year. For both periods, these amounts are
primarily comprised of income taxes from operations in China.
LightPath has net operating loss (“NOL”) carry-forward
benefits of approximately $74 million available to apply against
taxable 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 $14,000, compared to approximately
$65,000 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 third quarter of fiscal 2020 or the
third quarter of fiscal 2019.
Net
income for the third quarter of fiscal 2020 was approximately
$816,000, or $0.03 basic and diluted earnings per share, compared
to a net loss of approximately $352,000, or a loss of $0.01 per
share for the third quarter of fiscal 2019.
Weighted-average
shares of common stock outstanding were 25,858,155 basic and
27,569,844 diluted in the third quarter of fiscal 2020, compared to
25,810,681 basic and diluted shares in the third 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 third quarter of fiscal 2020 was approximately $1.9
million, as compared to approximately $942,000 for the third
quarter of fiscal 2019. The increase in EBITDA in the third quarter
of fiscal 2020 was due to higher revenue and gross margin, and
lower operating expenses.
Financial Results for the Nine Months Ended March 31, 2020,
Compared to the Nine Months Ended March 31, 2019
Revenue
for the first nine months of fiscal 2020 was approximately $25.9
million, an increase of 3%, as compared to the same period of the
prior fiscal year. Sales of IR products comprised 51% of the
Company’s consolidated revenue in the fiscal 2020 first nine
months, as compared to 50% of total sales in the same period of the
prior fiscal year. PMO product sales represented 42% of
consolidated revenues in both the first nine months of fiscal 2020
and in the same period of the prior fiscal year. Specialty products
continue to be a small component of the Company’s business,
decreasing slightly from 8% of consolidated revenue in the first
nine months of fiscal 2019 to 7% of consolidated revenue in the
first nine months of fiscal 2020.
Revenue
generated by IR products was approximately $13.3 million in the
first nine months of fiscal 2020, an increase of 6%, compared to
approximately $12.5 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
LightPath’s new BD6 material. Revenues from shipments against
the large-volume annual contract for diamond-turned IR products
during the first nine months of fiscal 2020 were similar to the
first nine months of fiscal 2019.
Revenue
generated by PMO products was approximately $10.7 million for the
first nine months of fiscal 2020, an increase of 1%, as compared to
$10.6 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 medical and telecommunications markets,
partially offset by a decrease in sales to customers in the
commercial market.
Revenue
generated by specialty products was approximately $1.9 million in
the first nine months of fiscal 2020, a decrease of approximately
2% as compared to the same period of the prior fiscal year. During
the first nine months of fiscal 2020, non-recurring engineering
(“NRE”) revenue related to new projects for customers
in the medical and commercial markets increased as compared to the
prior year period where certain other custom products sales did not
recur.
Gross
margin in the first nine months of fiscal 2020 was approximately
$10.3 million, an increase of 6%, as compared to approximately $9.7
million in the same period of the prior fiscal year. Total cost of
sales was approximately $15.5 million for the first nine months of
fiscal 2020, compared to $15.3 million for the same period of the
prior fiscal year. The increase in cost of sales is consistent with
the increase in revenue. Gross margin as a percentage of revenue
was 40% for the first nine months of fiscal 2020, compared to 39%
for the same period of the prior fiscal year. The slight increase
in gross margin reflects improvements made in the second and third
quarters of fiscal 2020, after several factors negatively impacted
the first quarter of fiscal 2020.
During the first nine months of fiscal 2020, total operating
expenses were approximately $8.8 million, a decrease of $928,000,
or 10%, as compared to $9.7 million in the same period of the prior
fiscal year. SG&A costs decreased by approximately $618,000, or
8%, as compared to the same period of the prior fiscal year.
SG&A for the first nine months of fiscal 2019 included
approximately $394,000 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. SG&A for the
first nine months 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 $185,000, or 12%, 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 $273,000 in the first nine months
of fiscal 2020, as compared to approximately $574,000 in the same
period of the prior fiscal year. 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 first nine months of fiscal 2020, the Company recorded income
tax expense of $674,000, 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 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 a net income tax benefit of approximately
$40,000 recorded for the first nine months of fiscal 2019, which
was comprised of a tax benefit on losses in the U.S. jurisdiction,
partially 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 $363,000 for the first nine months
of fiscal 2020, compared to $323,000 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 nine months of fiscal 2020, and a $0.01 unfavorable
impact on the loss per share for the first nine months of fiscal
2019.
Net
income for the first nine months of fiscal 2020 was approximately
$210,000, or $0.01 basic and diluted earnings per share, compared
to a net loss of approximately $919,000, or $0.04 loss per share
for the first nine months of fiscal 2019.
Weighted-average
shares of common stock outstanding were 25,840,881 basic and
27,349,303 diluted in the first nine months of fiscal 2020,
compared to 25,788,286 basic and diluted shares in the first nine
months 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 nine months of fiscal 2020 was approximately $3.7
million, as compared to approximately $2.2 million for the first
nine months of fiscal 2019. The increase in EBITDA in the first
nine months of fiscal 2020 was due to higher revenue and gross
margin, coupled with lower operating expenses as compared to the
prior year period.
Cash
and cash equivalents totaled approximately $4.4 million as of March
31, 2020, compared to approximately $4.3 million at December 31,
2019 and approximately $4.6 million as of June 30, 2019. Cash
provided by operations was approximately $1.9 million for the first
nine months of fiscal 2020, as compared with cash provided by
operations of approximately $26,000 in the same period of the prior
fiscal year. The increase in cash flow from operations for the
first nine months of fiscal 2020 was primarily due to the
improvement in net income driven by higher sales and margins along
with reduced ongoing and non-recurring expenses. The Company
expended approximately $1.5 million in investments in capital
equipment including equipment financed through capital leases
during the first nine months of fiscal 2020, compared to
approximately $2.1 million, in the same period of the prior fiscal
year.
The
current ratio as of March 31, 2020 was 3.2 to 1, compared to 2.8 to
1 as of December 31, 2019 and 3.1 to 1 as of June 30, 2019. Total
stockholders’ equity as of March 31, 2020 was approximately
$33.9 million, compared to approximately $33.3 million as of
December 31, 2019 and $33.5 million as of June 30, 2019. The net
increase over prior periods is primarily due to the higher net
income contribution coupled with adjustments for stock-based
compensation, which are additive to additional paid-in
capital.
As of
March 31, 2020, LightPath’s 12-month backlog reached another
record high at $20.0 million, as compared to $19.1 million as of
December 31, 2019 and $17.0 million as of March 31, 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, which have
contributed to the growth in backlog. In addition, more long-term
orders, including annual contracts, continue to be added to the
backlog. The timing of 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.
*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, May 7,
2020 at 4:30 p.m. ET to discuss its financial and operational
performance for the third quarter ended March 31,
2020.
Date: Thursday, May 7,
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/lpth200507.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 May 21, 2020. To
listen to the replay, dial 1-877-344-7529 (domestic) or
1-412-317-0088 (international), and enter conference ID
#10142161.
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.
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, 2019 and its Quarterly
Report on Form 10-Q for the quarter ended March 31, 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)
LIGHTPATH TECHNOLOGIES, INC.
|
Condensed Consolidated Balance Sheets
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(unaudited)
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Assets
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|
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Current
assets:
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Cash and cash
equivalents
|
$4,381,713
|
$4,604,701
|
Trade accounts
receivable, net of allowance of $15,189 and $29,406
|
6,309,284
|
6,210,831
|
Inventories,
net
|
8,237,059
|
7,684,527
|
Other
receivables
|
-
|
353,695
|
Prepaid expenses
and other assets
|
875,303
|
754,640
|
Total current
assets
|
19,803,359
|
19,608,394
|
|
|
|
Property and
equipment, net
|
11,119,527
|
11,731,084
|
Operating lease
right-of-use assets
|
1,348,381
|
—
|
Intangible assets,
net
|
6,989,235
|
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
|
$46,057,607
|
$45,973,180
|
Liabilities
and Stockholders’ Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$1,906,332
|
$2,227,768
|
Accrued
liabilities
|
1,154,162
|
1,338,912
|
Accrued payroll and
benefits
|
1,363,288
|
1,730,658
|
Operating lease
liabilities, current
|
757,168
|
—
|
Deferred rent,
current portion
|
—
|
72,151
|
Loans payable,
current portion
|
581,350
|
581,350
|
Finance lease
obligation, current portion
|
377,873
|
404,424
|
Total current
liabilities
|
6,140,173
|
6,355,263
|
|
|
|
Finance lease
obligation, less current portion
|
351,197
|
640,284
|
Operating lease
liabilities, noncurrent
|
1,073,981
|
—
|
Deferred rent,
noncurrent
|
—
|
518,364
|
Loans payable, less
current portion
|
4,578,059
|
5,000,143
|
Total
liabilities
|
12,143,410
|
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; 25,862,529 and 25,813,895
|
|
|
shares issued and
outstanding
|
258,625
|
258,139
|
Additional paid-in
capital
|
230,613,630
|
230,321,324
|
Accumulated other
comprehensive income
|
760,820
|
808,518
|
Accumulated
deficit
|
(197,718,878)
|
(197,928,855)
|
Total
stockholders’ equity
|
33,914,197
|
33,459,126
|
Total liabilities
and stockholders’ equity
|
$46,057,607
|
$45,973,180
|
LIGHTPATH TECHNOLOGIES, INC.
|
Condensed Consolidated Statements of Comprehensive Income
(Loss)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$8,708,981
|
$7,905,582
|
$25,860,823
|
$25,003,810
|
Cost of
sales
|
4,696,805
|
4,799,913
|
15,528,549
|
15,313,825
|
Gross
margin
|
4,012,176
|
3,105,669
|
10,332,274
|
9,689,985
|
Operating
expenses:
|
|
|
|
|
Selling, general
and administrative
|
2,255,625
|
2,431,819
|
6,796,536
|
7,414,550
|
New product
development
|
412,326
|
505,636
|
1,309,383
|
1,494,412
|
Amortization of
intangibles
|
281,271
|
283,521
|
848,071
|
937,143
|
Loss (gain) on
disposal of property and equipment
|
142
|
(136,125)
|
(129,082)
|
(92,868)
|
Total operating
expenses
|
2,949,364
|
3,084,851
|
8,824,908
|
9,753,237
|
Operating income
(loss)
|
1,062,812
|
20,818
|
1,507,366
|
(63,252)
|
Other income
(expense):
|
|
|
|
|
Interest expense,
net
|
(85,464)
|
(275,233)
|
(273,262)
|
(573,535)
|
Other income
(expense), net
|
42,038
|
64,267
|
(350,571)
|
(322,339)
|
Total other income
(expense), net
|
(43,426)
|
(210,966)
|
(623,833)
|
(895,874)
|
Income (loss)
before income taxes
|
1,019,386
|
(190,148)
|
883,533
|
(959,126)
|
Income tax
provision (benefit)
|
203,369
|
161,870
|
673,556
|
(40,493)
|
Net income
(loss)
|
$816,017
|
$(352,018)
|
$209,977
|
$(918,633)
|
Foreign currency
translation adjustment
|
(244,520)
|
53,327
|
(47,698)
|
279,167
|
Comprehensive
income (loss)
|
$571,497
|
$(298,691)
|
$162,279
|
$(639,466)
|
Earnings (loss) per
common share (basic)
|
$0.03
|
$(0.01)
|
$0.01
|
$(0.04)
|
Number of shares
used in per share calculation (basic)
|
25,858,155
|
25,810,681
|
25,840,881
|
25,788,286
|
Earnings (loss) per
common share (diluted)
|
$0.03
|
$(0.01)
|
$0.01
|
$(0.04)
|
Number of shares
used in per share calculation (diluted)
|
27,569,844
|
25,810,681
|
27,349,303
|
25,788,286
|
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
|
Issuance of common
stock for:
|
|
|
|
|
|
|
Employee Stock
Purchase Plan
|
17,167
|
171
|
12,274
|
—
|
—
|
12,445
|
Shares issued as
compensation
|
5,000
|
50
|
6,100
|
—
|
—
|
6,150
|
Stock-based
compensation on stock options & RSUs
|
—
|
—
|
68,130
|
—
|
—
|
68,130
|
Foreign currency
translation adjustment
|
—
|
—
|
—
|
(244,520)
|
—
|
(244,520)
|
Net
income
|
—
|
—
|
—
|
—
|
816,017
|
816,017
|
Balances
at March 31, 2020
|
25,862,529
|
$258,625
|
$230,613,630
|
$760,820
|
$(197,718,878)
|
$33,914,197
|
LIGHTPATH TECHNOLOGIES, INC.
|
Condensed Consolidated Statements of Cash Flows
|
(unaudited)
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
Net income
(loss)
|
$209,977
|
(918,633)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
Depreciation and
amortization
|
2,587,315
|
2,540,963
|
Interest from
amortization of debt costs
|
13,929
|
112,618
|
Gain on disposal of
property and equipment
|
(129,082)
|
(92,868)
|
Stock-based
compensation on stock options & RSUs, net
|
252,436
|
296,297
|
Provision for
doubtful accounts receivable
|
9,769
|
(4,436)
|
Change in operating
lease liabilities
|
(107,747)
|
(52,720)
|
Inventory
write-offs to allowance
|
37,883
|
3,193
|
Deferred tax
benefit
|
—
|
(406,000)
|
Changes in
operating assets and liabilities:
|
|
|
Trade accounts
receivable
|
(108,222)
|
(523,661)
|
Other
receivables
|
353,695
|
42,575
|
Inventories
|
(590,415)
|
(1,614,551)
|
Prepaid expenses
and other assets
|
198,058
|
181,200
|
Accounts payable
and accrued liabilities
|
(857,813)
|
461,970
|
Net cash provided
by operating activities
|
1,869,783
|
25,947
|
|
|
|
Cash flows from
investing activities
|
|
|
Purchase of
property and equipment
|
(1,505,021)
|
(1,673,482)
|
Proceeds from sale
of equipment
|
186,986
|
316,750
|
Net cash used in
investing activities
|
(1,318,035)
|
(1,356,732)
|
|
|
|
Cash flows from
financing activities
|
|
|
Proceeds from
exercise of stock options
|
—
|
13,767
|
Proceeds from sale
of common stock from Employee Stock Purchase Plan
|
24,612
|
41,922
|
Loan
costs
|
—
|
(92,860)
|
Borrowings on loan
payable
|
—
|
5,813,500
|
Payments on loan
payable
|
(436,013)
|
(6,686,167)
|
Repayment of
finance lease obligations
|
(315,638)
|
—
|
Payments on capital
lease obligations
|
—
|
(244,210)
|
Net cash used in
financing activities
|
(727,039)
|
(1,154,048)
|
Effect of exchange
rate on cash and cash equivalents and restricted cash
|
(47,697)
|
617,670
|
Change in cash and
cash equivalents and restricted cash
|
(222,988)
|
(1,867,163)
|
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
|
$4,381,713
|
$4,641,457
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
Interest paid
in cash
|
$262,607
|
$379,539
|
Income taxes
paid
|
$441,982
|
$297,599
|
Supplemental
disclosure of non-cash investing & financing
activities:
|
|
|
Purchase of
equipment through capital lease arrangements
|
—
|
$462,209
|
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)
|
$816,017
|
$(352,018)
|
$209,977
|
$(918,633)
|
Depreciation and
amortization
|
827,095
|
857,287
|
2,587,315
|
2,540,963
|
Income tax
provision (benefit)
|
203,369
|
161,870
|
673,556
|
(40,493)
|
Interest
expense
|
85,464
|
275,233
|
273,262
|
573,535
|
EBITDA
|
$1,931,945
|
$942,372
|
$3,744,110
|
$2,155,372
|
% of
revenue
|
22%
|
12%
|
14%
|
9%
|