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ANN ARBOR, Mich., Feb 11, 2008 (BUSINESS WIRE) -- Advanced Photonix, Inc.(R) (AMEX:API) (the "Company") today reported its third quarter fiscal 2008 results ending December 28, 2007. Net sales for the quarter were $5.31 million, a decrease of $575,000, or 10%, compared to revenues of $5.88 million for the quarter ended December 29, 2006. The Company reported a GAAP net loss of $2.73 million, or ($.11) per share fully diluted for the quarter, as compared with a GAAP net loss of $964,000, or ($0.05) per share fully diluted, for the third quarter of fiscal 2007.
The Non-GAAP net loss for the third quarter of fiscal 2008 was $(892,000), or $(0.04) per share fully diluted, compared to a Non-GAAP net income of $256,000, or $0.01 per share fully diluted, for the comparable period a year ago.
On an EBITDA basis (which is defined as GAAP earnings before interest, taxes, depreciation, and amortization), the Company reported a loss of $1.49 million in EBITDA for the third quarter of fiscal 2008. This compares to generating $194,000 in EBIDTA for the third quarter of fiscal 2007.
A reconciliation of the Non-GAAP and EBITDA financial measures reported herein to the Company's income as measured by generally accepted accounting principles is presented below.
The Company's revenues for the quarter ended December 28, 2007 were $5.31 million, a decrease of $575,000, or 9.8% from revenues of $5.88 million for the quarter ended December 29, 2006. Year to date revenues are 3.2% higher than the previous nine-month period, or $553,000.
While the telecommunications market revenues for the first nine months are approximately 2% higher than the prior year, they were 14% lower in the quarter ended December 28, 2007 (Q3 2008) as compared to the quarter ended December 29, 2006 (Q3 2007). Telecommunications market revenues for Q3 2008 were $1.52 million, a decrease of $245,000 from Q3 2007 revenues of $1.77 million. The shortfall was not caused by lack of demand, it was a result of delays in shipments of new 40G design wins due to difficulties our customers have experienced within their supply chain that have caused delays in their product shipments. Our customers continue to be optimistic about the prospects for growth for our 40 Gbps product lines. We expect shipments for this product offering to resume in Q4 2008 resulting in modest growth for the year.
Medical market revenues for Q3 2008 were $372,000, a decrease of 36% (or $206,000) from Q3 2007 revenues of $578,000. This decrease is a result of end of life product discontinuance by a customer. Any customer end of life purchases for their discontinued product is expected to be completed by the end of FY 2008. The Company expects Medical market revenue to be minimal for the Q4 2008.
Industrial Sensing/NDT market revenues decreased to $2.01 million in Q3 2008, a decrease of 12% (or $273,000) from Q3 2007 revenues of $2.29 million, due primarily to the Company's decision to stop supplying a low value added opto-electronic contract manufacturing part and loss of revenue experienced as result of the manufacturing delays during the closure of our Wisconsin facility, offset by increases in the THz/NDT revenue. We expect double digit growth for this portion of the market for the balance of the fiscal year.
Military/Aerospace market revenues were $1.23 million, an increase of 6% (or $67,000) from the comparable prior period revenues of $1.16 million. This increase is attributable to an increase in orders in Q3 2008, which were delayed from the 1st half of the fiscal year. Overall, the Company expects modest growth in Q4 2008, but military revenues will be down for the year.
The Company had Homeland Security revenues in Q3 2008 of $170,000 compared to Q3 2007 revenues of $88,000. The Company expects revenue in Homeland Security to increase substantially in the Q4 2008.
Richard Kurtz, Chairman and Chief Executive Officer, commented, "We are disappointed with our year over year third quarter comparisons, but remain confident that we will end up 2008 well ahead of last year. We have made significant investments in people and infrastructure this year, and now have the capacity to meet the growing demands we are experiencing for our HSOR product platform, particularly in 40G. The successful completion of the private equity placement in the third quarter, netting the Company $4.3 million, along with the conversion of $3.2 million of debt to equity, allowed us to substantially deleverage our balance sheet and provide additional funds to help us grow future revenues and earnings. We are particularly excited by the broadening application development activities that occurred with our Terahertz product platform during the third quarter, bringing us closer to potential full-scale commercial deployment in a number of commercial, industrial and governmental sectors. Finally, we successfully closed the Dodgeville, WI facility in December 2007, consolidating all assembly manufacturing into Camarillo, CA, which will result in significant cost savings and position us solidly for the future."
The Company will hold a conference call to discuss the results for the third quarter ended December 28, 2007 on Monday, February 11, 2008, at 5:00 PM EST. Participants can dial into the conference call at 888-680-0892 (617-213-4858 for international) using the pass code 79490208. The call will be webcast live by CCBN and can be accessed at Advanced Photonix's web site at http://investor.advancedphotonix.com/ or at www.earnings.com.An audio replay of the call will be available shortly thereafter the same day and will remain on-line for two weeks. The replay number is 888-286-8010 (617-801-6888 for international) using pass code 87392083. The 10-Q will also be available on February 11, 2008 at the Company's website (www.advancedphotonix.com under the "Investors" link).
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, risks associated with the move of our wafer fabrication facilities, technological obsolescence of existing product lines and technological obstacles which may prevent or slow the development and/or manufacture of new products, 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.
Condensed Consolidated Balance Sheets
December 28, March 31,
Assets 2007 2007
Current Assets:
Cash and cash equivalents $ 2,099,000 $ 3,274,000
Accounts receivable, net of allowance 3,128,000 3,587,000
Inventories, net of allowances 3,677,000 4,439,000
Prepaid expenses and other current
assets 436,000 377,000
--------------------------
Total current assets 9,340,000 11,677,000
Equipment & Leasehold Improvements, at
cost 10,406,000 10,301,000
Accumulated depreciation (5,582,000) (5,565,000)
--------------------------
Net Equipment and Leasehold Improvements 4,824,000 4,736,000
Goodwill, net of accumulated
amortization 4,579,000 4,579,000
Patents, net 499,000 355,000
Intangible assets, net 10,800,000 12,285,000
Deferred tax asset, net of current
portion 1,225,000 1,225,000
Other assets 390,000 385,000
--------------------------
Total assets $ 31,657,000 $ 35,242,000
==========================
Liabilities and shareholders' equity
Current liabilities
Line of credit $ - $ 741,000
Accounts payable and accrued expenses 1,725,000 2,336,000
Compensation and related withholdings 896,000 1,091,000
Current portion of long-term debt-
related party 900,000 550,000
Current portion of long-term debt 460,000 4,535,000
--------------------------
Total current liabilities 3,981,000 9,253,000
Long term debt, less current portion 3,883,000 3,015,000
Long term debt, less current portion-
related party 951,000 1,851,000
--------------------------
Total liabilities 8,815,000 14,119,000
Class A redeemable convertible preferred
stock, $.001 par value; 780,000 shares
authorized; 40,000 shares issued and
outstanding; liquidation preference
$32,000. 32,000 32,000
Shareholders' equity
Class A common stock, $.001 par value,
50,000000 shares authorized; December 28,
2007 - 23,977,678 shares issued and
outstanding, March 31, 2007 - 19,226,006
shares issued and outstanding. 24,000 19,000
Additional paid-in capital 52,090,000 43,887,000
Accumulated deficit (29,304,000) (22,815,000)
--------------------------
Total shareholders' equity 22,810,000 21,091,000
--------------------------
Total liabilities and shareholders' equity $ 31,657,000 $ 35,242,000
==========================
Advanced Photonix, Inc.
Financial Highlights
Three months ended Nine months ended
---------------------------------------------------
December 28, December 29, December 28, December 29,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net Sales $ 5,306,000 $ 5,881,000 $17,980,000 $17,427,000
Cost of Sales 3,431,000 2,997,000 10,890,000 9,185,000
---------------------------------------------------
Gross Margin 1,875,000 2,884,000 7,090,000 8,242,000
Percent to Net
Sales 35.3% 49.0% 39.4% 47.3%
Other Operating
Expenses
Research &
Development 1,034,000 1,004,000 2,944,000 2,991,000
General &
Administrative 1,209,000 1,102,000 3,562,000 3,853,000
Amortization 491,000 383,000 1,471,000 1,146,000
Dodgeville
Consolidation 534,000 - 534,000 -
Other Expense -
Wafer Fab 421,000 174,000 1,032,000 294,000
Sales & Marketing 462,000 524,000 1,667,000 1,508,000
---------------------------------------------------
Total Other
Operating
Expenses 4,151,000 3,187,000 11,210,000 9,792,000
Net Operating Loss (2,276,000) (303,000) (4,120,000) (1,550,000)
Other (Income) &
Expense
Other
(Income)/Expense 42,000 10,000 24,000 7,000
Interest Income (35,000) (48,000) (82,000) (165,000)
Interest Expense-
Related Party 39,000 56,000 138,000 168,000
Interest Expense
- Warrant
discount 299,000 407,000 1,672,000 1,048,000
Interest Expense 105,000 236,000 617,000 713,000
---------------------------------------------------
Other (Income) &
Expense 450,000 661,000 2,369,000 1,771,000
Net Income (Loss) $(2,726,000) $ (964,000) $(6,489,000) $(3,321,000)
Net earnings per
share $ (0.11) $ (0.05) $ (0.31) $ (0.17)
Diluted earnings anti- anti- anti- anti-
per share dilutive dilutive dilutive dilutive
Weighted number of
shares outstanding 23,804,000 19,089,000 20,996,000 19,032,000
Non-GAAP Financial Measures
The Company provides Non-GAAP Net Income(Loss) and 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(Loss) and 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(Loss) and EBITDA to GAAP net income and loss are set forth in the financial schedule section below.
Reconciliation of Non-GAAP Income (Loss) to GAAP Income (Loss)
Three months ended Nine months ended
--------------------------------------------------
December 28, December December 28, December 29,
2007 29, 2006 2007 2006
------------ ----------- ------------ ------------
GAAP Net Income
(Loss) $(2,726,000) $ (964,000) $(6,489,000) $(3,321,000)
Adjustments
Interest Expense -
Convertible notes 11,000 129,000 269,000 378,000
Warrant Fair Value
adjustment 299,000 407,000 1,672,000 1,048,000
Amortization -
intangibles/
patents
491,000 383,000 1,471,000 1,146,000
Stock Option
Compensation
expense 68,000 94,000 201,000 276,000
Interest - Debt
issue cost 10,000 33,000 70,000 100,000
Private placement
- Legal costs - - 170,000 -
Dodgeville
Consolidation 534,000 - 534,000 -
Wafer Fabrication
consolidation 421,000 174,000 1,032,000 294,000
--------------------------------------------------
Subtotal -
Adjustments 1,834,000 1,220,000 5,419,000 3,242,000
--------------------------------------------------
Non-GAAP Loss $ (892,000) $ 256,000 $(1,070,000) $ (79,000)
==================================================
Net earnings per
share $ (0.04) $ 0.01 $ (0.05) $ (0.00)
Diluted earnings per
share $ - $ - $ - $ -
Weighted Number of
shares outstanding 23,804,000 19,089,000 20,996,000 19,032,000
Diluted shares
outstanding 24,959,000 22,542,000 22,151,000 22,580,000
Reconciliation of EBITDA to GAAP Income/(Loss)
Three months ended Nine months ended
---------------------------------------------------
December 28, December 29, December 28, December 29,
2007 2006 2007 2006
------------ ------------ ------------ ------------
GAAP Net Income
(Loss) $(2,726,000) $ (964,000) $(6,489,000) $(3,321,000)
Adjustments
Net Interest
expense
(income) 408,000 497,000 2,345,000 1,764,000
Depreciation
expense 336,000 278,000 858,000 753,000
Amortization -
intangibles/
patents 491,000 383,000 1,471,000 1,146,000
---------------------------------------------------
Subtotal -
Adjustments 1,235,000 1,158,000 4,674,000 3,663,000
---------------------------------------------------
EBITDA $(1,491,000) $ 194,000 $(1,815,000) $ 342,000
===================================================
Advanced Photonix, Inc.(R) (AMEX - API) is a leading vertically integrated optoelectronic semiconductor manufacturer of optoelectronic solutions, high-speed optical receivers and terahertz instrumentation to a global OEM customer base. Products include patented silicon (Si), indium phosphide (InP) and gallium arsinide (GaAs) based APD, PIN, and FILTRODE(R) photodetectors; high-speed optical receivers; and the T-Ray(TM) 2000 and QA1000 THz product platforms. More information on Advanced Photonix can be found at http://www.advancedphotonix.com.
SOURCE: Advanced Photonix, Inc.
Advanced Photonix, Inc. Richard Kurtz, 734-864-5600 or Cameron Associates Richard Moyer, 212-554-5466
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