Gross profit margins resist downward pressure despite recession's
revenue drop ANN ARBOR, Mich., Feb. 8 /PRNewswire-FirstCall/ --
Advanced Photonix, Inc.® (NYSE Amex: API) (the "Company") today
reported its third quarter fiscal 2010 results ending December 25,
2009. Financial Highlights for the Third Quarter Ended December 25,
2009 -- Net sales for the quarter were $4.6 million, a decrease of
$3 million, or 40%, compared to revenues for the third quarter
ended December 26, 2008. The decrease was broad based across four
of its five markets. -- Gross profit margin for the first nine
months was 42% compared to 45% for the prior year nine month
period, despite a 32% drop in revenue when compared to the record
revenues in the first nine months of last year. Strong gross
margins reflect the results of company-wide cost reduction
initiatives and prior years' facilities consolidation activities.
-- GAAP net loss for the quarter was $1,344,000, or $.05 per
diluted share, as compared to a GAAP net loss of $359,000, or $.01
per diluted share for the quarter ended December 26, 2008. GAAP net
loss year to date was $2,832,000 or $.12 per diluted share, as
compared to a net loss of $538,000, or $.02 per diluted share, for
the prior year period. -- The Non-GAAP net loss for the third
quarter of fiscal 2010 was $921,000, or $0.04 per diluted share, as
compared to a Non-GAAP net income of $261,000, or $.01 per diluted
share, for the comparable quarter ended December 26, 2008. The
Company reported year to date Non-GAAP net loss of $1,058,000, or
$0.04 per diluted share, as compared to a Non-GAAP income of
$1,434,000, or $0.06 per diluted share, for the comparable prior
year period. -- On an EBITDA basis (which is defined as GAAP
earnings before interest, taxes, depreciation, and amortization),
the Company reported EBITDA of a negative $646,000 for the third
quarter of fiscal 2010 as compared to positive EBITDA of $591,000
for the quarter ended December 26, 2008. For the year to date, the
Company reported negative EBITDA of $312,000 as compared to
positive EBITDA of $2,183,000 for the comparable prior year period.
Richard Kurtz, Chairman and Chief Executive Officer, commented,
"The first nine months of the year have been negatively impacted by
the recessionary environment and this quarter was hit exceptionally
hard. Our proactive actions in making the necessary cost reduction
steps and consolidating our facilities have paid off and helped
minimize the financial impact. We continue to expect the balance of
the year to be challenging, but believe we have hit the bottom of
the revenue decline and expect to slowly return to growth driven
mainly by our HSOR and Terahertz product platforms. We do not
anticipate top line revenue to meet our 2009 guidance,
predominantly due to the continued softness in capital expenditures
resulting from the recession. Our new Terahertz contract for the
F-35 announced last month will strengthen our application product
development in the aerospace and industrial markets and we will
continue to develop the next generation 100G HSOR products that
will be shipping in the coming quarters. While the recession's
impact on our revenues has been severe this year, we expect to
resume our organic growth in FY2011 when capital expenditures begin
to return to normal levels." The Company will hold a conference
call to discuss the results for the third quarter ended December
25, 2009 on Monday, February 8, 2010 at 4:30 PM EST. Participants
can dial into the conference call at 888-713-4218 (617-213-4870 for
international) using the pass code 25674092. 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
http://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 24885602. 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, 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. CONSOLIDATED BALANCE SHEETS December 25, March 31, Assets
2009 2009 Current Assets Cash and cash equivalents $2,007,000
$2,072,000 Restricted cash 500,000 500,000 Accounts receivable, net
2,505,000 3,284,000 Inventories, net 3,681,000 3,669,000 Prepaid
expenses and other current assets 338,000 252,000 ------- -------
Total current assets 9,031,000 9,777,000 Equipment & Leasehold
Improvements, at cost 11,241,000 11,470,000 Accumulated
depreciation (7,673,000) (7,148,000) ---------- ---------- Net
Equipment and Leasehold Improvements 3,568,000 4,322,000 Goodwill
4,579,000 4,579,000 Patents, net 861,000 705,000 Intangible assets,
net 6,744,000 8,270,000 Other assets 110,000 388,000 -----------
----------- Total assets $24,893,000 $28,041,000 ===========
=========== Liabilities and shareholders' equity Current
liabilities Accounts payable and accrued expenses $2,394,000
$2,484,000 Compensation and related withholdings 940,000 1,037,000
Current portion of long-term debt - line of credit 1,394,000 -
Current portion of long-term debt - related parties 450,000
1,401,000 Current portion of long-term debt - bank term loan
1,229,000 434,000 Current portion of long-term debt - MEDC
1,014,000 353,000 --------- ------- Total current liabilities
7,421,000 5,709,000 Long term debt, less current portion - MEDC
1,210,000 1,871,000 Long term debt, less current portion - bank
line of credit - 1,394,000 Long term fair value of warrant
liability 172,000 - Long term debt, less current portion- related
parties 951,000 1,121,000 ------- --------- Total liabilities
9,754,000 10,095,000 Shareholders' equity Class A common stock,
$.001 par value, 50,000,000 shares authorized; December 25, 2009
-24,463,978 shares issued and outstanding; March 31, 2009
-24,089,726 shares issued and outstanding 24,000 24,000 Additional
paid-in capital 50,100,000 52,400,000 Accumulated deficit
(34,985,000) (34,478,000) ----------- ----------- Total
shareholders' equity 15,139,000 17,946,000 ----------- -----------
Total liabilities and shareholders' equity $24,893,000 $28,041,000
=========== =========== CONSOLIDATE STATEMENT OF OPERATIONS
(unaudited) Three months ended Nine months ended ------------------
----------------- December 25, December 26, December 25, December
26, 2009 2008 2009 2008 Net Sales $4,588,000 $7,606,000 $15,947,000
$23,565,000 Cost of Sales 3,009,000 4,329,000 9,306,000 12,967,000
--------- --------- --------- ---------- Gross Margin 1,579,000
3,277,000 6,641,000 10,598,000 Other Operating Expenses Research
& Development 1,183,000 1,112,000 3,413,000 3,321,000 General
& Administrative 998,000 1,236,000 3,152,000 3,751,000
Amortization 518,000 516,000 1,552,000 1,561,000 Wafer Fab
Consolidation - 58,000 40,000 266,000 Sales & Marketing 380,000
605,000 1,249,000 1,935,000 ------- ------- --------- ---------
Total Other Operating Expenses 3,079,000 3,527,000 9,406,000
10,834,000 Net Operating Income (Loss) (1,500,000) (250,000)
(2,765,000) (236,000) Other (Income) & Expense Other
(Income)/Expense (62,000) - (54,000) 2,000 Interest Income (1,000)
3,000 (4,000) (25,000) Interest Expense- Related Parties 15,000
22,000 44,000 77,000 Change in fair value of warrant liability
(174,000) - (121,000) - Interest Expense 66,000 84,000 202,000
248,000 ------ ------ ------- ------- Other (Income) & Expense
(156,000) 109,000 67,000 302,000 Net Income (Loss) $(1,344,000)
$(359,000) $(2,832,000) $(538,000) Basic and diluted earnings per
share $(0.05) $(0.01) $(0.12) $(0.02) Weighted number of shares
outstanding -Basic and diluted 24,483,000 24,109,000 24,323,000
24,057,000 Non-GAAP Financial Measures The Company provides
Non-GAAP Net Income 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 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 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 25, December 26,
December 25, December 26, 2009 2008 2009 2008 Net Income (Loss)
$(1,344,000) $(359,000) $(2,832,000) $(538,000) Add Back: Change in
warrant fair value (174,000) - (121,000) - Amortization -
intangibles/ patents 519,000 517,000 1,552,000 1,561,000 Stock
Option Compensation Expense 78,000 45,000 303,000 145,000 Other
Expense - Wafer Fabrication - 58,000 40,000 266,000 --- ------
------ ------- Subtotal - Add backs 423,000 620,000 1,774,000
1,972,000 ------- ------- --------- --------- Non-GAAP Income
(Loss) $(921,000) $261,000 $(1,058,000) $1,434,000 =========
======== =========== ========== Net earnings loss per share $(0.04)
$0.01 $(0.04) $0.06 Weighted Number of shares outstanding
24,483,000 24,109,000 24,323,000 24,057,000 Reconciliation of
EBITDA to GAAP income/(loss) Three months ended Nine months ended
------------------ ----------------- December 25, December 26,
December 25, December 26, 2009 2008 2009 2008 Net Income (Loss)
$(1,344,000) $(359,000) $(2,832,000) $(538,000) Add Back: Net
Interest expense (income) 80,000 109,000 242,000 300,000 Interest
expense - Warrant (fair value) (174,000) - (121,000) - Depreciation
Expense 273,000 324,000 847,000 860,000 Amortization 519,000
517,000 1,552,000 1,561,000 ------- ------- --------- ---------
Subtotal - Add backs 698,000 950,000 2,520,000 2,721,000 -------
------- --------- --------- EBITDA $(646,000) $591,000 $(312,000)
$2,183,000 ========= ======== ========= ========== About Advanced
Photonix, Inc. Advanced Photonix, Inc. (R) (NYSE Amex: API) is a
leading supplier with a broad offering of optoelectronic products
to a global customer base. We provide optoelectronic solutions,
high-speed optical receivers and terahertz instrumentation for
telecom, homeland security, military, medical and industrial
markets. With our patented technology and state-of-the-art
manufacturing we offer industry leading performance, exceptional
quality, and high value added products to our OEM customer base.
For more information visit us on the web at
http://www.advancedphotonix.com/. Contact: Richard Kurtz, Advanced
Photonix, Inc. (734) 864-5600 Cameron Donahue, Hayden IR (651)
653-1854; DATASOURCE: Advanced Photonix, Inc. CONTACT: Richard
Kurtz of Advanced Photonix, Inc., +1-734-864-5600; or Cameron
Donahue of Hayden IR, +1-651-653-1854; , for Advanced Photonix,
Inc. Web Site: http://www.advancedphotonix.com/
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