Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
ADVANCED PHOTONIX, INC.
REPORTS THIRD QUARTER FISCAL 2007 RESULTS
| o | Telecom sales up 109% from year ago quarter |
| o | Gross profit margin improved to 49% from 46% from year ago quarter |
| o | GAAP loss of $0.05 per share, Non-GAAP income of $0.01 per share. |
Ann Arbor, MI, February 12, 2007 --Advanced Photonix, Inc. ® (AMEX:API) (the “Company”) today reported its third quarter fiscal 2007 results.
Revenues for the third quarter of fiscal 2007 ended December 29, 2006 were $5.881 million, a decrease of $630,000, or 10%, compared to revenues of $6.511 million for the quarter ended December 25, 2005. . The Company reported a net loss calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP") of $964,000, or $.05 per share fully diluted, for the quarter, compared with a GAAP net loss of $886,000, or $0.05 per share fully diluted, for the third quarter of fiscal 2006.
The Company had substantial growth in the telecommunications market in the 3rd quarter ended December 29, 2006 (Q3 2007) as compared to the quarter ended December 25, 2005 (Q3 2006). Telecommunications market revenues were $1.766 million, an increase of 109% (or $922,000) over Q3 2006 revenues of $844,000. Medical market revenues were $578,000, an increase of 12% (or $60,000) over Q3 2006 revenues of $518,000. Industrial Sensing/NDT market revenues decreased to $2.287 million, a decrease of 16% (or $452,000) from Q3 2006 revenues of $2.739 million due primarily to the delay in shipments of Terahertz NDT systems. Military/aerospace market revenues were $1.162 million, a decrease of 32% (or $534,000) from the comparable prior period revenues of $1.696 million, due primarily to the delay in Optosolution product orders and a reduction in development contracts for Terahertz. Homeland Security revenues of $88,000 decreased $626,000 (or 88%) compared to Q3 2006 revenues of $714,000, due to the continued delay in government Terahertz development contracts from the Transportation Security Administration (TSA).
Gross profit improved to 49% of sales for the third quarter 2007 and to 47% of sales for the nine months ended December 29, 2006, compared to 46% and 43%, respectively, of sales for the comparable prior year periods, due primarily to product mix. For the nine months ended December 29, 2006, gross profit of $8.242 million, increased by $972,000 over the comparable nine month period of fiscal 2006 on increased sales of $645,000.
Revenues for the nine months ended December 29, 2006 were $17.427 million, an increase of $645,000 or 4%, compared to revenues of $16.782 million for the nine months ended December 25, 2005. Telecommunication revenues were $4.271 million, an increase of 88% compared to revenues of $2.269 million in the comparable period of the prior year, due primarily to the introduction and rapid market acceptance of new 10 Gbs and 40Gbs products for the growing fiber optic communications market, resulting in new customers and gains in existing market share.
The Non-GAAP income for the third quarter of fiscal 2007 was $256,000, or $0.01 per share fully diluted, compared to Non-GAAP income of $537,000 or $0.03 per share fully diluted for the comparable period a year ago. Non-GAAP loss for the nine month period ended December 29, 2006 was $79,000 or $0.00 per share fully diluted, as compared to Non-GAAP income of $427,000, or $0.02 per share fully diluted, for the period ended December 25, 2005.
Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
Non-GAAP income is considered non-GAAP financial information, and a reconciliation of non-GAAP financial measures used in this press release to the GAAP financial measures can be found in the reconciliation of Non-GAAP income to GAAP income financial schedule, included on page five of this press release.
On an EBITDA basis (which is defined as GAAP earnings before interest, taxes, depreciation, and amortization), the Company reported income of $347,000 for the third quarter of 2007. This compares to income of $889,000 for the third quarter of 2006. A reconciliation of EBITDA to GAAP income can also be found on page five of this press release.
Richard Kurtz, Chairman and Chief Executive Officer, commented, "We are pleased with our growth in the telecommunications market, up 109% over the same period of the prior year. We expect our growth in this market to continue through the remainder of this year and next year. While we did not meet our internal revenue growth targets for the quarter, we did exceed our gross margin expectations. The revenue short fall comes from both the military and homeland security markets. The military market shortfall is the result of delays in receiving follow-on contracts, which we fully expect to receive in future quarters. While we continue to be disappointed in the speed at which the Transportation Security Administration (TSA) is developing and deploying the next generation technologies for Homeland security, we are actively engaged in non-destructive testing application development for other markets, and in the development of next generation terahertz systems. These next generation systems will provide the foundation for further expansion in homeland security, aerospace, military and industrial quality control markets, and we believe will pay dividends in the coming years. With the delay in receiving military contracts, and continued delay in receiving TSA contracts, we are reducing our revenue guidance for fiscal 2007 from the previous $27 to $28 million to $24.5 million to $25.5 million, or approximately 4% to 8% revenue growth.”
The Company will hold a conference call to discuss the results for the third quarter ended December 29, 2006 on Monday, February 12, 2007, at 5:00 PM EST. Participants can dial into the conference call at 800-798-2801 (617-614-6205 for international) using the pass code 94694797. 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 passcode 36105562.
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 integration of newly acquired businesses, 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.
Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
Consolidated Statement of Operations (unaudited) | |
| | | Three months ended | | Nine months ended | |
| | | December 29, 2006 | | December 25, 2005 (Restated) | | December 29, 2006 | | December 25, 2005 (Restated) | |
Net Sales | | $ | 5,881,000 | | $ | 6,511,000 | | $ | 17,427,000 | | $ | 16,782,000 | |
| Cost of Sales | | | 2,997,000 | | | 3,513,000 | | | 9,185,000 | | | 9,512,000 | |
Gross Margin | | | 2,884,000 | | | 2,998,000 | | | 8,242,000 | | | 7,270,000 | |
| | | | | | | | | | | | | | |
Other Operating Expenses | | | | | | | | | | | | | |
| Research & Development | | | 1,005,000 | | | 836,000 | | | 2,994,000 | | | 2,083,000 | |
| General & Administrative | | | 1,517,000 | | | 1,420,000 | | | 5,097,000 | | | 4,229,000 | |
| Other Expense - Wafer Fab | | | 174,000 | | | - | | | 294,000 | | | - | |
| Sales & Marketing | | | 524,000 | | | 482,000 | | | 1,507,000 | | | 1,311,000 | |
| Total Other Operating Expenses | | | 3,220,000 | | | 2,738,000 | | | 9,892,000 | | | 7,623,000 | |
| | | | | | | | | | | | | | |
Net Operating Loss | | | (336,000 | ) | | 260,000 | | | (1,650,000 | ) | | (353,000 | ) |
| | | | | | | | | | | | | | |
Other (Income) & Expense | | | | | | | | | | | | | |
| Other (Income)/Expense | | | 10,000 | | | (3,000 | ) | | 7,000 | | | 4,000 | |
| Interest Income | | | (48,000 | ) | | (10,000 | ) | | (165,000 | ) | | (24,000 | ) |
| Interest Expense-Related Party | | | 56,000 | | | 57,000 | | | 168,000 | | | 140,000 | |
| Interest Expense - Warrant discount | | | 407,000 | | | 1,013,000 | | | 1,048,000 | | | 1,904,000 | |
| Interest Expense | | | 203,000 | | | 89,000 | | | 613,000 | | | 368,000 | |
| Other (Income) & Expense | | | 628,000 | | | 1,146,000 | | | 1,671,000 | | | 2,392,000 | |
| | | | | | | | | | | | | | |
Net Loss | | $ | (964,000 | ) | $ | (886,000 | ) | $ | (3,321,000 | ) | $ | (2,745,000 | ) |
Net earnings per share | | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.17 | ) | $ | (0.16 | ) |
Diluted earnings per share | | | anti-dilutive | | | anti-dilutive | | | anti-dilutive | | | anti-dilutive | |
| | | | | | | | | | | | | | |
Weighted number of shares outstanding | | | 19,089,000 | | | 18,563,000 | | | 19,032,000 | | | 16,983,000 | |
Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
Condensed Consolidated Balance Sheets
| | | December 29, 2006 (Un-audited) | | March 31, 2006 (Restated) | |
Assets | | | | | |
| Current assets: | | | | | |
| Cash and cash equivalents | | $ | 4,191,000 | | $ | 5,933,000 | |
| Accounts receivable, net | | | 3,164,000 | | | 4,387,000 | |
| Inventory, net | | | 4,135 000 | | | 3,434,000 | |
| Prepaid expenses and other current assets | | | 547,000 | | | 711,000 | |
| Total current assets | | | 12,037,000 | | | 14,465,000 | |
| E Equipment and leasehold improvements, net | | | 4,196,000 | | | 3,375,000 | |
| Goodwill, net of accumulated amortization of $353,000 for December 29, 2006 and March 31, 2006 | | | 4,719,000 | | | 4,719,000 | |
| Intangibles and patents, net | | | 13,315,000 | | | 14,355,000 | |
| Other assets | | | 1,014,000 | | | 1,087,000 | |
Total assets | | $ | 35,281,000 | | $ | 38,001,000 | |
Liabilities and shareholders' equity | | | | | |
| Current liabilities | | | | | |
| Line of credit | | $ | 1,000,000 | | $ | 1,000,000 | |
| Accounts payable and accrued expenses | | | 2,100,000 | | | 1,934,000 | |
| Compensation and related withholdings | | | 855,000 | | | 697,000 | |
| Deferred income | | | -- | | | 77,000 | |
| Current portion of long-term debt, related party | | | 550,000 | | | 500,000 | |
| Current portion of long-term debt | | | 4,956,000 | | | 927,000 | |
| Total current liabilities | | | 9,461,000 | | | 5,135,000 | |
| | | | | | | | |
| Long-term debt, less current portion | | | 1,350,000 | | | 5,002,000 | |
| Long-term debt, less current portion - related party | | | 1,851,000 | | | 2,401,000 | |
Total liabilities | | | 12,662,000 | | | 12,538,000 | |
| | | | | | | | |
Commitments and contingencies | | | | | | | |
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: | | | | | | | |
| Preferred stock - no shares issued and outstanding | | | - | | | - | |
| Class A common stock, $.001 par value, 50,000,000 authorized; December 29, 2006 - 19,059,006 shares issued and outstanding, March 31, 2006 - 18,885,006 shares issued and outstanding. | | | 19,000 | | | 19,000 | |
| Class B common stock, $.001 par value; 4,420,113 shares authorized, December 29, 2006 and March 31, 2006 - 31,691 issued and outstanding. | | | - | | | - | |
| Additional paid-in capital | | | 44,058,000 | | | 43,581,000 | |
| Accumulated deficit | | | (21,490,000 | ) | | (18,169,000 | ) |
| Total shareholders' equity | | | 22,587,000 | | | 25,431,000 | |
Total liabilities and shareholders' equity | | $ | 35,281,000 | | $ | 38,001,000 | |
Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
Non-GAAP Financial Measures
The Company provides Non-GAAP 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 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 income and EBITDA to GAAP net income and loss are set forth in the financial schedule section below.
Reconciliation of GAAP Net Income/(Loss) to EBITDA | |
| | | Three months ended | | Nine months ended | |
| | | December 29, 2006 | | December 25, 2005 (Restated) | | December 29, 2006 | | December 25, 2005 (Restated) | |
| Net Income (Loss) | | $ | (964,000 | ) | $ | (886,000 | ) | $ | (3,321,000 | ) | $ | (2,745,000 | ) |
| | | | | | | | | | | | | | |
| Add Back: | | | | | | | | | | | | | |
| Net Interest expense (income) | | | 210,000 | | | 136,000 | | | 616,000 | | | 484,000 | |
| Interest expense - Warrant (Fair Value) | | | 407,000 | | | 1,013,000 | | | 1,048,000 | | | 1,904,000 | |
| Depreciation Expense | | | 278,000 | | | 217,000 | | | 753,000 | | | 581,000 | |
| Amortization | | | 416,000 | | | 409,000 | | | 1,246,000 | | | 1,122,000 | |
| Subtotal - Add backs | | | 1,311,000 | | | 1,775,000 | | | 3,663,000 | | | 4,091,000 | |
EBITDA | | $ | 347,000 | | $ | 889,000 | | $ | 342,000 | | $ | 1,346,000 | |
Reconciliation of GAAP Net Income/(Loss) to Non-GAAP Income (Loss) | |
| | | Three months ended | | Nine months ended | |
| | | December 29, 2006 | | December 25, 2005 (Restated) | | December 29, 2006 | | December 25, 2005 (Restated) | |
| Net Income (Loss) | | $ | (964,000 | ) | $ | (886,000 | ) | $ | (3,321,000 | ) | $ | (2,745,000 | ) |
| | | | | | | | | | | | | | |
| Add Back: | | | | | | | | | | | | | |
| Interest Expense - Convertible notes | | | 129,000 | | | 1,000 | | | 378,000 | | | 146,000 | |
| Interest expense - Warrant (Fair Value) | | | 407,000 | | | 1,013,000 | | | 1,048,000 | | | 1,904,000 | |
| Amortization - prepaid finance expense | | | 33,000 | | | 57,000 | | | 100,000 | | | 177,000 | |
| Amortization - intangibles/patents | | | 383,000 | | | 352,000 | | | 1,146,000 | | | 945,000 | |
| Stock Option Compensation Expense | | | 94,000 | | | - | | | 276,000 | | | - | |
| Other Expense - Wafer Fabrication | | | 174,000 | | | - | | | 294,000 | | | - | |
| Subtotal - Add backs | | | 1,220,000 | | | 1,423,000 | | | 3,242,000 | | | 3,172,000 | |
Non-GAAP Income/(Loss) | | $ | 256,000 | | $ | 537,000 | | $ | (79,000 | ) | $ | 427,000 | |
| | | | | | | | | | | | | | |
| Net earnings per share | | $ | 0.01 | | $ | 0.03 | | $ | (0.00 | ) | $ | 0.03 | |
| Diluted earnings per share | | $ | 0.01 | | $ | 0.02 | | | anti dilutive | | $ | 0.02 | |
| | | | | | | | | | | | | | |
| Weighted number of shares outstanding | | | 19,089,000 | | | 18,563,000 | | | 19,032,000 | | | 16,983,000 | |
| Diluted shares outstanding | | | 22,637,000 | | | 20,559,000 | | | 22,580,000 | | | 18,979,000 | |
Contact:
Richard Kurtz, Advanced Photonix, Inc. (734) 864-5600
Richard Moyer, Cameron Associates (212) 554-5466
Advanced Photonix, Inc® (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® photodetectors; high-speed optical receivers; and the T-Ray™ 2000 and QA1000 THz product platforms. More information on Advanced Photonix can be found at http://www.advancedphotonix.com.
