Advanced Photonix® (NYSE MKT: API) (the "Company") today reported results for the third quarter ended December 26, 2014.
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."
www.advancedphotonix.com
