ANN ARBOR, Mich., Nov. 10, 2014 /PRNewswire/ -- Advanced Photonix® (NYSE MKT: API) (the "Company") today reported results for the second quarter ended September 26, 2014.
Financial Highlights for the Second Quarter Ended September 26, 2014
- Net sales for the quarter were $7.8 million, an increase of $253,000 or 3% from the second quarter ended September 27, 2013. Sequentially, revenues were up 2% relative to the first quarter of fiscal 2015. Telecommunication sales picked up $268,000 from last year but slowed sequentially by $477,000. Sequential growth in Test and Measurement, Medical and Military sales more than offset the weak Telecommunication market thereby allowing for the 2% sequential improvement.
- Gross profit margin for Q2 FY2015 was 33.7% of sales compared to 37.0% for the second quarter ended September 27, 2013. The lower gross profit percentage has been driven by the growing mix of 100G HSOR product sales at competitively priced levels and a decline in Terahertz revenue.
- Current quarter net loss was $368,000 or $0.01 per diluted share, as compared to a quarterly net loss of $578,000, or $0.02 per diluted share for the quarter ended September 27, 2013. Cost reductions in all operating expense lines were the main reason for the reduced loss.
- The Non-GAAP net loss for the second quarter of fiscal 2015 was $152,000 or $0.00 per diluted share, as compared to a Non-GAAP loss of $300,000, or $.01 per diluted share, for the second quarter last year. Cost reductions in all operating expense lines were the main reason for the reduced loss.
- Adjusted EBITDA (which is defined as GAAP earnings before interest, taxes, depreciation, amortization and stock compensation), was a positive $74,000 for the second quarter of fiscal 2015 as compared to a positive adjusted EBITDA of $20,000 for the quarter ended September 27, 2013.
Operating Expenses
The Company's total operating expenses for the quarter were $2.9 million, down approximately $439,000 from the prior year quarter due to cost reduction measures taken during last years' second quarter. Total operating expenses were 37.2% of sales compared to 44.3% for the second quarter last year.
Balance Sheet
The Company finished the quarter with $1.1 million in cash compared to $120,000 as of March 31, 2014 given the receipt in June 2014 of $2.9 million in net proceeds from a firm underwritten placement of 6.2 million shares by B Riley and Co. In addition to the cash on hand, the Company had access to approximately $2.6 million in additional funds available on the Company's line of credit at quarter end. Approximately $1.2 million was drawn on the Company's line of credit. Net working capital as of September 26, 2014 was $4.2 million.
Richard Kurtz, President and Chief Executive Officer, commented, "The second quarter was lower than expected due to a combination of a slowdown in telecommunication revenues and the continuing push out of F-35 contract activity. Our major customers for 100G transmission products are seeing a pause by domestic service providers in capital expenditures. This is simply a temporary situation and we expect to see a return in ordering later in our fiscal year. As previously mentioned during the quarter, we received a $1.6 million contract for the Rolling Airframe Missile or RAM program. This award will grow our military revenues for the remaining balance of the year. On the terahertz side, we have expanded our Valued-Added Reseller (VAR) distribution chain with the addition of Seltek Ltd. This privately held company is located in Turkey, but has systems installed around the world. We have completed their VAR training and shipped the first system last month.
We are also in the process of launching a new Terahertz product designated as the Single Point Gauge or SPG, targeted at off-line inspection for thickness measurements. While we cannot disclose the near term market opportunity, due to department of defense restrictions, we will have more news about the SPG product and market opportunities in our 4th quarter earnings call. On our HSOR product development roadmap, we have started to sample our new 10G APD Receiver Optical Sub Assembly or ROSA product for the fiber to the home market. We are expecting to see revenues from this new product next fiscal year.
The recent pause in telecommunication and contract revenues has caused us to revaluate the year over year growth projections for this year. We are now positioning ourselves for flat growth year over year. We do believe that the combination of new products in the pipeline today, the release of the F-35 contract and a return to normalized capital expenditures by service providers, will happen in our 4th quarter and lead to a resumption of growth."
Conference Call
Participating in the call will be Richard Kurtz (CEO and Director), Rob Risser (COO and Director), and Jeff Anderson (CFO).
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