Financial Results in Focus: LightPath Technologies Inc. (NASDAQ: LPTH) – News Description

Financial Results in Focus: LightPath Technologies Inc. (NASDAQ: LPTH)

ORLANDO, FL, September 28, 2019 – Shares of LightPath Technologies Inc. (NASDAQ: LPTH) showed the bearish trend with a lower momentum of -1.12% to $0.87. The company traded total volume of 40.997K shares as contrast to its average volume of 107.77K shares. The company has a market value of $21.88M and about 25.15M shares outstanding.

LightPath Technologies Inc. (NASDAQ: LPTH) reported revenue of $7.90M for the third quarter of fiscal 2019, contrast to $8.50M in the third quarter of fiscal 2018. Revenue for the first nine months of fiscal 2019 was $25.00M, contrast to $24.40M in the same period of fiscal 2018.

Gross margin in the third quarter of fiscal 2019 was about $3.10M, a decrease of 6%, as contrast to about $3.30M in the same quarter of the prior fiscal year. Gross margin as a percentage of revenue remained at 39% for the third quarter of fiscal 2019, as contrast to the same period of the prior fiscal year. Total cost of sales was about $4.80M for the third quarter of fiscal 2019, a decrease of about 8%, contrast to $5.20M for the same period of the prior fiscal year. The decrease is driven by lower sales, offset by certain cost increases, counting higher duties and freight charges resulting from newly effective tariffs, and elevated costs counting labor costs, manufacturing inefficiencies, and increased overhead expenses associated with the relocation of the Company’s New York facility. Although the Company anticipates having higher costs for the remainder of fiscal 2019, the Company anticipates costs and operating performance to improve after the relocation of the New York facility is accomplished during the fourth quarter of fiscal 2019.

During the third quarter of fiscal 2019, total operating costs and expenses were about $3.10M, flat in comparison to the same period of the prior fiscal year. New product development costs increased by about $121.0K, or 32%, because of increased wages related to additional engineering employees to handle the higher level of product development work, particularly for new BD6 lenses. Selling, general and administrative (“SG&A”) costs increased by about $69.0K, or 3%, because of about $103.0K of non-recurring expenses related to the relocation of the New York Facility. Management anticipates SG&A costs will continue to be elevated through the end of fiscal 2019 as part of this facility relocation. On a long-term basis, the consolidation of the Company’s manufacturing facilities is expected to reduce operating and overhead costs. ; The increases in new product development and SG&A costs were offset by decreases in the amortization of intangibles, and gains on disposals of equipment.

Interest expense, net, was about $275.0K in the third quarter of fiscal 2019, contrast to net interest income of about $343.0K in the same period of the prior fiscal year. The difference in interest expense and income is because of discrete items that occurred in each period. Interest expense for the three months ended March 31, 2019 includes non-recurring costs associated with the refinancing of the Company’s previous term loan with a new lender, counting the write-off of formerly unamortized debt costs. For the three months ended March 31, 2018, net interest income included a gain of about $467.0K associated with the satisfaction in full, of the promissory note issued to the sellers of ISP, an IR business attained by the Company in December 2016, in the original aggregate principal amount of $6.0M (the “Sellers Note”), which satisfaction occurred during the third quarter of fiscal 2018. The gain resulted from the reversal of the fair value adjustment liability associated with the Sellers Note. The Company anticipates interest expense to be lower during the remainder of fiscal 2019, because of more favorable terms associated with the new term loan.

During the third quarter of fiscal 2019, the Company recorded income tax expense of about $162.0K, contrast to an income tax benefit of about $183.0K for the same period of the prior fiscal year. The income tax expense for the third quarter of fiscal 2019 is mainly attributable to income taxes on the income generated in China. The income tax benefit for the third quarter of fiscal 2018 was mainly related to tax reform enacted in the Republic of Latvia, which was effective January 1, 2018. The Company recorded an income tax benefit during the third quarter of fiscal 2018 because of the reduction of the formerly recorded net deferred tax liability to zero. LightPath has net operating loss (“NOL”) carry-forward benefits of about $75.0M against net income as reported on a consolidated basis in the U.S. The NOL does not apply to taxable income from foreign auxiliaries. Outside of the U.S., income taxes are attributable to the Company’s wholly-owned auxiliaries in China and Latvia.

Net loss for the third quarter of fiscal 2019 was about $352.0K, or $0.01 basic and diluted loss per share, contrast to net income of about $1.20M, or $0.05 basic and $0.04 diluted earnings per share for the third quarter of fiscal 2018.

Weighted-average shares of common stock outstanding were 25.810M basic and diluted, in the third quarter of fiscal 2019, contrast to 25.546M basic and 27.281M diluted in the third quarter of fiscal 2018. The increase in the weighted-average shares of common stock outstanding was because of shares of Class A common stock issued under the Employee Stock Purchase Plan (“2014 ESPP”), and upon the exercises of stock options and restricted stock units (“RSUs”).

EBITDA for the third quarter of fiscal 2019 was about $942.0K; contrast to about $1.60M in the third quarter of fiscal 2018. The year-over-year decrease in EBITDA in the third quarter of fiscal 2019 was caused by lower sales resulting in lower gross margin, coupled with additional expenses related to the relocation of the New York facility and a boost in new product development costs, as well as a decrease in foreign exchange gains of about $380.0K.

The Company offered net profit margin of -7.90% while its gross profit margin was 37.10%. ROE was recorded as -7.70% while beta factor was 0.10. The stock, as of recent close, has shown the weekly upbeat performance of 6.71% which was maintained at -41.60% in this year.

About the Author

Mel Villarreal
Mel Villarreal
I am Mel Villarreal and I’m passionate about business and finance news with over 4 years in the industry starting as a writer working my way up into senior positions. I am the driving force behind News Description with a vision to broaden the company’s readership throughout 2016. I am an editor and reporter of “Industrial Goods” category. Address: 2171 Medical Center Drive Venice, FL 34285, USA Phone: (+1) 941-492-9329 Email: [email protected]

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