LightPath Technologies(US:LPTH)2023-02-09 21:04Financial Performance - For the three months ended December 31, 2022, net revenue was $8,472,679, a decrease of 8.3% compared to $9,243,174 for the same period in 2021[17]. - The company reported a net loss of $(694,061) for the three months ended December 31, 2022, compared to a net loss of $(1,055,291) for the same period in 2021[17]. - For the six months ended December 31, 2022, the net loss was $2,074,761, compared to a net loss of $1,687,388 for the same period in 2021, indicating an increase in losses of approximately 23%[21]. - Revenue for Q2 fiscal 2023 was approximately $8.5 million, a decrease of 8% compared to $9.2 million in Q2 fiscal 2022, primarily due to lower sales of infrared products[111]. - Net loss for the second quarter of fiscal 2023 was approximately $694,000, or $0.03 per share, compared to a net loss of $1.1 million, or $0.04 per share, in the same quarter last year[129]. Revenue Breakdown - Revenue from precision molded optics (PMO) for the six months ended December 31, 2022, was $7,149,182, down 5.6% from $7,575,447 in the same period of 2021[32]. - Revenue from infrared products for the three months ended December 31, 2022, was $4,024,591, a decline of 20.7% compared to $5,075,168 in the same period of 2021[32]. - PMO product revenue in Q2 fiscal 2023 was approximately $3.9 million, an increase of 3% from $3.8 million in Q2 fiscal 2022, driven by sales to defense, industrial, and medical customers[113]. - Revenue from infrared products in the first half of fiscal 2023 was approximately $7.7 million, a decrease of 23% from $9.9 million in the same period of fiscal 2022, mainly due to timing of sales against a large annual contract[116]. - Specialty products revenue increased by 27% to approximately $1.0 million in the first half of fiscal 2023, up from $808,000 in the prior year[119]. Expenses and Costs - Operating loss for the three months ended December 31, 2022, was $(556,484), an improvement from $(980,383) in the prior year[17]. - Total cost of sales for the first half of fiscal 2023 was approximately $10.4 million, down from $12.4 million in the same period last year[121]. - SG&A costs for the second quarter of fiscal 2023 were approximately $3.0 million, an increase of 3% from $2.9 million in the same period last year[122]. - New product development costs for the second quarter of fiscal 2023 were approximately $466,000, a decrease of 16% from the prior year[125]. Assets and Liabilities - Total current assets decreased to $16,159,196 as of December 31, 2022, down from $18,169,414 as of June 30, 2022[14]. - Total liabilities decreased to $18,772,264 as of December 31, 2022, compared to $20,982,683 as of June 30, 2022[15]. - Cash and cash equivalents were $3,793,852 as of December 31, 2022, down from $5,507,891 as of June 30, 2022[14]. - The outstanding balance on the BankUnited Term Loan was approximately $3.6 million as of December 31, 2022[137]. Tax and Compliance - The effective income tax rate for the three months ended December 31, 2022, was -9%, compared to -3% for the same period in 2021, indicating a worsening tax position[38]. - The company has accrued approximately $40,000 in unpaid withholding taxes as of December 31, 2022, related to intercompany dividends[43]. - The U.S. federal and state statutory income tax rate is estimated to be 25.5%, with no additional tax expense expected on pre-tax income or losses generated in the U.S.[41]. Operational Challenges - The company anticipates continued challenges due to inflation and supply chain disruptions impacting future operations[12]. - The ongoing Russian-Ukraine conflict has created economic disruption, impacting the company's customers and suppliers, with uncertain future effects[89]. - Economic conditions in China have negatively impacted sales across all industries served, particularly affecting PMO product sales[113]. Cash Flow and Financing - Cash used in operations for the first half of fiscal 2023 was approximately $752,000, a significant increase from approximately $157,000 in the same period of the prior fiscal year[142]. - Cash paid for operating leases was $523,157 for the six months ended December 31, 2022, compared to $448,485 for the same period in 2021, an increase of 16.7%[63]. - The company raised approximately $9.2 million in net proceeds from a public offering of Class A common stock in January 2023[140]. Future Projections - Total backlog at December 31, 2022, was approximately $29.4 million, representing a 34% increase compared to $21.9 million as of December 31, 2021, and a 66% increase from the end of fiscal 2022[154]. - Future amortization of identifiable intangibles is projected to be $562,541 for the fiscal year ending June 30, 2023, and $1,125,083 for the fiscal year ending June 30, 2024[37]. - The company does not expect to need additional equity capital for the foreseeable future following a recent equity raise, but may require funds for acquisitions or strategic transactions[95]. Management and Strategy - The company is focusing on developing partnerships for optical solutions, leveraging its expertise in optics to provide comprehensive value propositions to customers[107]. - Management uses non-GAAP financial measures to assess business performance and make operational decisions, acknowledging their limitations[169].