Advanced Photonix, Inc.® (AMEX:API) (the “Company”) today reported its fourth quarter and fiscal year results for the periods ended March 31, 2007.
Net sales for the fourth quarter of fiscal 2007 were $6.2 million compared with $6.8 million for the fourth quarter of fiscal 2006. Net loss for the fourth quarter of fiscal 2007, on a generally accepted accounting principles (GAAP) basis, was $(1.3 million) or $(0.07) per diluted share, compared with a net loss of $(2.5 million) or $(0.13) per diluted share for the fourth quarter of fiscal 2006. Net sales for fiscal 2007 were $23.6 million, compared with $23.6 million for fiscal 2006. Net loss for fiscal 2007, on a GAAP basis, was $(4.6 million) or $(0.24) per diluted share, compared with a net loss of $(5.3 million) or $(0.30) per diluted share for fiscal 2006.
Non-GAAP net loss for the fourth quarter of fiscal 2007 was $(208,000) or $(0.01) per diluted share, compared with $(538,000) or $(0.03) per diluted share for the fourth quarter of fiscal 2006. Non-GAAP net loss for fiscal 2007 was $(287,000) or $(.02) per diluted share as compared to $(264,000) or $(.02) per diluted share for fiscal 2006. Non-GAAP net income (loss) is considered non-GAAP financial information, and reconciliation between net income (loss) on a GAAP basis and non-GAAP net income (loss) is provided in a table at the end of this press release.
On an EBITDA basis (GAAP earnings/loss before interest, taxes, depreciation, and amortization), the Company reported a net loss of $(302,000) for the fourth quarter of 2007, and net income of $40,000 for fiscal 2007. This compares to a net loss of $(300,000) and net income of $870,000, respectively, for the fourth quarter of 2006 and fiscal 2006.
The Company's revenues for fiscal 2007 were $23.6 million, the same as for fiscal 2006. The most significant revenue increases came from the Telecommunications market, which increased $2.7 million, or 87%, to $5.9 million. Homeland Security revenues were $73,000, a decrease of $1.9 million, all attributable to a delay of Terahertz development contracts primarily from the Transportation Security Administration (TSA). Revenues in the Industrial Sensing/NDT market were $10.0 million, a decrease of $318,000, or 3 %, from the prior year. Revenues in the Medical market were $2.5 million, an increase of $239,000, or 11%, over the prior year. Sales to the military/aerospace market were $5.2 million, a decrease of $703,000, or 12%, over the prior year due to a long-standing military contract that reached end of life status, and unexpected delays in other follow on contracts. The Company continues to expect quarter to quarter fluctuations in consolidated revenue for fiscal 2008 due to fluctuations in customer delivery schedules, which are beyond its control.
Although revenue was unchanged year over year, gross profit increased $1.7 million (18.6%) to $10.9 million for fiscal 2007, compared to $9.1 million for fiscal 2006. In terms of per cent of sales, the gross margin improved to 46% of sales for fiscal 2007 compared to 39% for fiscal 2006. This improvement in gross profit is attributable to increased sales of higher gross margin products in the telecommunications and medical markets.
Research and development (R&D) expenses increased $1.0 million to $4.0 million for fiscal 2007 compared to $3.0 million for fiscal 2006. Approximately 22% of this increase is the result of having a full year (52 weeks) of ownership of Picometrix and its HSOR and Terahertz product R&D expenses in fiscal 2007, compared to 47 weeks in fiscal 2006. The remaining increase in R&D costs (approximately $780,000) consists primarily of increased personnel costs to support new product development for the HSOR and next generation Terahertz product platforms. It is anticipated that overall R&D expenses will increase in fiscal 2008 with the continued focus on new opportunities in the high growth HSOR and Terahertz markets, but generally remain constant as a percentage of sales.
Marketing and sales expenses increased $245,000 to $2.2 million (9% of revenues) in fiscal 2007, compared to $1.9 million (8%) in fiscal 2006. The increase in sales and marketing expenses was primarily due to increased personnel costs and commission expenses of $320,000.
General and administrative expenses increased $1.1 million to $7.9 million (including amortization expense) in fiscal 2007 (33% of revenues), compared to $6.8 million (29%) in fiscal 2006. The increase is primarily attributable to costs incurred for the previously announced Wafer Fabrication consolidation to Ann Arbor, which accounted for approximately $720,000, or 63%, of the increase. The balance of $361,000 reflects expensing of non-cash stock-based compensation in fiscal 2007; there was no comparable expense incurred in fiscal 2006.
Richard Kurtz, Chairman and Chief Executive Officer, commented, "Fiscal 2007 has been an exciting and pivotal year for API. With the launch of our new T-Ray™ 4000 system, the opening of our new wafer fabrication facility in Ann Arbor and the ongoing expansion of our HSOR product offerings and active customer base, we are looking forward to a very solid year of growth and progress on a number of fronts in fiscal 2008. We are particularly pleased with the $1.7 million improvement in gross profit that was accomplished in 2007. With our forecasted revenue growth of 15% to 25% over 2007, we believe the company is well positioned to improve our bottom line and grow shareholder value in the coming year”.
This press release, the financial tables, as well as other supplemental information including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, will also be available on our website under the “Investor Relations” link.
The Company will hold a conference call to discuss the results for the fourth quarter and fiscal year ended March 31, 2007 on Monday, July 2, 2007, at 11:00 AM ET. Participants can dial into the conference call at 888-679-8033 (617-213-4846 for international) using the pass code 21188109. 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 pass code 64857293.
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.