LightPath Technologies Inc (LPTH) Q4 2024 Earnings Call Transcript Highlights: Revenue Decline ...

Revenue: $8.6 million for Q4 2024, down from $9.7 million in Q4 2023. Infrared Component Sales: $3 million, 35% of consolidated revenue. Visible Component Sales: $3.2 million, 37% of consolidated revenue. Assemblies and Modules Revenue: $1.4 million, 16% of consolidated revenue. Engineering Services Revenue: $1 million, 12% of consolidated revenue.

Gross Margin: $2.5 million, 29% of revenue, down from 32% in Q4 2023. SG&A Costs: $3.6 million, up 20% from Q4 2023. Net Loss: $2.4 million, $0.06 per share, compared to $2.8 million, $0.02 per share in Q4 2023. EBITDA: Loss of $1.3 million, compared to an income of $0.1 million in Q4 2023. Full-Year Revenue: $31.7 million, down from $32.9 million in fiscal 2023.

Full-Year Infrared Component Sales: $14.1 million, 44% of consolidated revenue. Full-Year Visible Component Sales: $11.2 million, 35% of consolidated revenue. Full-Year Assemblies and Solutions Revenue: $4.5 million, 14% of consolidated revenue. Full-Year Engineering Services Revenue: $2 million, 6% of consolidated revenue. Full-Year SG&A Costs: $12.3 million, up 8% from fiscal 2023.

Full-Year Net Loss: $8 million, $0.21 per share, compared to $4 million, $0.13 per share in fiscal 2023. Full-Year EBITDA: Loss of $3.7 million, compared to $0.4 million in fiscal 2023. Cash and Cash Equivalents: $3.5 million as of June 30, 2024. Working Capital: $7.5 million as of June 30, 2024. Cash Flow from Operations: $0.5 million for fiscal 2024, compared to -$2.8 million in fiscal 2023.

Capital Expenditures: $2.2 million for fiscal 2024, compared to $3.1 million in fiscal 2023. Backlog: $19.3 million as of June 30, 2024, down 11% from $21.7 million as of June 30, 2023. Warning! GuruFocus has detected 4 Warning Signs with LPTH. Release Date: September 19, 2024 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Successful transformation from a component supplier to a systems provider, with 20% of revenue now coming from new product lines.

Significant growth in the infrared components business, now accounting for 44% of overall revenue. Exclusive partnerships and licenses, including a significant contract with the Department of Defense and an exclusive license from the government for new materials. Strong entry into the thermal camera market, with innovative products like the Mantis camera generating significant interest. Potentially transformative contracts, such as the Lockheed Martin missile program, which could bring in $50 million to $100 million annually once in full production. Story continues Negative Points Overall revenue decreased to $31.7 million from $32.9 million in the prior fiscal year.

Gross margin decreased to 29% from 32% in the same quarter of the prior fiscal year. Net loss for fiscal 2024 increased to $8 million from $4 million in fiscal 2023. Significant decrease in sales of infrared components due to the non-renewal of a large annual contract for Germanium-based products. Increased SG&A costs, primarily due to non-recurring executive severance costs and legal fees, impacting overall profitability. Q & A Highlights Q: Based on your backlog and pipeline, how should we think about fiscal 2025 in terms of revenue? Do you expect double-digit growth? A: We expect low-end double-digit growth for the next fiscal year.

The largest customer has not yet started volume delivery of BlackDiamond optics but is still in the evaluation stage. Q: Have you received feedback on Lockheed's standing in the missile system competition with Raytheon? When do you expect an award? A: The down select has already happened, and both Lockheed and Raytheon are fully funded to deliver ready products. We expect a decision by September or November 2025. Q: Can you provide more details on the second opportunity for an airborne system? When will production begin? A: We are the sole source for the prime building the system for Apache helicopters. We expect to deliver the first three prototypes by the end of this calendar year or early next year.

If successful, we will move to low-rate initial production (LRIP) immediately. Q: What is the status of the new Mantis Cameras for greenhouse gas emissions? Are they available for sale? A: We have already shipped orders for the new Mantis Cameras. We estimate the addressable market to be in the range of 100 to 200 units per year, priced up to $30,000 per unit. Q: How should we think about SG&A costs going forward? A: We have reduced structural costs by $1.2 million, but we will reinvest these savings into business development initiatives, including sales, marketing, and product development. Q: Has the timetable for the automotive opportunity changed? A: Yes, the timeline has shifted.

We expect lower volumes in the next two years, with significant volume shipments beginning to ramp up in fiscal 2027. Q: How quickly can you move to production if Lockheed wins the missile program? A: We could start shipping within about three months after the decision is made. We are setting up the infrastructure for production in Orlando next calendar year. Q: What are the gross margin dynamics for assemblies and engineering services? A: Margins for assemblies and modules are higher, typically north of 40%. Q: What is the cash requirement to run the business? A: We project being operating cash flow positive.

Additional cash needs will be for CapEx and business development initiatives. Q: Is there any expense related to setting up for LRIP with Lockheed? A: The infrastructure and layout are already in place. Specific capital equipment needed will be paid by the customer. Q: How is the AI technology being integrated into your cameras? A: We started focusing on infrared cameras but are now also considering visible cameras. We are working with partners to make AI modules compatible with our cameras, enabling easier implementation for customers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View comments