Advanced Photonix Loss Shrinks; Corner Turned?

Ann Arbor-based Advanced Photonix Inc. (NYSE Amex: API) Tuesday reported a loss of $846,000 or 3 cents a share, an improvement from a loss of $1.5 million or 6 cents a share, for the fourth fiscal quarter ended March 31.

Revenue for the quarter was $5.1 million, down 16 percent from $6.1 million a year earlier. However the number was up 12 percent from $4.6 million in revenue in the third fiscal quarter.

The loss for the fiscal year was $3.7 million or 15 cents a share, worse than a loss of $2 million or 8 cents a share the prior fiscal year. Revenue for the year was $21.1 million, down 29 percent over the prior year, a broad decline across the company's industrial, military and medical markets.

For the quarter, earnings before interest, taxes, depreciation, and amortization was minus $12,000 for the fourth quarter of fiscal 2010, an improvement from minus $603,000 for the quarter ended March 31, 2009. For the year to date, the company reported negative EBITDA of $325,000 as compared to a positive EBITDA of $1.6 million for the comparable prior-year period.

The company's total operating expenses for the quarter were $3.3 million, down 13 percent from $3.8 million reported for the fourth quarter last year. As a percent of revenue, total operating expenses were 63.7 percent compared to 61.4 percent for the fourth quarter last year. For the year, total operating expenses were $12.7 million, or 60.1 percent of revenue, compared to $14.6 million, or 49.2 percent of revenue last year.

The company completed the year with $1.8 million in cash compared to $2.1 million as of March 31, 2009.

Said chairman and CEO Richard Kurtz, "We have successfully navigated the worst recessionary environment in our lifetime. While the speed and the amount of the recovery may still be in question, the fact is, business is getting better. We have continued to make the necessary investment in our product platforms to position us for growth as the economy recovers. The sequential revenue growth of 12 percent in the fourth quarter compared to the third quarter is an indication that we have turned the corner and are beginning to grow again. Gross margins in the fourth quarter improved to 46 percent compared to 38 percent in the prior year fourth quarter, despite a 16 percent drop in revenue on a comparative basis. This is a validation of the improved operating leverage of the business as a result of our operational improvements gained through facilities consolidation during the past several years as well as our long term strategic plan. Our growth platforms of High Speed Optical Receivers (HSOR) and Terahertz systems are starting to show signs of recovery. We recently added a second shift in response to the growing demand and backlog for our HSOR products and our terahertz application development pipeline has never been stronger. Our Optosolutions business has stabilized and has begun to gradually recover. We are looking forward to restoring growth to our business in the coming year, lead by our high growth HSOR products."

To listen to a replay of the conference call discussing the results, visit http://investor.advancedphotonix.com/.

Advanced Photonix also announced that its Picometrix LLC subsidiary has begun shipping its new 100G line of high-speed optical receivers, with an order backlog of $1.2 million already.

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