UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file no. 1-11056
ADVANCED PHOTONIX, INC.
Incorporated pursuant to the Laws of Delaware
IRS Employer Identification No. 33-0325826
1240 Avenida Acaso, Camarillo, CA 93012
(805) 987-0146
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
On August 7, 2000, 12,190,848 shares of Class A Common Stock, $.001 par value,
and 31,691 shares of Class B Common Stock, $.001 par value, were outstanding.
<PAGE>
ADVANCED PHOTONIX, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3 - 6
Balance Sheet at June 25, 2000 3 - 4
Statements of Operations for the three month 5
periods ended June 25, 2000 and June 27, 1999
Statements of Cash Flows for the three month 6
periods ended June 25, 2000 and June 27, 1999
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 8 - 9
or Plan of Operation
PART II OTHER INFORMATION 10
SIGNATURES 10
2
<PAGE>
<TABLE>
ADVANCED PHOTONIX, INC.
BALANCE SHEET
AT JUNE 25, 2000
(UNAUDITED)
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,594,000
Short-term investments 2,603,000
Accounts receivable, less allowance of $5,000 1,047,000
Inventories 1,667,000
Prepaid expenses and other current assets 305,000
-------------------------
Total Current Assets 8,216,000
-------------------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, at cost 3,127,000
Less accumulated depreciation and amortization (2,652,000)
-------------------------
475,000
-------------------------
OTHER ASSETS
Goodwill, net of accumulated amortization of $294,000 541,000
Patents, net of accumulated amortization of $36,000 65,000
Other 24,000
-------------------------
630,000
-------------------------
$ 9,321,000
=========================
</TABLE>
See notes to financial statements.
3
<PAGE>
<TABLE>
ADVANCED PHOTONIX, INC.
BALANCE SHEET - Continued
AT JUNE 25, 2000
(UNAUDITED)
<CAPTION>
--------------------------------------------------------------------------------
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 186,000
Accrued expenses:
Salaries and employee benefits 258,000
Warranty 17,000
Other 12,000
----------------------------
Total Current Liabilities 473,000
----------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Convertible preferred stock at redemption value; 32,000
10,000,000 shares authorized;
40,000 shares issued and outstanding
Class A common stock, $.001 par value; 12,000
50,000,000 shares authorized;
12,190,848 shares issued and outstanding
Class B common stock, $.001 par value; --
4,420,113 shares authorized;
31,691 issued and outstanding
Additional paid-in capital 26,515,000
Accumulated Deficit (17,711,000)
----------------------------
8,848,000
----------------------------
$ 9,321,000
============================
</TABLE>
See notes to financial statements.
4
<PAGE>
<TABLE>
ADVANCED PHOTONIX, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the three month period ended June 25, 2000 June 27, 1999
------------------------------------------- -------------- --------------
<S> <C> <C>
NET PRODUCT SALES $ 1,662,000 $ 1,520,000
COSTS AND EXPENSES
Cost of product sales 961,000 1,034,000
Research and development 109,000 163,000
Marketing and sales 226,000 253,000
General and administrative 246,000 249,000
-------------- --------------
1,542,000 1,699,000
-------------- --------------
PROFIT (LOSS) FROM OPERATIONS 120,000 (179,000)
-------------- --------------
OTHER INCOME (EXPENSE)
Interest income 74,000 26,000
Other, net -- (2,000)
-------------- --------------
74,000 24,000
-------------- --------------
NET INCOME (LOSS) - $.02, $(.01) per share $ 194,000 $ (155,000)
============== ==============
</TABLE>
See notes to financial statements.
5
<PAGE>
<TABLE>
ADVANCED PHOTONIX, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
For the three month period ended June 25, 2000 June 27, 1999
--------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 194,000 $ (155,000)
Adjustments to reconcile net income (loss)
to net cash used in operating
activities:
Depreciation 56,000 45,000
Amortization 11,000 10,000
Changes in assets and liabilities:
Short-term investments (634,000) (195,000)
Accounts receivable 128,000 131,000
Inventories (150,000) (84,000)
Prepaid expenses and other current assets (196,000) (9,000)
Accounts payable and accrued expenses (212,000) (33,000)
----------- ------------
NET CASH USED IN OPERATING ACTIVITIES (803,000) (290,000)
----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (7,000) (64,000)
----------- ------------
NET CASH USED IN INVESTING ACTIVITIES (7,000) (64,000)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options 95,000 --
----------- ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 95,000 --
----------- ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (715,000) (354,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 3,309,000 664,000
----------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,594,000 $ 310,000
=========== ============
</TABLE>
See notes to financial statements.
6
<PAGE>
ADVANCED PHOTONIX, INC.
NOTES TO FINANCIAL STATEMENTS
June 25, 2000
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of Regulation S-X and
Regulation S-B. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) necessary for a fair presentation have been
included. Operating results for the three month period ended June 25, 2000, are
not necessarily indicative of the results that may be expected for the fiscal
year ending March 25, 2001. For further information, refer to the consolidated
financial statements and notes thereto included in the Advanced Photonix, Inc.
Annual Report on Form 10-KSB for the fiscal year ended March 26, 2000.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net Income (Loss) Per Share: Net income (loss) per share is based on the
weighted average number of common shares outstanding. Such weighted average
shares were approximately 12,167,000 at June 25, 2000 and 10,917,000 at June 27,
1999. Net income (loss) per share calculations are in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" (SFAS
128). Accordingly, "basic" net income (loss) per share is computed by dividing
net income (loss) by the weighted average number of shares outstanding for the
year. "Diluted" net income (loss) per share has not been presented as the impact
is either not material or anti-dilutive.
Inventories: Inventories consist of the following:
June 25, 2000 June 27, 1999
--------------------- ---------------------
Raw materials $ 592,000 $ 428,000
Work in progress 730,000 1,041,000
Finished products 345,000 166,000
--------------------- ---------------------
$ 1,667,000 $ 1,635,000
===================== =====================
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
RESULTS OF OPERATIONS
NET PRODUCT SALES
Net product sales for the first quarter of fiscal year 2001 ("Q1 01") were
$1,662,000, an increase of $142,000 or 9% from revenues of $1,520,000 for the
first quarter of fiscal year 2000 ("Q1 00").
The increase in net revenues was primarily due to increased sales to companies
in the automotive electronic, industrial sensing, and military aerospace
markets, which were partially offset by a reduction in sales to the medical
segment in Q1 01 as compared to Q1 00. During Q1 01, shipments of Large Area
Avalanche Photodiode (LAAPD) products (included in net product sales) were
$49,000 or 37% higher than the same period in the prior year. Sales from the
LAAPD product line represented 11% of total net product sales during Q1 01 as
compared to 9% during Q1 00. The Company continues to anticipate increasing
volume from sales of LAAPD products as markets begin to implement this
"enabling" technology.
COSTS AND EXPENSES
Cost of product sales decreased by $73,000 in Q1 01 compared to Q1 00. The
decrease is primarily attributable to a reduction in production staffing. Cost
of product sales as a percent of net product sales decreased by 10 percentage
points in Q1 01 compared to Q1 00 due to a number of factors including an
increase in non-recurring engineering design revenues, which utilize existing
staffing and labor and have lower material costs.
Research and development costs decreased by $54,000 (33%) to $109,000 in Q1 01
as compared to Q1 00. The decrease in R&D costs is primarily due to a decrease
in staffing as well as general cost cutting efforts. Internal R&D efforts are
continuing, however, as the Company focuses on improving its current line of
LAAPD products as well as expanding into new derivatives of the patented
technology. The Company is continuing its efforts toward the development of new
generation LAAPD Array products. R&D costs have varied significantly in the
past, and may continue to do so, due to the level of activity associated with
development contracts as well as the number and complexity of new process and
product development projects, the qualification of new process developments and
customer evaluation and acceptance of new products.
Marketing and sales expenses decreased by $27,000 (11%) to $226,000 in Q1 01 as
compared to Q1 00. The Company believes its marketing and sales expenses will
increase slightly during the remainder of the year as the Company pursues its
plan of increased print media advertising and trade show attendance, in addition
to anticipated increases in sales commission expenses as a result of continually
increasing product sales.
General and administrative expenses remained flat at $246,000 in Q1 01 as
compared to $249,000 in Q1 00. The Company does not anticipate any notable
fluctuations in general and administrative expenses for the remainder of the
year.
8
<PAGE>
Interest income in Q1 01 of $74,000 was $48,000 higher than Q1 00, due to
substantially higher cash reserves available for investment.
FINANCIAL CONDITION
At June 25, 2000, the Company had cash, cash equivalents and short-term
investments of $5.2 million and working capital of $7.7 million. The Company's
cash, cash equivalents and short-term investments decreased by $81,000 during
the three months ended June 25, 2000. Cash of $95,000 was obtained through the
exercise of stock options. Cash of $169,000 was used for operating activities
(before cash used for short-term investments), and cash of $7,000 was used for
capital equipment, compared to $64,000 during the comparable period of the prior
year. The Company anticipates that cash outlays for capital items will increase
during the remainder of the year, as plans to purchase additional machinery and
computer equipment upgrades are scheduled throughout the remainder of fiscal
2001.
To enable the Company to meet its capital commitment needs, the Company has
historically supplemented cash provided by operations with proceeds from private
and public sales of capital stock and borrowings. These funds have been used to
grow the core business and finance the development and initial commercialization
of the Company's LAAPD technology. While the Company believes that initial
commercialization has been completed and has reduced its expenditures for
research and development, it continues development of other derivatives of the
base technology. The continued development of LAAPD derivative products as well
as revenue growth in the business may require additional funds.
The Company previously maintained a revolving line of credit agreement with a
bank for the lesser of $1,000,000 or 75 percent of eligible trade accounts
receivable, as defined by the agreement, which expired during fiscal year 2000.
Based on current projections and available cash reserves, the Company does not
foresee an immediate need for borrowing and has therefore elected to forego the
costs for maintaining the line at this time. The Company believes that it would
be most efficient to establish a line when the situation warrants.
The Company believes that the moderate rate of inflation over the past few years
has not had a significant impact on the Company's sales or operating results.
YEAR 2000 ISSUES
None.
FORWARD LOOKING STATEMENTS
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, unforeseen
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 (particularly its LAAPD product line), the availability of other
competing technologies and a decline in the general demand for optoelectronic
products.
9
<PAGE>
PART II OTHER INFORMATION
Items 1 - 5
None
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Advanced Photonix, Inc.
-----------------------
(Registrant)
Date: August 8, 2000 /s/ Susan A. Schmidt
-------------- --------------------
Susan A. Schmidt
Chief Financial Officer and Secretary
10
