News

9 February 2010

 

Advanced Photonix minimizes drop in margin despite sales slump

For its fiscal third-quarter 2010 (ended 25 December 2009), Advanced Photonix Inc of Ann Arbor, MI, USA (which designs and makes silicon, InP- and GaAs-based photodetectors, high-speed optical receivers, and terahertz instrumentation) has reported sales of $4.6m, down 15% on $5.4m the prior quarter and down 40% on $7.6m a year ago. The decrease was broad based across four of the firm's five markets (telecom, homeland security, military, medical and industrial).

For the first nine months of the fiscal year, despite revenue dropping 32% from the record $23.6m the prior-year period to $16m, gross margin has only fallen from 45% to 42%. The firm says that such relatively robust gross margin reflects the results of company-wide cost-reduction initiatives as well as prior years’ facilities consolidation activities. Advanced Photonix consolidated the wafer fabs in Camarillo, CA and Dodgeville, WI into Ann Arbor in mid-2007 and closed the silicon photodiode assembly facility in Dodgeville in late 2007.

“The first nine months of the year have been negatively impacted by the recessionary environment and this quarter was hit exceptionally hard,” says chairman & CEO Richard Kurtz. “Our proactive actions in making the necessary cost-reduction steps and consolidating our facilities have paid off and helped minimize the financial impact,” he adds.

Nevertheless, on a non-GAAP basis, net loss has more than doubled from $452,000 last quarter to $921,000 for fiscal Q3, compared to income of $261,000 a year ago. Earnings before interest, taxes, depreciation, and amortization (EBITDA) has also worsened from –$220,000 to –$646,000, compared to +$591,000 a year ago.

“We continue to expect the balance of the year to be challenging...We do not anticipate top-line revenue to meet our 2009 guidance, predominantly due to the continued softness in capital expenditures resulting from the recession,” says Kurtz.

However, he believes that the firm has hit the bottom of the revenue decline and expects to slowly return to growth, driven mainly by the HSOR [high-speed optical receiver] and Terahertz product platforms. “Our new Terahertz contract for the F-35 announced last month will strengthen our application product development in the aerospace and industrial markets, and we will continue to develop the next-generation 100G HSOR products that will be shipping in the coming quarters,” says Kurtz. “While the recession’s impact on our revenues has been severe this year, we expect to resume our organic growth in fiscal-year 2011, when capital expenditures begin to return to normal levels.”

See related items:

Advanced Photonix amends Michigan facility lease, saving $1.6m

Advanced Photonix maintains gross margin despite slump

Search: Advanced Photonix

Visit: www.advancedphotonix.com