JANUARY 2022 INVESTOR PRESENTATION - GLOBAL LEADER IN OPTICAL TECHNOLOGY - LightPath ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
INVESTOR PRESENTATION JANUARY 2022 NASDAQ: LPTH GLOBAL LEADER IN OPTICAL TECHNOLOGY
Safe Harbor Statement This presentation contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, product development plans, competitive position, potential growth opportunities, the effects of competition and the expected effects on the Company’s business from the COVID- 19 pandemic. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this presentation. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. This presentation includes certain non-GAAP financial measures as defined by the SEC rules. We believe these non-GAAP financial measures are appropriate indicators to assist in the evaluation of our operating performance on a period-to-period basis. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in this presentation. Leaders in optical and infrared solutions 2 LightPath Confidential – DO NOT DISTRIBUTE
Table of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 3 LightPath Confidential – DO NOT DISTRIBUTE
About LightPath Leading global provider of OEM optical solutions for over 30 years Industry name recognition Large and growing portfolio of Photonics Technologies FY21 $38.5M Revenue; 10% growth Typical design win has a lifetime of 5-15 years Proprietary manufacturing techniques and vertical integration Expertise in cost-efficient fabrication for high-volume applications Diversified end markets include industrial, commercial, medical, defense, telecom Approx. 350 employees in US, China and Europe Leaders in optical and infrared solutions 4 LightPath Confidential – DO NOT DISTRIBUTE
Table of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 5 LightPath Confidential – DO NOT DISTRIBUTE
Why Invest in LightPath?
• New, highly experienced Management. Turnaround of the organization
began March 2020
• New Strategic direction, going upstream into technological solutions
based on Optics. Formally focused on components.
• Optical engineered solutions with proprietary technologies
• Accelerated organic growth, expanding vertically into complex systems
New Era, • Positioned to be the domain expert in the exponentially growing field of
New Opportunity Optics and Photonics
• Serving an array of emerging industries, including Lidar, AR/VR, Medical, 5G,
and more
• $38.5 million in revenue and growing
• Undervalued stock price with shares nearly 60% off 52-week high
despite significant progress in transition and growth developments
Leaders in optical and infrared solutions 6 LightPath Confidential – DO NOT DISTRIBUTE
Table of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 7 LightPath Confidential – DO NOT DISTRIBUTE
Experienced & Expanded Management Team
Joined Company in 2020
Sam Rubin
25 Years in Optics
President & Revenue Growth of Prior Firm
Owner / Exec / Sales / R&D / M&A
Chief Executive Officer $30M to $500M
Joined Company in 2021
Albert Miranda 22 Years in Optics
Chief Financial Officer Finance / GM / Exec / M&A Revenue Growth of Prior Firm
$30M to $220M
Mark Palvino
22 Years in Optics Joined Company in 2020
VP, Global Sales
Finance / GM / Exec
& Marketing
Joined Company in 2021
22 Years in Manufacturing
Peter Greif Exec / GM / Ops / Engineering / M&A Revenue Growth of Prior Firm
VP, Operations
$6B to $27B
Leaders in optical and infrared solutions 8 LightPath Confidential – DO NOT DISTRIBUTE
Table of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 9 LightPath Confidential – DO NOT DISTRIBUTE
Strategic Plan Implemented Beginning in Fiscal 2021
• Capitalizing on optics as an enabling technology that is increasingly pervasive
among various industries and markets
• Prioritizing our key differentiators, including our deep design and manufacturing
expertise, coupled with key optical technologies and low cost, vertically integrated Growth
global manufacturing
• Continuous improvement through operational excellence
Technical Operational
• Engaging in a solutions-oriented approach for high value customers Expertise Efficiency
• Investing in our people to enable execution of our strategy, as we elevate our
design and engineering talent and continue to build a sales force that can focus and
prioritize customer opportunities that align with our strategic goals
• Utilize strategic acquisitions to complement and expand capabilities
“This strategy is one that is based on our strengths and our core capabilities to address the largest and
fastest growing trends in our industry for visible and infrared optical solutions.” -- Sam Rubin, CEO
Leaders in optical and infrared solutions 10 LightPath Confidential – DO NOT DISTRIBUTEEnabling Technology
Optics and Photonics is the Future.
“Although the study of light has been underway for centuries, it is only in the last 40 years that optics and
photonics has become a dominant field, with impact in almost every aspect of our lives, from entertainment,
to manufacturing, to medicine, to public safety, to communications.
“In the 20th century, electronics was the dominant influencing technology, enabled by optics. The 21st
century is the “Age of Light”, a century that will have optics & photonics as the dominant influencing
technology.”
The science and technology of light:
lasers, LEDs, LCDs, optical fibers &
imaging systems
Statement from University of Central Florida, CREOL, The College of Optics and Photonics
Leaders in optical and infrared solutions 11 LightPath Confidential – DO NOT DISTRIBUTETable of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 12 LightPath Confidential – DO NOT DISTRIBUTE
“The science and application of light, called photonics,
represents roughly 11% of the world’s economy.”
National Academy of Sciences Report: Optics & Photonics: Essential Technologies for our Nation . 13Markets We Serve
SALES BY MARKET
• Diverse market verticals Catalogue /
Distribution
15%
• Based on same core technology
*Commercial
34% Defense
• Slightly modified for different applications 8%
Industrial
22%
“The beauty of Photonics is, that as an enabling technology that
is embedded in products across many industries, it provides us Telecom Medical
with a built-in diversification across our customer base” 15% 6%
- Sam Rubin, CEO
*Commercial includes Automotive & Consumer Goods
Leaders in optical and infrared solutions 14 LightPath Confidential – DO NOT DISTRIBUTETable of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 15 LightPath Confidential – DO NOT DISTRIBUTE
Growth Focus - IR
Growing market
Changing technology
Less competition. Existing Engineered Solutions are
Why Infrared distributed between multiple companies
Imaging Had been primarily serving the defense industry,
supply chain has not consolidated
Molding technology is a key element in the future of
this segment
A current strength of ours
Higher margins
Leaders in optical and infrared solutions 16 LightPath Confidential – DO NOT DISTRIBUTEFocus on Infrared Imaging
SYSTEMS
MODULES
COMPONENTS
Leaders in optical and infrared solutions 17 LightPath Confidential – DO NOT DISTRIBUTEInfrared Imaging
SWIR MWIR LWIR
(CAGR 20%)
TAM $800M $2B $5.5B
$200M $500M $1.4B
SAM
SOM $50M $125M $350MIR Growth Strategy
L6 EO-Systems Missile
Machine Observation Airborne
examples LIDAR Guidance
Vision Systems Platforms
Systems
L5 EO-Sub- Spectroscopy
systems, ex. Instrumentation
Range Finders Imagers, sights Payloads Periscopes
L4 Cameras Area for Further Growth Thermopiles/
VIS SWIR MWIR LWIR
Detectors pyroelectrics
VIS Imaging, IR Imaging
L3 Sub- Modulators, Area for Organic Multispectral
Microscope Obj, (FFOC &
Growth Aiming
assemblies switches imaging
Endoscopes zooms)
DT/Conv.
L2 Passive Glass/Plastic DLC,HD,AR,B/S Fibers (Vis &
PMO lenses Lenses &
Components lenses , laser ctd IR)
Mirrors
Current
NEW: IR GRIN,
L1 Optical VIS glass (old IR glass (old &
Plastic IR Crystals IR Polymers,
Materials & new) new)
etc.
Leaders in optical and infrared solutions 19 LightPath Confidential – DO NOT DISTRIBUTEProduct Map Growth Matrix and Risk Assessment
L1 Optical Materials L3 Sub Assemblies
L1 Optical Materials
VIS Glass IR Imaging
IR Crystals
L3 Sub Assemblies
Modulators, Switches
L1 Optical Materials Safe
IR Glass
L4 Camera Detector
SWIR
L2 Passive DT/Conv
Lens, Mirror
L4 Camera Detector
MWIR
L2 Passive PMO
Lenses
Risky
L4 Camera Detector
LWIR
L2 Passive DLC, HD AS
B/S laser ctd L3 Sub Assemblies
Multispectral Imaging
Leaders in optical and infrared solutions 20 LightPath Confidential – DO NOT DISTRIBUTEM&A to Bolster Our Position
• Targeting engineered solutions-oriented companies • Market presence: US based with international
• including full systems, business in defense and commercial markets
• integrated subsystems, • Automotive LiDAR
• OEM cores and core modules, • Vehicle sensors
• design projects and components • Soldier sensors
• Space exploration
• Similar culture
• Externally customer-oriented Cultural Tech
Fit Fit • Up to $50 million in annual revenues
• Internally open • Accretive to margins and EBITDA
• Get it done
Market Financial
Fit Fit
Leaders in optical and infrared solutions 21 LightPath Confidential – DO NOT DISTRIBUTETable of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 22 LightPath Confidential – DO NOT DISTRIBUTE
November 2021 – Freeform Optics
• Freeform optics allow optical designers complete design
freedom that had not been available until now
• Production has been limited to 2 methods
• Machining each piece individually on a 5-axis optical CNC -- Freeform optics: Evolution? No, revolution!
expensive and not scalable At no time since the science of optical system
development was created in 1885 has the industry
• Injection molding of plastic optics -- lower quality, temperature
been so technologically dynamic.
sensitive, and poor durability
• LightPath is leveraging its 30+ years of leadership in
precision molding of glass and materials sciences to now offer
the ability to mold freeform optics out of glass
• Benefits:
• Ability to produce components in almost any shape
• Reduces the number and size of optics in a system
• E.g., AR glasses design that previously would require 4-8 optical
components could potentially be achieved with 2 freeform lenses
• With billions of optical components produced using our
technology, the revolution of freeform optics can now be A Freeform AR design, attributed to Apple.*
rolled out to high volume production!
* https://www.quora.com/How-does-Apple-make-their-AR-glasses-work-with-2-thin-pieces-of-glass-
while-Microsoft-HoloLens-s-thick-bulky-display-system-has-multiple-lenses-stacked-behind-the-visor
Leaders in optical and infrared solutions 23 LightPath Confidential – DO NOT DISTRIBUTEFreeform Optics In AR/VR Leaders in optical and infrared solutions 24 LightPath Confidential – DO NOT DISTRIBUTE
December 2021 – Exclusive License for Infrared Materials
• The Problem: Need 3 Cameras Visible SWIR LWIR
• infrared imaging is done in different wavebands (SWIR,
MWIR, LWIR) to capture images under different conditions.
Day, night, fog, clouds, etc.
• Current solutions are to have separate cameras for each
modality (see payload to the right)
• Technological Advances:
Prevailing Technology, The New Technology,
• Detector technology is advancing and detectors that can
image in multiple wavebands are becoming available
• But there are a limited number of optical materials that can
work in the infrared, so an optical system for multiple
wavebands is not feasible
• Solution: LightPath license from Naval Research Lab (NRL)
• 9 New materials designed specifically for multiband imaging.
• 3 Cameras become 1 or 2, Reducing weight, size, power
consumption and cost!
Leaders in optical and infrared solutions 25 LightPath Confidential – DO NOT DISTRIBUTELiDAR: One of Our Emerging Markets
Advanced Driver
Assistance
Systems
(ADAS)
Leaders in optical and infrared solutions 26 LightPath Confidential – DO NOT DISTRIBUTECommercial
The Worldwide Market Leader
Sporting Optics
in Infrared Sporting Optics World Market
Over
100,000
Lenses Per
Supplier Year
to the top
4 of 5
48%
Market
Leaders
Available
Market Share
$600M Market Size
27
*Data Source: MAXTECH 2018Space Related Activities
• Long history of space activities:
LightPath in • Mars Rover, ISS, STS missions and numerous satellites
• 6/2021 - Collaborative effort with a leading space company to develop an
Space improved optical communication system between satellites
• 8/2021 - Funding from Space Florida to develop a LOE thermal camera
• 12/2021 - Funding from European Space Agency to develop & qualify
Global Leader in Optical Technologies materials for space, which could replace Germanium
LightPath Confidential – DO NOT DISTRIBUTE
28LightPath Differentiators
• Significant IP in tooling to
Precision Molding Technology •
develop our own equipment
Materials sciences knowledge
• PMO library for visible light
Proprietary Glass Portfolio •
•
IR lenses acquired in 2016
NRL IR license in 2021
• Large global engineering team
Engineered Solutions •
•
Expanding design portfolio
IR & Visible lens assemblies
• From glass making to
Vertical Integration •
polishing and finishing
Available on 3 continents
• Leaders in respective fields
Large OEMs in High Growth Markets •
increases design-ins
Solutions-focused since 2021
Leaders in optical and infrared solutions 29 LightPath Confidential – DO NOT DISTRIBUTETable of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 30 LightPath Confidential – DO NOT DISTRIBUTE
Global Operations
Headquarters: Orlando, Florida
• Prototyping • Chalcogenide production
• R&D • Diamond turned manuf.
• Molded lens • Coating
manufacturing • Capacity expansion Riga, Latvia
Zhenjiang, China
• Infrared optics manufacturing
• Molded lens volume manufacturing
2022 $2.6M of Total Company Capex of • Diamond turned/CNC polishing
• Coating
Up to $3.2M to be Invested in • Crystal growth
Efficiency & Clean Room Expansion • Capacity expansion
• Coating capacity expansion
2020 $1.8M Invested in Capacity
2021 $2.2M Invested in
Capacity & Capability
Leaders in optical and infrared solutions 31 LightPath Confidential – DO NOT DISTRIBUTEComplete Vertical Integration
Raw Materials Glass Boule Production Glass Preform
1 2 3
Lens Molding Coating Final Assembly
4 5 6
Leaders in optical and infrared solutions 32 LightPath Confidential – DO NOT DISTRIBUTETable of Contents • About LightPath • The New LightPath • Management Team • Strategy • Markets • Growth Initiatives • Key Technology / Products • Global Operations • Financial / Investment Highlights Leaders in optical and infrared solutions 33 LightPath Confidential – DO NOT DISTRIBUTE
Fiscal 2022 First Quarter Financial Results Highlights Quarter Ended 09/30/2021: • Revenue for the first quarter of fiscal 2022 of $9.1 million • Total backlog at September 30, 2021 of $19.3 million • Net loss for the first quarter of fiscal 2022 was $632,000, which includes additional expenses associated with the management changes in Chinese subsidiaries • EBITDA* for the first quarter of fiscal 2022 was $454,000 • Cash and cash equivalents of $4.0 million as of September 30, 2021 • Total debt, including finance leases, of $5.0 million as of September 30, 2021 • Capital expenditures of $1.2 million for the first quarter of fiscal 2022 • Chairman, CEO and CFO execute open market purchases of Class A common shares during quarter ended September 30, 2021 *Please see the heading reconciliation for “Use of Non-GAAP Financial Measures” below. Leaders in optical and infrared solutions 34 LightPath Confidential – DO NOT DISTRIBUTE
Investment Highlights
NASDAQ: LPTH
• Strategic Plan provides for visibility into more sustainable growth and higher profitability
and cash flow
• Core markets are diversified and experiencing solid secular growth
• Adding capacity & vertical integration for cost savings and time-to-market advantages LPTH Snapshot
Stock Price* $2.32
• Multiple cost reduction opportunities being implemented; allows price flexibility which
Market Cap $64M
leads to increasing volumes (lower cost materials, in-house coating, diamond turning)
Dil. Shares 27.0M
• Balance sheet fortified by debt reductions from F2018-2021; cash increased 26% from
3-M Volume* 310K
2020 to 2021
* Source: Yahoo! Finance, 1/5/22
• Experienced management; significant insider/affiliate ownership; insider purchases in
1Q22
Leaders in optical and infrared solutions 35 LightPath Confidential – DO NOT DISTRIBUTETransition & Recent Developments in China
• As the new strategic plan took shape in FY21, irregularities were discovered within the Company’s subsidiaries in China
China management team and others engaging in malfeasance/adverse conduct, including misappropriation of cash and rerouting
customer orders to 3rd party entities owned/controlled by the management team in China, thus effectively helping themselves to
company money; efforts to misappropriate certain proprietary technology and other suspected acts of fraud, theft and
embezzlement; some of these activities had been going on undetected for years
• LightPath immediately terminated staff and began rebuilding a new management team in China; certain ongoing legal proceedings
with the terminated employees remain
• China sales were disrupted as certain key members of the sales leadership were terminated
• Significant one-time expenses
$1.2 million of expenses for terminations and related matters, including severance, legal and consulting fees in F21; $386,000 of
additional legal fees and consulting expenses in 1Q22; accrued China employee severance of approximately $485,000, which is
being disputed and subject to outcome of legal proceedings
• Separately, a large customer in China for 5G PMO lenses, among the Company’s higher margin product lines, lost a significant network
infrastructure contract in the country which resulted in reduced orders for LightPath
• 1Q22 performance begins rebound
Revenues improved to greater than $9 million, a marked improvement over 4Q21, although China sales headwinds may persist
for the next 1 or 2 quarters; GM% increased by 10 percentage points from 4Q21; expenses in China significantly declined from
4Q21 to 1Q22
Leaders in optical and infrared solutions 36 LightPath Confidential – DO NOT DISTRIBUTENASDAQ: LPTH
THANK YOU.
For more information on LightPath
and its businesses, please visit
www.lightpath.com.
For investor relations questions,
please contact:
Jordan Darrow
Darrow Associates
512-551-9296
jdarrow@darrowir.com
37Appendix
38Balance Sheet
39Income Statement
LIGHTPATH TECHNOLOGIES, INC.
Consolidated Statements of Comprehensive Income (Loss)
(unaudited)
Three Months Ended Year Ended
June 30, June 30,
2021 2020 2021 2020
Revenue, net $ 8,332,316 $ 9,107,140 $ 38,464,821 $ 34,967,963
Cost of sales 6,268,831 5,596,915 25,017,051 21,125,464
Gross margin 2,063,485 3,510,225 13,447,770 13,842,499
Operating expenses:
Selling, general and administrative 3,980,113 2,164,614 11,989,597 8,961,150
New product development 545,024 404,694 2,165,951 1,714,077
Amortization of intangibles 281,271 281,270 1,125,083 1,129,341
Loss (gain) on disposal of property and equipment — 21,802 8,951 (107,280)
Total operating expenses 4,806,408 2,872,380 15,289,582 11,697,288
Operating income (loss) (2,742,923) 637,845 (1,841,812) 2,145,211
Other income (expense):
Interest expense, net (48,863) (66,184) (215,354) (339,446)
Other income (expense), net (171,095) 175,733 (194,170) (174,838)
Total other income (expense), net (219,958) 109,549 (409,524) (514,284)
Income (loss) before income taxes (2,962,881) 747,394 (2,251,336) 1,630,927
Income tax provision (49,671) 90,442 933,915 763,998
Net income (loss) $ (2,913,210) $ 656,952 $ (3,185,251) $ 866,929
Foreign currency translation adjustment 300,670 (24,928) 1,380,260 (72,626)
Comprehensive income (loss) $ (2,612,540) $ 632,024 $ (1,804,991) $ 794,303
Earnings (loss) per common share (basic) $ (0.11) $ 0.03 $ (0.12) $ 0.03
Number of shares used in per share calculation (basic) 26,796,326 25,875,127 26,314,025 25,853,419
Earnings (loss) per common share (diluted) $ (0.11) $ 0.02 $ (0.12) $ 0.03
Number of shares used in per share calculation (diluted) 26,796,326 28,182,614 26,314,025 27,469,845
40Non-GAAP Reconciliation
LIGHTPATH TECHNOLOGIES, INC.
Reconciliation of Non-GAAP Financial Measures and Regulation G Disclosure
(unaudited)
Quarter Ended June 30, Year Ended June 30,
2021 2020 2021 2020
Net income (loss) $ (2,913,210) $ 656,952 $ (3,185,251) $ 866,929
Depreciation and amortization 900,964 837,123 3,509,436 3,424,438
Income tax provision (49,671) 90,442 933,915 763,998
Interest expense 48,863 66,184 215,354 339,446
EBITDA $ (2,013,054) $ 1,650,701 $ 1,473,454 $ 5,394,811
% of revenue -24% 18% 4% 15%
41You can also read
