Advanced Photonix Reports FY2013 Third Quarter Results

Conference Call

The Company will hold a conference call to discuss the results for the third quarter ended on Monday, February 11, 2013, at 4:30 PM EST.

The conference call will be webcast live and will be accessible at http://advancedphotonix.investorroom.com. Participants can dial into the conference call at 888.680.0869 (617.213.4854 for international) using the passcode 71842800. A question and answer period will take place at the end of the discussion.

An audio replay of the call will be available shortly thereafter and will remain on-line until February 18, 2013. The replay number is 888.286.8010 (617.801.6888 for international) and the passcode is 20930728.

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; potential problems with the integration of the acquired company and its technology and possible inability to achieve expected synergies; obstacles to successfully combining product offerings and lack of customer acceptance of such offerings; limited (or slower than anticipated) customer acceptance of new products which have been and are being developed by the Company; and a decline in the general demand for optoelectronic products; and the risk factors listed from time to time in the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and any subsequent SEC filings. The Company assumes no obligation to update forward-looking statements contained in this release to reflect new information or future events or developments. API-G

CONDENSED CONSOLIDATED BALANCE SHEET
			Dec 28, 2012
ASSETS			(unaudited)					March 31, 2012
Current assets
Cash and cash equivalents			$	559,000				$	3,249,000
Receivables, net				3,770,000					4,539,000
Inventories				3,702,000					3,594,000
Prepaid expenses and other current assets				450,000					261,000
Total current assets				8,481,000					11,643,000
Equipment and leasehold improvements, net				3,033,000					3,301,000
Goodwill				4,579,000					4,579,000
Intangibles and patents, net				3,760,000					4,538,000
Other assets				345,000					322,000
Total assets			$	20,198,000				$	24,383,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses			$	2,206,000				$	1,878,000
Accrued compensation				708,000					866,000
Current portion of long-term debt – bank term loan				333,000					333,000
Current portion of long-term debt – bank line of credit				--					500,000
Current portion of long-term debt – MEDC/MSF				547,000					532,000
Total current liabilities				3,794,000					4,109,000
Long-term debt, less current portion – MEDC/MSF				517,000					929,000
Long-term debt, less current portion – bank term loan				417,000					667,000
Warrant liability				--					26,000
Total liabilities				4,728,000					5,731,000
Shareholders' equity
Class A common stock, $.001 par value, 100,000,000 shares authorized; December 28, 2012 – 31,161,147 shares issued and outstanding; March 31, 2012 – 31,159,431 shares issued and outstanding				31,000					31,000
Additional paid-in capital				58,570,000					58,446,000
Accumulated deficit				(43,131,000	)				(39,825,000	)
Total shareholders' equity				15,470,000					18,652,000
Total liabilities and shareholders' equity			$	20,198,000				$	24,383,000

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
			Three months ended								Nine months ended
			Dec 28, 2012				Dec 30, 2011				Dec 28, 2012				Dec 30, 2011
Sales, net			$	5,834,000			$	6,518,000			$	17,636,000			$	22,991,000
Cost of products sold				3,381,000				3,828,000				10,965,000				13,356,000
Gross profit				2,453,000				2,690,000				6,671,000				9,635,000
Operating expenses
Research and development				1,558,000				1,660,000				4,271,000				5,066,000
Sales and marketing				527,000				484,000				1,528,000				1,664,000
General and administrative				1,087,000				1,062,000				3,259,000				3,521,000
Amortization				293,000				344,000				876,000				1,028,000
Total operating expenses				3,465,000				3,550,000				9,934,000				11,279,000
Loss from operations				(1,012,000	)			(860,000	)			(3,263,000	)			(1,644,000	)
Other income (expense)
Interest income				7,000				1,000				7,000				5,000
Interest expense				(34,000	)			(30,000	)			(97,000	)			(93,000	)
Interest expense, related parties				--				(10,000	)			--				(38,000	)
Change in fair value of warrant liability				13,000				84,000				26,000				719,000
Other income				--				3,000				22,000				3,000
Net loss			$	(1,026,000	)		$	(812,000	)		$	(3,305,000	)		$	(1,048,000	)
Net loss per common share
Basic and diluted			$	(0.03	)		$	(0.03	)		$	(0.11	)		$	(0.03	)
Weighted average common shares outstanding
Basic and diluted				31,161,000				30,972,000				31,161,000				30,828,000

Non-GAAP Financial Measures

The Company provides Non-GAAP Net Income, EBITDA and adjusted EBITDA as supplemental financial information regarding the Company's operational performance. These Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. Non-GAAP Net Income, EBITDA and adjusted EBITDA should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from similar measures used by other companies. Reconciliation of Non-GAAP Net Income, EBITDA and adjusted EBITDA to GAAP net income and loss are set forth in the financial schedule section below.

RECONCILIATION OF NON-GAAP INCOME (LOSS) TO GAAP INCOME (LOSS)
			Three months ended								Nine months ended
			Dec 28, 2012				Dec 30, 2011				Dec 28, 2012				Dec 30, 2011
Net income (loss)			$	(1,026,000	)		$	(812,000	)		$	(3,305,000	)		$	(1,048,000	)
Add back:
Change in warrant fair value				(13,000	)			(84,000	)			(26,000	)			(719,000	)
Amortization - intangibles/patents				293,000				344,000				876,000				1,028,000
Stock option compensation expense				46,000				235,000				124,000				480,000
Subtotal – add backs				326,000				495,000				974,000				789,000
Non-GAAP (loss)			$	(700,000	)		$	(317,000	)		$	(2,331,000	)		$	(259,000	)
Net loss per common share
Basic and diluted			$	(0.02	)		$	(0.01	)		$	(0.07	)		$	(0.01	)
Weighted average common shares outstanding
Basic and diluted				31,161,000				30,972,000				31,161,000				30,828,000
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA TO GAAP (LOSS)
			Three months ended								Nine months ended
			Dec 28, 2012				Dec 30, 2011				Dec 28, 2012				Dec 30, 2011
Net income (loss)			$	(1,026,000	)		$	(812,000	)		$	(3,305,000	)		$	(1,048,000	)
Add Back:
Net interest expense (income)				27,000				39,000				90,000				126,000
Warrant (fair value) adjustment				(13,000	)			(84,000	)			(26,000	)			(719,000	)
Depreciation expense				188,000				277,000				583,000				806,000
Amortization				293,000				344,000				876,000				1,028,000
Subtotal – add backs				495,000				576,000				1,523,000				1,241,000
EBITDA			$	(531,000	)		$	(236,000	)		$	(1,782,000	)		$	193,000
Stock compensation				46,000				235,000				124,000				480,000
Adjusted EBITDA			$	(485,000	)		$	(1,000	)		$	(1,658,000	)		$	673,000

About Advanced Photonix, Inc.

Advanced Photonix, Inc. ^® (NYSE MKT: API) is a leading supplier with a broad offering of optoelectronic products to a global customer base. We provide optoelectronic solutions, high-speed optical receivers and terahertz instrumentation for telecom, homeland security, military, medical and industrial markets. With our patented technology and state-of-the-art manufacturing we offer industry leading performance, exceptional quality, and high value added products to our OEM customer base. For more information visit us on the web at www.advancedphotonix.com.

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