Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Advanced Photonix, Inc. (NYSEMKT:API)

Q4 2014 Earnings Conference Call

June 30, 2014 04:30 pm ET

Executives

Jeff Anderson - Chief Financial Officer

Rob Risser - Chief Operating Officer, Secretary, Director

Rick Kurtz - President, Chief Executive Officer

Analysts

Dave Kang - B. Riley

Operator

Good day, everyone. Welcome to Advanced Photonix's 2014 Fourth Quarter and Year End Earnings Conference Call. Today's conference is being recorded.

At this time for opening remarks and introductions, I would like to turn the call over to Mr. Jeff Anderson, Advanced Photonix's CFO. Please go ahead, sir.

Jeff Anderson

Thank you, Laura. Before we get started, I want to remind listeners that this conference call will contain forward-looking statements, which involve known and unknown risks and uncertainties about the company's business and the economy and other factors that may cause actual results to differ materially from our expected achievements and anticipated results, including unforeseen technological obstacles, which may prevent or slow the development and/or manufacture of new products; problems with the integration of acquired companies and technology and possible inability to achieve expected synergies; and limited or slower-than-anticipated customer acceptance of new products, which have been and are being developed by the company.

Please see our press release of today and our periodic reports filed with the Securities and Exchange Commission for a fuller statement of such risk factors. Given these uncertainties listeners are cautioned not to place undue reliance on any forward-looking statements contained in this conference call.

The forward-looking information given during this teleconference represents management's expectations and beliefs as at the date hereof. The continued availability of this teleconference on the Internet, or through other media, does not mean that the company is reaffirming or confirming its continued validity. Except as may otherwise be required by law, the company expressly disclaims any obligation to update or alter any of the forward-looking statements made herein as a result of any event occurrence after the date hereof.

This conference call also contains a presentation of non-GAAP financial measures, as defined in the SEC's Regulation G. Reconciliations of the non-GAAP financial measures to the company's GAAP-based financial statements are included in the company's fourth quarter and year-end earnings press release dated June 30, 2014, and are available on our website at www.advancedphotonix.com.

On today's call, I will briefly review our few financial highlights from the fourth quarter and year ending March 31, 2014, and then I will turn the call over Rob Risser, COO; for an update on business activities. We will pass the call on to Richard Kurtz, CEO, for closing remarks.

Our total revenues for fiscal 2014 were $29 million, an increase of approximately $5.4 million or 23% from revenues of $23.6 million for fiscal 2013. Three of our four market segments showed growth in fiscal 2014 relative to fiscal 2013.

Test and measurement market revenues were $18.6 million in fiscal 2014, an increase of 23% or $3.5 million from fiscal 2013 revenues, due to the full year of activity from the newly acquired net operating assets of Silonex. Our test and measurement revenue in the fourth quarter of the current year decreased 7% or 327,000 from the comparable prior year quarter, primarily due to completion of Terahertz contracts on the F-35 program.

Telecommunication sales were $6.5 million, an increase of $3.1 million or more than 90% from fiscal 2013. The increase in our telecommunications revenue for fiscal 2014 was the result of resolution of supply chain disruptions that allow us to regain market share at major 100 gigabyte customers.

Our telecommunications revenue in the fourth quarter increased approximately 388% or $1.5 million from the prior year fourth-quarter. Market share improvements, market growth and new awards in China to improved Internet infrastructure explain the improved business conditions.

Military/Aerospace market revenues were $2.7 million in fiscal 2014, a decrease of 34% or $1.4 million from the comparable prior year revenues. Our Military/Aerospace market revenue in the fourth quarter of the current year decreased 25% or an $182,000 from the prior year fourth quarter both, decreases occurred due to the completion of the F-35 development contract in these respective periods.

Medical market revenues increased $207,000 or 22% to $1.1 million from the prior year revenue of $939,000. Our medical market revenue in the fourth quarter of the current year was similar to the prior year fourth quarter. These fluctuations are primarily result of the shipment pattern for one customer.

Looking out to next year, we believe test and measurement revenues will grow more modestly given there has been a full year of the Silonex revenue in the base. Most of the growth is expected from forecasted Terahertz product sales.

Telecom revenues in the fiscal year 2015 are expected to be up significantly as we supply HSOR products to satisfy the rapidly growing 100 gigabytes per second infrastructure build-out and market share increase coming from China.

The Military/Aerospace market retrenched significantly in fiscal year 2014 and we plan to earn slightly higher revenues in fiscal year 2015 given anticipated orders on the F-35 naval hull coating and certain missile programs.

We expect medical revenues to be flat to slightly down in fiscal 2015, due to the product transitions at a major customer. Overall, we anticipate fiscal year 2015 growth to exceed 20% on the strength of our HSOR and Terahertz product offerings.

Gross profit was $9.6 million or 33% of revenue compared to the prior year of $8.8 million or 37% of revenue. Gross profit dollars increased given the higher volumes from the telecom market and silicon acquisition and was muted since we shutdown our silicon fabrication activities in the third quarter of fiscal 2014, incurring special charges of $667,000.

The lower gross profit rate was due primarily to the lower volume of Terahertz contracts during the year. Gross profit in the fourth quarter of fiscal 2014 was $2 million or 9% of revenue versus $2.2 million or 36% of revenue during the prior year fourth quarter given the mix shift out of Terahertz contracts.

Our total operating expenses for the quarter were $3.1 million, down about $216,000 from the fourth quarter last year. For the year total operating expenses were $13 million or 45% of revenue compared to %13.2 million or 56% of revenue last year. Early in fiscal 2014, we completed several development projects and reduced our engineering headcount to bring our spending more in line with our revenue profile. This resulted in a drop in spending year-over-year of $708,000.

Sales, marketing and administrative costs for the fiscal 2014 were up $697,000, due to the overhead assumed with the Silonex business purchase, higher commissions from the increased revenue profile and a reduction in tax credits obtained in the current year.

Intangible amortization declined by approximately $152,000 as we use the cash flow amortization method on the majority of our intangible assets, which results in a declining expense profile over the life of the assets. Our operating loss decreased by $945,000 in fiscal 2014. Included in the fiscal 2014 loss was a one-time fab shutdown cost of $667,000.

Other income and expense items were up $822,000, due mostly to higher interest expense and a non-cash charge related to our outstanding warrants. The charge was driven by an increase in our stock price. As a result of these items, our net loss for fiscal 2014 was $4.3 million or $0.14 per share as compared to a loss of $4.4 million or $0.14 per share in fiscal 2013, a decrease in the loss of approximately $123,000.

During the past two years, we have been consuming cash because we have been operating at revenue levels below our cash breakeven point as measured on an EBITDA basis, calculated based on our lending agreements. We had business needs to purchase certain equipment and continue patent activities and have had to pay principal on amortized in term debt.

To fund this activity, we have steadily drawn down our cash balance, liquidated working capital into cash and use our available line of credit with SVB.

As mentioned in previous press releases, the lack of positive EBITDA pursuant to our lending agreement in December 2013 and the line of credit levels in January 2014 caused us to violate our covenants. To improve our liquidity position, we have evaluated many different alternatives for the lowest cost of capital that eventually settled on a secondary offering which was done on a firm underwritten basis by B. Riley & Company, LLC in June 2014.

The net proceeds after expense of approximately $2.9 million were received in June 2014 and were used to pay down our existing line of credit with SVB. With this cash infusion, our lenders were comfortable revising our terms. As announced on June 20, 2014, we signed separate amendments with SAB and partners for growth, SVB agreed to extend the maturity date of the company's credit to June 2016 and reset the interest rates to a metrics previously established and both parties agreed to new covenant structure with us reaching a positive adjusted EBITDA on a six-month trailing basis by October 2014.

Headwinds that slowed our growth in 2014 are expected to become tailwinds such that we expect revenue levels to increase in fiscal 2015 to a point that we began generating positive EBITDA. We believe that with this positive EBITDA, our existing cash and cash equivalents plus availability on our line of credit will provide sufficient liquidity for us for the next 12 months.

I would like now to turn the call over to our COO, Rob Risser.

Rob Risser

Thank you, Jeff. Good afternoon, everyone. Thank you for joining us on the call today. We made significant progress in fiscal 2014 toward the two goals that we believe will drive shareholder value, revenue growth and positive adjusted EBITDA. Revenue grew 23% for the year compared to last year driven by 55% organic growth in our high-speed optical receiver product platform, including a 91% growth in our transmission products primarily with our 100-gig coherent receiver product offerings and growth through acquisition in our Optosolutions silicon product platform.

Unfortunately our revenue growth in these two product platforms was offset by a 47% revenue decline in our Terahertz product platform compared to last year, which caused us to miss our 35% revenue growth target. Revenue from products introduced in the last two years accounted for more than 27% of revenue in fiscal 2014.

Our adjusted EBITDA was negative $846,000 for the year compared to a negative $2.2 million last year, an improvement of $1.4 million, short of our goal of positive adjusted EBITDA for the year.

We plan for FY'14 to be revenue-neutral in our Terahertz product platform and a year of transition marked by rapid product sales growth offset by shrinking contract revenue. Rapid revenue growth was delayed in our Terahertz product platform due to our longer than anticipated training and sales cycle with our value-added reseller account.

Operationally, we had significant accomplishments in each of our product platforms last year that resulted in revenue growth and improved performance and positions us well for continued organic revenue growth and adjusted EBITDA profitability in fiscal 2015.

We had major 2014 initiatives in cost reduction across all three product platforms. New product development and our high-speed optical receiver and Terahertz product platforms and market development in our Terahertz product platform, cost reductions included closing the Optosolutions silicon fab in the Ann Arbor facility and outsourcing our silicon detector fabrication utilizing larger wafers, outsourcing the assembly and test of many Optosolutions products to a contract manufacturer in China and reducing the rental square footage of our Optosolutions manufacturing facility in California.

Closing the silicon fab in Ann Arbor resulted in one-time expenses of $667,000 and reduced our GAAP gross profit margin as a percentage of sales by 2.3%. The majority of the benefits of these cost reductions will be realized in our fiscal 2015 and beyond. We successfully, significantly cost reduced the high-speed optical receiver and Terahertz product platforms, bill of material and labor efficiency in the competitive 100-gig products and the T-Ray 5000 product platform.

These cost reductions are necessary in order to stay competitive in the telecom sector which typically has annual price reductions that need to be offset by product cost reductions and to cost reduce the T-Ray 5000 in order to penetrate the volume, process and quality control markets. Benefits of these cost reductions were partially realized in fiscal 2014, but will be more fully realized in fiscal 2015 and beyond.

Four new products were developed in our high-speed optical receiver product platform during the year, including the 100-gig initial volume shipments of our coherent receiver with variable optical attenuator for the long haul market and the DGM32 [X] product to test 32 gigabit fiber channel transceivers and 100 gigabit per second Ethernet transceivers that are used in the rapidly growing enterprise market, driven by the demand for cloud computing.

In addition first samples of the 10-gig APD, receiver optical subassembly or ROSA, targeted at the access and metro transmission market and the 2.5-gig front side illuminated avalanche photodiode targeted at high volume, but price-sensitive fiber-to-the-home market were completed in the fourth quarter. The 100-gig high-speed optical receiver and Comtest fiber channel products contributed significant revenue in 2014. In 10-gig APD ROSA and to 2.5-gig APD front side illuminated detectors are just in the customer sampling stage.

Our Optosolutions product platform successfully introduced currency validation products with the acquisition of Silonex. The penetration in the currency validation market would have been very difficult and expensive without the acquisition. Our cost reduced in fact for ruggedized Terahertz product, the T-Ray 5000 was introduced during fiscal 2014 along with underwriter laboratory safety certification.

In addition, we made significant progress toward our T-Ray 5000 CE certification during the year. CE certification is targeted at European market penetration and is required by certain European customers. In addition, we gained significant traction through our value-added reseller channel, which now totals four VARs and distributors located in Asia, Europe and North America.

With these VARs, we have successfully penetrated and had factory acceptance of our T-Ray 5000 and the building products, extruded plastics, pipe and research markets. In addition, we have deployed and are awaiting factory acceptance in the military, paper and pharmaceutical markets. We are successfully penetrating the industrial early adopters and have a business model that will allow a price point that is attractive for a more rapid market acceptance by industrial customers.

During the fourth quarter, our sales and marketing expense is typically high since we exhibited two large tradeshows. Photonics West and the Optical Fiber Conference or OFC, both shows were very successful for us this year and confirmed that we targeted the high growth segments of the markets we participate in.

Photonics West was held in San Francisco this past February, which is the primary tradeshow for our Optosolutions product platform

In March, we exhibit at OSC in San Francisco, which is the largest conference in the world targeted at the optical communication market. In addition it was the fifth consecutive year that we sponsored the executive forum at OSC which is a very cost efficient and high profile way of marketing the companies to the industry.

Our fourth quarter also typically reflects the impact of the annual price reductions on telecom transmission products, so the fourth quarter is typically challenging given the price reductions and the large marketing expenses typically incurred when we exhibited our two largest annual tradeshows.

In summary, we made significant progress in fiscal 2014, but fell short of our goals in revenue growth and adjusted EBITDA. Our high-speed optical receiver product platform exceeded plan for the year, Optosolutions grew as a result of the Silonex acquisition, but total revenue was below plan for the year and Terahertz was significantly below plan for the year as market adoption was slower than anticipated in the plan during a transition year, driven by product sales.

I would now like to turn the call over to Rick.

Rick Kurtz

Thank you, Rob. Good afternoon, everyone, and thank you for joining us on the call today. Last year was a year of transition and growth. As already mentioned by Jeff and Rob, we grew revenues by over 20%. We did believe that we could have been higher, but delays in the integration of Advanced Photonix Canada combined with our slowdown in military deliveries and a push out to the government contract awards for Terahertz slowed growth in the second half.

Pursuant to our press release of last Friday, we did receive the first of two major Terahertz development contracts discussed during our mid-quarter update. The first was from the Navy, which we proposed to build and test a prototype non-contact, time domain Terahertz non-destructive evaluation scanning system to acquire sub service, beneath summary acoustic hull coatings.

The system will enable the rapid detection of hull defects such as corrosion and gouges beneath submarine hull coating as well as hull coating material and adhesion defects. We remain in discussion on the second SBIR Phase 2 contract for $1.5 million for the F-35 program. We are expecting to receive this award during our second quarter fiscal 2015.

To maintain our leading market position in Terahertz, we have reduced our manufacturing costs for T-Gauge products by more than 25% thus allowing us to lower our price points opening more product sales opportunities.

We are continuing to work on new product developments to further lower the cost of Terahertz solution, thereby allowing us to accelerate market adoption, compete more effectively against older technologies, expand our addressable markets and encourage additions to our value-added reseller channel.

We now are seeing a strong build up and potential T-Gauge orders in both, the industrial and the research market. We are expecting to more than double the number of T-Gauge product sales this coming year. We have strengthened our financial position with the equity raise completed quickly and with little impact to the stock price by B. Riley & Company. Once again, thanks to B. Riley.

As Jeff mentioned, we now have the new two-year agreement in place with Silicon Valley Bank and the capital in place to manage our growing working capital needs. We have a growing backlog and HSOR and our 100 products are being driven by China, Comtest and the long-haul markets.

The news out of the telecom market is one of growth and opportunity. As Rob has already mentioned, our major telecom business demand grew substantially year-over-year by more than 90%. We are expecting a significant growth this coming year.

Our supply chain has responded to the increase in demand and we are adding capacity every day to meet this growing demand. What our shareholders should keep in mind is that API's telecommunication business is mostly focused on the 100-gig market.

Our competitors have legacy business in the 10-G long-haul market that is currently being replaced with the 100-G, making the revenues incremental for API replacement revenues for our competitors. This makes API truly the only pure play in the 100-gig long-haul market.

We continue to make progress in our new 10-gig products for fiber-to-the-home recur, we expect to have samples available during the calendar year. In the Optosolutions product platform, we are continuing to - our operational focus with the fabless and offshore business model. As Jeff and Rob have mentioned, we had a non-cash write-off within the third quarter for the fab shutdown. This will ultimately have a positive effect on the bottom line for Optosolutions and API overall.

As I mentioned in the mid-quarter update call, our Optosolutions group is developing a new product platform based on solid-state LED technology which we have called tunable light source or TLS. This technology has applications in the test and measurement, medical and lighting industries. It is too early to talk about potential revenue opportunities, but we are excited about getting into new markets and new customers.

We are looking forward to the coming year and projecting 20% revenue growth year-over-year. This will be driven by both, our HSOR and Terahertz product platform. We expect that the Optosolutions platform will continue to grow at a lower rate than our other product platforms. By the end of the year, we are projecting to be EBITDA positive and generate non-GAAP profits.

On behalf of our team, we appreciate your continued support. I would now like to open up this call for your questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions) Our first question comes from Dave Kang of B. Riley.

Dave Kang - B. Riley

Yes. Good afternoon. Thank you. The first question is regarding the gross margins situation in fiscal fourth quarter. Was this just simply a product mix issue or is there something else that to lower gross margin and then just if you can comment about the gross margins recovery going forward. Is Terahertz coming back? Is that sufficient to get back to mid-30% to maybe even high 30% range by maybe second half this fiscal year?

Jeff Anderson

Dave, this is Jeff Anderson here. To answer your questions, was mix driven in the quarter as well as Rob mentioned, we have our annual contract negotiation, so our HSOR products in the March quarter essentially had their reductions in sell price, so that's typically where we have the most difficulty on the gross margin is in that March quarter because of that price drop.

Back to your question about how we look going forward, I would say that you have us forecasted pretty consistent with how we view ourselves going forward and that we do expect to rebound back into the mid-30 range as we go forward here and then higher during the year as volume benefits us.

Dave Kang - B. Riley

Got it. Then just housekeeping item, what was the CapEx number and what's the budget for this fiscal year?

Jeff Anderson

We have been running about $100,000 a quarter, Dave, and I think that's still a good estimate going forward.

Dave Kang - B. Riley

Got it. Then regarding the HSOR expansion, where are you in terms of second shift. I mean, have they been qualified or what's the latest?

Rob Risser

Dave, this is Rob. Yes. We are continuing to ramp up. We have an almost fully functioning second shift and believe that we will hit our capacity expansion target as we knew it a month ago in July. However, you know, it's a moving target on the demand side, so we are seeing potential that we will still be behind the curve.

Dave Kang - B. Riley

Okay.

Rob Risser

…Capacity.

Dave Kang - B. Riley

Sure. Then just a couple of more, regarding 100-G margins, any on to more all the margins any difference between you and ZTE. There certainly has been a lot of concerned about the Chinese margins being fairly challenging. Any comment on difference AOU and ZTE.

Rob Risser

Well, what I would say is while the products are slightly different products. They are both, 100-gig, but they are slightly different products.

Overall, they are very similar margin, so we haven't seen what I think some others in the industry maybe at some more legacy products…

Dave Kang - B. Riley

Right. I mean, the margin, but the price adjustment that occurred in the fiscal fourth quarter. Anything out of ordinary? I mean, was it still 10% to 15% range or.

Rob Risser

That said. That's whole price curve is starting to level off. If you remember, three years ago when we first started the margins tended to look more like Comtest margins, because it was - and that was small. Then you got some pretty big price reductions. Of course we had corresponding cost reductions and curve like all these curses in the telecom space to move down into the normal pace.

Dave Kang - B. Riley

Got it. Then need many to for competitive landscape changes with you U2T going to Finisar.

Rob Risser

Well, I would say that we have seen some indications that we could benefit from some of that, but there aren't any, but you can look through the rearview mirror.

Dave Kang - B. Riley

I was thinking more like, is Finisar and see any of our policy to more like are used in the start of the loan you know above unity using authoring their weight around and making sure price pressure but we haven't seen that yet.

Rob Risser

No. I haven't seen that. No.

Dave Kang - B. Riley

Okay. Lastly, for you Jeff, so you talked about a couple of major tradeshows that's why OpEx was a little bit up, so how much can we expect that to come down for out quarters starting with June.

Jeff Anderson

I think, I got it forecasted pretty correctly. I mean, you are going to see this kind of normal spend rate going forward here in Q4 offsets on one side into the other, so it's going to net be about the same.

Dave Kang - B. Riley

Got it. Then I guess the shares will be around 37 million by maybe not June but by September quarter fully diluted will be around $37 million.

Jeff Anderson

That's correct because of 6.2 million shares that we recently placed with B. Riley.

Dave Kang - B. Riley

Got it. Thank you.

Jeff Anderson

All right. Thank you.

Operator

Our next question comes from Randy [Knudson].

Unidentified Analyst

Good afternoon.

Jeff Anderson

Afternoon, Randy.

Unidentified Analyst

Well, let me ask you first about you mentioned in Terahertz. You mentioned pharmaceutical for the first time since about 2008 that I have heard pharmaceutical mentioned with API. Was that intended to be neutroceutical.

Jeff Anderson

Yes. It should have been more neutroceutical than pharmaceutical. It's antibiotic.

Unidentified Analyst

Okay, but we are then in at least in some very end of the pharmaceutical market and I assume -

Jeff Anderson

Yes.

Unidentified Analyst

Anybody else contacting you in that industry?

Jeff Anderson

Not at the present time. Again, we have a VAR in Japan that's leading the charge over there for us. They are the ones have been mostly engaged. Our focus obviously has been with the industrial market and the replacement of nuclear gauge is out there because we believe that that's the path to volume today.

Unidentified Analyst

What are you noticing in Terahertz in terms of these areas that we've moved into such as the roofing industry? Are the competitors starting to look at us as well? I mean is it the fact that one party in the industry is purchasing the product leading to other ones.

Jeff Anderson

Yes. When you first get the first install ones. Then the competitors-type for those building product applications start looking at a lot more seriously more and more opportunities out there within the on the various industrial applications that we have gone after.

Our competitors of course are looking and trying to figure out how they get there, because we do have one of the most advanced Terahertz industrial hardening systems in the world, so we do have a large ahead of our competitors we want to keep that.

That's the reason our focus is on cost reduction to make the ROI even more attractive and we do have multiple in the building product side. We have multiple customers now.

Unidentified Analyst

Okay. I don't see anyone else. I see a lot of talk about Terahertz. You know, I try to keep up with all the stuff that's going on the net, but I don't see anyone affirmatively indicating they are actually doing commercial. I mean, they may be selling to universities, but I don't see anyone else doing what you are doing in the industrial market. Is that fair or are there?

Jeff Anderson

That's absolutely correct. Some people do talk about selling to maybe a pharma, but it will be offline. It won't be on the factory floor. It will be in the lab type of thing, so we are the only ones that have deployed Terahertz on the factory floor real time to control the manufacturing process. We don't really control it. That's our VARs doing that within their software package and their scanning systems that they make.

Unidentified Analyst

Yes. I wish there was something you could put out that would affirmatively state that, because you know there's just so much information. As a result, this information that people don't know what the truth of the matter is, so unless you affirmatively tell us that's the situation as you understand that you know nobody knows, so - Let me ask you, are you in contact at all with any of the automotive industry. I know you went to the show in Detroit one-time.

Jeff Anderson

We went to the paint show. We really haven't talked to the OEMs we will call it directly. We are in dialogue with some component manufacturers. We have finished a contract for the F-35 program that is prototype to what we refer to as SPG or single point gauge. We will have hopefully some video next month on it that we can be putting on the website that shows the handheld device with a touch screen on it to measure multiple layers at the same time and there has been some interest in the gas tank manufacturers to manufacture plastic gas tanks that have multiple layers, including a [vapor] layer to ensure they have the proper thickness within corners and on flat surfaces of the blow molded gas tank, so yes we have had some dialogue, but there haven't been the early adopters that we have seen in other applications.

Unidentified Analyst

Let me ask you about the paper industry. You mentioned paper, you still haven't completed a contract sale as I understand in paper and I thought that was done a long time ago.

Jeff Anderson

We did. We sold our prior version of T-Ray 4000 to (Inaudible) that was over a year-and-a-half ago. We are still working with them, consulting with them and hopefully we will be able to expand to other people in the paper industry.

Unidentified Analyst

Then the big question is relates to the QPL or the qualified provider list, with TSA. Where are we in terms of that?

We have not gotten any notice whatsoever on that. You are at the mercy of the government and we are not a large enough company to have the lobbyists in place that can really help us to arrive at that, so we really haven't made any progress. From our perspective it's more of a holding pattern today. We are looking at potentially other options to take that to market and that one include maybe you know a strategic relationship out there, but we are in the evaluation phase of that.

Unidentified Analyst

Okay. Just enlighten me I don’t understand what the status is of API candidate. As I understand you have off-shored all word all the silicon-based line and so is there still an API candidate out there?

Jeff Anderson

The entity is there. It's in engineering facility and it's very unique in the fact that the Canadian government really wants to have engineering facilities there, so they provide very high tax credit for that against the salaries and so we have four, five engineers located in our little office up there.

They are the ones that are working on a lot of new product development force with this tunable light source's and some other products that we are developing, so it's really an adjunct engineering facility not a manufacturing production facility.

Unidentified Analyst

Can you tell us any more about the tunable light source, what that is?

Jeff Anderson

I can, but I am going to save it for the Shareholder Conference.

Unidentified Analyst

All right. Well, thank you. That's all I have.

Jeff Anderson

Okay. Thank you, Randy.

Operator

(Operator Instructions) We are showing no further questions at this time. I will turn it back to management for any closing remarks.

Jeff Anderson

While I don't have anything other to add other than to thank everybody for taking the time to listen to our report today, I appreciate for our entire team. We appreciate your continued support for our company and we are very focused on growing our revenues and increasing both, our non-GAAP and EBITDA and translating this into GAAP profits, so have a great week and holiday and thanks again.

Operator

Thank you again. That does conclude today's conference call. We appreciate your participation. You may now disconnect your lines.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Advanced Photonix's (API) CEO Richard Kurtz on Q4 2014 Results - Earnings Call Transcript
This Transcript
All Transcripts