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LightPath Technologies announces corporate realignment and the closure of its Albuquerque facility in favor of new Orlando HQ
June 28, 2002
ALBUQUERQUE, N.M. -- LightPath Technologies, Inc. (Nasdaq: LPTH), manufacturer and integrator of families of high performance fiber optic components for the telecom industry, announced plans to realign the Company and the consolidation of its corporate headquarters and manufacturing facilities in Albuquerque, New Mexico to Orlando, Florida. Robert Ripp, Chairman of the Board of Directors of LightPath, said, "The current quarter will not meet our previously announced revenue and cash flow expectations. While there were some sales execution issues, telecom industry demand in the current quarter for LightPath lens products has fallen off sharply. The industry lens demand in ensuing quarters remains very uncertain. The outlook for LightPath's integrated platforms is stable and we can see opportunities to increase our offerings and to broaden our customer base. We believe the actions that we are announcing will: increase our cost competitiveness and accelerate our time to market in our optical lens business; provide for investments in new areas of revenue opportunity; and increase our financial flexibility to ensure we achieve and sustain a positive cash flow position. The Company remains committed to being operationally cash flow positive for the quarter ending December 31, 2002 and with these actions the Company will enter 2003 with approximately $8 million of cash on the balance sheet and we expect all of calendar 2003 to be cash flow positive." The Company is realigning its business into three operating groups: the Optical Lens Group; the Laser Component Group; and the Optical Integration Group. Dennis Yost, Senior Vice President of the newly formed Optical Lens Group, will manage the collimator and aspheric lens product lines. Yost commented: "A single site will bring a sharper focus, a reduction in duplicate process engineering resources and a higher capacity utilization to significantly improve the cost competitiveness of our products. As part of our initiative, we will aggressively extend our offerings to non-telecom business segments. We expect to complete the transfer by September 30, 2002 and once fully implemented we expect to save approximately $1.8 million of expenses per quarter. We will eliminate approximately 66 positions in Albuquerque and we estimate total restructuring and asset impairments charges will range from $3.9 million to $4.3 million for closure costs (of which approximately $1.7 million will be cash charges) relating to employee severance costs, lease termination fees and asset impairments which will be recorded during the quarters ending June 30, 2002 and September 30, 2002. In addition, we estimate non-cash charges of approximately $1.7 million related to write downs for certain finished goods and raw materials inventory and the impairment of manufacturing equipment will also be reported in the quarter ending June 30, 2002." As part of this realignment, to increase our focus on the fiber optic innovation trends, and leveraging LightPath's capabilities and technologies, Dr. Jean-Luc Nogues has been named Senior Vice President and Chief Technology Officer. All members of this new organization will report to Ken Brizel, CEO and President, who will assume his new responsibilities July 8, 2002. In addition, the activities of Vice President of Sales (Ken Brizel will be acting Vice President of Sales as the position is currently vacant) and the CFO will report to Mr. Brizel. LightPath Technologies Inc.
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