ORLANDO, Fla. - LightPath Technologies, Inc. (NASDAQ: LPTH), a provider of advanced optics and imaging systems, announced today it has received an initial development contract from a new European defense customer. The contract involves the use of the company’s proprietary BlackDiamond glass for prototype optical systems.
The BlackDiamond glass, made from LightPath’s exclusive BlackDiamond™ Chalcogenide material, has completed qualification with the customer and is expected to be integrated into next-generation optical systems. LightPath anticipates that successful development could lead to larger, recurring orders.
President and CEO Sam Rubin remarked on the significance of the contract in light of the company's recently acquired European Defense license, which allows LightPath to supply to the European defense market. Rubin highlighted the EU defense market's growth to $295 billion in 2023, up 12.5% from the previous year, and the potential for LightPath’s increased participation in this expanding market.
The company has scaled back its Germanium operations over the past year to increase the production of BlackDiamond materials, which are noted for their secure supply chain and higher margin profile. LightPath has also expanded its manufacturing capabilities at its facility in Latvia, in preparation for expected growth in European defense sales.
LightPath Technologies, headquartered in Orlando, Florida, with additional facilities in Texas, Latvia, and China, specializes in custom solutions ranging from BlackDiamond™ chalcogenide-based glass materials to complete infrared optical systems and thermal imaging assemblies.
This development contract serves as a stepping stone for LightPath into the European defense sector, with the potential for future growth contingent on the success of the prototypes. The information for this article is based on a press release statement from LightPath Technologies.
In other recent news, LightPath Technologies has been making significant strides in its operations. The company has secured Phase 2 funding from the U.S. Department of Defense to further qualify additional variants of its Black Diamond chalcogenide glasses, which could potentially replace germanium in defense applications. In addition, LightPath has received a $0.5 million order from a new tier-1 defense customer for its thermal imaging assemblies, highlighting the market's acceptance of its proprietary BlackDiamond glass optics.
The company also secured a $3.5 million follow-on order for advanced infrared optics for the F-35 combat aircraft program, demonstrating the increasing demand for LightPath's technology. Despite a decline in its fiscal fourth quarter 2024 revenue to $8.6 million from $9.7 million year-over-year, the company's infrared components business accounted for 44% of total revenue. LightPath also reported a net loss of $2.4 million, compared to a $0.8 million loss in the previous year.
Analysts note that LightPath is transitioning from a component supplier to a systems provider, with 20% of revenue now coming from new product lines. The company has secured significant developments such as a sole-source design win for a new infrared imaging system and a project with Lockheed Martin (NYSE:LMT), which are expected to significantly increase annual revenue. For fiscal 2025, LightPath anticipates low double-digit growth. Despite challenges, LightPath continues to focus on innovation and market opportunities.
InvestingPro Insights
LightPath Technologies' recent contract win aligns with its strategic focus on the defense sector, particularly in Europe. This move could be crucial for the company's future growth, especially considering its recent financial performance. According to InvestingPro data, LightPath's revenue for the last twelve months as of Q4 2023 stood at $31.73 million, with a revenue growth of -3.67% over the same period. This new contract could potentially help reverse this trend.
InvestingPro Tips highlight that LightPath has shown a strong return over the last month, with a 26.5% price total return. This recent performance might reflect market optimism about the company's strategic moves, including this new European defense contract. Additionally, the tip indicating that LightPath's liquid assets exceed short-term obligations suggests the company has the financial flexibility to invest in new opportunities like the BlackDiamond glass development.
It's worth noting that analysts do not anticipate the company to be profitable this year, as per another InvestingPro Tip. This underscores the importance of contracts like the one announced, which could pave the way for larger, recurring orders and potentially improve the company's profitability outlook.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide a fuller picture of LightPath's financial health and growth prospects. In fact, InvestingPro lists 6 additional tips for LPTH, which could be valuable for those looking to delve deeper into the company's potential.
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