February 9, 2010 (FinancialWire) (Investrend Forums Syndicate) (By Gary Vassalotti, LIFA) — LightPath Technologies, Inc.’s (NASDAQ: LPTH) strategy of lowering product manufacturing costs and increasing sales volume has resulted in an increase in its gross margins to 27% (9/30/08) vs. 10% (9/30/07). That dramatic increase was achieved with an increase in sales, which went from $2.308 mm (9/07) to $2.337 mm (9/08), an increase of over 25%.

In my prior post (http://www.investrendweblogs.net/vassalotti/2010/02/03/lightpath-specific-products-few-specific-competitors/) we briefly discussed markets. I estimated that the market for LPTH’s lens product was close to the $77 million dollar Electrical Equipment Supplies subcategory.

During the company’s Q2 ’10 results conference call (at http://www.investorcalendar.com/IC/ClientPage.asp?ID=154437), however, LPTH estimated its market segment for Asphere lenses to grow to $1.5 billion over the next five years. This is a much bigger pond to play in, and, if the projections are accurate, should allow the company to generate future sales growth. The Asphere market’s growth was broken-down as 50% in the cell phone arena, 40% from digital still cameras, and 105% growth in the laser projector and thermal imaging segment. Furthermore, LPTH’s growth in those markets should not cause as significant an increase in costs, because their China factory is currently running at only 25% of capacity.

Unlike many small firms, LightPath’s quick ratio of 2.13 indicates good financial stability. The quick ratio is an indicator of short term liquidity and the company’s ability to pay its bills over the next year. LightPath’s number means the company has the ability to repay twice its current short term liabilities amount. Too many small firms end up having to issue stock or debt just to survive during the following year, often at fire sale prices. A quick ratio of 2.13 greatly reduces any perceived need to urgently raise funds.

All-in-all, it was a good quarter that shows a positive potential for further growth in sales and profitability. Investors may wish to do further research into this firm to determine a price target and investment suitability for their portfolios.

Source: Investrend Weblogs (http://www.investrendweblogs.net/vassalotti/2010/02/08/lightpath-posts-a-high-performance-quarter/)

Gary Vassalotti, LIFA, is president of Vimcor, an equity analysis and portfolio management practice, as well as a contributing equity research analyst for Investrend Research. He previously worked with First American Bank, NA, First Union National Bank, and Montag Management, and has an overall interest in global markets. Mr. Vassalotti is a member of the North Carolina Society of Financial Analysts, the CFA Institute, and the North Carolina Investment Advisors Association (and was a former board member). Mr. Vassalotti has a B.S. in Finance with an emphasis in Economics from The Pennsylvania State University.

FinancialWire(tm) is committed to serving the financial community through true journalism and providing relevant resources to investors. Standards-based, independent equity research on numerous public companies is available through the Investrend Research Syndicate (http://www.investrend.com/reports) written by FIRST Research Consortium (http://www.investrend.com/FIRST) member-providers. Free annual reports and company filings for companies mentioned in the news are available through the Investrend Information Syndicate (at http://investrend.ar.wilink.com/?level=279). FinancialWire(tm), in cooperation with the Investrend Broadcast Syndicate, also provides complete, daily conference call and webcast schedules as a service to shareholders and investors via the FirstAlert(tm) Network’s “FirstAlert(tm) Daily” (http://www.financialwire.net/news-alerts/).

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation for its news, opinions or distributions. Further disclosure is at the FinancialWire(tm) website  (http://www.financialwire.net/disclosures.php). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.