Good afternoon. And welcome to the LightPath Technologies Quarterly Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Ms. Dorothy Cipolla, Chief Financial Officer and Corporate Vice President. Please go ahead.

Thank you and good afternoon. Welcome to the LightPath Technologies’ Fiscal 2015 First Quarter Financial Results Conference Call. Our call today will be hosted by Mr. Jim Gaynor, President and Chief Executive Officer. Following management's discussion, there will be a formal Q&A session open to participants on the call. Before we get started, I would like to remind you that during the course of this conference call, we will be making a number of forward-looking statements that are based on our current expectations and involve various risks and uncertainties that are discussed in our periodic SEC filings. Although, we believe that the assumptions underlying these statements are reasonable, any of them can prove to be inaccurate and there can be no assurance that the results will be realized. With that out of the way, it's now my pleasure to introduce Mr. Jim Gaynor, President and Chief Executive Officer of LightPath.

Thank you, Dorothy, and welcome to everyone who has joined us on the call today. We appreciate your interest in LightPath. I will open with an overview of operational results, highlights and recent developments, and then we will turn the call over to Dorothy for a more in-depth review of our financials. After some closing remarks, we will open the call to your questions. The first quarter of fiscal 2015 was marked by a continuation of the momentum gained in 2014, which was one of the most important years of progress for LightPath. Most notable, among our achievement is the sustained global demand for optical lenses and the traction for our new infrared products line. For the last several years our strategy is focused on investment and technology development to drive down the cost of production of our lenses, so that we can engage customers at lower price points. In turn, this will enable us to increase demand from a broad spectrum of industries around the world and to add production capacity as needed. While our prices for lenses would come down, our intent was to maintain if not increase our margin on this sale. As part of this strategy, increase investments were [year] (ph) mark for our new manufacturing facility in Zhenjiang, China. This facility is crucial to increasing our production capacity in the intermediate term and lowering our costs longer term. We invested approximately $2 million in fiscal 2014 and expanding our manufacturing capacity and purchasing new equipment. Personnel costs were more noticeably realized in the first quarter of 2015, particularly since our revenue was lower due to the delay by one quarter or a project for defense contractor. Therefore, our substantially lower gross margin for the first quarter is viewed as a temporary setback. As we perfected…

Thank you, Jim. First, I would like to mention that much of the information we are discussing during this call is also included in the press release issued earlier today and on Form 10-Q, which was filed today. I encourage you to visit our website at lightpath.com and specifically the section titled, Investor Relations where we’ve included the presentations that we’ve made at recent investor conferences. I’ll now review financial performance and operational details from our fiscal 2015 first quarter, which ended September 30, 2014. Revenue for the first quarter totaled $2.6 million, down 7% to $206,000 as compared with the same period last year. The difference in year-over-year sales is attributable to a decrease in sales of our precision molded lenses, primarily due to a delayed order from a major U.S. defense contractor. The order, as Jim mentioned, is on track to be fulfilled and recognize its revenue in the current quarter. Partially offsetting the lower optical lens revenue was an increase in sales of infrared and GRADIUM products. Our gross margin percentage for the first quarter was 38% as compared to 47% in the same period last year. Total manufacturing costs of $1.63 million increased by approximately $135,000 in the first quarter of fiscal 2015 compared to the same period last year, primarily due to higher wages. Wages were higher due to the ramp up in infrared production and the transition of production between our two China facilities with overlapping manufacturing workforces. As we noted in the fourth quarter, the addition of a second manufacturing facility in China increased our global occupancy by 67%, with commensurate increases in rents, electricity and overhead expenses. In the first quarter, we felt the impact of the new added manufacturing personnel. We anticipate our margin to improve as we take advantage of…

Thank you. (Operator Instructions) And our first question comes from John Nobile of Taglich Brothers. Please go ahead.

Hi. Good afternoon. Actually, your comments answered a couple of my questions but I have a few. Now you had mentioned that the HDOEI order, the 1 million lens order was expected by the end of -- now that’s calendar 2015, correct, not fiscal?

Correct, that’s when we expect to be -- to have shipped, John.

Okay.

I think it’s got to start shipping before that.

Okay. So going to start shipping before that. My next question is have any of these shipments begun because I know it was just in September. So I’m just curious how long it would take?

We haven’t -- we started producing it but the first shipments have not started yet. But they will start shortly.

Shortly being in this quarter, this current quarter Q2?

I do believe so. Yes.

Okay. And hold on -- that was answered. Oh yes, the gross margins, I just want to make sure because it was more than one issue there. Is there any more spillover into Q2 that we might see or -- I think Dorothy said that one particular issue was resolved. I just want to make sure that there is nothing still happening into Q2 that’s going to reflect gross margin. We could see them go back to mid to upper 40% range?

Yeah. John, I really think we will bounce right back, given the nature of the things that caused the drop. They all tend to be one-off type events. And we kind of had a perfect storm there, I think of things sliding. So but I do think there is nothing in there that’s systemic or that’s going to continue on an ongoing basis, that impacts that.

Okay.

Bounce right back.

On those parts, you could see, right now, no surprises for Q2. We should get back into the -- I mean, last year you did a 45.5% gross margin. So we should be looking to get back to that type of a margin level in….

Yes.

Okay. Just wanted to make sure there was nothing else falling into it. And yes, the backlog, you had mentioned, I just want to make sure. This should be satisfied within the next 12 months, this backlog?

Yeah, I mean, the backlog that we report which is about $5.3 million is product that is shippable in the next 12 months.

Okay. And a lot of that backlog, I would, imagine is in regard to the infrared camera order or other things?

I think it’s -- that's everything. I mean, certainly today, the majority of the backlog is precision-molded optics products. But the backlog on the infrared is growing quite rapidly.

I think on the last call you had mentioned that. I know, it was nice to see considering that you only had one month of the quarter in the uptake of the infrared camera sales and…

Okay.

That was up -- was it 47% which was September in there?

The growth from year-over-year was 47%.

Albeit of a small base but still for just one month of that in there….

Right.

I think last call you also alluded to the fact that anticipate from, I mean, not this quarter’s level but from prior quarter’s level, basically the infrared business doubling. I just want to make sure we are still in track for that?

Yes. We have a nice sales funnel filling right now that’s got several million dollars in it and it’s growing so. We will win all of that but we should win a good chunk of it. And so that funnel has got a lot of nice opportunities in it. And we certainly will take advantage of that.

Okay. But being just September, was the reason for the 47% increase. Now in this quarter, we have a full quarter three months work. So I would anticipate even further growth of your infrared business.

I think we expect the infrared business to continue to grow throughout the year. And I think that’s what we are anticipating. And I see no reason for that as we are into a production mode now.

Okay. Great and thanks for that ray of hope there because when I saw the numbers, I was like wow, wait a minute. I didn’t anticipate the drop but that sense order is in fact going in this quarter that 200 something thousand dollar order growth.

John, it continues -- the customer continues to tell us that they are expecting it. And as soon as we have it, it will go. So I don’t know I mean this is business. This isn’t a new project. It’s an ongoing project that we’ve participated in over the years. As far as we know, it’s funded. So we certainly expect and anticipate that order based on the information we are receiving from our customers.

Okay. Fair enough. Well that’s all I have. Thank you.

Thank you, John.

Our next question comes from [Michael Diet] (ph). Please go ahead.

Jim and Dorothy, just have a few follow-ups from the prior calls. And I wonder if you touch again on the projector business? Any new news on that?

I was over in China a few months ago. And I met with couple of our major customers there and that business still looks strong. And I think we anticipate that to grow as they have success. And Michael, they showed us some of their projectors. They showed us they had a big display setup for us. And this was one of their larger commercial projectors and it was shooting a picture that I think was about 16 feet wide and about 8 feet tall. And it had all of the different kinds of giraffes and birds and colors and you could see the hair twitching on giraffe’s neck. And the other thing that was amazing, you could walk right up to the screen such as -- may be I was an inch away and there was no distortion in the picture and it was absolutely phenomenal. But the thing that’s more exciting to me is when I went back and looked at the projector, I think there were like 350 diodes in it. So that means that one projector has about 350 lenses in it.

That’s really exciting. That’s great.

And this guy has got, he is doing a really good job. He’s built a whole brand new factory to build these things in China. And I think they are going to do very well. That’s a good business opportunity for us.

Great. You didn’t mention Europe. And its always been an interest of mine in these calls, any news?

Well, I think Europe has been weak, but we have been doing pretty well there. And I think we are expecting kind of a slow recovery there. Although we’ve done, okay. I think the forecast for Europe is going to start to recover, but at a very moderate pace I think. So I think we are holding our own basically.

Nothing really coming out of the trade fairs yet that’s substantial?

No. I mean its -- most of our dealings are through a master distributor AMS technology over there into…

Right, right.

And we’ve had some pretty good -- pretty solid performance for them over the last two quarters. So I think that continues which is encouraging given the macro economic outlook there.

Good. Then couple of other quickies. Thailand they are still recovering and moving ahead?

Yes. I mean we’ve gotten, we’ve actually booked some significant orders for that business that runs through there. So that business is starting to come back on line and that’s very encouraging for us.

When you last spoke, you mentioned some of the video as part of the Internet and telecommunications, any news on that front?

Not really. It’s a same story. I mean….

Okay.

….we are doing things with the major players there, that business is growing. It’s growing a little slower than I had anticipated but it is growing. But nothing is -- they still going to have to build out their networks and as long as that happens, then they are going to need equipment to do it and those are the guys who we are selling to. So that story has not changed and I don’t think the bandwidth demand and the mobile Internet theme has changed at all. So that’s continuing, particularly when guys like Apple sell 6 million phones in the first day so.

Okay. You mentioned at trade show and IR person, is this a new one or replacement from Jordan or I didn’t quite get that?

No. It’s a -- LD Micro is a small cap investor conference and we participated in for the last couple of years and we are intended to participate this December as well.

Okay. So it’s a separate thing from what Jordan does with you?

He coordinates with us but yes.

Great. No, no I just didn’t -- there is no new player.

No. No.

That’s only. Great. Well, I’m excited as always when I hear you and really hope the transition to the new factory continues on track. Thank you.

Thank you very much, Michael.

(Operator Instructions) Our next question comes from Steven Donovan. Please go ahead.

Hi, Jim and Dorothy.

Hi, Steven. How are you?

Hi Steve.

I’m doing good.

Good.

I have a question about wearables.

Okay. That’s not something that we are doing. I have much information about or nor do I. I don’t know of any specific opportunities that we are working on there yet.

In the Taglich report that John Nobile report, that’s beautifully written. It refers to an infrared application of changing blood clot and skin.

It’s more of a medical instrument type thing, where you can scan non-invasively, the body and see the body fluids moving through the veins and arteries. I mean, there are just so many kinds of applications for that technology that’s one of the exciting things about it.

So let me refer to the -- like the Apple Watch where there are sensors on the back of the watch and two infrared sensors, there are two visible light sensors.

I’m not familiar with that. Steven.

So that’s not something we use. You don’t have any -- you are not pursuing anything in that area at the moment?

No, no, we’re not. We’ve had meetings with Apple but on different kinds of subjects.

It seems like it’s quite a few of them.

Well, I tell you what I will look into it based on your input, but I will roughly do that.

Okay. Thank you, guys.

Thanks.

(Operator Instructions) And our next question comes from Robert Ainbinder of Newport Coast. Please go ahead.

Hi Jim. Hi Doherty.

Hey, Bob.

Hi, Bob.

I think I heard your comments a little bit about what I’m going to ask. I’m wondering if you can elaborate on the infrared thermal imaging camera market a little bit. I have seen some recent product releases from the likes of FLIR and another company. They’re coming out with the slip-on or add-on type products that done iPhones and Androids that turn those phones into thermal imaging cameras for I mean next to nothing compared to thermal imaging camera goes for. I believe they are $3500 to $5000 range and these things and these add-ons are turning the -- your smartphones into thermal imaging cameras $200 plus, I mean on the prices and price points. Can you elaborate on that marketplace?

Well, I mean, it’s certainly a marketplace of interest to us. We have met with the both of the companies that you’re referring to. So we made them aware of our capabilities and there is interest. So far that’s where it is, but that’s definitely a lead that we’re going to continue to follow, particularly with the second company, which I think is (indiscernible).

Yeah, that’s it. That’s the one.

That’s a very interesting application where I think they have a lot of interest in what we can do. They are kind of brand new outfit and they just released their product and they are a little bit overwhelmed with the response I think, which is a positive thing I think. And as soon as they get through that, I think we will have some serious discussions with what we can do with them. So we are following up on that application seriously.

Great. And as far as your infrared production capabilities, you have -- I believe you said that the Orlando facility is now ready for significant production. Can you elaborate on what type of production capabilities we currently have?

Well, I mean, we have the bulk of production capability in place to do the volumes that we have in our forecast and the kind of demand that we’re building to. So that we’re fully capable from all the way from the fact that we now produce our own glass and we put that capability in place. We do our preform preparation pressings, so we have a completely integrated process now. And I think vertically integrated so that we can maintain the quality of the product as well as it gives us cost advantage. So, that whole process has been put in place. We are coming up to the learning curve with the new operators and things of that nature. And we’re making very good progress along that line. And so I am quite pleased with the capability that we have. And we’re ready to take on the business that we see coming. We have certain demand that on the books that we’re currently building and that’s going quite well now.

Okay. And last question. You actually had laid out quite a while ago the advent of a host of new commercial products that will be coming into play in the infrared space. And it looks like you were dead-on with that prediction as we’re seeing a proliferation of the whole host of infrared applications in all kinds of different areas including automobile space. Can you talk about maybe more pr give us some color as to the different markets that you’re currently looking at and areas that you might be working with or talking with companies that could become potential customers?

Well, right now, Bob, there are four areas that we believe we will be growing quite rapidly in that space. One is the automotive as you mentioned, then the surveillance type things, with the surveillance cameras and those kinds of applications is a second, some thermography type applications where it’s like you’re looking for hotspots or wetspots, building maintenance type thing, that type of application, and then the fourth one is this personnel device thing with that we just discussed with these, add-on devices that turn your smartphones into a thermal imaging device. So those are four areas. Those four areas are forecasted to have growth rate of around 25% compounded annually. We are talking with customers in all four of those spaces and we are in production with a couple of them doing devices like firefighting cameras that are more for the individual fireman as oppose to special type camera. And so those are the major things. We are also working in the automotive area, but that’s much longer term, I think, because of the long qualification cycles, but we’re involved to that and some future generations of product. So, I think, there are number of those things. We’re starting discussions with some of the security camera type, surveillance type people as well and there is some very large opportunities there that I think will be able to participate in. So I think, right now we are engaged with about 11 different customers that some were in production with others. We’re in design talks with and others were in the beginning stages of what our capabilities are. So it’s a nice spectrum, it’s a growing area and I am quite pleased with the progress we’re making.

Okay. Actually, I have one more question. As we put this quarter behind us and obviously, we had some issues this quarter. As we look forward, do you see our revenue snapping back to prior levels, as well as those margins?

I do, Bob, because I think, as I said, we had record bookings, even though the revenue fell short in Q1, the bookings were at record levels and so we booked $3.5 million in Q1. We’re having strong booking so far in this current quarter. So things are looking pretty positive from that standpoint, so I do expect our revenues levels to come back and continue to grow.

Okay. Great. Thank you very much, Jim. Thanks, Dorothy.

Thanks.

(Operator Instructions) Since I am not showing any more questions, I would like to turn the conference back over to Jim Gaynor for any closing remarks.

Thank you, Dan. In conclusion, we appreciate the support of our shareholders and the dedication of our global team at LightPath. Collectively, I believe, we share a vision for providing unique, optical and infrared products to large market segments. Our demand creation model of engineering low costs, highly technical products to stimulate market opportunity is delivering its intended results. These are exciting times and we’re very encouraged by the company’s outlook for continued expansion. Thanks again and we look forward to speaking to you with -- next quarter.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.