Inrad Optics, Inc. Reports Financial Results For Second Quarter And Six Months 2013

NORTHVALE, N.J., Aug. 19, 2013 /PRNewswire/ -- Inrad Optics, Inc. (OTC Bulletin Board: INRD) has reported its consolidated financial results for its second quarter and six months ended June 30, 2013.

Revenue for the second quarter was $2.7 million, down 6.4% from $2.9 million in the same period last year.  For the six months ended June 30, 2013, revenue of $5.8 million was up slightly compared to $5.7 million for the comparable period last year.

Orders were $2.7 million and $4.8 million for the three and six months ending June 30, 2013, down 19.3% and 23.8% compared to the respective periods last year. Orders from longtime aerospace and defense customers continued to decline, and were off a total of 15% as compared to the same period in 2012.

Gross profit for the second quarter was $308,000 or 11.4% of sales, down from $567,000 or 19.7% in the comparable quarter last year.  For the six months ended June 30, 2013, gross profit decreased to $1 million or 17.4% of sales compared to $1.3 million or 22.9% in 2012. The 2013 decrease in gross profit margin primarily reflects a less profitable sales mix compared to 2012 as well as the impact of the Company's relatively fixed overhead structure.  Sales to the Company's top five customers represented approximately 34% of sales in six months ended June 30, 2013, down from 43% last year.

The net loss was $648,000 and $817,000 for the three and six months ended June 30, 2013. This compares with a net loss of $333,000 and $482,000, in the comparable periods last year.  The Company had a net loss per share of $0.05, basic and diluted, for the three months ended June 30, 2013 compared to a net loss of $0.03 last year.  For the six months ended June 30, 2013 and 2012, the basic and diluted net loss per share was $0.07 and $0.04, respectively. 

Net cash used in operating activities was $134,000 for the six months ended June 30, 2013 compared to net cash used of $96,000  last year.  The difference mainly reflects the impact of a higher net loss in the six months ended June 30, 2013 offset by a $200,000 decrease in inventory during the current period.  For the six months ended June 30, 2013, the lower net loss was negatively impacted by an increase of $413,000 in inventory. 

Investing activities in the six months ended June 30, 2013 included final payment of $325,000 on the purchase of a plasma assist optical coating chamber and related expenditures for additional equipment and installation of $92,000.  The coating chamber became operational in the second quarter of 2013.

After investing and financing activities, net cash decreased by $624,000 versus a decrease of $277,000 in net cash last year.  At June 30, 2013, the Company had cash and cash equivalents of $2.5 million

President and CEO, Amy Eskilson commented, "Following on my remarks last quarter, our second quarter and year-to-date results continue to reflect the impact of planned cuts to defense spending under the 2011 Budget Control Act, as well as the burden of additional cuts as part of the 2013 budget sequestration.   Despite these challenges, we saw a modest increase in year-to-date sales over the same period last year.  The sales mix included a number of orders with up-front development costs.  However, we believe this work presents significant future opportunity.  Our recent investment in new coating capabilities is showing early promise and we continue to execute on focused operational initiatives.  With this said, we still see a challenging path forward for the remainder of 2013."

Inrad Optics, Inc. (formerly Photonic Products Group, Inc.) was incorporated in New Jersey in 1973. In January 2012, the Company's Board of Directors and shareholders approved the name change to Inrad Optics, Inc. The Company develops, manufactures and markets products and services for use in photonics industry sectors via three distinct but complimentary product areas -   "Crystals and Devices", "Custom Optics" and "Metal Optics."

The Company is a vertically integrated organization specializing in crystal-based optical components and devices, custom optical components from both glass and metal, and precision optical and opto-mechanical assemblies.  Manufacturing capabilities include solution and high temperature crystal growth, extensive optical fabrication capabilities, including precision diamond turning and the ability to handle large substrates, optical coatings and in-process metrology expertise.    Inrad Optics' customers include leading corporations in the defense, aerospace, laser systems, process control and metrology sectors of the photonics industry, as well as the U.S. Government, National Laboratories and Universities worldwide.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this press release that are not purely historical are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These statements may be identified by their use of forward-looking terminology such as "believes", "expects", "should", "will", "plan", "anticipate", "probably", "targeting" or similar words.  Such forward-looking statements, such as our expectation for revenues, new orders, and improved results involve risks and uncertainties that could cause actual results to differ materially from those projected. Risks and uncertainties that could cause actual results to differ materially from such forward looking statements are, but are not limited to, uncertainties in market demand for the company's products or the products of its customers, future actions by competitors, inability to deliver product on time, inability to develop new business, inability to retain key employees or hire new employees, and other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended December 31, 2012. The forward looking statements made in this news release are made as of the date hereof and Inrad Optics, Inc. does not assume any obligation to update publicly any forward looking statement.

www.inradoptics.com

 

INRAD OPTICS, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS




June 30,


December 31,




2013


2012




(Unaudited)


(Audited)








Assets






Current assets:






Cash and cash equivalents


$

2,465,145


$

3,089,013


Accounts receivable (net of allowance for doubtful accounts of $15,000 in

     2013 and 2012)


1,372,270


1,557,930


Inventories, net


3,396,253


3,596,646


Other current assets


111,945


158,742


         Total current assets


7,345,613


8,402,331


 

Plant and equipment:






Plant and equipment,  at cost


16,124,802


15,446,826


Less: Accumulated depreciation and amortization


(14,133,460)


(14,182,712)


         Total plant and equipment


1,991,342


1,264,114


 

Precious Metals


474,960


474,960


Goodwill


311,572


311,572


Intangible Assets, net


398,042


437,324


Other Assets


34,838


534,838


 

Total Assets


$     10,556,367


$   11,425,139








Liabilities and Shareholders' Equity






Current Liabilities:






Current portion of other long term notes


$

150,200


$

150,200


Accounts payable and accrued liabilities


787,526


813,705


Customer advances


184,739


297,251


         Total current liabilities


1,122,465


1,261,156








Related Party Convertible Notes Payable


2,500,000


2,500,000








Other Long Term Notes, net of current portion


794,966


869,135


         Total liabilities


4,417,431


4,630,291








Commitments












Shareholders' Equity:






Common stock: $.01 par value; 60,000,000 authorized shares; 

     12,050,603 shares issued at June 30, 2013 and 11,881,724

     issued at December 31, 2012


120,508


118,819


Capital in excess of par value


18,236,035


18,076,518


Accumulated deficit


(12,202,657)


(11,385,539)




6,153,886


6,809,798


Less - Common stock in treasury, at cost (4,600 shares)


(14,950)


(14,950)


         Total shareholders' equity


6,138,936


6,794,848


 

Total Liabilities and Shareholders' Equity


$

10,556,367


$

11,425,139



 



INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)




Three Months Ended June 30,


     Six Months Ended June 30,




2013


2012


2013


2012












Total revenue


$

2,694,598


$

2,880,448


$

5,771,724


$

5,721,129












Cost and expenses:










Cost of goods sold


2,386,866


2,312,614


4,764,894


4,413,339


Selling, general and administrative expenses


909,664


864,804


1,763,472


1,719,093




3,296,530


3,177,418


6,528,366


6,132,432












Loss from operations


(601,932)


(296,970)


(756,642)


(411,303)












Other expense:










Interest expense—net


(45,832)


(36,113)


(91,476)


(70,739)


Gain on sale of plant and equipment




31,000





(45,832)


(36,113)


(60,476)


(70,739)












Net loss before income taxes


(647,764)


(333,083)


(817,118)


(482,042)












Income tax (provision) benefit
















Net loss


$

(647,764)


$

(333,083)


$

(817,118)


$

(482,042)



Net loss per common share—

     basic and diluted


$

(0.05)


$

(0.03)


$

(0.07)


$

(0.04)



Weighted average shares outstanding—

     basic and diluted



12,046,003



11,875,874



11,926,328



11,786,207


 

 

INRAD OPTICS, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




Six Months Ended

June 30,



2013


2012






Cash flows from operating activities:





Net (loss)


$

(817,118)


$

(482,042)






Adjustments to reconcile net (loss) to net cash 

  (used in) operating activities:





Depreciation and amortization


259,094


319,576

401K common stock contribution


80,922


151,775

(Gain) on sale of plant and equipment


(31,000)


Stock based compensation


80,284


106,646

Changes in operating assets and liabilities:





       Accounts receivable


185,660


233,291

        Inventories, net


200,393


(413,289)

        Other current assets


46,797


64,540

        Accounts payable and accrued liabilities


(26,180)


(30,973)

        Customer advances


(112,512)


(45,803­)

        Total adjustments and changes


683,458


385,763

        Net cash (used in) operating activities


(133,660)


(96,279)






Cash flows from investing activities: 





Capital expenditures


(447,039)


(180,832)

Proceeds from sale of plant and equipment


31,000


Net cash (used in) investing activities


(416,039)


(180,832)






Cash flows from financing activities:





Proceeds from exercise of stock options



5,349

Principal payments on notes payable-other


(74,169)


(4,844)

Net cash (used in) provided by financing activities


(74,169)


505






Net (decrease) in cash and cash equivalents


(623,868)


(276,606)






Cash and cash equivalents at beginning of period


3,089,013


3,400,205






Cash and cash equivalents at end of period


$

2,465,145


$

3,123,599








Supplemental Disclosure of Cash Flow Information:







         Interest paid


$

59,000


$

82,000

         Income taxes paid


$

2,000


$

5,000

 

 

SOURCE Inrad Optics, Inc.

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