Attached files
| file | filename |
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| 8-K - Inrad Optics, Inc. | v217474_8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Monday, April 4, 2011
Source: Photonic Products Group, Inc.
PHOTONIC PRODUCTS GROUP, INC. (“PPGI”) RELEASES FY 2010 FINANCIAL RESULTS
NORTHVALE, NJ, April 4 – Photonic Products Group, Inc. (OTC Bulletin Board: PHPG) has released its consolidated financial results for the year ended December 31, 2010.
The Company ended the year with fourth quarter sales of $3.6 million, an increase of 22% from $2.95 million in the corresponding quarter of 2009. Sales for the year were $11.05 million, unchanged from 2009.
Bookings for 2010 were $12.3 million compared to $9.5 million, or 29% higher than 2009. The company booked $3.4 million in new orders in the fourth quarter of 2010, up from $3.1 million in the in the fourth quarter of 2009. Year-end backlog was $5.4 million versus $4.4 million at the end of 2009, or a 23% improvement.
Net income, applicable to common shareholders was $471,000 for the fourth quarter of 2010, versus a net loss of ($26,000), for the fourth quarter 2009. Fourth quarter earnings per share were $0.04 basic and diluted versus $0.00 in 2009.
For the year ended December 31, 2010, the Company’s net loss was ($734,000). In 2009 the Company reported a net loss of ($2.8) million which included a non-cash goodwill impairment charge of $1.6 million. Excluding the impairment charge last year, net loss was ($1.2) million. For 2010, basic and diluted net loss per share was ($0.06) versus a net loss of ($0.25) per share in 2009.
As a result of stronger fourth quarter sales, gross profit increased by 63% to $1.22 million or 33.9% of sales, up from $747,000 or 25.3%, of sales in the fourth quarter of 2009. For 2010, gross profit improved to $2.5 million or 22.7% of sales versus $2.2 million or 19.5% of sales, in 2009.
EBITDA1 for 2010 was $514,000 compared to EBITDA of ($1.5) million in 2009. Excluding the $1.6 million goodwill impairment charge, which the Company recorded in the third quarter of 2009, adjusted EBITDA2 for 2009 was $10,000.
During the year, management maintained tight control over discretionary expenses, selectively invested in capital expenditures and focused on cash conservation. Net cash flow from operating activities in 2010 was $576,000, down from $815,000 in 2009. Cash flow in 2010 was negatively impacted by fourth quarter increases in accounts receivable balances, reflecting higher sales in the period, offset by increases in accounts payable and customer advance balances at the end of 2010. Although the Company incurred losses in 2010, PPGI ended the year with a stronger cash position, of $4.4 million, up $296,000, versus $4.1 million, at the end of 2009.
Joe Rutherford, President and CEO of PPGI stated, “Although we have continued to deal with the lingering effects of a depressed economy in the markets we serve, which has negatively affected our performance for the past two years, our 2010 results are encouraging. Our 2010 fourth quarter results were particularly positive as sales were the highest since the fourth quarter of 2008. In addition, bookings of $3.4 million in our fourth quarter, followed strong third quarter bookings of $4.6 million. This represents the two highest bookings quarters since the first quarter of 2008. The optimism I have previously expressed has been borne out by our 2010 results. I feel confident that our focus on internal process improvement, adding engineering resources, new product development, and increased customer focus domestically and internationally, as well as selective and strategic investment in capital equipment will position us for success as our markets continue to rebound and demand for our products grows."
1, 2 Note Regarding Use of Certain Non-GAAP Financial Measures:
The Company defines EBITDA1 as (loss) earnings before non-cash, stock-based compensation, net interest, income taxes, depreciation, and amortization. Adjusted EBITDA2 is calculated by excluding the goodwill impairment charge from the EBITDA results. EBITDA and adjusted EBITDA are presented herein because we consider these numbers an important measure of the Company’s ability to internally fund capital expenditures and service debt. EBITDA and adjusted EBITDA should not be considered an alternative to cash flow as an indicator of the Company’s financial performance, or liquidity. The reader is referred to the Supplemental Financial Data set forth below for a reconciliation of net (loss) income to EBITDA.
The reconciliation follows:
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Years ended December 31,
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Reconciliation of EBITDA and adjusted EBITDA to Net Loss
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2010
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2009
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(In thousands)
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||||||||
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Net (loss), as reported
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$ | (734 | ) | $ | (2,800 | ) | ||
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Interest expense, net
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138 | 131 | ||||||
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Depreciation and amortization
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942 | 1,008 | ||||||
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Non-cash, stock-based compensation
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168 | 113 | ||||||
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EBITDA
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$ | 514 | $ | (1,548 | ) | |||
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Goodwill impairment charge
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— | 1,558 | ||||||
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Adjusted EBITDA
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$ | 514 | $ | 10 | ||||
Founded in 1973, Photonic Products Group, Inc. develops, manufactures, and markets products and services for use in a diverse Photonics industry via three brand names INRAD, Laser Optics (“LOI”) and MRC. INRAD specializes in crystal-based optical components, optical devices, laser accessories and instruments. LOI specializes in custom optical components, assemblies, and optical coatings. MRC specializes in custom diamond turned metal and crystalline optics, and opto-mechanical and electro-optical assemblies. PPGI’s customers include leading corporations in the Defense, Aerospace, Laser System manufacturers, Process Control system manufacturers in the Photonics Industry marketplace. PPGI products are used directly by researchers within U.S. Government supported laboratories, National/International Research Laboratories and Universities world-wide.
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, 2010. The forward looking statements made in this news release are made as of the date hereof and Photonic Products Group, Inc. does not assume any obligation to update publicly any forward looking statement.
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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December 31,
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2010
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2009
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Assets
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Current assets:
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Cash and cash equivalents
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$ | 4,365,045 | $ | 4,069,310 | ||||
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Accounts receivable (after allowance for doubtful accounts of $15,000 in 2010 and 2009)
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2,224,592 | 1,927,672 | ||||||
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Inventories, net
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2,390,876 | 2,265,973 | ||||||
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Other current assets
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119,243 | 164,081 | ||||||
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Total Current Assets
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9,099,756 | 8,427,036 | ||||||
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Plant and equipment:
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Plant and equipment at cost
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14,879,508 | 14,604,728 | ||||||
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Less: Accumulated depreciation and amortization
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(12,876,163 | ) | (12,016,247 | ) | ||||
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Total plant and equipment
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2,003,345 | 2,588,481 | ||||||
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Precious Metals
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157,443 | 157,443 | ||||||
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Deferred Income Taxes
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408,000 | 408,000 | ||||||
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Goodwill
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311,572 | 311,572 | ||||||
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Intangible Assets, net of accumulated amortization
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594,452 | 673,016 | ||||||
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Other Assets
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47,235 | 45,192 | ||||||
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Total Assets
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$ | 12,621,803 | $ | 12,610,740 | ||||
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Liabilities and Shareholders’ Equity
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Current Liabilities:
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Current portion of notes payable -other
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$ | 9,000 | $ | 9,000 | ||||
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Accounts payable and accrued liabilities
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836,190 | 657,650 | ||||||
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Customer advances
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441,987 | 346,429 | ||||||
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Total Current Liabilities
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1,287,177 | 1,013,079 | ||||||
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Related Party Convertible Notes Payable
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2,500,000 | 2,500,000 | ||||||
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Accrued Interest on Related Party Convertible Note Payable
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1,125,000 | 975,000 | ||||||
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Notes Payable – Other, net of current portion
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335,874 | 344,946 | ||||||
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Total Liabilities
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5,248,051 | 4,833,025 | ||||||
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Commitments
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Shareholders’ equity:
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Common stock: $.01 par value; 60,000,000 authorized shares 11,562,656 issued at December 31, 2010 and 11,443,347 issued at December 31, 2009
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115,626 | 114,433 | ||||||
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Capital in excess of par value
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17,402,528 | 17,073,871 | ||||||
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Accumulated deficit
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(10,129,452 | ) | (9,395,639 | ) | ||||
| 7,388,702 | 7,792,665 | |||||||
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Less - Common stock in treasury, at cost (4,600 shares)
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(14,950 | ) | (14,950 | ) | ||||
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Total Shareholders’ Equity
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7,373,752 | 7,777,715 | ||||||
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Total Liabilities and Shareholders’ Equity
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$ | 12,621,803 | $ | 12,610,740 | ||||
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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Years Ended December 31,
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2010
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2009
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2008
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Revenues
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Net sales
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$ | 11,054,178 | $ | 11,051,127 | $ | 16,301,209 | ||||||
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Cost and expenses
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Cost of goods sold
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8,545,153 | 8,896,539 | 11,486,620 | |||||||||
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Selling, general and administrative expense
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3,105,063 | 3,278,161 | 3,857,805 | |||||||||
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Goodwill Impairment
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— | 1,558,074 | — | |||||||||
| 11,650,216 | 13,732,774 | 15,344,425 | ||||||||||
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Operating (loss) income
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(596,038 | ) | (2,681,647 | ) | 956,784 | |||||||
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Other income (expense)
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Interest expense, net
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(137,775 | ) | (130,387 | ) | (170,476 | ) | ||||||
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Gain on sale of plant and equipment
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— | 4,671 | 9,113 | |||||||||
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Gain on sale of precious metals
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— | 7,371 | — | |||||||||
| (137,775 | ) | (118,345 | ) | (161,363 | ) | |||||||
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(Loss) income before income taxes
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(733,813 | ) | (2,799,992 | ) | 795,421 | |||||||
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Income tax benefit (provision)
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— | — | 303,000 | |||||||||
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Net (loss) income
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$ | (733,813 | ) | $ | (2,799,992 | ) | $ | 1,098,421 | ||||
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Net (loss) income per share - basic
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$ | (0.06 | ) | $ | (0.25 | ) | $ | 0.10 | ||||
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Net (loss) income per share - diluted
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$ | (0.06 | ) | $ | (0.25 | ) | $ | 0.08 | ||||
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Weighted average shares outstanding - basic
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11,522,297 | 11,331,258 | 10,902,061 | |||||||||
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Weighted average shares outstanding – diluted
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11,522,297 | 11,331,258 | 15,619,304 | |||||||||
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Years Ended December 31,
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2010
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2009
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2008
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Cash flows from operating activities:
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Net (loss) income
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$ | (733,813 | ) | $ | (2,799,992 | ) | $ | 1,098,421 | ||||
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Adjustments to reconcile net (loss) income to net cash provided by operating activities:
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Depreciation and amortization
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941,941 | 1,008,310 | 1,059,741 | |||||||||
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Goodwill impairment charge
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— | 1,558,074 | — | |||||||||
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401K common stock contribution
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154,535 | 179,068 | 160,180 | |||||||||
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Accrued interest on Related Party Convertible Note Payable
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150,000 | 150,000 | 150,000 | |||||||||
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Deferred income taxes
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— | — | (408,000 | ) | ||||||||
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Gain on sale of plant and equipment
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— | (4,671 | ) | (9,113 | ) | |||||||
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Gain on sale of precious metal
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— | (7,371 | ) | — | ||||||||
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Stock-based compensation expense
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168,054 | 112,950 | 88,417 | |||||||||
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Change in inventory reserve
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(154,326 | ) | 94,628 | 302,511 | ||||||||
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Changes in operating assets and liabilities:
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||||||||||||
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Accounts receivable
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(296,920 | ) | 882,930 | (628,743 | ) | |||||||
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Inventories
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29,423 | 371,735 | (103,767 | ) | ||||||||
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Other current assets
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44,838 | 24,003 | (24,019 | ) | ||||||||
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Other assets
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(2,043 | ) | 34,107 | 7,865 | ||||||||
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Accounts payable and accrued liabilities
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178,540 | (678,015 | ) | (731,301 | ) | |||||||
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Customer advances
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95,558 | (110,325 | ) | (413,796 | ) | |||||||
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Total adjustments
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1,309,600 | 3,615,423 | (550,025 | ) | ||||||||
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Net cash provided by operating activities
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575,787 | 815,431 | 548,396 | |||||||||
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Cash flows from investing activities:
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Proceeds (purchase) of certificates of deposit
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— | 800,000 | (800,000 | ) | ||||||||
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Purchase of plant and equipment
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(278,241 | ) | (210,563 | ) | (784,534 | ) | ||||||
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Purchase of precious metals
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— | (53,538 | ) | — | ||||||||
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Proceeds from disposal of plant and equipment
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— | 4,671 | 10,000 | |||||||||
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Proceeds from disposal of precious metals
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— | 16,317 | — | |||||||||
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Net cash (used in) provided by investing activities
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(278,241 | ) | 556,887 | (1,574,534 | ) | |||||||
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Cash flows from financing activities:
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Net proceeds from issuance of common stock
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7,261 | 161,514 | 1,064,357 | |||||||||
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Principal payments of notes payable-other
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(9,072 | ) | (136,609 | ) | (14,989 | ) | ||||||
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Principal payments of convertible promissory notes
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— | — | (1,700,000 | ) | ||||||||
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Principal payments of capital lease obligations
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— | — | (47,088 | ) | ||||||||
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Net cash (used in) provided by financing activities
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(1,811 | ) | 24,905 | (697,720 | ) | |||||||
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Net increase (decrease) in cash and cash equivalents
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295,735 | 1,397,223 | (1,723,859 | ) | ||||||||
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Cash and cash equivalents at beginning of the year
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4,069,310 | 2,672,087 | 4,395,945 | |||||||||
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Cash and cash equivalents at end of the year
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$ | 4,365,045 | $ | 4,069,310 | $ | 2,672,087 | ||||||
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Supplemental Disclosure of Cash Flow Information:
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Interest paid
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$ | 14,000 | $ | 19,000 | $ | 508,000 | ||||||
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Income taxes (refund) paid
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$ | (74,000 | ) | $ | (8,000 | ) | $ | 408,000 | ||||
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
QUARTERLY DATA (Unaudited)
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Year 2010
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First
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Second
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Third
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Fourth
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Net sales
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$ | 2,808,046 | $ | 2,164,491 | $ | 2,478,581 | $ | 3,603,060 | ||||||||
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Gross profit
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540,494 | 255,712 | 494,678 | 1,218,141 | ||||||||||||
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Net income (loss)
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(274,469 | ) | (648,898 | ) | (281,755 | ) | 471,309 | |||||||||
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Net income (loss) per share - Basic
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(0.02 | ) | (0.06 | ) | (0.02 | ) | 0.04 | |||||||||
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Net income (loss) per share – Diluted
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(0.02 | ) | (0.06 | ) | (0.02 | ) | 0.04 | |||||||||
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Year 2009
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First
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Second
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Third
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Fourth
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Net sales
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$ | 2,815,097 | $ | 2,620,437 | $ | 2,664,963 | $ | 2,950,630 | ||||||||
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Gross profit
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381,687 | 419,098 | 606,530 | 747,273 | ||||||||||||
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Net loss
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(314,409 | ) | (336,998 | ) | (2,122,330 | ) | (26,255 | ) | ||||||||
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Net loss per share - Basic
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(0.03 | ) | (0.03 | ) | (0.19 | ) | (0.00 | ) | ||||||||
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Net loss per share - Diluted
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(0.03 | ) | (0.03 | ) | (0.19 | ) | (0.00 | ) | ||||||||
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Year 2008
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First
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Second
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Third
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Fourth
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Net sales
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$ | 4,164,248 | $ | 4,007,412 | $ | 3,802,935 | $ | 4,326,614 | ||||||||
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Gross profit
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1,501,593 | 1,219,202 | 1,065,424 | 1,028,370 | ||||||||||||
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Net income
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491,200 | 294,017 | 169,120 | 144,084 | ||||||||||||
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Net income per share - Basic
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0.05 | 0.03 | 0.02 | 0.01 | ||||||||||||
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Net income per share - Diluted
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0.03 | 0.02 | 0.01 | 0.01 | ||||||||||||