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8-K - FORM 8-K - Inrad Optics, Inc.v360716_8k.htm

  

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Source: Inrad Optics, Inc.

 

INRAD OPTICS, INC. REPORTS FINANCIAL RESULTS FOR THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2013

 

NORTHVALE, NJ, November 14 – Inrad Optics, Inc. (OTC Bulletin Board: INRD) has reported its consolidated financial results for its third quarter and nine months ended September 30, 2013.

 

Revenue for the third quarter was $2.8 million, down 5.1% from $2.9 million in the same period last year. For the nine months ended September 30, 2013, revenue of $8.5 million decreased by 1.1% compared to $8.6 million last year.

 

Orders were $2.5 million and $7.4 million for the three and nine months ending September 30, 2013, a decrease of 4% and 18% compared to the respective periods last year. Orders from aerospace and defense and government entities continued to decline primarily due to the ongoing uncertainty in U.S. defense spending and the impact of federal budget sequestration.

 

Gross profit for the third quarter was $550,000 or 20% of sales, down from $616,000 or 21.2% in the comparable quarter last year. For the nine months ended September 30, 2013, gross profit decreased to $1.6 million or 18.3% of sales compared to $1.9 million or 22.3% last year. Overall, gross profit margin for 2013 and 2012 reflects the impact of low sales combined with the Company’s relatively fixed overhead cost structure.

 

The net loss was $239,000 and $1.1 million for the three and nine months ended September 30, 2013. This compares with a net loss of $280,000 and $762,000, in the comparable periods last year. The Company had a net loss per share of $0.02, basic and diluted, for the three months ended September 30, 2013 and 2012. For the nine months ended September 30, 2013 and 2012, the basic and diluted net loss per share was $0.09 and $0.06, respectively.

 

Net cash provided by operating activities was $90,000 for the nine months ended September 30, 2013. This compares to net cash used in operations of $111,000 in the nine month period, last year. After investing and financing activities, net cash decreased $440,000 for the year to date versus a decrease of $153,000 last year. Net cash was positively impacted, last year, by the proceeds of a term loan of $750,000, net of a down-payment of $500,000 on the purchase of a large coating chamber.

 

At September 30, 2013, the Company had cash and cash equivalents of $2.6 million. 

 

President and CEO Amy Eskilson commented,

 

 
 

 

“Our third quarter and nine month results reflect a significant decrease in orders from government, aerospace and defense customers due to federal budget sequestration and on-going uncertainty in defense funding. We are addressing these challenges on multiple fronts. We have recently put in place a number of initiatives to drive down costs, and are assessing several key operational improvement opportunities. Additionally, we have implemented a strategic sales plan that is diversifying our customer base. Progress on this front has yielded new customers in the medical imaging and x-ray inspection markets. We are continuing to build our capabilities and products in order to serve a broader range of potential customers.”   

 

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.

 

 
 

  

INRAD OPTICS, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   September 30,   December 31, 
   2013   2012 
   (Unaudited)   (Audited) 
           
Assets          
Current assets:          
Cash and cash equivalents  $2,649,559   $3,089,013 
Accounts receivable (net of allowance for doubtful accounts of
$15,000 in 2013 and 2012)
   1,181,766    1,557,930 
Inventories, net   3,328,190    3,596,646 
Other current assets   130,115    158,742 
Total current assets   7,289,630    8,402,331 
 
Plant and equipment:
          
Plant and equipment,  at cost   16,126,168    15,446,826 
Less: Accumulated depreciation and amortization   (14,269,092)   (14,182,712)
    Total plant and equipment   1,857,076    1,264,114 
 
Precious Metals
   474,960    474,960 
Goodwill   311,572    311,572 
Intangible Assets, net   378,401    437,324 
Other Assets   34,838    534,838 
 
Total Assets
  $10,346,477   $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   904,582    813,705 
Customer advances   107,641    297,251 
Total current liabilities   1,162,423    1,261,156 
           
Related Party Convertible Notes Payable   2,500,000    2,500,000 
           
Other Long Term Notes, net of current portion   757,376    869,135 
Total liabilities   4,419,799    4,630,291 
           
Commitments          
           
Shareholders’ Equity:          
Common stock: $.01 par value; 60,000,000 authorized shares; 12,050,603
shares issued at September 30, 2013 and 11,881,724 issued at December 31, 2012
   120,508    118,819 
Capital in excess of par value   18,262,570    18,076,518 
Accumulated deficit   (12,441,450)   (11,385,539)
    5,941,628    6,809,798 
Less - Common stock in treasury, at cost (4,600 shares)   (14,950)   (14,950)
Total shareholders’ equity   5,926,678    6,794,848 
 
Total Liabilities and Shareholders’ Equity
  $10,346,477   $11,425,139 

 

 

 
 

  

INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

  Three Months Ended September 30,   Nine Months Ended September 30, 
   2013   2012   2013   2012 
                 
Total revenue  $2,756,488   $2,903,740   $8,528,212   $8,624,869 
                     
Cost and expenses:                    
Cost of goods sold   2,206,529    2,287,493    6,971,423    6,700,833 
Selling, general and administrative expenses   743,190    848,569    2,506,662    2,567,661 
    2,949,719    3,136,062    9,478,085    9,268,494 
Loss from operations   (193,231)   (232,322)   (949,873)   (643,625)
                     
Other (expense) income:                    
Interest expense—net   (45,562    (47,267)   (137,038    (118,006)
Gain on sale of plant and equipment           31,000     
    (45,562    (47,267)   (106,038)   (118,006)
Net loss before income taxes   (238,793)   (279,589    (1,055,911    (761,631)
                     
Income tax (provision) benefit                
                     
Net loss  $(238,793   $(279,589)  $(1,055,911)  $(761,631)
                     
Net loss per common share—
basic and diluted
  $(0.02)  $(0.02)  $(0.09)  $(0.06)
                     
Weighted average shares outstanding—
basic and diluted
   12,046,003    11,877,124    11,956,712    11,811,241 

 

 

 
 

 

INRAD OPTICS, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Nine Months Ended September 30, 
   2013   2012 
         
Cash flows from operating activities:        
Net (loss)  $(1,055,911   $(761,631)
           
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
          
Depreciation and amortization   414,367    476,863 
401K common stock contribution   80,922    151,775 
(Gain) on sale of plant and equipment   (31,000)    
Stock based compensation   106,819    153,604 
Changes in operating assets and liabilities:          
       Accounts receivable   376,164    237,765 
        Inventories, net   268,456    (550,815)
        Other current assets   28,627    11,079 
        Accounts payable and accrued liabilities   90,877    140,097 
        Customer advances   (189,610)   30,482 
Total adjustments and changes   1,145,622    650,850 
Net cash provided by (used in) operating activities   89,711    (110,781)
           
Cash flows from investing activities:          
Capital expenditures   (448,406)   (267,956)
Down payment on purchase of equipment       (500,000)
Proceeds from sale of plant and equipment   31,000     
Net cash (used in) investing activities   (417,406)   (767,956)
           
Cash flows from financing activities:          
Proceeds from exercise of stock options       5,349 
Proceeds from Term Note Payable       750,000 
Principal payments on notes payable-other   (111,759)   (29,614)
Net cash (used in) provided by financing activities   (111,759)   725,735 
           
Net (decrease) in cash and cash equivalents   (439,454)   (153,002)
           
Cash and cash equivalents at beginning of period   3,089,013    3,400,205 
           
Cash and cash equivalents at end of period  $2,649,559   $3,247,203 
           
 Supplemental Disclosure of Cash Flow Information:          
Interest paid  $144,000   $132,000 
Income taxes paid  $2,000   $12,000