NORTHVALE, N.J., Aug. 18 /PRNewswire-FirstCall/ -- Photonic Products Group, Inc. (OTC Bulletin Board: PHPG) has reported its consolidated financial results for its second quarter and six months ended June 30, 2009.
Revenue for the second quarter was $2.6 million and $5.4 million for the first six months, down 34.6% and 33.5%, respectively, from the same periods last year.
Orders for the three months ended June 30, 2009 totaled $3.2 million compared to $1.8 million in the three comparable months of 2008, up 77.8%. For the six months ended June 30, 2009 and 2008, orders were $4.8 million and $8.8 million, respectively, down 45.5% on a year-to-year basis. Overall, the lower order activity in first six months of 2009 is primarily attributable to continued weakness in customer demand, in both defense and commercial markets, and reflects the tight management of inventories by a few of our large customers in response to the current economic slowdown.
Gross profit for the second quarter of 2009 was $419,000 or 16.0% of sales, compared with a gross profit of $1.2 million, or 30.4% of sales, in the second quarter of 2008. Gross profit for the first six months of 2009 was $801,000, or 14.7 %, compared with a gross profit of $2.7 million, or 33.3 % in the first six months of 2008.
The Company reported a net loss of $(337,000) for the quarter just ended compared to a net income of $294,000 for the same period last year. This quarter's result included a benefit from income taxes of $156,000 in comparison with a benefit from income taxes of $78,000, in last year's second quarter. For the first half of 2009, the Company had a net loss of $(651,000) after reflecting a benefit from income tax of $392,000. Net income in the first half of 2008 was $785,000, including a benefit from income taxes of $130,000.
Basic and diluted net loss per common share for the second quarter of 2009 was $(0.03). In last year's second quarter, basic net income per common share was $0.03 and diluted net income per common share was $0.02. For the first six months of 2009, basic and diluted net loss per common share was $(0.06) which compares with basic and diluted net income per common share of $0.07 and $0.06 in the same period last year.
The Company reported positive cash flow from operations of $485,000 for the first six months of 2009, which compares with positive cash flow from operations of $558,000 in the first six months of 2008. Cash and cash equivalents had a net increase of $1.2 million for the six months ended June 30, 2009, including $800,000 from the redemption of certificates of deposits previously classified as short-term investments. For the six months ended June 30, 2008, cash and cash equivalents decreased by $(494,700) reflecting the Company's accelerated repayment of $2,177,000 of principal and accrued interest on a $1,700,000 senior secured note. The Company's cash balance at the end of the first half of 2009 was approximately $3.9 million compared, to $3.5 million (including certificates of deposit) at December 31, 2008, up $384,000 or 11.1%.
Joe Rutherford, President and CEO of PPGI commented, "Our six month results continue to reflect the current economic conditions in the markets we serve. As we had previously reported, we have implemented cost cutting measures across our organization, at all levels, and have reduced our workforce levels to right size our operations. We feel confident that these changes will position the Company to rebound strongly as the economy improves."
Founded in 1973, Photonic Products Group, Inc. develops, manufactures, and markets products and services for use in diverse Photonics industry sectors via its portfolio of distinctly branded businesses. INRAD specializes in crystal-based optical components and devices, laser accessories and instruments. Laser Optics specializes in precision custom optical components, assemblies, and optical coatings. MRC Optics' business specializes in precision diamond turned optics, metal optics, and opto-mechanical and electro-optical assemblies. PPGI's customers include leading corporations in the Defense and Aerospace, Laser Systems, and Process Control and Metrology sectors of the Photonics Industry, as well as the U.S. Government. Its products are also used by researchers at 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", "targeting" or similar words. Such forward-looking statements, such as our expectation for revenues, new orders, and income, 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 implement its growth strategies or to integrate new operations, inability to realize synergies from its acquisitions, inability to raise capital, 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. 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
June 30, December 31,
2009 2008
---- ----
(Unaudited) (Audited)
Assets
------
Current assets:
Cash and cash equivalents $3,855,807 $2,672,087
Certificates of deposit - 800,000
Accounts receivable (net of
allowance for doubtful
accounts of $15,000 in 2009
and 2008) 1,488,892 2,810,602
Inventories, net 2,453,219 2,732,336
Other current assets 240,519 188,084
------- -------
Total current assets 8,038,437 9,203,109
--------- ---------
Plant and equipment:
Plant and equipment, at cost 14,493,477 14,445,027
Less: Accumulated depreciation
and amortization (11,605,183) (11,139,771)
----------- -----------
Total plant and equipment 2,888,294 3,305,256
--------- ---------
Precious Metals 157,443 112,851
Deferred Income Taxes 800,000 408,000
Goodwill 1,869,646 1,869,646
Intangible Assets, net 712,298 751,580
Other Assets 47,601 81,707
------ ------
$14,513,719 $15,732,149
Total Assets =========== ===========
Liabilities and Shareholders' Equity
------------------------------------
Current Liabilities:
Current portion of other long
term notes $9,000 $136,892
Accounts payable and accrued
liabilities 1,702,930 2,160,665
Customer advances 121,573 456,754
------- -------
Total current liabilities 1,833,503 2,754,311
--------- ---------
Related Party Convertible Notes Payable 2,500,000 2,500,000
Other Long Term Notes, net of
current portion 349,328 353,663
------- -------
Total liabilities 4,682,831 5,607,974
--------- ---------
Commitments and Contingencies - -
Shareholders' Equity:
Common stock: $.01 par value;
60,000,000 authorized
shares; 11,391,132 shares
issued at June 30, 2009 and
11,230,678 issued at
December 31, 2008 113,910 112,306
Capital in excess of par value 16,978,982 16,622,466
Accumulated deficit (7,247,054) (6,595,647)
---------- ----------
9,845,838 10,139,125
Less - Common stock in treasury,
at cost (4,600 shares respectively) (14,950) (14,950)
------- -------
Total Shareholders' Equity 9,830,888 10,124,175
--------- ----------
Total Liabilities and Shareholders'
Equity $14,513,719 $15,732,149
=========== ===========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
------------- --------------
2009 2008 2009 2008
Total Revenue $2,620,437 4,007,412 $5,435,534 $8,171,660
Cost and Expenses:
Cost of goods sold 2,201,339 2,788,210 4,634,749 5,450,865
Selling, general and
administrative expenses 879,852 977,915 1,786,931 1,964,728
------- ------- --------- ---------
3,081,191 3,766,125 6,421,680 7,415,593
--------- --------- --------- ---------
Income (loss) from
operations (460,754) 241,287 (986,146) 756,067
Other expense:
Interest expense-net (32,244) (34,383) (64,632) (109,963)
Gain on sale of
precious metals - - 7,371 -
Gain on sale of fixed assets - 9,113 - 9,113
- ----- - -----
(32,244) (25,270) (57,261) (100,850)
Net (loss) income before
income taxes (492,998) 216,017 (1,043,407) 655,217
Benefit from income taxes 156,000 78,000 392,000 130,000
Net (loss) income $(336,998) $294,017 $(651,407) $785,217
========= ======== ========== ========
Net (loss) income per
common share-basic $(0.03) $0.03 $(0.06) $0.07
====== ===== ====== =====
Net (loss) income per
common share-diluted $(0.03) $0.02 $(0.06) $0.06
====== ===== ====== =====
Weighted average shares
outstanding-basic 11,333,477 11,006,591 11,286,263 10,706,680
========== ========== ========== ==========
Weighted average shares
outstanding-diluted 11,333,477 16,014,483 11,286,263 15,766,599
========== ========== ========== ==========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
-------------------------
2009 2008
---- ----
Cash flows from operating activities:
Net (loss) income $(651,407) $785,217
--------- --------
Adjustments to reconcile net (loss)
income to cash provided by operating
activities:
Depreciation and amortization 504,694 537,592
Common stock contribution
to retirement plan 179,068 160,181
Gain on sale of fixed assets - (9,113)
Gain on sale of precious metals (7,371) -
Deferred income taxes (392,000) (204,000)
Stock based compensation 62,586 37,146
Changes in operating assets and
liabilities:
Accounts receivable 1,321,710 (165,978)
Inventories, net 279,117 (245,076)
Other current assets (52,435) (72,621)
Other assets 34,106 32,051
Accounts payable and
accrued liabilities (457,733) (501,359)
Customer advances (335,181) 204,379
-------- -------
Total adjustments 1,136,561 (226,798)
--------- --------
Net cash provided by
operating activities 485,154 558,419
------- -------
Cash flows from investing activities:
Capital expenditures (48,450) (366,864)
Purchase of precious metals (53,538) -
Proceeds from redemption of
certificates of deposit 800,000 -
Proceeds from sale of fixed assets - 10,000
Proceeds from sale of precious metals 16,317 -
------ -
Net cash provided by (used
in) investing activities 714,329 (356,864)
------- --------
Cash flows from financing activities:
Redemption of restricted stock units (986) -
Proceeds from exercise of stock options 66,825 244,755
Proceeds from exercise of warrant 50,625 807,587
Principal payment of convertible
note payable - (1,700,000)
Principal payments of other
notes payable (132,227) (7,441)
Principal payments of
capital lease obligations - (41,158)
- -------
Net cash used in financing activities (15,763) (696,257)
------- --------
Net increase (decrease) in
cash and cash equivalents 1,183,720 (494,702)
Cash and cash equivalents
at beginning of period 2,672,087 4,395,945
Cash and cash equivalents
at end of period $3,855,807 $3,901,243
========== ==========
Supplemental Disclosure of
Cash Flow Information:
Interest paid $11,441 $482,860
====== ========
Income taxes paid $25,000 $360,000
====== ========
