NORTHVALE, N.J., April 2, 2012 /PRNewswire/ --Inrad Optics, Inc. (formerly Photonic Products Group, Inc.) (OTC Bulletin Board: PHPG) has released its consolidated financial results for the year ended December 31, 2011.
Sales for the fourth quarter were $3.4 million, a decrease of 6% from $3.6 million in the corresponding quarter of 2010. However, sales for the year ended December 31, 2011 were $13.2 million, up 19%, from $11.1 million, last year.
The Company ended 2011 with bookings of $12.9 million compared to $12.3 million in 2010, up 5%. Bookings in the fourth quarter of 2011 were $2.7 million compared to $3.4 million in the fourth quarter of 2010, as new orders expected in the period were pushed out into 2012. The Company’s year-end backlog was $5.0 million, down 7.4% versus $5.4 million at the end of 2010.
Net income, applicable to common shareholders was $142,000 for the fourth quarter of 2011 compared to $471,000 in the fourth quarter of 2010. Fourth quarter earnings per share were $0.01 basic and diluted versus $0.04 basic and diluted in 2010.
For the year ended December 31, 2011, the Company reported net income of $165,000 which compares favorably with a net loss of $(734,000) for the previous year. For the year, basic and diluted earnings per share were $0.01. Basic and diluted net loss per share was $(0.06) in 2010.
Fourth quarter gross profit for 2011 was $998,000 or 29.5% of sales, down from $1.2 million or 33.8% of sales, in the same quarter last year. For the twelve months ended December 31, 2011, gross profit improved to $3.6 million or 27.0% of sales, an increase of $1.1 million from $2.5 million or 22.7% of sales, in 2010.
EBITDA(1) for 2011 was $1.3 million versus EBITDA of $514,000 in 2010.
During the year, the Company paid $1,125,000 in accrued interest on convertible notes and an additional $150,000 in current interest related to the same notes. As a result, net cash flow from operating activities for 2011 decreased to $(358,000) compared to $576,000 in the previous year. Cash flow in 2011 was also impacted by increases in inventory as management built inventory ahead of scheduled shipments. The Company ended the year with cash of $3.4 million, down from $4.4 million at the end of 2010, reflecting two offsetting events; the Company’s aggressive debt repayment and strong cash flow generated from improved profitability.
Joe Rutherford, President and CEO of Inrad Optics stated, “I am pleased to announce improved sales and earnings results for 2011. We achieved a sales increase of more than 19% for the year, and showed a significant improvement in profitability over the previous two years. Although our fourth quarter results were down compared to the fourth quarter of last year, I feel the results reflect the ongoing economic volatility and subdued nature of both the semi-conductor and worldwide defense markets. Bookings for the year grew by 5% despite a push-out of several large expected fourth quarter orders into 2012, and bookings activity to-date in 2012 has been very positive.
During 2011, we maintained our focus on reducing debt and repaid approximately $1.3 million in accrued and current interest on convertible debt and ended the year with a cash position of over $3.4 million. In early 2012, our board and shareholders approved a name change to Inrad Optics, Inc. This significant and distinctive change will allow us to leverage the positive historical and current brand equity of the Inrad name. This will allow us to more clearly communicate the Company’s principal business activities. We are now executing on a well-considered strategic marketing plan designed to create an ongoing memory in the marketplace for Inrad Optics’ unique products and capabilities.”
(1) Note Regarding Use of Certain Non-GAAP Financial Measures:
The Company defines EBITDA(1) as earnings (loss) before non-cash, stock-based compensation, net interest, income taxes, depreciation, and amortization. EBITDA is presented herein because we consider these numbers an important measure of the Company’s ability to internally fund capital expenditures and service debt. 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 income (loss) to EBITDA.
The reconciliation follows:
Years ended December 31, | |||||||||
Reconciliation of EBITDA and adjusted EBITDA to Net Income (Loss) | 2011 | 2010 | |||||||
(In thousands) | |||||||||
Net income (loss), as reported | $ | 165 | $ | (734) | |||||
Income tax provision | 11 | ||||||||
Interest expense, net | 131 | 138 | |||||||
Depreciation and amortization | 836 | 942 | |||||||
Non-cash, stock-based compensation | 171 | 168 | |||||||
EBITDA | $ | 1,314 | $ | 514 | |||||
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”.
