NORTHVALE, N.J., May 16 NJ-Photonic-earnings
NORTHVALE, N.J., May 16 /PRNewswire-FirstCall/ -- Photonic Products Group,
Inc. (OTC Bulletin Board: PHPG) has reported its consolidated financial
results for its first quarter, which ended March 31, 2008.
Revenues for the first quarter were $4,164,000, up 17.6% from the same
period last year.
Orders for the first three months were up 38% to $6,851,000 compared to
$4,960,000 in the first three months of 2007. The backlog at the end of the
first quarter was $12,359,000, up 46.3% from the same point last year, and up
27.8% from the backlog on December 31, 2007.
Gross profit for the quarter was $1,502,000, or 36.1%, compared with a
gross profit of $1,382,000, or 39.0% in last year's first quarter.
The Company reported net income of $491,200 for the quarter just ended
which compares with $434,800 for the same period last year. This quarter's
result included a benefit from income taxes of $102,000, reflecting
recognition of a deferred tax asset. Earnings per share were $0.05 basic and
$0.03 diluted. This compares with $0.06 basic and $0.04 diluted in the first
quarter of 2007.
Dan Lehrfeld, President and CEO of PPGI commented, "In 2008, our top line
is off to a good start overall with revenues, customer orders, and backlog all
setting new records in the first quarter. Timing of our customer's release of
major orders varies, and that affected our first quarter bookings favorably.
While we don't expect our order intake for the full year to reflect this past
quarter's pace, we look forward to positive results from our initiatives to
expand sales channels and pursue business development opportunities across a
broader front.
Notwithstanding the Company's overall good performance for the quarter, we
experienced production problems at our Florida facility which are negatively
impacting our production and our delivery schedules. We've been expanding
capacity within our operations in order to meet our current record customer
backlogs and projected customer needs, but ran into difficulties in Florida.
This adversely affected our consolidated revenues and gross profits for the
quarter. Both our corporate and regional management are focused on solving
these problems. We are working closely with our customers to minimize the
impact to them from these difficulties."
Mr. Lehrfeld continued, "In addition, we are shifting this year to a
business and product mix characterized by higher material content and higher
cost of goods sold percentage. We anticipate these structural changes will
result in higher revenues and solid profitability, but our overall gross
profit margin percentage will trend lower from last year's highs as a result.
We continued the balance sheet strengthening initiative we aggressively
pursued in 2007 with the repayment this March of our $1,700,000 senior secured
note and accrued interest of $477,000. With this payment, and the redemption
for cash of a $1,000,000 convertible note, last year, we have retired over
$4,000,000 in debt principal and accrued interest during the past 15 months.
We have also retired via conversion into common shares all of our $2,582,000
in convertible preferred shares.
We had a net cash deployment into operations of $223,000, including payout
of $477,000 of accrued interest vs. a positive cash flow from operations of
$287,000 in the same period last year. Our net cash flow decrease for the
period was $1,403,925, reflecting both the accelerated payment of our senior
secured note, and increased capital investments into operations. We ended the
quarter with a clean and strong balance sheet, and a cash balance of
$2,992,000."
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 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",
"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
March 31, December 31,
2008 2007
(Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $2,992,020 $4,395,945
Accounts receivable (net of allowance
for doubtful accounts of $15,000 in
2008 and 2007) 2,366,085 2,181,859
Inventories 3,295,069 2,931,080
Deferred income taxes 102,000 -
Other current assets 196,391164,065
Total Current Assets 8,951,565 9,672,949
Plant and equipment:
Plant and equipment at cost13,876,592 13,690,229
Less: Accumulated depreciation and
amortization (10,440,400) (10,189,853)
Total plant and equipment 3,436,192 3,500,376
Precious Metals 112,851112,851
Goodwill 1,869,646 1,869,646
Intangible Assets, Net of Accumulated
Amortization810,503830,144
Other Assets 55,260 91,981
Total Assets $15,236,017$16,077,947
Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of notes payable - other $14,814$14,814
Accounts payable and accrued liabilities2,524,631 2,741,966
Customer advances 570,539870,550
Current obligations under capital leases 25,082 47,088
Related party secured note due within
one year- 1,700,000
Total Current Liabilities3,135,066 5,374,418
Secured and Convertible Notes Payable 2,500,000 2,500,000
Other Long Term Notes487,031490,730
Total Liabilities 6,122,097 8,365,148
Commitments and Contingencies:
Shareholders' equity:
Common stock: $.01 par value; 60,000,000
authorized 10,912,937 shares issued at
March 31, 2008 and 10,104, 719 issued
December 31, 2007109,128101,046
Capital in excess of par value 16,222,610 15,320,771
Accumulated deficit(7,202,868)(7,694,068)
9,128,870 7,727,749
Less - Common stock in treasury, at cost
(4,600 shares respectively) (14,950) (14,950)
Total Shareholders' Equity 9,113,920 7,712,799
Total Liabilities & Shareholders'
Equity$15,236,017$16,077,947
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2008 2007
Total Revenue $4,164,248 $3,540,874
Cost and Expenses:
Cost of goods sold 2,662,655 2,159,374
Selling, general and administrative expenses 986,813856,728
Total Cost and Expenses3,649,468 3,016,102
Income from operations 514,780524,772
Other expense:
Interest expense, net 75,580 74,912
Income before income taxes 439,200449,860
Benefit from (provision for) income taxes 52,000(15,000)
Net income applicable to common shareholders$491,200 $434,860
Net income per common share - basic$0.05 $0.06
Net income per common share - diluted $0.03 $0.04
Weighted average shares outstanding-basic 10,535,075 7,902,763
Weighted average shares outstanding-diluted 15,862,817 13,491,585
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2008 2007
Cash flows from operating activities:
Net income $491,200 $434,860
Adjustments to reconcile net income to cash
(used in) provided by operating activities:
Depreciation and amortization 270,188284,136
401K common stock contribution160,181166,693
Deferred income taxes(102,000) -
Stock based compensation 18,573 9,105
Changes in operating assets and liabilities:
Accounts receivable (184,226) 201,232
Inventories (363,989) (235,693)
Other current assets (32,326)29,075
Other assets 36,721 (2,554)
Accounts payable and accrued liabilities (217,335) (381,431)
Customer advances(300,011) (218,072)
Total adjustments(714,224) (147,509)
Net cash (used in) provided by operating
activities (223,024) 287,351
Cash flows from investing activities:
Capital expenditures (186,363) (30,241)
Net cash used in investing activities(186,363) (30,241)
Cash flows from financing activities:
Proceeds from issuance of common stock139,580 -
Exercise of warrants 591,587 -
Principal payments of secured note
payable (1,700,000) -
Principal payments of notes payable(3,699) (24,441)
Principal payments of capital lease
obligations (22,006) (62,880)
Net cash used in financing activities(994,538) (87,321)
Net (decrease) increase in cash and cash
equivalents (1,403,925) 169,789
Cash and cash equivalents at beginning
of period 4,395,945 3,078,052
Cash and cash equivalents at end of period$2,992,020 $3,247,841
SOURCE Photonic Products Group, Inc.
