NORTHVALE, NJ, November 15 – Photonic Products Group, Inc. (OTC Bulletin Board: PHPG) has reported its consolidated financial results for its third quarter and nine months ended September 30, 2011.
Revenue for the third quarter increased to $3.3 million from $2.5 million in the same period last year. For the nine months ended September 30, 2011, revenue was $9.8 million or 31% higher than last year’s $7.5 million for the comparable period.
Orders for the nine months ended September 30, 2011, orders totaled $10.2 million, up approximately 15% from orders of $8.9 million in 2010.
For the Company’s third quarter ended September 30, 2011, gross profit rose to $908,000, or 27% of sales, from $495,000 or 20% of sales in the comparable quarter last year. Gross profit of $2.6 million or 26% of sales for the nine months ended September 30, 2011 compared favorably to $1.3 million and 17% of sales last year. Increased sales revenue and the impact of the leverage of higher production volumes on a relatively fixed level of overhead costs were major contributors to the improved gross profit and margins in the most recent third quarter and nine month period.
Net income was $84,000 and $23,000 for the three and nine months ended September 30, 2011, respectively. This compares with a net loss of $(282,000) and $(1,205,000) in the same periods last year. The Company had net income per share of $0.01, basic and diluted, in the current quarter and $0.00 for the nine months ended September 30, 2011. This compares with a net loss per share of $(0.02) and $(0.10), basic and diluted, for the three and nine months ended September 30, 2010.
Net cash used by operating activities was $47,000 for the nine months ended September 30, 2011 compared to net cash provided by operating activities of $298,000 in the comparable period last year. The decrease primarily reflects the payment of approximately $1.0 million of accrued and current interest on convertible notes this year and increased inventory required to support the higher level of business activity in the current period. Overall, net cash used in investing activities totaled $542,000 in the nine months ended September 30, 2011 compared with $124,000, last year. Net cash decreased by $578,000 compared to an increase of $174,000 last year. The Company ended the quarter with cash and cash equivalents of $3.8 million.
President and CEO, Joe Rutherford commented, “Our third quarter and year-to-date results show a marked improvement from the previous year.. Increased sales and profit improvement in the third quarter and year-to-date show an encouraging trend versus last year. This is no small accomplishment and can be attributed to our constant focus on daily operations to improve efficiencies, customer service and ultimately our profitability. I am pleased with the level of new orders from our customers which has increased sequentially this year, by quarter, and for the year is up almost 15% from 2010 levels. We have used our strong cash position to invest selectively in new equipment and people and will continue to look for opportunities to strengthen our operating capabilities and grow our business. Despite the challenges of a sluggish economy in the markets we serve, which has caused some order delays, we are cautiously optimistic that we are positioned to improve future sales and profitability.”
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’ 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 process improvements in its operations, 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 the risk factors in 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.
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