FY 2013 Financial Results Released By Inrad Optics, Inc.

NORTHVALE, N.J., April 1, 2014 /PRNewswire/ -- Inrad Optics, Inc. (the "Company") (OTC Bulletin Board: INRD) has released its consolidated financial results for the year ended December 31, 2013.

Net sales for the fourth quarter of 2013 were $ 2.7 million compared to $2.8 million and $3.4 million for the fourth quarter of 2012 and 2011, respectively.  For the twelve months ended December 31, 2013, net sales were $11.2 million, down 1.5% from $11.4 million, last year, and 14.7% from $13.2 million in 2011.

The Company ended 2013 with bookings of $9.8 million, a decrease from $12.3 million or approximately 20% from 2012. Bookings in the fourth quarter of 2013 were $2.5 million.  The Company ended 2013 with a backlog of $4.4 million compared to $5.9 million at the end of 2012. 

The Company reported a net loss of $(549,000) in the fourth quarter of 2013 compared to a net loss of $(659,000) and net income of $142,000 in the fourth quarter of 2012 and 2011, respectively.  The fourth quarter 2013 results included $313,000 of accrued and incurred expenses related to the relocation of the Florida operation to the Company's Northvale, New Jersey facility which is currently close to completion.  The Company's 2012 fourth quarter results reflected an income tax provision of $408,000 for a write-off of deferred tax assets compared to an income tax provision for federal and state taxes of $11,000 in 2011.

Basic and diluted (loss) earnings per share for the fourth quarter was $(0.05) in 2013 versus $(0.06) in 2012 and $0.01 in 2011, respectively. 

For the twelve months ended December 31, 2013, the Company reported a net loss of $(1,650,000)  and a basic and diluted loss per share of  $(0.14) versus $(1,421,000) and $(0.12)  last year.  This compares with net income of $165,000 and basic and diluted earnings per share of $0.01 for the year ended December 31, 2011. 

Gross profit was $119,000 or 4.4% of sales for the fourth quarter of 2013 compared to $567,000 or 20.4% of sales and $998,000 or 29.5% of sales in the comparable quarters in 2012 and 2011, respectively. 
The Company had a gross profit of $432,000 or 15.9 %, in the fourth quarter of 2013 before restructuring costs of $313,000.

For the twelve months ended December 31, 2013, gross profit was $1.7 million or 14.9% of sales compared to $2.5 million or 21.8% of sales in the 2012.  For the twelve months ended December 31, 2011, gross profit was $3.6 million or 27.0% of sales. Gross margins continue to be negatively impacted by declining sales and the Company's overhead structure which is relatively fixed.  

EBITDA¹ for 2013 was $(739,000) versus $2,000 in 2012.  

Net cash used in operating activities was $70,000 for 2013 compared to $208,000 in 2012. 

In 2012, the Company negotiated an equipment loan from Valley National Bank in the amount of $750,000 and paid $500,000 as a deposit on new thin film coating equipment which was delivered in the first quarter of 2013.

The Company ended the 2013 with cash of $2.5 million, down from $3.1 million at the end of 2012.

Amy Eskilson, President and CEO of Inrad Optics stated, "Our 2013 results depict the major internal and external drivers that influenced the business during the year.  Internally, the expenses associated with restructuring in New Jersey in Q2 and Q3, and the accrued expenses related to the Sarasota consolidation effort in Q4 reduced our gross profit.  When combined with a decline in orders from the defense sector, the result was an operating loss of $1.5 million.    With that said, many difficult but formative changes were implemented in 2013 that we believe will bear fruit in the future.  Looking forward, our Q1 bookings are higher than anticipated and our consolidation of the Sarasota metal optics production facility continues to move ahead, on-time and on budget.

The consolidation of our metal optics operations into the New Jersey headquarters will integrate all of our unique resources into one optimized facility.  The Sarasota capabilities combined with the extensive Northvale competencies will offer our customers an enhanced value proposition.  The consolidation is expected to reduce our manufacturing costs and provides a unique opportunity to make significant improvements to our operating results in the second half of 2014."

¹ Note Regarding Use of Certain Non-GAAP Financial Measures:

The Company defines EBITDA¹ 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:

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, 2013. 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.

SOURCE Inrad Optics, Inc.