International Isotopes Inc. Announces Second Quarter And Six Months 2012 Financial Results

IDAHO FALLS, Idaho, Aug. 15, 2012 /PRNewswire/ -- International Isotopes Inc. (OTC Bulletin Board: INIS) announces financial results for the second quarter and six-months ended June 30, 2012. 

Revenue for the three months ended June 30, 2012 was $2,042,949, as compared to $2,614,744 for the same period in 2011, an overall decrease of $571,795, or approximately 22%.  Revenue for the six months ended June 30, 2012, was $3,992,292, as compared to $5,028,059 for the same period in 2011, a decrease of $1,035,767, or approximately 21%.

The Company's three most significant business segments are Radiochemical Products, Nuclear Medicine Standards, and Cobalt Products.  All three segments are seeing some decline in 2012.  Revenue from the sale of radiochemical products for the three months ended June 30, 2012 was $405,118, compared to $475,901 for the same period in 2011, a decrease of $70,783, or approximately 15%.  Revenue from the sale of radiochemical products for the six-month period ended June 30, 2012, was $787,033, compared to $917,201 for the same period in 2011. This is a decrease in revenue of $130,168, or approximately 14%.  Sales of radiochemical product decreased in the latter part of 2011 after the Company received a warning letter from the U.S. Food and Drug Administration (FDA) for violations of Current Good Manufacturing Practices (CGMP), and have been slow to regain previous sales levels.  The Company has completed an upgrade of manufacturing processes to meet all CGMP requirements and believes the combination of increased marketing, strong customer service, and competitive pricing will improve the strength of sales for the remainder of 2012.

Revenue from nuclear medicine standard products for the three months ended June 30, 2012 was $1,074,124, compared to $1,186,399 for the same period in 2011.  This represents a decrease of $112,275, or approximately 9%.  Revenue from nuclear medicine standard products for the six months ended June 30, 2012 was $2,202,129 compared to $2,579,556 for the same period in 2011, a decrease of $377,427 or approximately 15%.   The Company believes this decline is the result of medical facilities delaying the replacement of imaging and calibration sources due to budgetary constraints and also a decline in the number of operating nuclear medicine clinics.   The Company expects revenue within this segment to remain at this pace for the balance of the year.

Revenue from the sale of cobalt products for the three months ended June 30, 2012 was $484,098, compared to $821,409 for the same period in 2011, a decrease of $337,311, or approximately 41%.  Revenue from the sale of cobalt products for the six months ended June 30, 2012 was $833,430, compared to $1,234,244 for the same period in 2011. This represents a decrease of $400,814, or approximately 32%.  The Company did not record any bulk cobalt sales for the six-month period ended June 30, 2012, but did record $502,533 of bulk cobalt sales for the same period in 2011.  Because each bulk cobalt sale represents a material dollar amount, these sales can create significant variations in period-to-period comparisons. Therefore, management believes that a comparison of total revenue excluding bulk cobalt sales provides meaningful information to investors because of these large period-to-period variations. This information does have limitations as an analytical tool and should not be considered in isolation or as a substitute for total revenue.  The following table presents a period-to-period comparison of total revenue by segment, as well as a period-to-period comparison of total revenue by segment excluding bulk cobalt sales.

Gross profit for the three months ended June 30, 2012 was $656,953, compared to $999,221 for the same period in 2011.  This represents a decrease of $342,268, or approximately 34%.  Cost of sales decreased to $1,385,996 for the three months ended June 30, 2012 from $1,615,523 for the same period in 2011. This is a decrease of $229,527, or approximately 14%, and is tied directly to the decrease in sales for the same period comparison. Gross profit for the six months ended June 30, 2012 was $1,327,693, compared to $1,918,258, for the same period in 2011.  This represents a decrease of $590,565, or approximately 31%. The decrease in gross profit for the six months is tied directly to the decrease in sales for this same period comparison; however, an additional factor in the reduction of gross profit percentage was the impact of changes in the Department of Energy contracting for cobalt production activities.  Gross profit of cobalt products for the three months ended June 30, 2012 was $257,774, compared to $452,197 for the same period in 2011, a difference of $194,423, or approximately 43%.

Operating expense decreased to $1,194,329 for the three months ended June 30, 2012, from $2,549,481 for the same period in 2011, a decrease of $1,355,152, or approximately 53%.  Operating expense was $2,471,264 for the six months ended June 30, 2012, compared to $5,046,367 for the same period in 2011, a decrease of $2,575,103 or approximately 51%.   The decreases in operating expense were largely attributable to the decrease in research and development costs related to engineering design and licensing of the proposed de-conversion facility.  Those costs were previously treated as research and development expense, but once it became reasonably certain the NRC would likely issue the license to build and operate the planned depleted uranium de-conversion facility, the Company began to capitalize these costs rather than expensing them.

Operating expense within most of the Company business segments was reduced during the three and six months ended June 30, 2012, with the exception of the cobalt segment.  Operating expense in the cobalt product segment increased by $51,380, or approximately 85%, for the three months ended June 30, 2012. Operating expense in this segment increased by $126,540, or approximately 105% for the six-month period ended June 30, 2012, compared to the same period in 2011. These increases are due to additional costs incurred as a result of contract requirements imposed by the DOE National Isotopes Development Center, Isotopes Business Office and additional contract charges by the prime-operating contractor for the DOE's advanced test reactor in Idaho Falls, ID.

The net loss for the three months ended June 30, 2012 was $515,132, compared to $1,670,186 for the same period in 2011.  This is a decrease in loss of $1,155,054, or approximately 69%.  The net loss for the six months ended June 30, 2012, was $1,105,379 as compared to $3,385,198 for the same period in 2011, a decrease in loss of $2,279,819, or approximately 67%.  The decrease in net loss for both periods is the combined result of decreased operating expense for most segments, capitalizing research and development expense, and a reduction in interest expense for the period comparisons.

Steve T. Laflin, President and CEO of the Company said, " I am  disappointed with our financial results in the first six months of the year and the Company is examining every way to make improvements.  Through this most recent quarter and for the first six months of 2012, our revenue has continued to be impacted by the challenging world and US economic conditions, a decline in nuclear medicine clinics, and the adverse impact of government contracting on our cobalt production activities.  While we expect these pressures to remain for the rest of 2012, the good news is, we do not expect a further decline in revenue this year.  We are also taking aggressive steps to further reduce our operating expense and expand the revenue producing capability of our core business segments.  While the impact of these actions may not be immediately evident, we believe we are on track to bring the core business segments in Idaho to consistent profitability and see increasing revenue once again in 2013.  We will continue to work towards resolving the contract issues that have led to the significant increase in operating cost for cobalt production and we have fully addressed the FDA issues that led to the decline in radiochemical sales in 2011 and 2012.

"In addition to building strength in our core business segments we intend to continue to support and advance the planned environmentally friendly depleted uranium processing and fluorine extraction project.  Through the second quarter of this year we have spent nearly $18 million on this project and we are poised to receive the ever-important Nuclear Regulatory Commission (NRC) construction and operating license for this facility in October 2012.  Possession of the NRC forty-year license, our exclusive ownership of the fluorine extraction process patents, and the opportunity for significant revenue generation through the sale of products and services from the new facility, puts the Company and our shareholders in an excellent position to capitalize on this green technology and unique business opportunity for the long term"

About International Isotopes Inc.
International Isotopes Inc. manufactures a full range of nuclear medicine calibration and reference standards, high purity fluoride gases, and a variety of cobalt-60 products such as teletherapy sources.  The Company also provides a wide selection of radioisotopes and radiochemicals for medical devices, calibration, clinical research, life sciences, and industrial applications and provides a host of analytical, measurement, recycling, and processing services on a contract basis to clients

International Isotopes Inc. Safe Harbor Statement
Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements with respect to expectations for improving the strength of sales, the impact of general economic conditions upon the Company, the ability of the Company to reduce cost, future revenue producing capability, the ability of the Company to reach profitability, the Company's ability to raise funds to construct the depleted uranium de-conversion facility, the receipt of the NRC license for the facility, and the revenue potential of the depleted uranium project.  Information contained in such forward-looking statements is based on current expectations and is subject to change.  These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of International Isotopes, Inc. to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Other factors, which could materially affect such forward-looking statements, can be found in International Isotopes, Inc.'s filings with the Securities and Exchange Commission at www.sec.gov, including our Annual Report on Form 10-K for the year ended December 31, 2011.  Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.  The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

FOR  MORE INFORMATION CONTACT:

Jim Drewitz
Creative Options Communications
Investor and Public Relations
[email protected]
www.jdcreativeoptions.com
Phone:  830-669-2466

For more information, please visit the Company web site:  www.internationalisotopes.com

SOURCE International Isotopes Inc.