International Isotopes Inc. Announces Third Quarter And Nine Months 2012 Financial Results

IDAHO FALLS, Idaho, Nov. 14, 2012 /PRNewswire/ -- International Isotopes Inc. (OTC Bulletin Board: INIS) announces financial results for the third quarter and nine months ended September 30, 2012. 

Revenue for the three months ended September 30, 2012 was $1,793,483, as compared to $2,229,947 for the same period in 2011, an overall decrease of $436,464, or approximately 20%.  Revenue for the nine months ended September 30, 2012 was $5,785,775, as compared to $7,258,006 for the same period in 2011, a decrease of $1,472,231, or approximately 20%. The Company's three principal business segments are Radiochemical Products, Nuclear Medicine Standards, and Cobalt Products.

Revenue from the sale of radiochemical products for the three months ended September 30, 2012 was $443,127, compared to $480,562 for the same period in 2011, a decrease of $37,435, or approximately 8%.  Revenue from the sale of radiochemical products for the nine months ended September 30, 2012 was $1,230,161, compared to $1,397,763 for the same period in 2011. This is a decrease in revenue of $167,602, or approximately 12%.  The Company has completed extensive upgrades of its radiochemical manufacturing processes and restructured sales terms to its major radiochemical distributor which the Company believes will improve revenue and margins in this segment for the remainder of 2012.

Revenue from nuclear medicine standard products for the three months ended September 30, 2012 was $1,021,230, compared to $1,246,417 for the same period in 2011.  This represents a decrease of $225,187, or approximately 18%.  Revenue from nuclear medicine standard products for the nine months ended September 30, 2012 was $3,223,359, compared to $3,825,973 for the same period in 2011, a decrease of $602,614, or approximately 16%.  The Company believes this decline is the continuing result of an overall reduction in the number of operating nuclear medicine clinics in the U.S. and budgetary constraints at a number of facilities.  The Company expects revenue within this segment to remain at this pace for the balance of the year, but is optimistic further reductions in the number of operating clinics in 2013 is unlikely.  The Company is also expecting to see greater expansion of international sales of these products in 2013.

Revenue from the sale of cobalt products for the three months ended September 30, 2012 was $202,545, compared to $401,745 for the same period in 2011, a decrease of $199,200, or approximately 50%.  Revenue from the sale of cobalt products for the nine months ended September 30, 2012 was $1,035,975, compared to $1,635,989 for the same period in 2011. This represents a decrease of $600,014, or approximately 37%.  The decline in cobalt product sales for the two periods was primarily the result of delays in cobalt production resulting from contract negotiation, the impact of irradiation experiments on high specific activity cobalt, and a curtailment of cobalt handling by the Department of Energy (DOE) pending an investigation of a damaged cobalt target.  The Company did not record any bulk cobalt sales in the nine months ended September 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 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.

The Company continues to note the adverse impact of changes in the DOE contracting methods and pricing for cobalt production activities.  Operating expense in the cobalt product segment increased by approximately 96% for the three months ended September 30, 2012, and by approximately 101% for the nine months ended September 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.  In addition to these increased costs the Company has experienced significant delays in production caused by contract and technical issues.  The Company continues to work towards resolution of those issues and hopes to resume normal production levels of all cobalt products by the middle of 2013.

Gross profit for all segments for the three months ended September 30, 2012 was $626,507, compared to $775,879 for the same period in 2011.  This represents a decrease of $149,372, or approximately 19%.  Cost of sales decreased to $1,166,976 for the three months ended September 30, 2012 from $1,454,068 for the same period in 2011. This is a decrease of $287,092, or approximately 20%, and is tied directly to the decrease in sales for the same period comparison. Gross profit for the nine months ended September 30, 2012 was $1,954,200, compared to $2,694,137 for the same period in 2011.  This represents a decrease of $739,937, or approximately 28%. The decrease in gross profit for the nine months ended September 30, 2012 is tied directly to the decrease in sales for this same period comparison.

Operating expense across all segments decreased to $1,187,554 for the three months ended September 30, 2012, from $3,237,630 for the same period in 2011, a decrease of $2,050,076, or approximately 63%.  Operating expense was $3,658,817 for the nine months ended September 30, 2012, compared to $8,283,997 for the same period in 2011, a decrease of $4,625,180, or approximately 56%.  The decreases in operating expense were largely attributable to the decrease in research and development costs related to engineering design and licensing of the planned 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.

The net loss for the three months ended September 30, 2012 was $591,526, compared to $4,871,176 for the same period in 2011.  This is a decrease in loss of $4,279,650, or approximately 88%.  The net loss for the nine months ended September 30, 2012 was $1,696,905 as compared to $8,256,374 for the same period in 2011, a decrease in loss of $6,559,469, or approximately 79%.  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, "While I am disappointed with the decline in revenue for 2012, I remain optimistic we are through most of the challenging U.S. economic conditions and other issues that have led to this decline in sales.  I believe our very significant reductions in operating loss are a strong sign the Company is well poised to benefit from a hopefully improving  U.S. economic environment.  I expect the Company will continue to face challenges in dealing with the DOE charging and contracting methods for cobalt production.  To counteract that, however, we are taking distinct actions to address these issues and expand the range of products and services that can be provided in this business segment.  On balance, I believe that the value of opportunities available to the Company today significantly outweigh our challenges.  We will continue to focus upon those positive opportunities through the last quarter of this year and work to bring them to fruition in 2013."   

"In addition to the improving core business outlook, the Company continues to make significant progress to launch our planned depleted uranium processing and fluorine extraction facility.  This project is truly unique to the nuclear industry and would be the most significant business development project in our Company's history.  With the receipt last month of the forty-year operating license from the Nuclear Regulatory Commission the Company continues right on track and has now completed all of the prerequisites necessary to pursue financing and start construction of this important project.  Significant hurdles still exist with respect to securing financing on terms that are acceptable to the Company and we are considering several options including the possibility of financing segments of the project in order to reduce the initial capital requirement and time required to revenue generation.  In the mean time, the Company will continue to focus on continued improvement in core business performance, management of our existing financial resources, and structuring project financing to provide the greatest benefit for our shareholders."

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, 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 the Company's filings with the Securities and Exchange Commission at www.sec.gov, including its 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.