Irvine Sensors Releases Third Quarter Results

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Aug 11, 2010, 04:15 ET

COSTA MESA, Calif., Aug. 11 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (Nasdaq: IRSN) today reported operating results for its third quarter and first three quarters of fiscal 2010, the 13 and 39 weeks ended June 27, 2010.

Total revenues were up in both the 13-week and 39-week periods measured against the comparable periods of last year. Total revenues for the 13 weeks ended June 27, 2010 were $3,576,100, as compared to $2,774,500 in the 13 weeks ended June 28, 2009, an increase of approximately 29%. Total revenues in the fiscal 2010 39-week period were $9,507,700, up approximately 14% from $8,359,200 in the first three quarters of fiscal 2009. Revenue increases in both current periods were largely due to increased product sales, particularly sales of Irvine Sensors' Clip-On Thermal Imager ("COTI") product.

Net loss in the current 13-week period was $2,625,400, approximately 3% greater than the $2,544,900 net loss for the 13-week period ended June 28, 2009. Net loss in the current 39-week period was $7,761,700, as compared to $468,900 of net income for the 39-week period ended June 28, 2009. This difference largely reflected the non-recurring gain from Company's patent sale in the second quarter of fiscal 2009, an event that was not replicated in the 39-week period ended June 27, 2010. The current year 13-week and 39-week periods also included litigation settlement expense that was not present in the comparable periods of fiscal 2009.

Irvine Sensors Corporation (www.irvine-sensors.com), headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating such products and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications.

IRVINE SENSORS CORPORATION CONSOLIDATED BALANCE SHEETS
	June 27, 2010
	(Unaudited)	September 27, 2009
Assets
Current assets:
Cash and cash equivalents	$ 154,900	$ 125,700
Accounts receivable, net of allowance for doubtful accounts of $15,000 and $15,000, respectively	1,730,100	1,396,300
Unbilled revenues on uncompleted contracts	710,900	885,300
Inventory, net	824,900	441,100
Prepaid expenses and other current assets	225,200	53,200
Total current assets	3,646,000	2,901,600
Property and equipment, net (including construction in process of $806,000 and $35,000, respectively)	2,684,000	2,845,200
Intangible assets, net	35,500	67,300
Deferred financing costs	414,000	-
Deposits	87,400	37,500
Total assets	$ 6,866,900	$ 5,851,600
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable	$ 4,243,500	$ 3,427,100
Accrued expenses	4,238,100	3,730,800
Accrued estimated loss on contracts	15,000	-
Advance billings on uncompleted contracts	301,000	249,600
Advances against accounts receivable	604,800	985,800
Deferred revenue	155,400	180,000
Restructured debt, net of debt discounts	163,100	188,400
Promissory note payable – related party	-	400,000
Secured promissory note, current portion	159,000	-
Debentures, net of debt discounts	1,638,700	-
Capital lease obligations	-	11,200
Total current liabilities	11,518,600	9,172,900
Secured promissory note	2,341,000	-
Executive Salary Continuation Plan liability	875,000	1,057,600
Total liabilities	14,734,600	10,230,500
Commitments and contingencies (Note 10)
Stockholders' deficit:
Convertible Preferred stock, $0.01 par value, 1,000,000 and 1,000,000 shares authorized, respectively;	600	1,200
Series A-1 – 12,200 (unaudited) and 99,900 shares issued and outstanding, respectively (1);
liquidation preference of $410,800 (unaudited) and $3,586,200, respectively;
Series A-2 – 22,500 (unaudited) and 25,000 shares issued and outstanding, respectively (1);
liquidation preference of $908,700 (unaudited) and $1,043,500, respectively;
Series B – 1,900 (unaudited) and 0 shares issued and outstanding, respectively (1);
liquidation preference of $1,561,600 (unaudited) and $0, respectively
Series C – 27,500 (unaudited) and 0 shares issued and outstanding, respectively (1);
liquidation preference of $825,000 (unaudited) and $0, respectively
Common stock, $0.01 par value, 150,000,000 and 150,000,000 shares authorized, respectively;
24,570,500 and 9,694,500 shares issued and outstanding, respectively (1)	245,700	96,900
Prepaid stock-based compensation	(347,000)	-
Common stock held by Rabbi Trust	(1,169,600)	(1,169,600)
Deferred compensation liability	1,169,600	1,169,600
Paid-in capital	164,309,900	162,497,700
Accumulated deficit	(172,401,300)	(167,299,100)
Irvine Sensors Corporation stockholders' deficit	(8,192,100)	(4,703,300)
Noncontrolling interest	324,400	324,400
Total stockholders' deficit	(7,867,700)	(4,378,900)
Total liabilities and stockholders' deficit	$ 6,866,900	$ 5,851,600
(1) The number of shares of preferred stock and common stock issued and outstanding have been rounded to the nearest one hundred (100).

IRVINE SENSORS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	13 Weeks Ended		39 Weeks Ended
	June 27, 2010	June 28, 2009	June 27, 2010	June 28, 2009
Revenues:
Contract research and development revenue	$ 2,171,000	$ 2,508,500	$ 6,944,700	$ 7,247,000
Product sales	1,402,800	262,700	2,550,200	1,099,400
Other revenue	2,300	3,300	12,800	12,800
Total revenues	3,576,100	2,774,500	9,507,700	8,359,200
Cost and expenses:
Cost of contract research and development revenue	1,565,300	1,705,200	5,070,200	5,651,100
Cost of product sales	1,335,500	323,000	2,442,800	1,110,800
General and administrative expense	1,565,100	2,862,500	4,693,100	6,982,200
Research and development expense	655,200	531,300	2,011,400	1,318,000
Total costs and expenses	5,121,100	5,422,000	14,217,500	15,062,100
Gain on sale or disposal of assets	100	8,000	12,600	8,640,800
Income (loss) from operations	(1,544,900)	(2,639,500)	(4,697,200)	1,937,900
Interest expense	(636,500)	(218,400)	(882,600)	(1,458,100)
Provision for litigation judgment	-	-	(20,200)	-
Litigation settlement expense	(450,000)	-	(2,270,700)	-
Change in fair value of derivative instrument	7,000	-	67,000	-
Interest and other income (expense)	(1,000)	5,000	(1,300)	51,700
Income (loss) from continuing operations before
benefit (provision) for income taxes	(2,625,400)	(2,852,900)	(7,805,000)	531,500
Benefit (provision) for income taxes	-	308,000	43,300	(121,000)
Income (loss) from continuing operations	(2,625,400)	(2,544,900)	(7,761,700)	410,500
Discontinued operations:
Income from discontinued operations	-	-	-	58,400
Net income (loss)	(2,625,400)	(2,544,900)	(7,761,700)	468,900
Add net income attributable to noncontrolling interests in subsidiary	-	-	-	100
Net income (loss) attributable to Company	$ (2,625,400)	$ (2,544,900)	$ (7,761,700)	$ 469,000
Basic net income (loss) per common share information:
From continuing operations attributable to Company	$ (0.15)	$ (0.35)	$ (0.66)	$ 0.01
From discontinued operations attributable to Company	-	-	-	0.01
Basic net income (loss) attributable to Company per common share	$ (0.15)	$ (0.35)	$ (0.66)	$ 0.02
Diluted net income (loss) per common share information:
From continuing operations attributable to Company	$ (0.15)	$ (0.35)	$ (0.66)	$ 0.01
From discontinued operations attributable to Company	-	-	-	0.01
Diluted net income (loss) attributable to Company per common share	$ (0.15)	$ (0.35)	$ (0.66)	$ 0.02
Weighted average number of common shares Outstanding -basic	17,302,800	7,708,400	13,932,100	6,257,000
Weighted average number of common shares Outstanding -diluted	17,302,800	7,708,400	13,932,100	6,259,500