Photonic Products Group, Inc. Announces Third Quarter and Nine Months 2010 Financial Results

NORTHVALE, N.J., Nov. 15, 2010 /PRNewswire-FirstCall/ -- Photonic Products Group, Inc. (OTC Bulletin Board: PHPG) today reported its consolidated financial results for its third quarter and nine months ended September 30, 2010.

Third quarter revenues were $2.48 million, down from $2.67 million in the same period last year.  For the nine months ended September 30, 2010, revenue was $7.45 million compared to $8.1 million for the comparable 2009 period, down 8.0%.

Orders for the third quarter were $4.63 million compared to $1.55 million last year.  Total orders for the year were $8.87 million compared to $6.35 million for the same nine month period last year.  Product backlog was $5.6 million at September 30, 2010 versus backlog of $4.3 million at September 30, 2009.

Gross profit for the quarter was $495,000, or 20.0%, down from a gross profit of $607,000, or 22.8% in the comparable quarter last year, reflecting the impact of lower sales levels and the Company's high percentage of fixed overhead costs.  Overall the gross profit margin of 17.3% for nine months this year is relatively unchanged from 17.4% the same period last year despite lower sales.  This reflects the positive impact of lower manufacturing labor costs due to work force reductions phased in during the first and second quarter of 2009.  

The net loss for the quarter was $282,000 and $1,205,000 for the nine months ended September 30, 2010. This compares with a net loss of $564,000 and $1,216,000 in the same periods in 2009, after excluding the goodwill impairment charge of $1,558,000.  The Company had a net loss per share of $0.02, basic and diluted, in the current quarter and a net loss per share of $0.10, basic and diluted, for the nine months ended September 30, 2010. This compares with a net loss per share of $0.19, basic and diluted, in the third quarter of 2009 and $0.25 for the nine months ended September 30, 2009.

Net cash provided by operating activities was $298,000, down from $451,000, for the same period last year.  After investing and financing activities, net cash increased by $174,000 for the nine months and the Company ended the quarter with cash and cash equivalents of $4.24 million. 

"Our financial results continue to reflect the low level of orders booked in 2009 and the first half of this year, despite the efforts we have made to reduce costs," commented Joe Rutherford, President and CEO of PPGI.  "On a positive note, bookings in the third quarter were in excess of $4.6 million bringing total bookings for the year to $8.9 million.  This was the highest booking quarter we have had since the first quarter of 2008. I am optimistic that the world economy is improving in the markets we serve.

"We have much to be proud of this year.  We have managed our cash wisely and worked diligently to achieve our goal of corporate wide certification under ISO 9000:2008.  In addition, we are pleased to have been recently approved for Lockheed Martin's Missiles and Fire Control Preferred Supplier Program, at the Company's MRC Optics facility located in Sarasota, Florida.  Our entire organization is committed to maintaining this high level of performance and customer satisfaction."

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 "anticipate" "believe", "expect", "plan", "should", "targeting", "will", or similar words verbs or descriptions.  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, 2009. 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 statements.

SOURCE Photonic Products Group, Inc.