Photonic Products Group, Inc. Reports Record Profits for Q3 and Nine Months
Monday November 12, 7:55 am ET
NORTHVALE, N.J., Nov. 12 /PRNewswire-FirstCall/ -- Photonic Products Group, Inc. (OTC Bulletin Board: PHPG - News) has reported its consolidated financial results for its third quarter and first nine months, which ended September 30, 2007.
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Revenues for the third quarter were $3,838,000, and revenues for the first nine months were $11,057,000, up 25.9% and up 7.9%, respectively, from the same periods last year.
The Company reported record net income before provision for income taxes and preferred stock dividends of $837,400 for the quarter and $1,708,800 for the first nine months, compared with profits of $173,000 and $381,500 for the same periods last year. Net income applicable to common shareholders, which is after the stock dividend on Company's preferred stock, was also a record at $797,400 and $1,395,500 for the three months and nine months ended September 30, 2007, respectively. This compares to $173,000 and $147,000 for the three months and nine months ended September 30, 2006
Gross profit margin in the third quarter was 47.3%, improved from 29.0% in the third quarter of 2006. Year to date gross profit margin was 41.5%, up significantly from 31.2% in the same period last year.
Cash flow from operations through the first nine months was $1,632,400, which compares with cash flow from operations of $1,026,600 in the first nine months of 2006. Net cash flow from all activities for the nine months ended September 30 was $644,300 after an accelerated repayment of $1,196,500 of principal and accrued interest on a $1,000,000 subordinated convertible note maturing on March 31, 2008. This compares with a net cash flow of $494,900 last year in the same period.
Orders for the nine months increased by 27.9% to $13,525,000 compared to the first nine months of 2006. The backlog at the end of the third quarter was $9,413,000 up 20.0% from a backlog of $7,843,000 at the same point in 2006. By comparison, product backlog was $6,969,000 on December 31, 2006.
Net basic and diluted earnings per common share (EPS) for the third quarter were $0.09 and $0.06, respectively. These record results compare favorably with net basic EPS and diluted EPS of $0.02 per common share for the same period last year. For the first nine months, basic and diluted EPS were $0.17 and $0.12. Both basic and diluted EPS for the same period last year were $0.02.
Dan Lehrfeld, President and CEO of PPGI commented, "We are on track for another year of record revenues, net income, and earnings per share. Net income for the third quarter and first nine months were up four-fold and both set new records, exceeding our highest full-year results and extending our string of positive quarters to nine. Our gross profit margin of 47.3% in the third quarter was boosted by improved labor productivity, a higher proportion of shipped products incorporating material provided by customers at no cost, and a lower ratio of non-labor costs to revenues. This exceptional third quarter raised gross profit margin for the nine months ended September 30, 2007 to 41.5%. Our backlog is strong, also a new record, and I expect revenues in the fourth quarter to trend higher than this quarter."
Mr. Lehrfeld continued, "Our cash flow from operations year-to-date is up more than 60% from last year, and it continues to finance our increased working capital needs while increasing our cash balances. In line with our continuing assessment of all of our options for expansion and growth in shareholder value, this year, we have been steadily and pro-actively focused on reducing our indebtedness and strengthening our balance sheet. Through September, we have realized an approximately $1,443,000 decrease in outstanding notes and capital lease principal and accrued interest balances through both scheduled and accelerated payments. We have also moved to eliminate our outstanding issues of preferred stock. In April, we called our 10% coupon, $500,000 principal, Series A convertible preferred stock. The holder elected to convert, resulting in the issuance of 500,000 common shares of the Company. In October, certain shareholders representing 1,560 shares, or 75%, of the total of 2,082 shares of our 10% coupon, Series B convertible preferred stock with a liquidation preference of $2,082,000, decided to voluntarily convert their shares into common stock. These shareholders included two major investors, two outside Directors, and myself. Subsequently, our Board authorized and the Company issued a recall for the remaining balance of the Series B shares, effective November 29, 2007."
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' business 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.
