U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
August 20, 2014
Inrad Optics, Inc.
(Exact name of registrant as specified in
its charter)
New Jersey |
|
000-11668 |
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22-2003247 |
(State or other
jurisdiction of
incorporation) |
|
(Commission
File Number) |
|
(IRS Employer
Identification
Number) |
|
|
|
|
|
181 Legrand Avenue, Northvale, New Jersey |
|
07647 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code: (201) 767-1910
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and
Financial Condition
On August 20, 2014,
Inrad Optics, Inc. (the “Company”) issued a press release announcing its financial results for the three and six months
ended June 30, 2014. A copy of the Company’s press release is attached as Exhibit 99.1 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits
|
Exhibit 99.1 |
Press Release dated August 20, 2014 announcing financial results for the three and six months ended June 30, 2014 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: August
20, 2014 |
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By: |
/s/ William J. Foote |
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CFO, Secretary and Treasurer |
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Exhibit 99.1
FOR IMMEDIATE RELEASE
SECOND QUARTER AND SIX MONTHS 2014
FINANCIAL RESULTS RELEASED BY INRAD OPTICS, INC.
NORTHVALE, NJ, August 20 – Inrad
Optics, Inc. (OTCBB: INRD) has reported its consolidated financial results for its second quarter and six months ended June 30,
2014.
Revenue for the second quarter was $2.2
million, down 17.3% from $2.7 million in the same period last year. For the six months ended June 30, 2014, revenue was $4.1 million
compared to $5.8 million for the comparable period last year as the Company experienced a decrease in shipments in the defense
and university & national labs markets. Increased shipments in laser systems and process control & metrology markets partially
offset the overall decline. Sales to the Company’s top five customers represented approximately 47% of sales in six months
ended June 30, 2014, compared to 35% last year.
Orders were $5.4 million and $4.8 million
for the six months ended June 30, 2014 and 2013, respectively, an increase of 12.5%.
Gross profit for the second quarter of
2014 was $(141,000) including restructuring costs of $62,000, or (6.3%) of sales, versus $308,000 or 11.4% in the comparable quarter
last year. For the six months ended June 30, 2014, gross profit decreased to $(277,000) including $121,000 of restructuring costs,
or (6.7%) of sales compared to $1.0 million or 17.4% in 2013. The 2014 decrease in gross profit margin primarily reflects a lower
and less profitable sales mix compared to 2013. The six months ended June 30, 2013 was favorably impacted by payroll savings of
approximately $79,000, net of severance and other separation costs, related to a reduction in work-force.
The Company had a net loss of $(1,031,000)
and $(1,906,000) for the three and six months ended June 30, 2014. This compares with a net loss of $(648,000) and $(817,000) in
the comparable periods last year. Net loss per share was $(0.08) and $(0.16), basic and diluted, for the three months and six months
ended June 30, 2014. For the three and six months ended June 30, 2013, the basic and diluted net loss per share was $(0.05) and
$(0.07), respectively.
Net cash used in operating activities was
$1,121,000 for the six months ended June 30, 2014 compared to net cash used of $134,000 last year. The difference primarily reflects
the impact of the higher net loss in the six months ended June 30, 2014.
Investing activities in the six months
ended June 30, 2014 include capital expenditures of $363,000 primarily related to the consolidation of the Florida operation in
Northvale, NJ, net of proceeds from the sale of plant and equipment of $78,000. This compared with capital expenditures of $447,000
in the same period last year related mainly to the purchase of a plasma assist optical coating chamber and related expenditures
for additional equipment and installation.
After investing and financing activities,
net cash decreased by $1,492,000 versus a decrease of $624,000 last year. At June 30, 2014, the Company had cash and cash equivalents
of $960,000.
President and CEO Amy Eskilson remarked
“Our Q2 results, while unfavorable, represent a predicted function of our one-time consolidation costs and reduced shipments
to our defense and university segment customers. Much more positively, I am pleased to report orders are up 15% in 2014 over the
same period in 2013, resulting in a backlog that is up over $1.2 million or 28% from the start of the year. We continue to be successful
at diversifying our customer base, represented by new orders in the medical, commercial sensing and inspection markets. Operationally,
facility integration efforts are paying off and cost savings are being realized.
Additionally, the development and commercialization
of the nuclear detection crystal stilbene continues to demonstrate success. In June, we were honored with two significant awards
– a coveted SBIR Tibbetts Award from the Small Business Association, and an award from the US Department of Homeland Security’s
Domestic Nuclear Detection Office.”
Inrad Optics,
Inc. was incorporated in New Jersey in 1973. The Company develops, manufactures and markets products and services for use in photonics
industry sectors via three distinct but complimentary product areas - “Crystals and Devices”, “Custom Optics”
and “Metal Optics.”
The Company is a vertically integrated
organization specializing in crystal-based optical components and devices, custom optical components from both glass and metal,
and precision optical and opto-mechanical assemblies. Manufacturing capabilities include solution and high temperature crystal
growth, extensive optical fabrication capabilities, including precision diamond turning and the ability to handle large substrates,
optical coatings and in-process metrology expertise. Inrad Optics’ customers include leading corporations in the defense,
aerospace, laser systems, process control and metrology sectors of the photonics industry, as well as the U.S. Government, National
Laboratories and Universities worldwide.
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 "believes", "expects", “should”,
"will", "plan", “anticipate”, “probably”, “targeting” or similar words.
Such forward-looking statements, such as our expectation for revenues, new orders, and improved results 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 develop
new business, 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 our Annual Report on Form 10-K for the year ended December 31, 2013.
The forward looking statements made in this news release are made as of the date hereof and Inrad Optics, Inc. does not assume
any obligation to update publicly any forward looking statement.
INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
June 30, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
(Unaudited) | | |
(Audited) | |
Assets | |
| | |
| |
Current assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 959,636 | | |
$ | 2,451,263 | |
Accounts receivable (net of allowance for doubtful accounts of $15,000 in 2014 and 2013) | |
| 1,121,043 | | |
| 1,236,958 | |
Inventories, net | |
| 2,917,718 | | |
| 3,129,855 | |
Other current assets | |
| 103,409 | | |
| 144,581 | |
Total current assets | |
| 5,101,806 | | |
| 6,962,657 | |
| |
| | | |
| | |
Plant and equipment: | |
| | | |
| | |
Plant and equipment, at cost | |
| 15,674,367 | | |
| 15,638,759 | |
Less: Accumulated depreciation and amortization | |
| (13,874,280 | | |
| (13,931,775 | |
Total plant and equipment | |
| 1,800,087 | | |
| 1,706,984 | |
| |
| | | |
| | |
Precious Metals | |
| 483,676 | | |
| 474,960 | |
Goodwill | |
| 311,572 | | |
| 311,572 | |
Intangible Assets, net | |
| 319,479 | | |
| 358,760 | |
Other Assets | |
| 33,122 | | |
| 33,122 | |
Total Assets | |
$ | 8,049,742 | | |
$ | 9,848,055 | |
| |
| | | |
| | |
Liabilities and Shareholders’ Equity | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Current portion of other long term notes | |
$ | 156,600 | | |
$ | 156,600 | |
Accounts payable and accrued liabilities | |
| 919,537 | | |
| 967,963 | |
Customer advances | |
| 251,370 | | |
| 146,784 | |
Total current liabilities | |
| 1,327,507 | | |
| 1,271,347 | |
| |
| | | |
| | |
Related Party Convertible Notes Payable | |
| 2,500,000 | | |
| 2,500,000 | |
| |
| | | |
| | |
Other Long Term Notes, net of current portion | |
| 635,339 | | |
| 712,868 | |
Total liabilities | |
| 4,462,846 | | |
| 4,484,215 | |
| |
| | | |
| | |
Commitments | |
| | | |
| | |
| |
| | | |
| | |
Shareholders’ Equity: | |
| | | |
| | |
Common stock: $.01 par value; 60,000,000 authorized
shares; 12,354,093 shares issued at June 30, 2014 and 12,050,603 issued at December 31, 2013 | |
| 123,543 | | |
| 120,508 | |
Capital in excess of par value | |
| 18,419,966 | | |
| 18,293,782 | |
Accumulated deficit | |
| (14,941,663 | | |
| (13,035,500 | |
| |
| 3,601,846 | | |
| 5,378,790 | |
Less - Common stock in treasury, at cost (4,600 shares) | |
| (14,950 | | |
| (14,950 | |
Total shareholders’ equity | |
| 3,586,896 | | |
| 5,363,840 | |
| |
| | | |
| | |
Total Liabilities and Shareholders’ Equity | |
$ | 8,049,742 | | |
$ | 9,848,055 | |
INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| |
Three Months Ended June 30, | | |
Six Months Ended June 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
Total revenue | |
$ | 2,227,546 | | |
$ | 2,694,598 | | |
$ | 4,131,926 | | |
$ | 5,771,724 | |
| |
| | | |
| | | |
| | | |
| | |
Cost and expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of goods sold | |
| 2,307,000 | | |
| 2,386,866 | | |
| 4,288,678 | | |
| 4,764,894 | |
Restructuring costs | |
| 61,951 | | |
| — | | |
| 120,616 | | |
| — | |
Selling, general and administrative expenses | |
| 844,581 | | |
| 909,664 | | |
| 1,603,686 | | |
| 1,763,472 | |
| |
| 3,213,532 | | |
| 3,296,530 | | |
| 6,012,980 | | |
| 6,528,366 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (985,986 | ) | |
| (601,932 | ) | |
| (1,881,054 | ) | |
| (756,642 | |
| |
| | | |
| | | |
| | | |
| | |
Other expense: | |
| | | |
| | | |
| | | |
| | |
Interest expense—net | |
| (45,308 | ) | |
| (45,832 | ) | |
| (90,183 | ) | |
| (91,476 | |
Gain on sale of plant and equipment | |
| — | | |
| — | | |
| 65,074 | | |
| 31,000 | |
| |
| (45,308 | ) | |
| (45,832 | ) | |
| (25,109 | ) | |
| (60,476 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss before income taxes | |
| (1,031,294 | ) | |
| (647,764 | ) | |
| (1,906,163 | ) | |
| (817,118 | |
| |
| | | |
| | | |
| | | |
| | |
Income tax (provision) benefit | |
| — | | |
| — | | |
| — | | |
| — | |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (1,031,294 | ) | |
$ | (647,764 | ) | |
$ | (1,906,163 | ) | |
$ | (817,118 | |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Net loss per common share— basic and diluted | |
$ | (0.08 | ) | |
$ | (0.05 | ) | |
$ | (0.16 | ) | |
$ | (0.07 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding— basic and diluted | |
| 12,349,490 | | |
| 12,046,003 | | |
| 12,133,666 | | |
| 11,926,328 | |
INRAD OPTICS, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
| |
Six Months Ended June 30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
Cash flows from operating activities: | |
| | |
| |
Net (loss) | |
$ | (1,906,163 | ) | |
$ | (817,118 | ) |
| |
| | | |
| | |
Adjustments to reconcile net (loss) to net cash (used in) operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 295,721 | | |
| 259,094 | |
401K common stock contribution | |
| 71,255 | | |
| 80,922 | |
(Gain) on sale of plant and equipment | |
| (65,074 | ) | |
| (31,000 | ) |
Stock based compensation | |
| 57,964 | | |
| 80,284 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| 115,915 | | |
| 185,660 | |
Inventories, net | |
| 212,137 | | |
| 200,393 | |
Other current assets | |
| 41,172 | | |
| 46,797 | |
Accounts payable and accrued liabilities | |
| (48,427 | ) | |
| (26,180 | ) |
Customer advances | |
| 104,586 | | |
| (112,512 | ) |
Total adjustments and changes | |
| 785,249 | | |
| 683,458 | |
Net cash (used in) operating activities | |
| (1,120,914 | ) | |
| (133,660 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Capital expenditures | |
| (362,848 | ) | |
| (447,039 | ) |
Purchase of precious metal tools | |
| (8,716 | ) | |
| — | |
Proceeds from sale of plant and equipment | |
| 78,380 | | |
| 31,000 | |
Net cash (used in) investing activities | |
| (293,184 | ) | |
| (416,039 | ) |
| |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | |
Principal payments on notes payable-other | |
| (77,529 | ) | |
| (74,169 | ) |
Net cash (used in) financing activities | |
| (77,529 | ) | |
| (74,169 | ) |
| |
| | | |
| | |
Net (decrease) in cash and cash equivalents | |
| (1,491,627 | ) | |
| (623,868 | ) |
| |
| | | |
| | |
Cash and cash equivalents at beginning of period | |
| 2,451,263 | | |
| 3,089,013 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
$ | 959,636 | | |
$ | 2,465,145 | |
| |
| | | |
| | |
Supplemental Disclosure of Cash Flow Information: | |
| | | |
| | |
Interest paid | |
$ | 55,000 | | |
$ | 59,000 | |
Income taxes paid | |
$ | 2,000 | | |
$ | 2,000 | |
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