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PPGI Releases FY 2009 Financial Results
NORTHVALE, N.J., March 31 -- Photonic Products Group, Inc. (BULLETIN BOARD: PHPG) today reported its consolidated financial results for the year ended December 31, 2009.
Fourth quarter sales of $3.0 million declined by 30% from $4.3 million in the corresponding quarter of 2008. Sales for the year were $11.1 million, or approximately 32% below last year's all-time high of $16.3 million. All three of the Company's brands had a sales decline for the year.
Bookings for 2009 were $9.5 million, a decrease of 27% from $13.0 million a year earlier. Year-end backlog was $4.4 million versus $6.1 million at the end of 2008.
Net (loss) income applicable to common shareholders was $(26,000) for the fourth quarter of 2009, compared to $144,000, last year in the comparable period, which included a deferred tax benefit from income taxes of $87,000. Fourth quarter (loss) earnings per share was $0.00 basic and diluted in 2009 and $0.01 basic and diluted in 2008, respectively.
For the year ended December 31, 2009, the Company's net (loss) applicable to shareholders was $(2.8) million, including a non-cash goodwill impairment charge of $1.6 million against the full carrying value of goodwill in its Florida subsidiary. In 2008, the Company reported net income applicable to common shareholders of $1.1 million. For 2009, basic and diluted (loss) per share was $(0.25) compared to earnings per share of $0.10 basic and $0.08 diluted for 2008. The 2008 results include the positive impact of a deferred tax benefit of $408,000.
Despite lower sales in the fourth quarter compared to the fourth quarter of last year, gross profit margin as a percentage of sales ("GPM") increased, reflecting the positive impact of management's cost reductions implemented throughout 2009. Fourth quarter 2009 GPM was 25.3% of sales or $747,000, up from 23.8% of sales, or $1.03 million in 2008. For fiscal 2009, GPM of $2.15 million or 19.5% of sales decreased from $4.8 million or 29.5% of sales in the previous year.
EBITDA(1) for the year was a loss of $(1.6) million versus EBITDA of $2.1 million in 2008. Excluding the $1.6 million goodwill impairment charge which the Company recorded in the third quarter of 2009, adjusted EBITDA(2) for the year was $10,000.
During the year, the Company continued to reduce its debt obligations by paying the balance of $125,000 on a Promissory Note originally issued by the Company in 2004, as part of the purchase price of its Florida subsidiary.
Net cash flow from operating activities improved for the year to $815,000 compared to $548,000 in 2008. Cash flows were favorably impacted by reductions in accounts receivable and inventory balances, net of lower accounts payable and customer advances. Although the Company incurred losses in 2009, PPGI ended the year in a strong cash position, up $597,000 from the previous year balance including certificates of deposit.
Joe Rutherford, President and CEO of PPGI stated, "The severe economic recession affected most of the markets we served in 2009 and continues to impact our business in the first quarter of 2010. The company experienced an increase in business from the universities/national laboratories sector but this was not significant enough to offset the severe downturn in the semiconductor related marketplace that we serve. In addition, sales of products into the defense/aerospace marketplace declined due to program delays and/or cutbacks. We do, however, have reason to be optimistic that the economy and the markets we serve, are improving due to a significant increase in requests for quotes in the fourth quarter of 2009 and orders received in the first quarter of 2010. During the past year we increased our efforts to improve our international sales and are seeing encouraging interest and demand for our products in both Europe and the Far East. Our focus remains on improving our customer relationships, and decreasing our product cost while improving our product quality through process improvements."
"During 2009 the Company strengthened its cash position, made selective capital investments to improve our metrology, and prioritized our efforts in the development of new products to be released in 2010. In the first quarter of 2010, we are adding to our engineering and sales staff in order to better serve our customers and to respond to the improved business environment anticipated in 2010. We look forward to the future with cautious optimism."
(1, 2) Note Regarding Use of Certain Non-GAAP Financial Measures:
The Company defines EBITDA(1) as (loss) earnings before non-cash, stock-based compensation, net interest, income taxes, depreciation, and amortization. Adjusted EBITDA(2) is calculated by excluding the goodwill impairment charge from the EBITDA results. EBITDA and adjusted EBITDA are presented herein because we consider these numbers an important measure of the Company's ability to internally fund capital expenditures and service debt. EBITDA and adjusted EBITDA should not be considered an alternative to cash flow as an indicator of the Company's financial performance, or liquidity. The reader is referred to the Supplemental Financial Data set forth below for a reconciliation of net (loss) income to EBITDA.
The reconciliation follows:
At December 31,
---------------
Reconciliation of
EBITDA and adjusted
EBITDA to Net (Loss)
Income 2009 2008
---- ----
(in thousands)
Net (loss) income, as
reported $(2,800) $1,098
Net income tax
provision (benefit) - (303)
Interest expense, net 131 170
Depreciation and
amortization 1,008 1,060
Non-cash, stock-
based compensation 113 88
--- ---
EBITDA $(1,548) $2,113
Goodwill impairment
charge 1,558 -
----- ---
Adjusted EBITDA $10 $2,113
=== ======
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.
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. 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 statement.
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
------------
2009 2008
---- ----
Assets
------
Current assets:
Cash and cash equivalents $4,069,310 $2,672,087
Certificates of deposit - 800,000
Accounts receivable (after
allowance for doubtful
accounts of $15,000 in
2009 and 2008) 1,927,672 2,810,602
Inventories, net 2,265,973 2,732,336
Other current assets 164,081 188,084
------- -------
Total Current Assets 8,427,036 9,203,109
--------- ---------
Plant and equipment:
Plant and equipment at cost 14,604,728 14,445,027
Less: Accumulated
depreciation and
amortization (12,016,247) (11,139,771)
----------- -----------
Total plant and equipment 2,588,481 3,305,256
Precious Metals 157,443 112,851
Deferred Income Taxes 408,000 408,000
Goodwill 311,572 1,869,646
Intangible Assets, net of
accumulated amortization 673,016 751,580
Other Assets 45,192 81,707
------ ------
Total Assets $12,610,740 $15,732,149
=========== ===========
Liabilities and
Shareholders' Equity
---------------------
Current Liabilities:
Current portion of notes
payable -other $9,000 $136,892
Accounts payable and
accrued liabilities 1,632,650 2,160,665
Customer advances 346,429 456,754
------- -------
Total Current Liabilities 1,988,079 2,754,311
Related Party Convertible
Notes Payable 2,500,000 2,500,000
Notes Payable - Other, net
of current portion 344,946 353,663
------- -------
Total Liabilities 4,833,025 5,607,974
--------- ---------
Commitments
Shareholders' equity:
Common stock: $.01 par
value; 60,000,000
authorized shares
11,443,347 issued at
December 31, 2009 and
11,230,678 issued at
December 31, 2008 114,433 112,306
Capital in excess of par
value 17,073,871 16,622,466
Accumulated deficit (9,395,639) (6,595,647)
---------- ----------
7,792,665 10,139,125
Less -Common stock in
treasury, at cost (4,600
shares) (14,950) (14,950)
------- -------
Total Shareholders' Equity 7,777,715 10,124,175
--------- ----------
Total Liabilities and
Shareholders' Equity $12,610,740 $15,732,149
=========== ===========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended
December 31,
------------
2009 2008 2007
Revenues
Net sales $11,051,127 $16,301,209 $15,099,878
Cost and expenses
Cost of goods sold 8,896,539 11,486,620 9,141,049
Selling, general and
administrative
expense 3,278,161 3,857,805 3,561,570
Goodwill Impairment
Charge 1,558,074 - -
--------- --- ---
13,732,774 15,344,425 12,702,619
---------- ---------- ----------
Operating (loss)
income (2,681,647) 956,784 2,397,259
Other income
(expense)
Interest expense, net (130,387) (170,476) (261,327)
Gain on sale of plant
and equipment 4,671 9,113 -
Gain (loss) on sale
of precious metals 7,371 - (5,851)
(118,345) (161,363) (267,178)
-------- -------- --------
(Loss) income before
income taxes and
preferred stock
dividends (2,799,992) 795,421 2,130,081
Income tax benefit
(provision) - 303,000 (250,000)
--- ------- --------
Net (loss) income (2,799,992) 1,098,421 1,880,081
Preferred stock
dividends - - (238,167)
--- --- --------
Net (loss) income
applicable to common
shareholders $(2,799,992) $1,098,421 $1,641,914
=========== ========== ==========
Net (loss) income per
share -basic $(0.25) $0.10 $0.19
====== ===== =====
Net (loss) income per
share -diluted $(0.25) $0.08 $0.13
====== ===== =====
Weighted average
shares outstanding -
basic 11,331,258 10,902,061 8,609,822
========== ========== =========
Weighted average
shares outstanding -
diluted 11,331,258 15,619,304 13,777,114
========== ========== ==========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
December 31,
------------
2009 2008 2007
Cash flows from
operating
activities:
Net (loss) income $(2,799,992) $1,098,421 $1,880,081
---------- ----------
Adjustments to
reconcile net (loss)
income to net cash
provided by
operating
activities:
Depreciation and
amortization 1,008,310 1,059,741 1,119,887
Goodwill impairment
charge 1,558,074 - -
401K common stock
contribution 179,068 160,180 166,694
Deferred income taxes - (408,000) -
Gain on sale of plant
and equipment (4,671) (9,113) -
(Gain) loss on sale
of precious metal (7,371) - 5,851
Stock-based
compensation expense 112,950 88,417 34,074
Change in inventory
reserve 94,628 302,511 163,391
Changes in operating
assets and
liabilities:
Accounts receivable 882,930 (628,743) 214,627
Inventories 371,735 (103,767) (758,438)
Other current assets 24,003 (24,019) 12,522
Other assets 34,107 7,865 32,854
Accounts payable and
accrued liabilities (528,015) (581,301) 246,568
Customer advances (110,325) (413,796) (117,413)
-------- -------- --------
Total adjustments 3,615,423 (550,025) 1,120,617
--------- -------- ---------
Net cash provided by
operating activities 815,431 548,396 3,000,698
------- ------- ---------
Cash flows from
investing
activities:
Proceeds (purchase)
of certificates of
deposit 800,000 (800,000) -
Purchase of plant and
equipment (210,563) (784,534) (246,518)
Purchase of precious
metals (53,538) - -
Proceeds from sale of
plant and equipment 4,671 10,000 -
Proceeds from sale of
precious metals 16,317 - 12,030
------ --- ------
Net cash provided by
(used in) investing
activities 556,887 (1,574,534) (234,488)
------- ---------- --------
Cash flows from
financing
activities:
Net proceeds from
issuance of common
stock 161,514 1,064,357 445,247
Redemption of Series
B Preferred shares - - (50,000)
Principal payments of
notes payable-other (136,609) (14,989) (647,215)
Principal payments of
convertible
promissory notes - (1,700,000) (1,000,000)
Principal payments of
capital lease
obligations - (47,088) (196,349)
--- ------- --------
Net cash provided by
(used in) financing
activities 24,905 (697,720) (1,448,317)
------ -------- ----------
Net increase
(decrease) in cash
and cash equivalents 1,397,223 (1,723,859) 1,317,893
Cash and cash
equivalents at
beginning of the
year 2,672,087 4,395,945 3,078,052
$4,069,310 $2,672,087 $4,395,945
Cash and cash
equivalents at end
of the year
Supplemental
Disclosure of Cash
Flow Information:
Interest paid $19,000 $508,000 $298,000
------- -------- --------
Income taxes (refund)
paid $(8,000) $408,000 $69,000
------- -------- -------
Source: Photonic Products Group, Inc.
CONTACT: William J. Foote of Photonic Products Group, Inc.,
+1-201-767-1910
Web Site: http://www/ppgrpinc.com
PPGI Releases FY 2009 Financial Results
NORTHVALE, N.J., March 31 -- Photonic Products Group, Inc. (BULLETIN BOARD: PHPG) today reported its consolidated financial results for the year ended December 31, 2009.
Fourth quarter sales of $3.0 million declined by 30% from $4.3 million in the corresponding quarter of 2008. Sales for the year were $11.1 million, or approximately 32% below last year's all-time high of $16.3 million. All three of the Company's brands had a sales decline for the year.
Bookings for 2009 were $9.5 million, a decrease of 27% from $13.0 million a year earlier. Year-end backlog was $4.4 million versus $6.1 million at the end of 2008.
Net (loss) income applicable to common shareholders was $(26,000) for the fourth quarter of 2009, compared to $144,000, last year in the comparable period, which included a deferred tax benefit from income taxes of $87,000. Fourth quarter (loss) earnings per share was $0.00 basic and diluted in 2009 and $0.01 basic and diluted in 2008, respectively.
For the year ended December 31, 2009, the Company's net (loss) applicable to shareholders was $(2.8) million, including a non-cash goodwill impairment charge of $1.6 million against the full carrying value of goodwill in its Florida subsidiary. In 2008, the Company reported net income applicable to common shareholders of $1.1 million. For 2009, basic and diluted (loss) per share was $(0.25) compared to earnings per share of $0.10 basic and $0.08 diluted for 2008. The 2008 results include the positive impact of a deferred tax benefit of $408,000.
Despite lower sales in the fourth quarter compared to the fourth quarter of last year, gross profit margin as a percentage of sales ("GPM") increased, reflecting the positive impact of management's cost reductions implemented throughout 2009. Fourth quarter 2009 GPM was 25.3% of sales or $747,000, up from 23.8% of sales, or $1.03 million in 2008. For fiscal 2009, GPM of $2.15 million or 19.5% of sales decreased from $4.8 million or 29.5% of sales in the previous year.
EBITDA(1) for the year was a loss of $(1.6) million versus EBITDA of $2.1 million in 2008. Excluding the $1.6 million goodwill impairment charge which the Company recorded in the third quarter of 2009, adjusted EBITDA(2) for the year was $10,000.
During the year, the Company continued to reduce its debt obligations by paying the balance of $125,000 on a Promissory Note originally issued by the Company in 2004, as part of the purchase price of its Florida subsidiary.
Net cash flow from operating activities improved for the year to $815,000 compared to $548,000 in 2008. Cash flows were favorably impacted by reductions in accounts receivable and inventory balances, net of lower accounts payable and customer advances. Although the Company incurred losses in 2009, PPGI ended the year in a strong cash position, up $597,000 from the previous year balance including certificates of deposit.
Joe Rutherford, President and CEO of PPGI stated, "The severe economic recession affected most of the markets we served in 2009 and continues to impact our business in the first quarter of 2010. The company experienced an increase in business from the universities/national laboratories sector but this was not significant enough to offset the severe downturn in the semiconductor related marketplace that we serve. In addition, sales of products into the defense/aerospace marketplace declined due to program delays and/or cutbacks. We do, however, have reason to be optimistic that the economy and the markets we serve, are improving due to a significant increase in requests for quotes in the fourth quarter of 2009 and orders received in the first quarter of 2010. During the past year we increased our efforts to improve our international sales and are seeing encouraging interest and demand for our products in both Europe and the Far East. Our focus remains on improving our customer relationships, and decreasing our product cost while improving our product quality through process improvements."
"During 2009 the Company strengthened its cash position, made selective capital investments to improve our metrology, and prioritized our efforts in the development of new products to be released in 2010. In the first quarter of 2010, we are adding to our engineering and sales staff in order to better serve our customers and to respond to the improved business environment anticipated in 2010. We look forward to the future with cautious optimism."
(1, 2) Note Regarding Use of Certain Non-GAAP Financial Measures:
The Company defines EBITDA(1) as (loss) earnings before non-cash, stock-based compensation, net interest, income taxes, depreciation, and amortization. Adjusted EBITDA(2) is calculated by excluding the goodwill impairment charge from the EBITDA results. EBITDA and adjusted EBITDA are presented herein because we consider these numbers an important measure of the Company's ability to internally fund capital expenditures and service debt. EBITDA and adjusted EBITDA should not be considered an alternative to cash flow as an indicator of the Company's financial performance, or liquidity. The reader is referred to the Supplemental Financial Data set forth below for a reconciliation of net (loss) income to EBITDA.
The reconciliation follows:
At December 31,
---------------
Reconciliation of
EBITDA and adjusted
EBITDA to Net (Loss)
Income 2009 2008
---- ----
(in thousands)
Net (loss) income, as
reported $(2,800) $1,098
Net income tax
provision (benefit) - (303)
Interest expense, net 131 170
Depreciation and
amortization 1,008 1,060
Non-cash, stock-
based compensation 113 88
--- ---
EBITDA $(1,548) $2,113
Goodwill impairment
charge 1,558 -
----- ---
Adjusted EBITDA $10 $2,113
=== ======
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.
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. 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 statement.
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
------------
2009 2008
---- ----
Assets
------
Current assets:
Cash and cash equivalents $4,069,310 $2,672,087
Certificates of deposit - 800,000
Accounts receivable (after
allowance for doubtful
accounts of $15,000 in
2009 and 2008) 1,927,672 2,810,602
Inventories, net 2,265,973 2,732,336
Other current assets 164,081 188,084
------- -------
Total Current Assets 8,427,036 9,203,109
--------- ---------
Plant and equipment:
Plant and equipment at cost 14,604,728 14,445,027
Less: Accumulated
depreciation and
amortization (12,016,247) (11,139,771)
----------- -----------
Total plant and equipment 2,588,481 3,305,256
Precious Metals 157,443 112,851
Deferred Income Taxes 408,000 408,000
Goodwill 311,572 1,869,646
Intangible Assets, net of
accumulated amortization 673,016 751,580
Other Assets 45,192 81,707
------ ------
Total Assets $12,610,740 $15,732,149
=========== ===========
Liabilities and
Shareholders' Equity
---------------------
Current Liabilities:
Current portion of notes
payable -other $9,000 $136,892
Accounts payable and
accrued liabilities 1,632,650 2,160,665
Customer advances 346,429 456,754
------- -------
Total Current Liabilities 1,988,079 2,754,311
Related Party Convertible
Notes Payable 2,500,000 2,500,000
Notes Payable - Other, net
of current portion 344,946 353,663
------- -------
Total Liabilities 4,833,025 5,607,974
--------- ---------
Commitments
Shareholders' equity:
Common stock: $.01 par
value; 60,000,000
authorized shares
11,443,347 issued at
December 31, 2009 and
11,230,678 issued at
December 31, 2008 114,433 112,306
Capital in excess of par
value 17,073,871 16,622,466
Accumulated deficit (9,395,639) (6,595,647)
---------- ----------
7,792,665 10,139,125
Less -Common stock in
treasury, at cost (4,600
shares) (14,950) (14,950)
------- -------
Total Shareholders' Equity 7,777,715 10,124,175
--------- ----------
Total Liabilities and
Shareholders' Equity $12,610,740 $15,732,149
=========== ===========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended
December 31,
------------
2009 2008 2007
Revenues
Net sales $11,051,127 $16,301,209 $15,099,878
Cost and expenses
Cost of goods sold 8,896,539 11,486,620 9,141,049
Selling, general and
administrative
expense 3,278,161 3,857,805 3,561,570
Goodwill Impairment
Charge 1,558,074 - -
--------- --- ---
13,732,774 15,344,425 12,702,619
---------- ---------- ----------
Operating (loss)
income (2,681,647) 956,784 2,397,259
Other income
(expense)
Interest expense, net (130,387) (170,476) (261,327)
Gain on sale of plant
and equipment 4,671 9,113 -
Gain (loss) on sale
of precious metals 7,371 - (5,851)
(118,345) (161,363) (267,178)
-------- -------- --------
(Loss) income before
income taxes and
preferred stock
dividends (2,799,992) 795,421 2,130,081
Income tax benefit
(provision) - 303,000 (250,000)
--- ------- --------
Net (loss) income (2,799,992) 1,098,421 1,880,081
Preferred stock
dividends - - (238,167)
--- --- --------
Net (loss) income
applicable to common
shareholders $(2,799,992) $1,098,421 $1,641,914
=========== ========== ==========
Net (loss) income per
share -basic $(0.25) $0.10 $0.19
====== ===== =====
Net (loss) income per
share -diluted $(0.25) $0.08 $0.13
====== ===== =====
Weighted average
shares outstanding -
basic 11,331,258 10,902,061 8,609,822
========== ========== =========
Weighted average
shares outstanding -
diluted 11,331,258 15,619,304 13,777,114
========== ========== ==========
PHOTONIC PRODUCTS GROUP, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
December 31,
------------
2009 2008 2007
Cash flows from
operating
activities:
Net (loss) income $(2,799,992) $1,098,421 $1,880,081
---------- ----------
Adjustments to
reconcile net (loss)
income to net cash
provided by
operating
activities:
Depreciation and
amortization 1,008,310 1,059,741 1,119,887
Goodwill impairment
charge 1,558,074 - -
401K common stock
contribution 179,068 160,180 166,694
Deferred income taxes - (408,000) -
Gain on sale of plant
and equipment (4,671) (9,113) -
(Gain) loss on sale
of precious metal (7,371) - 5,851
Stock-based
compensation expense 112,950 88,417 34,074
Change in inventory
reserve 94,628 302,511 163,391
Changes in operating
assets and
liabilities:
Accounts receivable 882,930 (628,743) 214,627
Inventories 371,735 (103,767) (758,438)
Other current assets 24,003 (24,019) 12,522
Other assets 34,107 7,865 32,854
Accounts payable and
accrued liabilities (528,015) (581,301) 246,568
Customer advances (110,325) (413,796) (117,413)
-------- -------- --------
Total adjustments 3,615,423 (550,025) 1,120,617
--------- -------- ---------
Net cash provided by
operating activities 815,431 548,396 3,000,698
------- ------- ---------
Cash flows from
investing
activities:
Proceeds (purchase)
of certificates of
deposit 800,000 (800,000) -
Purchase of plant and
equipment (210,563) (784,534) (246,518)
Purchase of precious
metals (53,538) - -
Proceeds from sale of
plant and equipment 4,671 10,000 -
Proceeds from sale of
precious metals 16,317 - 12,030
------ --- ------
Net cash provided by
(used in) investing
activities 556,887 (1,574,534) (234,488)
------- ---------- --------
Cash flows from
financing
activities:
Net proceeds from
issuance of common
stock 161,514 1,064,357 445,247
Redemption of Series
B Preferred shares - - (50,000)
Principal payments of
notes payable-other (136,609) (14,989) (647,215)
Principal payments of
convertible
promissory notes - (1,700,000) (1,000,000)
Principal payments of
capital lease
obligations - (47,088) (196,349)
--- ------- --------
Net cash provided by
(used in) financing
activities 24,905 (697,720) (1,448,317)
------ -------- ----------
Net increase
(decrease) in cash
and cash equivalents 1,397,223 (1,723,859) 1,317,893
Cash and cash
equivalents at
beginning of the
year 2,672,087 4,395,945 3,078,052
$4,069,310 $2,672,087 $4,395,945
Cash and cash
equivalents at end
of the year
Supplemental
Disclosure of Cash
Flow Information:
Interest paid $19,000 $508,000 $298,000
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Income taxes (refund)
paid $(8,000) $408,000 $69,000
------- -------- -------
Source: Photonic Products Group, Inc.
CONTACT: William J. Foote of Photonic Products Group, Inc.,
+1-201-767-1910
Web Site: http://www/ppgrpinc.com