Ionatron Reports Second Quarter 2005 Financial Results
TUCSON, Ariz.--Aug. 9, 2005--Ionatron, Inc., a next generation controlled directed energy weapon technology company, today reported financial results for the three months ended June 30, 2005. The Company will host a live conference call tomorrow at 10:00 a.m. Eastern.Second Quarter 2005 Results
Revenue for the second quarter of 2005 was $4.0 million, compared to $1.8 million for the same period last year. The increase in revenues was derived from work on existing contracts with agencies of the U.S. government, revenue from the Company's JIN contract as well as the inclusion of North Star's revenues.
Net loss for the second quarter of 2005 was $1.7 million, or $0.02 per basic and diluted share compared to prior-comparable period net loss of $1.4 million or $0.02 per basic and diluted share.
Business Update
-- The first two Improvised Explosive Device Neutralizer (JIN) EX systems have completed factory acceptance testing by the customer and have been validated as meeting or exceeding all specifications. The Company expects the remaining four JIN EX units will be completed by the end of August and six JIN II A units will be completed by the end of September or early October. This represents a slight delay over the Company's planned initial schedule and is primarily due to additional program requirements and system performance enhancements.
-- Ionatron has contracted with a group of former Special Forces (U.S. Navy SEALS) to provide field support in Iraq and real-time feedback from the battlefield to Ionatron and to various military units and commanders. These personnel are presently training in Tucson where they are receiving classroom, field training and socialization to the military units that are expected to be deployed together with the JIN systems in Iraq.
-- The Company's Government customer has requested information to begin the process of consummating a potentially large follow-on production contract for JIN units, and Ionatron has provided detailed cost information for production versions of the technology. This is the first step in the process prior to proceeding to Government customer approval and negotiation of a production contract. The Company believes that the Supplemental Budget, passed by Congress in April 2005, provides for substantial potential funding that the Company believes is in excess of $100 million for JIN production. The Company believes that this production would occur at its Mississippi facility.
-- The $12.6 million in 2005 Congressional funding allocated to LIPC now has a defined statement of work and the Company officially started work on the program July 1st.
-- New Stennis facility employees have undergone training and certification at Ionatron's Tucson facility, and have commenced operations at Stennis. Additional facility upgrades have been made to the Stennis facility in anticipation of a pending production JIN contract.
Thomas Dearmin, CEO of Ionatron, commented, "We are very pleased with the progress we have achieved in the first half of 2005 in securing new and significant contracts, expanding our operations and continuing to advance our proprietary LIPC technology. The JIN system program is moving ahead and we are confident that this innovative technology will be supporting our troops in the very near future. The development of our core LIPC technology remains our long term priority and we were gratified to have recently commenced work on the 2005 Congressional funded contract. These and many other accomplishments were achieved by our dedicated Ionatron employees and through the support of our U.S. government customers. We are continuing the process of transitioning from a development stage company to a manufacturing company, and the continued expansion of operations at our Mississippi facility is a very good indicator of that trend."
Year-to-Date 2005 Results
Revenue for the six months ended June 30, 2005 was $6.5 million, compared to $2.1 million for the same period last year. The increase in revenues was derived from work on existing contracts with agencies of the U.S. government, revenue from the Company's JIN contract as well as the inclusion of North Star's revenues.
Net loss for the six months ended June 30, 2005 was $3.4 million or $0.05 per basic and diluted share compared to a net loss for the comparable period in 2004 of $2.3 million or $0.04 per basic and diluted share.
At June 30, 2005, the Company had approximately $1.6 million in cash and cash equivalents and municipal bonds available for sale as compared to $3.5 million in cash and cash equivalents and municipal bonds available for sale at December 31, 2004. Current account receivables are approximately $2.7 million as of June 30th.
Conference Call
As previously announced, Ionatron will host a conference call tomorrow, August 10, 2005, at 10:00 a.m. ET. Shareholders and other interested parties can participate in the conference call by dialing 866-700-6293 or for international/local participants by dialing 617-213-8835 and enter participant pass code #88702255 a few minutes before 10:00 a.m. on August 10, 2005. The call will also be broadcast live on the Internet at www.streetevents.com and www.fulldisclosure.com. A replay of the conference call will be available from August 10, 2005, at 12:00 p.m. until 11:59 p.m. ET August 17, 2005 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and enter the participant pass code #76769784. The call will also be archived for 90 days at www.streetevents.com and www.fulldisclosure.com.
About Ionatron Inc.
Ionatron, Inc. develops and markets Directed Energy Weapon technology products initially for sale to the U.S. Government. The goal of the Company is to produce products that incorporate our technology initially for specific U.S. Government customer applications and platforms.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements contained in this News Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any futures results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, but are not limited to: the risks of uncertainty of patent protection; the risks of uncertainty of strategic alliances; the risk and uncertainty of management tenure; the impact of third-party suppliers' manufacturing constraints or difficulties; management's ability to achieve business performance objectives, market acceptance of, and demand for, the Company's products, and resulting revenues; development of technology and manufacturing capabilities; impact of competitive products and pricing; litigation and other risks detailed in the company's filings with the Securities and Exchange Commission. The words "looking forward," "believe," "demonstrate," "intend," "expect," "estimate," "anticipate," "likely" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Ionatron undertakes no obligation to update any forward-looking statements contained in this news release.
IONATRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS
ENDED JUNE 30,
-------------------------
2005 2004
------------ ------------
Revenue $3,956,522 $1,833,572
Cost of revenue 3,775,826 1,726,753
------------ ------------
Gross profit 180,696 106,819
Operating expenses:
General and administrative 1,345,807 1,199,390
Selling and marketing 95,133 119,566
Research and development 385,656 120,133
------------ ------------
Total operating expenses 1,826,596 1,439,089
------------ ------------
Operating loss (1,645,900) (1,332,270)
Other (expense) income
Interest expense (58,102) (43,184)
Interest income 10,099 21,221
Other (7,500) --
------------ ------------
Total other (55,503) (21,963)
------------ ------------
Loss before provision for income taxes (1,701,403) (1,354,233)
Income taxes 9,293 --
------------ ------------
Net loss $(1,710,696) $(1,354,233)
------------ ------------
Net loss per share - basic and diluted $(0.02) $(0.02)
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Weighted average number of shares
outstanding, basic and diluted 71,212,062 69,060,586
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IONATRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED
JUNE 30,
-------------------------
2005 2004
------------ ------------
Revenue $6,526,793 $2,106,014
Cost of revenue 6,180,312 1,981,753
------------ ------------
Gross profit 346,481 124,261
Operating expenses:
General and administrative 2,869,011 1,764,939
Selling and marketing 230,622 232,072
Research and development 491,646 300,898
------------ ------------
Total operating expenses 3,591,319 2,297,909
------------ ------------
Operating loss (3,244,838) (2,173,648)
Other (expense) income
Interest expense (116,179) (117,700)
Interest income 21,001 21,221
Other 592 --
------------ ------------
Total other (94,586) (96,479)
------------ ------------
Loss before provision for income taxes (3,339,424) (2,270,127)
Income taxes 18,870 --
------------ ------------
Net loss $(3,358,294) $(2,270,127)
------------ ------------
Net loss per share - basic and diluted $(0.05) $(0.04)
============ ============
Weighted average number of shares
outstanding, basic and diluted 71,091,456 60,138,283
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IONATRON, INC.
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2005 2004
----------- ------------
(Unaudited) (Audited)
----------- ------------
ASSETS
Current assets
Cash and cash equivalents $1,116,027 $2,495,779
Accounts receivable - net 2,670,196 4,497,350
Inventory 1,028,212 341,334
Municipal bonds available for sale 500,000 1,000,000
Other receivables 38,872 30,403
Prepaid expenses 430,667 404,619
----------- ------------
Total current assets 5,783,974 8,769,485
Property and equipment, net 1,500,702 1,416,072
Goodwill 1,487,884 1,487,884
Unamortized intangible assets 603,000 603,000
Amortized intangible assets - net 218,350 261,450
----------- ------------
TOTAL ASSETS $9,593,910 $12,537,891
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $1,757,072 $1,639,018
Accrued expenses 500,455 841,067
Note payable to stockholder 2,800,000 2,800,000
Billings in excess of costs 45,042 25,695
Current portion of capital lease
obligation 15,284 2,435
----------- ------------
Total current liabilities 5,117,853 5,308,215
Capital lease obligation 31,969 3,482
Deferred tax liabilities 28,731 9,577
Stockholders' equity
Preferred stock, 1,000,000 shares
authorized and unissued -- --
Common stock, $.001 par value,
100,000,000 shares authorized;
71,234,613 shares issued and
outstanding at June 30, 2005 and
70,846,204 shares issued and
outstanding at December 31, 2004 71,235 70,846
Additional paid-in capital 10,963,421 10,406,776
Accumulated deficit (6,619,299) (3,261,005)
----------- ------------
Total stockholders' equity 4,415,357 7,216,617
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $9,593,910 $12,537,891
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