Implant Sciences Corporation (AMEX: IMX), a high technology
supplier of systems and sensors for the homeland security market and
related industries, today announced financial results for its third
quarter of fiscal 2008 which ended March 31, 2008. The Company’s
financial condition and results of operations reported below include
only continuing operations, which exclude the financial condition and
results of operations of i) Accurel Systems International, due to the
sale of substantially all of the assets of this subsidiary on May 1,
2007, ii) Core Systems Inc., the Company’s
wholly-owned subsidiary which is currently being marketed for sale, and
iii) the medical products reporting unit, assets of which have been sold
or are in the process of being sold as part of the Company’s
decision to withdraw from the medical business.
Total revenue for the three months ended March 31, 2008 was $787,000
compared with $1.1 million for the comparable prior year period, a
decrease of $334,000 or 30%. Total revenue for the nine months ended
March 31, 2008 was $2.5 million compared with $3.5 million for the
comparable prior year period, a decrease of $1.0 million or 29%. The
decrease in total revenue for the three and nine month periods ended
March 31, 2008 compared with the comparable prior year periods is
primarily attributable to decreased government contract revenues, offset
by increases in sales of explosives trace detection (ETD) equipment.
Sales of ETD equipment for the nine months of fiscal 2008 were nearly
the same for ETD equipment during all fiscal 2007.
Loss from continuing operations for the three months ended March 31,
2008 was $2.0 million, or $0.17 per basic and diluted share, compared
with $1.1 million, or $0.09 per basic and diluted share, for the
comparable prior year period. Loss from continuing operations for the
nine months ended March 31, 2008 was $5.5 million, or $0.46 per basic
and diluted share, compared with $2.6 million, or $0.22 per basic and
diluted share, for the comparable prior year period.
"With the turnaround phase of our strategy
well along, our attention is focused on sales growth and increased
product development activities in the security products group,”
stated Phillip Thomas, CEO and President. "We
are pleased with progress being made on sales of our handheld explosives
detector which continue to show improvement. Notably, we currently have
a multi-million
Dollar order backlog with many of these units destined
for supporting roles related to the Beijing Olympics. While we know
sales results will fluctuate as a normal part of the business, it is
clear the increased sales of explosives detectors are a direct result of
upgrading the leadership of our sales group and the efforts of our sales
team over the past several months.
"In other activities, we are continuing the
divestiture plan the Company embarked upon in fiscal 2007. We anticipate
the closing of several transactions involving the components of our
medical business to occur at various times over the next six months,
thus marking our complete withdrawal from the medical aspects of the
business. The sale of Core Systems, Inc., when completed, will end our
involvement in the semiconductor businesses.”
As of March 31, 2008, the Company’s cash
position was $2.4 million, down from $4.8 million at December 31, 2007.
The decrease in cash is attributable to i) cash repayments aggregating
$510,000 related to the monthly amortization and dividends payments on
our Series D Convertible Preferred Stock; ii) repayment of $407,000 of
long-term debt and capital lease obligations; iii) continued investment
in research and development to further the development and
commercialization of our security products; and iv) investment in
personnel in the areas of engineering, sales, and marketing necessary to
stabilize and expand the Company’s security
business.
Based on current sales, expense and cash flow projections, cash
available from the Company’s line of credit,
and the sale of Core Systems and certain other assets, management
believes there are plans in place to sustain operations for the next
twelve months. These plans depend on a substantial increase in sales of
the Company’s handheld trace explosives
detector product, the sale of Core Systems, and the sale of other
assets. To further sustain the Company, improve its cash position, and
enable it to grow while reducing debt, management plans to seek
additional capital through private financing sources during the next
twelve months. However, there can be no assurance that management will
be successful in executing these plans. Management will continue to
closely monitor and attempt to control costs at the Company and actively
seek needed capital through continuing sales of its products, equity
infusions, government grants and awards, strategic alliances, and
through relationships with lending institutions.
Additional information on the financial condition and results of
operations can be found in the Company’s
Quarterly Report on Form 10Q for the quarter ended March 31, 2008 filed
with the Securities and Exchange Commission.
Company Conference Call
Management will host a conference call on Thursday, May 22, 2008 at 4:10
PM Eastern time to review the Company’s
fiscal 2008 third quarter financial results and operations. Following
the Company’s prepared remarks there will be
a Q&A session. The call can be accessed by interested parties by
dialing: 866-825-1709 within the U.S. or 617-213-8060 outside the U.S.
and entering the passcode: 37114531. Participants are asked to call the
assigned number approximately 5 minutes before the conference call
begins. A replay of the conference call will be available two hours
after the call for the following two business days by dialing:
888-286-8010 within the U.S. or 617-801-6888 outside the U.S. and
entering passcode: 19917316. The conference call will also be available
live over the Internet at the investor relations section of Implant
Sciences’ website at www.implantsciences.com.
A replay of the webcast will be available for one month after the call.
About Implant Sciences
Implant Sciences develops, manufactures and sells sophisticated sensors
and systems for the Security, Safety and Defense (SS&D) industries. The
Company has developed proprietary technologies used in its commercial
portable and bench-top explosive trace detection systems which ship to a
growing number of locations domestically and internationally. In
addition to its emphasis on security products, the Company has also
developed and acquired technologies using ion implantation and thin film
coatings for microelectronics and other applications. For further
details on the Company and its products, please visit the Company’s
website at www.implantsciences.com.
Safe Harbor Statement
This press release contains forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements are subject
to risks and uncertainties, including, but not limited to, the fact that
our auditors’ opinion regarding our financial
statements for the fiscal year ended June 30, 2007 expresses substantial
doubt about our ability to continue as a "going
concern”; we do not operate at a profit and
do not expect to be profitable for some time; if the American Stock
Exchange delists our common stock, we may not be able to raise capital
and shareholder liquidity may become extremely limited; an adverse
determination in the litigation related to our sale of the assets of our
Accurel subsidiary could have a material adverse effect on our financial
condition and results of operations; our business is subject to intense
competition and rapid technological change; our explosives detection
products and technologies (including any new products we may develop)
may not be accepted by the market; we may not be able to effectively
protect our intellectual property; we may not be able to manage our
future growth or attract or retain key personnel; liability claims
related to our products or our handling of hazardous materials could
damage our reputation and have a material adverse effect on our
financial results; any failures of our suppliers or contract
manufacturers could materially damage our business; if we are required
to redeem our Series D Preferred Stock for cash, our cash flow and
results of operations could be materially and adversely affected; if
third party credit is unavailable, our working capital could be
restricted and we may not be able to borrow capital; shares of our
common stock eligible for future sale may adversely affect the market
for our stock; and other risks and uncertainties described in the Company’s
filings with the Securities and Exchange Commission, including its most
recent Forms 10-K, 10-Q and 8-K. Such statements are based on
management's current expectations and assumptions which could differ
materially from the forward-looking statements.
For further information, you are encouraged to review Implant Sciences’
filings with the Securities and Exchange Commission, including its
Annual Report on Form 10-K for the period ended June 30, 2007 and
Quarterly Reports for the periods ended September 30, 2007, December 31,
2007 and March 31, 2008. The Company assumes no obligation to update the
information contained in this press release.
Implant Sciences Corporation Consolidated Balance Sheets (Unaudited)
ASSETS:
March 31,2008
June 30,2007
Currents assets:
Cash and cash equivalents
$
2,421,000
$
9,621,000
Restricted cash
75,000
25,000
Accounts receivable, net
269,000
346,000
Accounts receivable, unbilled
64,000
162,000
Inventories
566,000
683,000
Investments - available for sale securities
54,000
133,000
Prepaid expenses and other current assets
255,000
712,000
Current assets held for sale
1,720,000
2,071,000
Total current assets
5,424,000
13,753,000
Property and equipment, net
477,000
530,000
Other non-current assets
1,181,000
711,000
Non-current assets held for sale
2,583,000
4,606,000
Total assets
$
9,665,000
$
19,600,000
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current maturities of long-term debt and obligations under capital
lease
$
556,000
$
705,000
Line of credit
227,000
-
Payable to Med-Tec
63,000
143,000
Accrued expenses
1,248,000
1,763,000
Accounts payable
974,000
570,000
Current portion of long-term lease liability
313,000
301,000
Deferred revenue
330,000
71,000
Current liabilities held for sale
942,000
1,111,000
Total current liabilities
4,653,000
4,664,000
Long-term liabilities:
Long-term debt and obligations under capital lease, net of current
maturities
24,000
629,000
Long-term lease liability
498,000
735,000
Derivatives related to preferred stock features
97,000
133,000
Long-term liabilities held for sale
2,000
4,000
Total liabilities
5,274,000
6,165,000
Commitments and contingencies
Series D Cumulative Redeemable Convertible Preferred Stock
2,551,000
2,989,000
Stockholders' equity:
Common stock
1,211,000
1,183,000
Additional paid-in capital
58,170,000
57,358,000
Accumulated deficit
(57,317,000
)
(47,927,000
)
Deferred compensation
(7,000
)
(30,000
)
Accumulated other comprehensive loss
(144,000
)
(65,000
)
Treasury stock
(73,000
)
(73,000
)
Total stockholders' equity
1,840,000
10,446,000
Total liabilities and stockholders' equity
$
9,665,000
$
19,600,000
Implant Sciences Corporation Consolidated Statements of Operations (Unaudited)
Three Months EndedMarch 31,
Nine Months EndedMarch 31,
2008
2007
2008
2007
Security revenues
$
787,000
$
1,121,000
$
2,505,000
$
3,507,000
Cost of security revenues
581,000
780,000
1,809,000
2,560,000
Gross margin
206,000
341,000
696,000
947,000
Operating expenses:
Research & development
822,000
326,000
2,135,000
1,212,000
Selling, general & administrative
1,328,000
977,000
4,185,000
2,722,000
Total operating expenses
2,150,000
1,303,000
6,320,000
3,934,000
Loss from operations
(1,944,000
)
(962,000
)
(5,624,000
)
(2,987,000
)
Other income (expenses):
Interest income
29,000
11,000
193,000
22,000
Interest expense
(22,000
)
(226,000
)
(82,000
)
(282,000
)
Change in fair value of embedded derivatives related to preferred
stock features
(97,000
)
95,000
36,000
800,000
Gain on disposal of fixed assets
-
-
9,000
Equity losses in unconsolidated subsidiaries
-
-
-
(158,000
)
Total other income (expense), net
(90,000
)
(120,000
)
156,000
382,000
Loss from continuing operations
(2,034,000
)
(1,082,000
)
(5,468,000
)
(2,605,000
)
Preferred distribution, dividends and accretion
(249,000
)
(277,000
)
(845,000
)
(658,000
)
Loss from continuing operations applicable to common shareholders
(2,283,000
)
(1,359,000
)
(6,313,000
)
(3,263,000
)
Income (loss) from discontinued operations
506,000
(810,000
)
(3,078,000
)
(1,295,000
)
Net loss applicable to common shareholders
$
(1,777,000
)
$
(2,169,000
)
$
(9,391,000
)
$
(4,558,000
)
Net loss
$
(1,528,000
)
$
(1,892,000
)
$
(8,546,000
)
$
(3,900,000
)
Loss per share from continuing operations,
basic and diluted
$
(0.17
)
$
(0.09
)
$
(0.46
)
$
(0.22
)
Loss per share from continuing operations applicable to common
shareholders, basic and diluted
$
(0.19
)
$
(0.12
)
$
(0.53
)
$
(0.28
)
Income (loss) per share from discontinued operations
$
0.04
$
(0.07
)
$
(0.26
)
$
(0.11
)
Net loss per share applicable to common shareholders, basic and
diluted
$
(0.15
)
$
(0.18
)
$
(0.79
)
$
(0.39
)
Net loss per share
$
(0.13
)
$
(0.16
)
$
(0.72
)
$
(0.33
)
Weighted average common shares outstanding used in computing basic
and diluted loss per share
11,956,189
11,815,310
11,879,350
11,784,427
