International Isotopes Inc. Announces 2012 Year End Financial Results
Shareholder Conference Call Scheduled For Monday, April 1, 2013 at 10:00AM Central
IDAHO FALLS, Idaho, March 28, 2013 /PRNewswire/ — International Isotopes Inc. (OTC Bulletin Board: INIS) announces the financial results for fiscal year ended December 31, 2012, and plans for a shareholder conference call to review these results and provide a general update on the business performance and plans of the Company in 2013.
What: International Isotopes Inc. Year End Financial Results and General Business Update.
When: Monday, April 1, 2013 at 10:00AM Central Time
How: Live via phone by dialing 800-624-7038. Code: International Isotopes. Steve Laflin, President and CEO of International Isotopes, Inc. will be leading the call. Participants to the conference call should call in at least 5 minutes prior to the start time. For those who cannot attend the call, an audio replay with be archived on the Company’s web site www.internationalisotopes.com on Tuesday, April 2, 2013.
Total revenue in 2012 was $7,621,934, compared to $9,462,012 in 2011, which represents a decrease of $1,840,078, or approximately 20%. Each of the Company’s business segments reported decreased revenue in 2012.
Sales of Cobalt Products decreased by 41% to $1,369,130 in 2012, as compared to $2,339,154 in 2011. The decrease in revenue in this segment was attributable to a combination of a decrease in the production rate of high specific activity material caused by the delays in U.S. Department of Energy’s (DOE) contracting and a curtailment of cobalt handling by the DOE pending an investigation of a damaged cobalt target in the test reactor.
The Company previously reported in December 2011 that it was forced into a new contract arrangement through the DOE Office of Science National Isotope Development Center (NIDC). As expected, this change in contract approach by the DOE resulted in a significant increase in costs to the Company and caused delays in production that adversely impacted sales. Furthermore, in June 2012, a leak of a cobalt target belonging to another commercial business resulted in the curtailment of all further cobalt handling and production activities at the DOE reactor pending completion of corrective actions. The Company is currently completing corrective actions and anticipates at least partial resumption of cobalt target transfers before the third quarter of 2013 and development of a new cobalt target design by the end of 2013. However, it is not certain at this time whether the reactor contractor will permit continued irradiation of the “in process” cobalt targets currently stored at the reactor site. The Company is still discussing that issue with the reactor contractor and expects to make an announcement on the outcome of those discussions later this year. In addition, to mitigate the impact of these delays and interruptions to cobalt production activities caused by the NIDC and the cobalt target failure, the Company is investigating alternative sources of cobalt supply and identifying additional reactors for cobalt irradiation.
Sales of nuclear medicine standards accounted for approximately 55% and 51%, of the Company’s total sales revenue in 2012 and 2011, respectively. Sales in this segment decreased by $625,659, or approximately 13%, to $4,169,710 in 2012, as compared to $4,795,369 in 2011. This year-to-year comparison includes sales from TI Services, LLC, a 50/50 joint venture the Company formed with RadQual, LLC in December 2010, to distribute products and services for nuclear medicine, nuclear cardiology, and Positron Emission Tomography (PET) imaging. TI Services, LLC sales for 2012 were $2,390,514 as compared to $2,801,109, for 2011, a decrease of $410,595, or approximately 15%. This decrease in TI Services, LLC sales is largely attributable to a drop in sales of paper products used in nuclear medicine imaging which is the result of clinics shifting towards maintaining electronic records. The Company is working closely with RadQual, LLC, its partner in the TI Services, LLC joint venture, to develop new products to market through TI Services, LLC and to make further cuts in operating expense.
Revenue from the Radiological Services segment accounted for approximately 2% of total sales revenue in both 2012 and 2011. Sales in this segment decreased by $50,760, or approximately 22%, from $228,631 in 2011, to $177,871 in 2012. Sales of radiochemical products accounted for approximately 22% of the Company total sales revenue in 2012 and decreased by $134,643, or approximately 7% to $1,677,291, as compared to $1,811,935 in 2011. Revenue from the Transportation segment accounted for approximately 3% of total revenues in 2012 and 2011. Sales in this segment decreased by approximately 21% to $227,932 in 2012, as compared to $286,923 in 2011. The decline in revenue in these segments was attributed to adverse market conditions, impacts related to delays in cobalt production, and the lack of appropriate transportation containers in 2012. The Company expects improving market conditions, the availability of the new AOS-100 shipping container, and resolution of cobalt production issues to improve the performance of these business segments in 2013.
There was no revenue to report from the Fluorine Products segment for 2012 or 2011. The Company is developing its fluoride products in conjunction with uranium de-conversion, in order to take advantage of the anticipated need for depleted uranium de-conversion services project. During 2012, the Company incurred $1,050,995 of planning and other expenses related to the de-conversion project, as compared to $4,428,799 in 2011. This decrease of approximately $3,378,000 is the result of reduced project spending as well as capitalizing certain expenditures on the project versus expensing them as research and development cost. Although new funding for this project was limited in 2012, the Company successfully completed the NRC licensing process by receiving the NRC combination construction and operating license in October 2012. The Company also reported successful completion of its Fluorine Extraction Process (FEP) test program during 2012 and the expected shutdown of the FEP pilot scale facility during 2013.
Cost of Revenue and Gross Profit
Cost of revenue for 2012 was $4,970,033, as compared to $6,045,471 in 2011, a decrease of $1,075,438 or approximately 18%. Gross profit percentage decreased to 35% for 2012, from 36% in 2011. The slight decrease in gross profit can be attributed to incremental increases in the cost of manufacturing materials including increases in freight costs.
Operating Costs and Expenses
Total operating costs and expenses for 2012 were $4,835,351, as compared to $6,786,991 in 2011; this is a decrease of $1,951,640 or approximately 29%. Salaries and Contract Labor decreased 38% in 2012, as compared to 2011. Salaries and Contract Labor included approximately $286,000 in equity-based compensation in 2012, as compared to approximately $1,400,000 in 2011. This decrease was the result of recording a significant amount of non-cash, equity-based compensation expense in 2011 resulting from modification to the terms of several classes of warrants. General, Administrative and Consulting expenses decreased 4% to $1,946,105 in 2012, as compared to $2,031,862 in 2011. Research and development expense was $990,021 for 2012 as compared to $1,695,315 for 2011. This is a decrease of $705,294, or approximately 42%. The majority of research and development expense, reported in both 2012 and 2011, was incurred for planning and licensing activities with regard to the planned de-conversion facility.
Net Loss was $2,240,810 in 2012, compared to a Net Loss of $5,950,438 in 2011. The decrease in net loss of $3,709,628, or approximately 62%, was the result of the decrease in research and development expense related to the proposed de-conversion facility, the decrease in operating expense, and the decrease in interest expense recorded during 2012 as compared to 2011.
Steve Laflin, President and CEO said, “2012 was a challenging and disappointing year. Our core business encountered many production and distribution obstacles; yet, we did make significant progress on our long-term business objective to advance our ‘green’, patented, uranium de-conversion project. During 2012 we received our Part 40 combined construction and operating license for our planned depleted uranium de-conversion and fluorine extraction processing facility from the Nuclear Regulatory Commission (NRC). It is important for our shareholders to note that there are no other companies with a similar license, or even an application for such a license under review by the NRC. Therefore, the NRC license represents a significant competitive barrier and we believe it also provides us with a very valuable asset and a very real and solid growth opportunity.
“While our progress on this project in 2012 was significant, a substantial amount of work and additional capital will be required in order to complete this facility. The total estimated cost for the project is still estimated to be approximately $125 million. During 2012, we were able to raise approximately $3 million through the sale of convertible debentures and we spent approximately $1.5 million on the project. During 2013, we intend to control the rate of capital expenditure on the project until project financing has been secured. There is no assurance that adequate financing for the project will be secured on terms acceptable to us, or at all.
“Our core business segments faced significant challenges during 2012. Economic conditions and market factors caused declines in the radiochemical and nuclear medicine segments and both contract and technical issues have hindered our cobalt sales over the past year. We have completed significant manufacturing process improvements in our iodine-131 processes, executed a contract to purchase an AOS Type B (U) transportation container, are adding new products to the nuclear medicine segment, and are working to resolve corrective actions necessary to allow the resumption of cobalt shipments and irradiation.
“While some of those issues will continue to have a detrimental impact in 2013, I am confident that we will begin to see improvement in revenue and I expect a solid future of revenue growth in our core business as we realize the benefits of these process changes, new product introductions, and implementation of new designs for cobalt target production. In addition, we plan to create and grow a new revenue area for the Company in 2013 dealing with radiological field services. This type of work required an amendment to our NRC license for the Idaho operations and we received that amendment in 2012. We already have several projects under contract for completion and I expect these services to begin to make a significant contribution to our revenue figures in 2013.”
International Isotopes Inc. Years Ended December 31, ------------------------ $ % 2012 2011 Change Change ---- ---- ------ ------ Sales of Products $7,621,934 $9,462,012 $(1,840,078) -19% Gross Profit $2,651,901 $3,416,541 $(764,640) -22% Total Operating Expense $4,835,351 $6,786,991 $(1,951,640) -29% Operating Loss Before Other Exp. $(2,183,450) $(3,370,450) $1,187,000 -35% Other Expense $(98,649) $(2,656,472) $2,557,823 -96% Net Loss $(2,240,810) $(5,950,438) $3,709,628 -62% Net (Loss) Per Common Share $(0.01) $(0.02) Weighted Ave. Sh. Outstanding 359,893,961 334,651,426
About International Isotopes Inc.
International Isotopes Inc. manufactures a full range of nuclear medicine calibration and reference standards, a variety of cobalt-60 products, and provides a wide selection of radioisotopes and radiochemicals for medical devices, calibration, clinical research, and industrial applications. The Company exclusively owns the patents for the fluorine extraction process and is planning to construct the first commercial depleted uranium de-conversion and fluorine extraction processing facility in the U.S.
International Isotopes Inc. Safe Harbor Statement
Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements with respect to the significant competitive barrier provided by the NRC license, the asset value of the NRC license, the Company’s ability to control the rate of capital expenditure on the depleted uranium project, the ability of the Company to obtain adequate financing for the project on terms acceptable to the Company, the resumption of cobalt target shipments and irradiation, the improvement in revenue growth in most business segments, and the expectations related to new field service activities. Information contained in such forward-looking statements is based on current expectations and is subject to change. These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of International Isotopes Inc. to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Other factors, which could materially affect such forward-looking statements, can be found in International Isotopes Inc.’s filings with the Securities and Exchange Commission at www.sec.gov, including our Annual Report on Form 10-K for the year ending December 31, 2012. Investors, potential investors, and other readers, are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and International Isotopes, Inc. undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
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SOURCE International Isotopes Inc