PEN Inc. Announces 2Q 2015 Financial Results

PEN Inc. reported financial results for its second quarter and six months ended June 30, 2015.
 
For the three months ended June 30, 2015, total revenues were $2,313,349, down 19.3% from reported revenues of $2,867,962 in the second quarter of 2014. On a pro forma basis, with both segments included, total revenues were $3,428,658 in the second quarter of 2014.
 
“During the second quarter of 2015, we continued to make rapid progress in aligning our teams toward a common objective,” said Scott Rickert, PEN’s President, chairman and CEO. “The success of our HALO group in developing a revolutionary new product so quickly after the merger demonstrates the innovation the two businesses can achieve together.
 
“In our optical products business, that currently accounts for the majority of product sales, we are expanding sales channels for optical cleaners and anti-fogging conditioners. Meanwhile, at our Design Center in Austin, TX, our team of scientists continues its groundbreaking work on the HALO product family and other new products, alongside its ongoing contract research projects for various government and private entities,” Rickert said.
 
“We are moving forward with the roll-out of the first product in the HALO family, an environmentally friendly surface protector, fortifier and cleaner,” Rickert concluded. “Sales commenced in July and we are expanding our sales efforts to approach key customers in several markets. Commercial production will begin in August. I am confident that HALO has the potential to transform PEN from a small innovative nanotechnology products company into a sizable global consumer products business.”
 
Sales from PEN’s Product segment were $1,862,133, down 35.1% as compared to the three months ended June 30, 2014. The decline in product revenue was due to abnormally high sales of anti-fog cloths in the first half of 2014 due to a large re-stocking order from one of the company’s major customers.
 
Revenues from Research and development services were $451,216 in the second quarter of 2015. The company did not recognize revenues for this segment until after August 27, 2014, the date of Combination. On a pro forma basis, revenues from the research and development segment were $560,696 in the second quarter of 2014.
 
For the second quarter of 2015, overall gross profit amounted to $779,083, down 47.6% from $1,486,435 for the second quarter of 2014. Gross margin was 33.7%, compared to 51.8% in the year ago period. The decrease in gross margin was primarily attributable to the sale of a larger proportion of higher margin anti-fog and protective coating products in the 2014 period as compared to 2015 period.
 
Net loss for the three months ended June 30, 2015 amounted to $582,578, or ($0.00) per basic and diluted share, as compared to net income of $258,505, or $0.00 per basic and diluted share, for the three months ended June 30, 2014.
 
For the six months ended June 30, 2015, total revenues were $5,381,090, down 4.6% from reported revenues of $5,639,373 in the first half of 2014. On a pro forma basis, with both segments included, total revenues were $7,082,501 in the first half of 2014. Gross profit was $1,931,721 in the first half of 2015, down 31.2% from reported gross profit of $2,807,705 in the first half of 2014.
 
Gross margin was 35.9% compared to 49.8% in the first half of 2014. Net loss for the six months ended June 30, 2015 amounted to $767,970, or ($0.00) per basic and diluted share, as compared to net income of $489,960, or $0.00 per basic and diluted share, for the six months ended June 30, 2014.