IOTN Ionatron (MM)

Ionatron, Inc., (Nasdaq:IOTN) a Laser Guided Energy (LGE�) Company developing next generation Directed Energy Weapons, today reported financial results for the first quarter ended June 30, 2007. The Company will host a live conference call today, August 9, 2007, at 11:00 a.m. (Eastern Daylight Time). Ionatron highlighted the following activities and accomplishments during the quarter: Awarded a sole source U.S. Navy contract for $9.8 million for further development of its Laser Guided Energy technologies. This contract funds significant advancement in our laser technologies, and the completion of an advanced Technology Demonstrator vehicle; Made continued progress in the engineering of the DESINS (Dual Effect Standoff IED Neutralization System), an advanced counter-IED system for future fielding on select U.S. Marine Corps vehicles. The company believes these and other related activities will lead to future contracts and the fielding of DESINS starting with the U.S. Marine Corps.; Established a new operating division, based in St. Louis, Missouri, to support development of LGE laser technologies; new military and aerospace applications for its ultrashort pulsed laser technologies; and the pursuit of other military and commercial laser opportunities; Dana Marshall, Ionatron�s president and chief executive officer, stated, �The new contracts received in the second quarter were the result of months of coordinated efforts with our customers, and are important milestones in the continued evolution of our company. The latest Laser Guided Energy contract with the Navy represents a major and essential transition from laboratory demonstrations toward fieldable technology by funding the engineering of compact, efficient and rugged laser hardware. The DESINS system is the first step in what we believe will lead to further work and potentially result in a series of contract awards for this urgently needed technology. Additionally, I would like to note that we continue to make solid progress on strengthening our operations as we continue to see favorable results from our focus on improving our internal processes and controls, and managing cash and expenses.� Second Quarter and Year-to-Date 2007 Financial Results Revenue for the second quarter of 2007 was approximately $3.1 million, compared to approximately $2.0 million for the same period last year. The increase in revenue was primarily attributable to performing new LGE-related contract activities. Net loss attributable to common shareholders for the second quarter of 2007 was ($2.5) million, or ($0.03) per diluted common share as compared to a net loss of ($5.2) million or ($0.07) per diluted common share for the same period last year. The loss decreased primarily due to improvements in operating gross margins, reductions in research and development costs of approximately $1.0 million, and general and administrative expense of $1.2 million, and an increase in our interest income of $0.2 million. Revenue for the six months ended June 30, 2007 was approximately $5.2 million, compared to approximately $7.1 million for the same period last year. The decrease in revenue was primarily attributable to completing certain counter-IED contracts in 2006. Net loss attributable to common shareholders for the six months ended June 30, 2007 was ($5.2) million, or ($0.07) per diluted common share as compared to a net loss of ($8.9) million or ($0.12) per diluted common share for the same period last year. This loss decreased primarily due to reductions in research and development costs of approximately $2.0 million, and general and administrative expense of $1.6 million, and an increase in our interest income of $0.5 million, partially offset by changes in gross margins. At June 30, 2007, the Company had approximately $26.6 million in cash and cash equivalents and securities available-for-sale as compared to $27.5 million cash and cash equivalents and securities available-for-sale at March 31, 2007 and $30.6 million in cash and cash equivalents and securities available-for-sale at December 31, 2006. As of June 30, 2007 the Company had a backlog of $9.3 million, which is expected to be completed within the next twelve-months. This backlog does not include proposals and contracts under negotiation. Conference Call As previously announced, Ionatron will host a conference call on August 9, 2007, at 11:00 a.m. (Eastern Daylight Time). Shareholders and other interested parties may participate in the conference call by dialing +1 866 362 5158 (domestic) or +1 617 597 5397 (international) and entering access code 74445348, a few minutes before 11:00 a.m. EDT on August 9, 2007. The call will also be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com and www.ionatron.com. A replay of the conference call will be accessible two hours after its completion through August 16, 2007, by dialing +1 888 286 8010 (domestic) or +1 617 801 6888 (international) and entering access code 42420817. The call will also be archived for 30 days at www.streetevents.com, www.fulldisclosure.com and www.ionatron.com. About Ionatron Inc. Ionatron, Inc. is a solution provider that develops and markets Laser Guided Energy (LGE�) and related products to defense and security customers for unique applications worldwide. Ionatron has significant expertise in the application of high-power lasers, optics and energy management technologies. Headquartered in Tucson, Arizona, Ionatron is focused on solving technology problems directly for its government, industry and security-conscious customers. For more information about Ionatron, please visit www.ionatron.com. "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 future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: the dependence on sales of a limited number of products and the uncertainty of the timing and magnitude of government funding and orders, dependence on sales to government customers; the uncertainty of patent protection; the uncertainty of strategic alliances; the 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 and testing of technology and products; 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," "contemplate," "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 BALANCE SHEETS � June 30, 2007 � December 31, 2006 ASSETS (Unaudited) � � Current assets Cash and cash equivalents $ 18,103,590 $ 22,123,792 Accounts receivable - net 1,133,978 640,082 Inventory 4,036,521 2,832,752 Securities available-for-sale 8,500,000 8,500,000 Prepaid expenses and deposits 248,235 639,728 Other receivables � 4,565 � � � 2,918 � Total current assets 32,026,889 34,739,272 Property and equipment - net 1,803,337 2,205,278 Other assets 78,748 72,776 Intangible assets - net � 110,700 � � � 135,300 � TOTAL ASSETS $ 34,019,674 � � $ 37,152,626 � � LIABILITIES AND STOCKHOLDERS� EQUITY Current liabilities Accounts payable - net $ 806,980 $ 570,572 Accrued expenses 386,558 638,925 Accrued compensation 555,102 818,779 Customer deposits 289,127 284,279 Current portion of capital lease obligations � 20,838 � � � 46,974 � Total current liabilities 2,058,605 2,359,529 Capital lease obligations 6,917 30,536 Deferred rent � 128,263 � � � 112,641 � Total liabilities � 2,193,785 � � � 2,502,706 � � Commitments and contingencies � Stockholders� equity Series A Convertible Preferred stock, $.001 par value, 2,000,000 shares authorized and 690,000 shares issued and outstanding at June 30, 2007 and December 31, 2006. � 690 690 Common stock, $.001 par value, 100,000,000 shares authorized; 79,074,900 shares issued and outstanding at June 30, 2007 and 78,171,267 shares issued and outstanding at December 31, 2006 � 79,074 78,171 Additional paid-in capital 62,863,226 60,488,633 Accumulated deficit � (31,117,101 ) � � (25,917,574 ) Total stockholders� equity � 31,825,889 � � � 34,649,920 � TOTAL LIABILITIES AND STOCKHOLDERS� EQUITY $ 34,019,674 � � $ 37,152,626 � IONATRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) � For the three months ended June 30, 2007 � 2006 � Revenue $ 3,149,173 $ 1,997,170 � Cost of revenue � 3,070,626 � � � 2,023,231 � � Gross profit (loss) 78,547 (26,061 ) � Operating expenses: General and administrative 2,382,555 3,594,220 Selling and marketing 125,015 126,291 Research and development � 183,804 � � � 1,201,179 � Total operating expenses � 2,691,374 � � � 4,921,690 � � Operating loss (2,612,827 ) (4,947,751 ) � Other (expense) income Interest expense (489 ) (4,120 ) Interest income 354,143 111,982 Other � 7,835 � � � 35 � Total other � 361,489 � � � 107,897 � � Loss before provision for income taxes (2,251,338 ) (4,839,854 ) � Provision for income taxes � - � � � 10,603 � � Net loss (2,251,338 ) (4,850,457 ) � Preferred stock dividends � (295,102 ) � � (303,663 ) � Net loss attributable to common stockholders $ (2,546,440 ) � $ (5,154,120 ) � Net loss per common share � basic and diluted $ (0.03 ) � $ (0.07 ) � Weighted average number of shares outstanding, basic and diluted � 78,741,988 � � � 73,272,731 � IONATRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) � For the six months ended June 30, 2007 � 2006 � Revenue $ 5,219,783 $ 7,071,997 � Cost of revenue � 5,408,620 � � � 6,790,409 � � Gross profit (188,837 ) 281,588 � Operating expenses: General and administrative 4,602,177 6,215,716 Selling and marketing 254,815 275,249 Research and development � 307,827 � � � 2,276,246 � Total operating expenses � 5,164,819 � � � 8,767,211 � � Operating loss (5,353,656 ) (8,485,623 ) � Other (expense) income Interest expense (1,488 ) (9,363 ) Interest income 737,969 224,102 Other � 7,847 � � � 44 � Total other � 744,328 � � � 214,783 � � Loss before provision for income taxes (4,609,328 ) (8,270,840 ) � Provision for income taxes � - � � � 21,902 � � Net loss (4,609,328 ) (8,292,742 ) � Preferred stock dividends � (590,218 ) � � (607,323.00 ) � Net loss attributable to common stockholders $ (5,199,546 ) � $ (8,900,065 ) � Net loss per common share � basic and diluted $ (0.07 ) � $ (0.12 ) � Weighted average number of shares outstanding, basic and diluted � 78,458,508 � � � 72,726,740 �