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International Isotopes Inc. Announces Financial Results for The First Quarter 2020
IDAHO FALLS, Idaho, May 21, 2020 /PRNewswire/ -- International Isotopes Inc. (OTCQB: INIS) (the "Company") is pleased to announce its financial results for the three months ended March 31, 2020.
Revenue for the three months ended March 31, 2020 was $2,335,786 as compared to $2,527,852 for the same period in 2019, an overall decrease of approximately 8%. This decrease in revenue was primarily the result of our conscious decision to discontinue our field services work within in our radiological services segment, and the impact of the COVID-19 outbreak on our nuclear medicine standards segment.
Cost of sales decreased to $968,525 for the three months ended March 31, 2020 from $1,088,429 for the same period in 2019. This is a decrease of approximately 11% and was primarily due to the decreased field services work within in our radiological services segment. Gross profit for the three months ended March 31, 2020 was $1,367,261, compared to $1,439,423 for the same period in 2019, which represents a decrease in gross profit of approximately 5%.
Our net loss for the three months ended March 31, 2020, was $422,494, compared to net loss of $51,958, for the same period in 2019. This is an increase in loss of $370,536 and is the result of the reduction in radiological services revenue, the impact of COVID-19 on nuclear medicine product sales, and the increase in operating expense from contract manufacturing salaries.
More information regarding the performance in each of our business segments is described in the following paragraphs.
Revenue from the sale of radiochemical products for the three months ended March 31, 2020 increased approximately 63% compared to the same period in 2019. The increase is primarily the result of increased demand for our Iodine I-131 radiochemical product and the commencement of sales of our new U.S. Food and Drug Administration (FDA) approved sodium iodide I-131 drug product. INIS launched commercial sales of its I-131 drug product in mid-March 2020, and thus the first quarter includes two weeks of sales of this product.
Revenue from the sale of cobalt products for the three months ended March 31, 2020 decreased approximately 19% compared to the same period in 2019. Periodically, we have been able to acquire cobalt material from alternative suppliers, but our primary source of cobalt supply is dependent on procuring material from the DOE's Advanced Test Reactor (ATR). Extended ATR shutdowns and lower than expected production rates of cobalt-60 using a new DOE cobalt target design, has delayed delivery of high specific activity cobalt from early this year, which we expect to continue for the rest of 2020.
Revenue from nuclear medicine products for the three months ended March 31, 2020 decreased approximately 5% compared to the same period in 2019. The decrease in sales for the period ended March 31, 2020, was due to sharply slowing sales activity during the final 3 weeks of March 2020 due to the COVID-19 global outbreak and the resulting closure of many imaging clinics and suspension of elective or non-essential imaging procedures. We anticipate that our sales in this segment will recover from the impact of the COVID-19 pandemic as the year progresses.
Revenue from all radiological services for the three months ended March 31, 2020 decreased by approximately 88% compared to the same period in 2019. Much of our revenue in this segment has been generated by the performance of activities in connection with contracts for the DOE and the International Atomic Energy Agency (IAEA) to support recovery of out of service sources, and removal of certain devices. The decrease in the revenue for the period comparison is the result of the Company suspending these types of contract activities going forward. Also, in January 2020, we notified our gemstone processing customer that the service contract with them was being terminated because the volume of gemstones sent for processing did not meet contract minimums. The termination activities and wrap up of this service will continue through the remainder of 2020, and the Company will see a steady decline in revenue from this service as production is wrapped up. We plan to convert the spaces in our facility that had been used to perform this contract work into expanded new product manufacturing. The anticipated loss in revenue resulting from termination of radiological services is expected to be more than compensated for by increase sales in nuclear medicine products and the radiochemical business segment.
Steve Laflin, President and CEO of the Company, said, "Like most businesses, the Company faced challenges in the first quarter of 2020 due to COVID-19 outbreak. I would encourage our shareholders not to let the short-term negative impact on our first quarter results overshadow the Company's expectations for increased revenue, and progress towards profitability, for the remainder of the year. FDA approval of our sodium iodide product was a major accomplishment for the Company during the first quarter. The commercial launch of this product did not start until late in the quarter, and we believe this product will have a positive impact on our financial performance for the remainder of the year.
We also expect the impact of COVID-19 on medical imaging procedures, and our nuclear medicine products segment, will be relatively short lived. We believe many procedures have been delayed, not canceled, and that there will be a pent-up demand for these products. Order flow has begun to increase from late-March levels, and we are hopeful orders will trend back towards normal levels as the year unfolds. We have developed several new products in this business segment that are currently in field trials which we expect to roll out later this year. We have significantly increased our R&D commitment towards medical imaging including the hiring of full time R&D personnel. INIS is also further expanding its international sales presence.
The construction of our new facility for the contract manufacturing of third-party radiopharmaceuticals is proceeding well. The COVID-19 outbreak has delayed the installation of some specialized equipment, but we are still targeting the new facility to be up and running later this summer. With the heightened concern about corporate liquidity during the pandemic, I would like to share that as of today's date, the Company has adequate cash and no pending debt maturities. Our liquidity is presently the strongest it has been in several years.
While the pandemic and its economic impact are of significant concern, these are exciting times for the Company as we transition away from some legacy business's such as gemstone processing and field services towards more consistent, higher growth and higher margin imaging products and radiopharmaceuticals. With all of this in consideration, I remain confident that the Company should see improvement in our overall financial performance for the remainder of the year."
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About International Isotopes Inc.
International Isotopes Inc. manufactures a wide range of calibration and reference standards for nuclear medicine, generic sodium iodide I-131 drug product for hyperthyroidism and thyroid cancer, Cobalt-60 sealed source products, and provides a contract manufacturing of various drug products for clients.
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 long term impact of COVID-19, the timing of cobalt production, future revenue growth predictions for the sodium iodide drug product, the impact of the cessation of the radiological services segment, and statements regarding management's expectations for future performance of the Company. 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 of the Company expressed or implied by these forward-looking statements. Other factors, which could materially affect such forward-looking statements, can be found in the Company's filings with the Securities and Exchange Commission at www.sec.gov, including its Annual Report on Form 10-K for the year ended December 31, 2019. 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. and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.
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