International Isotopes has significantly cut its losses on the back of higher revenue in its latest earnings quarter and through the first nine months of 2018, according to the company’s new 10-Q filing with the U.S. Securities and Exchange Commission.
The numbers build on the Idaho Falls, Idaho, nuclear medicine specialist’s prior earnings report, which showed year-over-year improvement in the second quarter and first half of 2018.
For the nine months ended Sept. 30, International Isotopes reported a net loss of $631,097. That is only about one-fifth of the over $2.9 million loss recorded for the same period of 2017. The third-quarter net loss dropped from nearly $1.6 million last year to $333,222 in 2018.
In a press release Thursday, management attributed the improved numbers to higher sales in International Isotopes’ cobalt products, nuclear medicine standards, and radiological services businesses, plus reduced operating costs.
Company-wide sales were up for both reporting periods: from $1.9 million to nearly $2.7 million for the quarter and from just over $5.5 million to nearly $7.9 million over three quarters.
Among its five business lines, the most improvement was in supply of cobalt products, which are used in cancer and brain treatments, industrial operations, and container security scanners at seaports and border crossings. Quarterly sales spiked from $116,750 in 2017 to $1.1 million in 2018, while the nine-month numbers more than quadrupled from $420,816 to over $1.7 million.
It has been five years since International Isotopes has collected any cobalt from the Advanced Test Reactor at the Department of Energy’s Idaho National Laboratory, but the company finally found another supplier. Cobalt from the DOE reactor is anticipated again beginning in 2019.
“We are the only company in the U.S. that can provide all these unique services” in cobalt products, the 10-Q says. “There has been a significant increase in regulation by the Nuclear Regulatory Commission (NRC) in recent years that has created a significant barrier to new entrants into this market.”
Lower general and administrative expenses were the primary contributors to a 15 percent reduction in operating costs for the quarter. Those costs dropped 11 percent over the first nine months of 2018, primarily thanks to eased licensing and legal expenses. Last year, the company was enmeshed in an unsuccessful arbitration to recoup money on a shipping container for which it paid a deposit but never received.
International Isotopes’ long-planned depleted uranium hexafluoride (DUF6) deconversion and fluorine extraction facility in Lea County, N.M., remains on hold. That means its fluorine products business continues to produce no revenue.
The company has a 40-year license from the Nuclear Regulatory Commission for the plant and in 2011 was deeded land from Lea County for construction.
The plant would process DUF6, generated from enrichment of uranium for nuclear fuel, for extraction of fluorine gases that could be applied to uses such as production of microelectronics. However, there is currently only one potential waste-producing customer: Eunice, N.M.-based enrichment company URENCO USA. That company for now is storing its own waste, and the downturn in the nuclear power market suggests little likelihood of new fuel-producing customers.
Under its original agreement with Lea County, the facility was to have been built by the end of 2014 and no fewer than 75 employees hired within a year after that. A modification to the deal pushed back each deadline by a year, but those milestones were also missed.
International Isotopes “is in the process of renegotiating a second modification to the agreement to further extend those dates,” the 10-Q says. “If the Company is not successful in extending the performance dates in the agreement then it may, at its sole option, either purchase or re-convey the property to Lea County, New Mexico.”
It would cost $776,078 to buy the land, along with annual interest of 5.25 percent between the time of the deal’s closing and payment.
The company this week did not respond to a query regarding the status of negotiations with Lea County or the outlook for reaching profitability.
International Isotopes has chalked up a couple wins since the third quarter ended. It reported on Oct. 2 that it had secured more than 12 contracts, valued in total over $1.6 million, for recovery of sealed radioactive sources under its field services segement. Just this week it announced it had secured a steady supply of the medical isotope I-131 from the University of Missouri Research Reactor.
“This milestone shipment makes INIS the first distributor of the isotope utilizing a U.S. source of supply since the 1980s,” the company said in a press release.
