COSTA MESA, Calif., Feb. 17 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (Nasdaq: IRSN) today reported operating results for its first quarter of fiscal 2009, the 13 weeks ended December 28, 2008.

Total revenues for the fiscal 2009 first quarter were $2,743,500, down from $3,558,500 in the first quarter of fiscal 2008. Despite the lower revenue, the current period net loss also decreased, from $3,713,500 in the 13-week period ended December 30, 2007 to $2,114,100 in the current 13-week period ended December 28, 2008. The reduction in net loss reflected a substantial decline in current period interest expense resulting from the extinguishment of $15 million of debt in conjunction with the October 2008 public UCC sale of the assets of Optex Systems, Inc. the Company's wholly-owned subsidiary that has now discontinued operations.

Irvine Sensors Corporation, headquartered in Costa Mesa, California, is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low-power analog and mixed-signal integrated circuits for diverse systems applications. 


                             IRVINE SENSORS CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                   13 Weeks Ended
                                            December 28,      December 30,
                                                 2008              2007
    Revenues:
      Contract research and
       development revenue                   $2,443,200        $2,711,700
      Product sales                             290,800           837,300
      Other revenue                               9,500             9,500
    Total revenues                            2,743,500         3,558,500

    Cost and expenses:
      Cost of contract research
       and development revenue                1,937,400         2,323,300
      Cost of product sales                     378,000           676,600
      General and administrative expense      1,860,800         2,054,800
      Research and development expense          350,400           344,600
    Total costs and expenses                  4,526,600         5,399,300

    Loss from operations                     (1,783,100)       (1,840,800)
      Interest expense                         (409,100)       (1,610,000)
      Gain on disposal of assets                      -             2,400
      Interest and other income                  31,600               400

    Loss from continuing operations
     before minority interest and
     provision for income taxes              (2,160,600)       (3,448,000)

    Minority interest in loss of
     subsidiaries                                   100               100

    Provision for income taxes                  (18,900)           (5,900)
    Loss from continuing operations          (2,179,400)       (3,453,800)
    Discontinued operations:
      Income (loss) from operations of
       discontinued operations                   65,300          (259,700)
    Net loss                                $(2,114,100)      $(3,713,500)

    Basic and diluted net income (loss)
    per common share information
      From continuing operations                 $(0.43)           $(1.26)

      From discontinued operations                 0.01            (0.09)

    Basic and diluted net loss per
    common share                                 $(0.42)           $(1.35)
    Weighted average number of common
     shares outstanding                       5,298,900         2,747,700



                               IRVINE SENSORS CORPORATION
                               CONSOLIDATED BALANCE SHEETS
                                       (Unaudited)

                                             December 28,      September 28,
                                                 2008               2008
    Assets
    Current assets:
      Cash and cash equivalents                $210,300          $638,600
      Restricted cash                            43,800            41,700
      Accounts receivable, net of
       allowance for doubtful accounts
       of $15,000 and $15,000, respectively     753,000           662,400
      Unbilled revenues on uncompleted
       contracts, net of allowance of
       $0 and $18,400, respectively             683,900         1,279,700
      Inventory, net                          1,171,100         1,126,900
      Prepaid expenses and other
       current assets                           157,100            64,800
      Current assets of discontinued
       operations                                     -         7,494,700
          Total current assets                3,019,200        11,308,800
    Property and equipment, net               3,944,100         4,328,300
    Intangible assets, net                      893,800         1,005,500
    Deferred costs                              206,400           260,100
    Deposits                                     37,500           101,000
    Non-current assets of discontinued
     operations                                       -         5,880,300
          Total assets                       $8,101,000       $22,884,000
    Liabilities and Stockholders' Deficit
    Current liabilities:
      Accounts payable                       $4,021,900        $4,047,100
      Accrued expenses                        3,430,100         4,595,200
      Accrued estimated loss on contracts             -           144,500
      Advance billings on uncompleted
       contracts                                 70,600            21,900
      Deferred revenue                          395,300           385,000
      Income taxes payable                       22,800            14,400
      Restructured debt, net of discounts     3,582,100        11,788,800
      Promissory note payable                   400,000           400,000
      Subordinated term loan                  2,000,000         2,000,000
      Capital lease obligations -
       current portion                           25,300            29,100
      Current liabilities of
       discontinued operations                        -         4,009,600
          Total current liabilities          13,948,100        27,435,600
    Senior promissory notes, net of
     discounts                                  480,000                 -
    Deferred interest                             9,700                 -
    Executive Salary Continuation
    Plan liability                            3,453,700         3,484,800
    Capital lease obligations,
     less current portion                         5,300            11,200
    Minority interest in consolidated
     subsidiaries                               324,400           411,600
          Total liabilities                  18,221,200        31,343,200
    Commitments and contingencies
     (Note 12)
    Stockholders' deficit:
      Preferred stock, $0.01 par value,
       1,000,000 and 500,000 shares
       authorized, respectively; 126,000
       and 126,000 shares issued and
       outstanding, respectively                  1,300             1,300
      Common stock, $0.01 par value,
       150,000,000 and 80,000,000 shares
       authorized, respectively; 5,641,900
       and 3,557,200 shares issued and
       outstanding, respectively                 56,400            35,600
      Common stock warrants; 1,076,800 and
       717,900 warrants outstanding,
       respectively                                   -                 -
      Prepaid stock-based compensation         (502,000)                -
      Deferred stock-based compensation        (142,900)         (183,200)
      Common stock held by Rabbi Trust       (1,169,600)       (1,214,100)
      Deferred compensation liability         1,169,600         1,214,100
      Paid-in capital                       160,795,000       159,901,000
      Accumulated deficit                  (170,328,000)     (168,213,900)
          Total stockholders' deficit       (10,120,200)       (8,459,200)
                                             $8,101,000       $22,884,000

SOURCE Irvine Sensors Corporation