COSTA MESA, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (Nasdaq: IRSN) today reported operating results for its third quarter and first three quarters of fiscal 2008, the 13 and 39 weeks ended June 29, 2008.

Total revenues for the 13 weeks ended June 29, 2008 were $8,561,000 compared to total revenues of $9,636,800 for the 13-week period ended July 1, 2007. Total revenues for the 39 weeks ended June 29, 2008 were $27,597,600, a record for the first three quarters of an Irvine Sensors' fiscal year and up from total revenues of $25,765,800 for the 39-week period ended July 1, 2007. The 39-week record reflected revenue increases realized earlier in fiscal 2008.

Net loss in the 13-week period ended June 29, 2008 was $2,609,300, an approximate 44% reduction from $4,681,200 in the third quarter of last year. Net loss through the 39 weeks of fiscal 2008 was reduced approximately 39% to $9,789,700 as compared to $16,078,000 for the first three quarters of fiscal 2007.

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, the manufacture and sale of optical systems and equipment for military applications through its Optex subsidiary 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 BALANCE SHEETS
                                 (Unaudited)

                                                       June 29,  September 30,
                                                         2008          2007
    Assets
    Current assets:
      Cash and cash equivalents                        $686,800    $1,442,300
      Restricted cash                                    40,800        39,600
      Accounts receivable, net of allowance for
       doubtful accounts of $15,000 and $15,000,
       respectively                                   2,651,200     3,614,600
      Unbilled revenues on uncompleted contracts,
       net of allowance of $150,000 and $0,
       respectively                                   1,380,200     1,289,300
      Inventory, net                                  6,990,900     7,011,500
      Prepaid expenses and other current assets         354,100        74,100
        Total current assets                         12,104,000    13,471,400
    Property and equipment, net                       5,105,100     5,771,400
    Intangible assets, net                            2,205,200     2,880,400
    Goodwill                                         11,633,500    11,633,500
    Deferred costs                                      349,900       587,200
    Deposits                                            121,700        86,500
        Total assets                                $31,519,400   $34,430,400
    Liabilities and Stockholders' Equity
    Current liabilities:
      Accounts payable                               $6,007,100    $5,949,900
      Accrued expenses                                3,724,300     2,638,700
      Success fee payable to related party                    -       500,000
      Accrued estimated loss on contracts               355,600     1,577,400
      Advance billings on uncompleted contracts          44,000       378,100
      Deferred revenue                                   70,500       156,500
      Income taxes payable                               33,600        31,400
      Promissory note payable - related party           400,000       400,000
      Subordinated term loan - related party          2,000,000             -
      Capital lease obligations - current portion        32,700        40,300
        Total current liabilities                    12,667,800    11,672,300
    Restructured debt, net of discounts              10,810,500    10,869,300
    Subordinated term loan - related party                    -     2,000,000
    Deferred interest                                 1,273,400     1,241,200
    Executive Salary Continuation Plan liability      3,700,700     3,800,500
    Capital lease obligations, less current portion      17,000        45,000
    Minority interest in consolidated subsidiaries      324,600       324,800
        Total liabilities                            28,794,000    29,953,100
    Stockholders' equity:
      Preferred stock, $0.01 par value, 500,000
       shares authorized; 126,000 and 0 shares
       issued and outstanding, respectively               1,300             -
      Common stock, $0.01 par value, 80,000,000
       shares authorized; 31,464,500 and 26,842,900
       shares issued and outstanding, respectively      314,600       268,400
      Common stock warrants; 6,644,900 and
       6,144,900 warrants outstanding, respectively           -             -
      Prepaid stock-based compensation                  (24,800)            -
      Deferred stock-based compensation                (338,900)     (299,700)
      Common stock held by Rabbi Trust               (1,214,100)   (1,115,100)
      Deferred compensation liability                 1,214,100     1,115,100
      Paid-in capital                               159,217,900   151,163,600
      Accumulated deficit                          (156,444,700) (146,655,000)
        Total stockholders' equity                    2,725,400     4,477,300
                                                    $31,519,400   $34,430,400



                          IRVINE SENSORS CORPORATION
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)

                                13 Weeks Ended            39 Weeks Ended
                                          July 1,                   July 1,
                             June 29,      2007       June 29,        2007
                               2008    As Restated      2008      As Restated
    Revenues:
      Contract research
       and development
       revenue             $4,189,900   $4,410,000  $11,266,100   $12,356,500
      Product sales         4,363,100    5,221,900   16,311,000    13,394,300
      Other revenue             8,000        4,900       20,500        15,000
     Total revenues         8,561,000    9,636,800   27,597,600    25,765,800
    Cost and expenses:
      Cost of contract
       research and
       development
       revenue              3,176,700    3,445,600    8,868,300    10,238,200
      Cost of product
       sales                3,183,600    5,676,100   13,492,000    12,189,100
      General and
       administrative
       expense              3,156,300    3,157,900    9,237,800     9,402,800
      Research and
       development
       expense                454,600      233,100    1,094,700       806,400
     Total costs and
      expenses              9,971,200   12,512,700   32,692,800    32,636,500
    Loss from operations   (1,410,200)  (2,875,900)  (5,095,200)   (6,870,700)
      Interest expense     (1,510,600)  (1,803,800)  (4,992,900)   (4,975,800)
      Loss on
       extinguishment
       of debt                      -            -            -    (4,398,000)
      Gain (loss) on
       disposal of assets     314,800         (200)     315,600          (200)
      Interest and other
       income                     900        2,200        1,900         3,600
    Loss before minority
     interest and
     provision for income
     taxes                 (2,605,100)  (4,677,700)  (9,770,600)  (16,241,100)
    Minority interest in
     loss of subsidiaries         100          100          200        85,100
    Benefit (provision)
     for income taxes          (4,300)      (3,600)     (19,300)       78,000
    Net loss              $(2,609,300) $(4,681,200) $(9,789,700) $(16,078,000)
    Basic and diluted
     net loss per common
     share                     $(0.09)      $(0.18)      $(0.34)       $(0.68)
    Weighted average
     number of common
     shares outstanding    30,590,300   25,808,200   29,171,400    23,613,700

SOURCE Irvine Sensors Corporation