Total sales for the year ended December 31, 2020 were negatively impacted by business factors resulting from COVID-19 and governmental restrictions, including disruptions to our customers’ and suppliers’ operations. Our sales and marketing efforts were negatively impacted due to travel and other operational restrictions. While the Company has seen improved results, the total impact of the global emergence of COVID-19 on our business and financial results are not completely known, and we cannot predict what impact it may have on our continuing operations and the effect to our financial results in the future.
Results of Operations
Inrad Optics is a vertically integrated manufacturer specializing in glass, crystal, and metal based optical components and subassemblies. Manufacturing capabilities include crystal growth, extensive optical fabrication capacity, super-precision optical surfacing, handling of large form factor optics, precision diamond turning, proprietary optical contacting processes, thin film coatings, and high resolution in-process metrology.
The majority of the Company’s custom optical components and assemblies are used in optical inspection applications, process control systems, defense and aerospace systems, laser systems, industrial scanners, medical applications, and in physics research.
Inrad Optics’ customers include leading photonics enabled corporations in the defense, aerospace, process control and metrology sectors, as well as the U.S. Government, National Laboratories and universities worldwide.
Manufacturing, engineering and administrative operations are in a 42,000 square foot building located in Northvale, New Jersey.
Sales Revenue
Sales for the three months ended September 30, 2021, were $2.8 million, an increase of 26.1%, or $0.6 million, compared to $2.2 million for the three months ended September 30, 2020. For the nine months ended September 30, 2021, sales were $8.5 million, an increase of 24.5%, or $1.7 million, compared to sales of $6.8 million for the nine months ended September 30, 2020.
For the three months ended September 30, 2021 and 2020, sales to the defense/aerospace market were $0.6 million and $0.9 million, respectively. This 28.6% decrease of $0.3 million is the result of the timing of delivery schedules and a large program that was completed and shipped in the third quarter of 2020. For the nine months ending September 30, 2021 and 2020, sales to the defense/aerospace market were $2.9 million and $2.7 million, respectively. The increase in sales of $0.2 million, or 6.3%, reflects an increase in demand.
Process control and metrology (“PC&M”) sales were $1.8 million for the three months ended September 30, 2021, an increase of $1.0 million, or 120.9%, from $0.8 million for the three months ended September 30, 2020. The increase reflects strong sales to the semi-conductor industry. For the nine months ended September 30, 2021, sales increased 47.0% or $1.3 million to $4.1 million from $2.8 million for the nine months ended September 30, 2020. Sales in the PC&M market continue to increase due to demand in the semi-conductor industry.
For the three months ended September 30, 2021 and 2020, sales to customers in the laser systems market were $0.2 million in each period. Sales for the nine months ended September 30, 2021 and 2020, were $0.6 million and $0.5 million, respectively. The $0.1 million, or 3.7%, increase reflects an increase in demand for our laser products.
Sales to customers in the Scientific/R&D market were $0.2 million and $0.4 million for the three months ended September 30, 2021 and 2020, respectively, a decrease of $0.2 million, or 41.6%. The decrease reflects timing of deliveries in this market. For the nine-month period ending September 30, 2021, sales increased $0.2 million to $1.0 million, compared to $0.8 million for nine months ended September 30, 2020. The increase in sales for the nine-month period ended September 30, 2021, reflects the revenues from a federal government R&D contract completed in the first quarter of 2021 and stronger sales to national laboratories.
For the three months ended September 30, 2021, three customers represented 10% or more of sales. For the three months ended September 2020, only one customer represented 10% or more of sales. For the nine months ended September 30, 2021, two customers represented 10.0% or more of sales, and for the nine months ended September 30, 2020 no customer represented 10.0% or more of sales.
The Company’s top five customers represented 67.1% of sales in the three-month period ended September 30, 2021, compared to 44.1% in the same period in 2020. For the nine-month period ended September 30, 2021 and 2020, the Company’s top five customers represented 50.5% and 37.5% of sales, respectively.