TIDMPPIX
RNS Number : 0438Q
ProPhotonix Limited
07 September 2017
September 7, 2017
ProPhotonix Limited
("ProPhotonix" or "the Company")
INTERIM RESULTS FOR THE HALF YEARED JUNE 30, 2017
ProPhotonix Limited (London Stock Exchange - AIM: PPIX &
PPIR, OTC: STKR), a high technology designer and manufacturer of
LED illumination systems and laser diode modules, with operations
in Ireland and the United Kingdom, today announces its unaudited
interim results for the six months ended June 30, 2017.
Financial Highlights
-- Revenue increased 5.5% to $8.5 million (2016: $8.1 million)
-- Gross profit increased 5.3% to $3.8 million (2016: $3.6 million)
-- Gross profit margin 44.4% (2016: 44.4%)
-- Operating income $0.6 million (2016: $0.7 million)
-- Net income $0.6 million (2016: $0.4 million)
-- EBITDA $0.7 million (2016: $0.9 million)
-- Order bookings of $8.8 million (2016: $8.8 million)
-- Book-to-Bill ratio of 1.04 (2016: 1.09)
-- Percentage revenue by market sectors: 75% industrial, 22%
medical and 3% security & defense (2016: 83% industrial, 13%
medical and 4% security & defense)
-- Percentage revenue by geography: 43% Europe, 44% North
America and 13% Rest of World (2016: 48% Europe, 42% North America
and 10% Rest of World)
Recent Operational Highlights
-- Received the Vision Systems Design 2017 Innovators award in April 2017
-- Announced the new Cobra Multispec Line Light of 12 Wavelengths
-- Institutionalization of the share register following the sale
by 600 Group of their ProPhotonix shareholding to several
institutional investors in August 2017
Tim Losik, President & CEO, commented:
Financial
"The first half of 2017 was a pivotal period for the Company as
we deleveraged our balance sheet by paying off all of the term debt
and launched new product lines to complement our existing award
winning products. Sales in the first half of 2017 were up 5.5%
primarily due to an increase in LED product sales offsetting a
modest decline in laser and laser diode sales. Sales to the medical
market were up 78% from the first half of 2016, and represents 22%
of total sales (2016: 13%). The increase was primarily due to LED
product sales including to a new Fortune 50 customer. Operating
income decreased to $0.6 million from $0.7 million in 2016, mainly
due to the increased Sales, General and Administrative costs plus
expenses and investments in the Company to support the future
growth of the business, including: expansion of the sales
organization in the fourth quarter of 2016 which increases sales
expense; increased engineering and development costs associated
with several large original equipment manufacturing ("OEM")
projects; and the continuing investment in the UV LED product
development. These increased expenses are a result of the Company's
focus on investing for growth.
"The Company's balance sheet continues to strengthen with all
term debt paid off as of June 30, 2017. Also, as at June 30, 2017,
the Company had $298,000 borrowing availability on its Sales
Finance facility through Barclays Bank. In addition, the Company is
currently in discussions with one or more lenders to secure further
financing to make investments in plant, equipment, and for working
capital purposes. The Directors are comfortable with the cash flow
of the business considering its plans and available credit
facilities.
"While the Company does not provide forecasts without sufficient
visibility to allow for reasonable certainty of the forecast, the
Board expects that revenue and EBITDA will be in line with full
year market expectations."
Strategy
"Repayment of term debt as of June 30, marks the successful
completion of the restructuring program initiated in 2013. It also
marks a turning point in strategy as we change priority from
capital repositioning and debt repayment, to investment for growth.
This has impacted marginally on operating income through increased
sales, general and administrative and product development costs
however, in the Board's opinion, it is justified by both current
product development and developing customer relations. The recent
investment from four well regarded institutions to take a 22% stake
in ProPhotonix from 600 Group demonstrates strong shareholder
support for this change in strategy.
"The strategy of the Company remains established in its OEM
heritage as well as the development of products directed at
specific markets. ProPhotonix has made and will continue to make
investments in commercially attractive OEM opportunities and
product development including UV LED, multi-wavelength devices and
laser technology advances, in the fulfillment of our strategy. We
continue to concentrate our engineering capacity in these defined
projects and areas that we believe are poised for fast market
expansion.
"The first of these is the UV LED and laser market for various
applications including: printing, curing, bonding, 3D printing,
bio-luminescence, medical microscopy and other applications. The
Company has launched several versions of its COBRA Cure(TM) product
and continues to work with many potential customers in their
applications using this technology. We plan to continue to launch
new higher power products while continuously enhancing our current
product lines to serve this market during 2017 and beyond.
"ProPhotonix also continues to focus on the market requirements
for multi-wavelength devices and systems, both laser and LED
solutions. Increasingly, customers are seeking multi-wavelength
solutions requiring innovative optics, complex electronics,
on-board sensing capabilities and sophisticated software control.
We see opportunities which include a broad range of applications in
printing, microscopy, industrial inspection and sorting, solar
simulation and security markets. As announced in January 2017, the
Company introduced the Cobra Multispec, a 12-wavelength modular
designed line light as a follow-on product to the Cobra RGB. We
intend to continue to enhance and expand this offering as market
demand dictates."
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President & CEO ir@prophotonix.com
Stockdale Securities Limited Tel: +44 (0) 20 7601
Tom Griffiths / David Coaten 6100
Nominated Adviser and Broker
This announcement contains inside information for the purpose of
Article 7 of Regulation (EU) No 596/2014
About ProPhotonix
ProPhotonix Limited, headquartered in Salem, New Hampshire, is a
high technology designer and manufacturer of LED illumination
systems and laser diode modules for industry leading OEMs and
medical equipment companies. In addition, the Company distributes
premium diodes for Ushio (formerly OCLARO), Osram, QSI, Panasonic,
and Sony. The Company serves a wide range of markets including the
machine vision, industrial inspection, security, and medical
markets. ProPhotonix has offices and subsidiaries in the U.S.,
Ireland, U.K., and Europe. For more information about ProPhotonix
and its innovative products, visit the Company's web site at
www.prophotonix.com.
Half Year 2017 Financial Results
Revenue for the half year ended June 30, 2017 was $8.5 million,
an increase of 5.5% compared with $8.1 million in the same period
of 2016. Gross profit was $3.8 million, an increase of 5.3%
compared to $3.6 million in the first half of 2016. Gross profit
margin remained at 44.4% compared with the same period in 2016 with
an increase in volume, but a shift in product mix.
Operating expenses totaled $3.2 million versus $2.8 million for
the comparable period in 2016. Sales and marketing and research and
development (R&D) expenses were $1.6 million, up $0.2 million
as compared to the first half 2016, while general and
administrative expenses increased by 12% over the same period
primarily due to state taxes, corporate relocation costs and legal
fees related to borrowing arrangements and shareholder matters.
Operating profit was $0.6 million, as compared to a $0.7 million in
the first half of 2016. EBITDA was $0.7 million, as compared to
$0.9 million in the first half of 2016. The net income was $0.6
million, as compared to the $0.4 million in the first half
2016.
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF Income AND COMPREHENSIVE
INCOME
In thousands except share and per share data
(unaudited)
Six Months Ended
June 30,
2017 2016
Revenue $ 8,511 $ 8,067
Cost of sales (4,736) (4,482)
Gross profit 3,775 3,585
Operating expenses:
Selling expenses (1,153) (953)
General and administrative (1,621) (1,452)
Research and development (430) (437)
Total operating expenses (3,204) (2,842)
Income from operations 571 743
Other income (expense), net 73 (203)
Interest expense (29) (81)
Amortization of debt discount and financing
costs (18) (51)
Income before income tax 597 408
Income tax - -
Net income 597 408
Other comprehensive income:
Foreign currency translation 17 (14)
Total comprehensive income $ 614 $ 394
Net income per share:
Basic net income per share $ 0.007 $ 0.005
Diluted net income per share $ 0.006 $ 0.005
Shares used in per share calculation
- basic 90,825 83,665
Shares used in per share calculation
- diluted 107,760 88,190
FINANCIAL STATEMENTS
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands except share and per share data
(unaudited)
For the Periods Ended June 30, 2017 and 2016 2017 2016
Assets
Current assets:
Cash and cash equivalents $ 831 $ 432
Accounts receivable, less allowances of $21 in 2017 and
$35 in 2016 2,393 2,599
Inventories 2,495 1,915
Prepaid expenses and other current assets 397 176
Total current assets 6,116 5,122
Net property, plant and equipment 577 171
Goodwill 403 392
Other long-term assets 81 82
Total assets $ 7,177 $ 5,767
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ 1,085 $ 1,579
Current portion of long-term debt, net - 975
Accounts payable 1,566 1,134
Accrued expenses 1,756 1,217
Current portion of capital lease 98 -
Total current liabilities 4,505 4,905
Long-term capital lease obligations, net of current
portion 104 -
Other long-term liabilities - 178
Total liabilities 4,609 5,083
Stockholders' Equity:
Common stock, par value $0.001; shares authorized
250,000,000 at June 30, 2017 and at June
30, 2016; 90,825,402 shares issued and outstanding at
June 30, 2017 and 83,665,402 at June
30, 2016 91 84
Paid-in capital 112,378 111,958
Accumulated deficit (110,881 ) (112,326 )
Accumulated other comprehensive income 980 968
Total stockholders' equity 2,568 684
Total liabilities and stockholders' equity $ 7,177 $ 5,767
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
(unaudited)
Six Months Ended
June 30,
2017 2016
Operations
Net income $ 597 $ 408
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation 118 98
Depreciation 33 35
Foreign exchange gain (175) (32)
Amortization of debt discount and financing costs 7 51
Provision for inventories 43 47
Provision for bad debts 13 13
Other change in assets and liabilities:
Accounts receivable 106 209
Inventories (204) (405)
Prepaid expenses and other current assets (79) (36)
Accounts payable (7) (156)
Accrued expenses (185) 165
Other assets and liabilities (6) (13)
Net cash provided by operating activities 261 384
Financing
Exercise of options and warrants 229 -
Net borrowing of revolving credit facility (53) 221
Capital lease (41) -
Principal repayment of long-term debt (425) (553)
Net cash used in financing activities (290) (332)
Investing
Purchase of plant and equipment (112) (70)
Net cash used in investing activities (112) (70)
Effect of exchange rate on cash 61 16
Net change in cash and equivalents (80) (2)
Cash and equivalents, beginning of period 911 434
Cash and equivalents, end of period $ 831 $ 432
Supplemental disclosure of cash flow information:
Cash paid for interest $ 29 $ 81
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
In thousands
(unaudited)
Common Stock
-------------------
Accumulated
Paid Other Total
in Deferred Accumulated Comprehensive Stockholders'
Shares Par $0.001 Capital Compensation Deficit Income Equity
------- ---------- --------- ------------ ----------- ------------- -------------
Balance
December
31, 2016 83,665 84 $112,038 - ($111,478) $963 $1,607
Net profit - - - - 597 - 597
Translation
adjustment - - - - - 17 17
Exercise
of options 4,960 5 167 - - - 172
Exercise
of warrants 1,900 2 55 - - - 57
Deferred
compensation 300 0 47 (47) - - 0
Share based
compensation - - 112 6 - - 118
Balance
June 30,
2017 90,825 91 $112,419 ($41) ($110,881) $980 $2,568
======= ========== ========= ============ =========== ============= =============
Notes to unaudited Interim Results
Basis of Presentation
The Company financial reports are issued under the recognition
and measurement principles of United States Generally Accepted
Accounting Principles (GAAP). The accompanying unaudited condensed
consolidated financial reports reflect all adjustments of a normal
recurring nature necessary for a fair statement of the (i) results
of operations and comprehensive income (loss) for the six month
periods ended June 30, 2017 and 2016; (ii) the financial position
at June 30, 2017 and June 30, 2016; and (iii) the cash flows for
the six month period ended June 30, 2017 and 2016. These unaudited
interim results are not necessarily indicative of results for a
full year or any other interim period. Copies of this announcement
are available on the Company's website at www.prophotonix.com.
Cautionary Statement
This press release contains 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. All statements
other than statements of historical fact, including without
limitation, those with respect to ProPhotonix's goals, plans and
strategies set forth herein are forward-looking statements. The
following important factors and uncertainties, among others, could
cause actual results to differ materially from those described in
these forward-looking statements: uncertainty that cash balances
may not be sufficient to allow ProPhotonix to meet all of its
business goals; uncertainty that ProPhotonix's new products will
gain market acceptance; the risk that delays and unanticipated
expenses in developing new products could delay the commercial
release of those products and affect revenue estimates; the risk
that one of our competitors could develop and bring to market a
technology that is superior to those products that we are currently
developing; and ProPhotonix's ability to capitalize on its
significant research and development efforts by successfully
marketing those products that the Company develops. Forward-looking
statements represent management's current expectations and are
inherently uncertain. All Company, brand, and product names are
trademarks or registered trademarks of their respective holders.
ProPhotonix undertakes no duty to update any of these
forward-looking statements.
Use of Non-GAAP Financial Measures
The Company provides non-GAAP financial measures, such as
EBITDA, to complement its consolidated financial statements
presented in accordance with GAAP. Non-GAAP financial measures do
not have any standardized definition and, therefore, are unlikely
to be comparable to similar measures presented by other reporting
companies. These non-GAAP financial measures are intended to
supplement the user's overall understanding of the Company's
current financial and operating performance and its prospects for
the future. Specifically, the Company believes the non-GAAP results
provide useful information to both management and investors by
identifying certain expenses, gains and losses that, when excluded
from the GAAP results, may provide additional understanding of the
Company's core operating results or business performance, which
management uses to evaluate financial performance for purposes of
planning for future periods. However, these non-GAAP financial
measures are not intended to supersede or replace the Company's
GAAP results.
The Company uses EBITDA (earnings before interest, taxes,
depreciation, amortization, stock-based compensation and impairment
charges) as a non-GAAP financial measure in this press release. A
reconciliation of net income to EBITDA for the six months ended
June 30, 2017 and 2016 is as follows:
In thousands
Six Months Ended
June 30,
2017 2016
---------- -------
Net income $597 $408
Plus:
Interest and other (income)
expense, net (33) 284
Amortization of debt discount
and financing costs 7 51
Depreciation 33 35
Stock based compensation 118 98
EBITDA $722 $876
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# # # # #
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SSSFAMFWSELU
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