Source - RNS
RNS Number : 2495J
ProPhotonix Limited
08 September 2016
 

 

September 8, 2016                                                                                        

ProPhotonix Limited

 ("ProPhotonix" or "the Company")

 

INTERIM RESULTS FOR THE HALF YEAR ENDED JUNE 30, 2016

 

ProPhotonix Limited (London Stock Exchange - AIM: PPIX , OTC: STKR), a high technology designer and manufacturer of LED illumination systems and laser diode modules, today announces its unaudited interim results for the six months ended June 30, 2016.

 

Financial Highlights

·     Revenue increased 20% to $8.1 million (2015: $6.7 million)

·     Gross profit increased 29.8% to $3.6 million (2015: $2.8 million)

·     Gross profit margin increased to 44.4% (2015: 41.2%)

·     Operating income increased significantly to $0.7 million (2015: $0.1 million)

·     Net income of $0.4 million (2015: loss $0.2 million)

·     EBITDA increased significantly to $0.9 million (2015: $0.3 million)

·     Order bookings of $8.8 million (2015: $7.7 million)

·     1.09 Book-to-Bill ratio (2015: 1.15)

·     Percentage revenue by market sectors: 84% industrial, 11% medical and 5% security & defense (2015: 81% industrial, 15% medical and 4% security & defense)

·     Percentage revenue by geography: 48% Europe, 42% North America and 10% Rest of World (2015: 48% Europe, 39% North America and 13% Rest of World)

·     Available credit lines of $2.0 million 

 

 

Operating Highlights

·     Introduced 3 new products in the first half

·     Renegotiated the terms of credit facility with Barclays

·     Booked a $1.1 million order for the delivery of laser modules during H2 2016 and early 2017 with one of the Company's largest customers

 

 

Tim Losik, President & CEO, commented:

 

Financial

"The first half results mark the sixth consecutive half-yearly positive EBITDA, fourth consecutive half-yearly positive operating income and the second consecutive half-yearly positive net income reported by the Company; clearly demonstrating the Company's continued financial progress.  Sales in the first half of 2016 were up 20% to $8.1 million from $6.7 million in 2015; both businesses (Lasers/Diodes and LED) contributed to the revenue growth.  Operating profit dramatically improved to $0.7 million compared to $0.1 million in 2015, a 600% increase.  Net income for the first half improved to $0.4 million compared to a loss of $0.2 million in the first half of 2015.  Of note, both operating income and net income include increased Development/Engineering costs ($150,000) associated with investment and expenditure in the UV printing and curing market and customer expansion.  Also, net income was negatively impacted by the dramatic decline in the British Pound versus U.S. Dollar foreign currency translation rate during the last week of June 2016 (approximately $180,000 non-cash impact) following the result of the EU referendum. 

 

"The Company's balance sheet continues to strengthen.  Principal on term debt of $553,000 was repaid and the net available credit from the Company's loan facilities was $2.0 million as of June 30, 2016.  Also, on February 10, 2016, the Company entered into an amendment to its revolving credit facility with Barclays Sales Finance to (i) increase the line from £1,400,000 to £1,500,000; (ii) to reduce certain fees and service charges; and (iii) increase the borrowing rate from 80% to 85% while extending the minimum period of this amendment to 12 months to February 10, 2017 with a rolling evergreen provision.  The Directors are comfortable with the cash flow of the business considering its plans and available credit facilities."

 

Strategy

 

"Since June 2013, our short-term strategy has been to eliminate costs, win new customers, and improve margins. Our results for the first half of 2016, building on our full year 2015 results demonstrate that these short term strategies, put into place at the time of the recapitalization of the Company, have succeeded in creating a sustainable business model. 

 

"The Company's longer term strategy, as noted in the 2015 Statement to Shareholders in the annual report, continues to be one of strategic repositioning to include a market(s) directed product portfolio.  As a result of this longer term strategy, some of our engineering talents continue to be concentrated in defined market areas that we believe are poised for fast market expansion. ProPhotonix is investing in additional engineering resources and will continue to make such investments in fulfillment of our strategy.  In addition, ProPhotonix is in the process of expanding its sales team to increase our world-wide sales coverage."

 

 

 

Enquiries:

 

ProPhotonix Limited

Tim Losik, President & CEO

Tel: +1 603 893 8778

[email protected]

 

Stockdale Securities Limited

Tom Griffiths / David Coaten

Tel: +44 (0) 20 7601 6100

Nominated Adviser and Broker


 

About ProPhotonix

 

ProPhotonix Limited, headquartered in Salem, New Hampshire, is a high technology designer and manufacturer of diode-based laser modules and LED systems 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, UV Printing and UV Curing, 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 2016 Financial Results

 

Revenue for the half year ended June 30 2016 was $8.1 million, an increase of 20% compared with $6.7 million in the same period of 2015.  Gross profit was $3.6 million, an increase of 29.8% compared to $2.8 million in the first half of 2015. Gross profit margin improved to 44.4% from 41.2% in the same period in 2015 due to an increase in volume and a shift in product mix. 

 

Operating expenses totaled $2.8 million versus $2.6 million for the comparable period in 2015.  Sales and marketing and research and development (R&D) expenses were up $0.1 million in 2016 compared to the first half 2015 at $1.4 million, while general and administrative expenses increased by 5% over the same period.  The operating profit was $0.7 million, as compared to a $0.1 million in the first half of 2015.  EBITDA was $0.9 million as compared to $0.3 million in 2015.  The net income was $0.4 million compared to the first half 2015 net loss of $0.2 million.

 

On the balance sheet, the Company continues to pay down term debt in accordance with the note provisions.  The balance of term debt at June 30, 2016 was $1.0 million, and has 12 months of amortisation remaining.     Available credit at June 30, 2016 was $2.0 million. The Company has not drawn down on its term notes since April, 2014.

 



 

PROPHOTONIX LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

In thousands except share and per share data

(unaudited)

 





Six Months Ended
June 30,

 

2016

 

2015

 


Revenue

   $     8,067

   $     6,703

Cost of sales

       (4,482)

       (3,941)


 

 

Gross profit

          3,585

          2,762


 

 

Operating expenses:



Selling expenses

          (953)

          (965)

General and administrative

       (1,452)

       (1,387)

Research and development

          (437)

          (288)


 

 

Total operating expenses

       (2,842)

       (2,640)


 

 

Income from operations

             743

             122

Other expense, net

          (203)

            (89)

Interest expense

            (81)

          (120)

Amortization of debt discount and financing costs

            (51)

            (86)


 

 

Income (loss)  before income tax

             408

           (173 )

Income tax

                 -

                 -


 

 

Net income (loss)

             408

           (173 )

Other comprehensive (loss) income:



     Foreign currency translation

            (14)

             145


 

 

Total comprehensive income (loss)

$           394

$          (28)


 

 







Net income (loss) per share:



          Basic net income (loss) per share

$          0.005

$         (0.002)


 

 

          Diluted net income (loss) per share

$          0.005

$         (0.002)


 

 




Shares used in per share calculation - basic

              83,665      

             83,665                  

Shares used in per share calculation - diluted

  88,190      

             83,665                  




 



                                                                                               FINANCIAL STATEMENTS

PROPHOTONIX LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS


(unaudited)

 ($ in thousands except share and per share data)

 




For the Periods Ended June 30, 2016 and 2015

 


2016

 


2015

 




Assets



Current assets:



Cash and cash equivalents

$                   432

$                   212

Accounts receivable, less allowances of $35 in 2016 and $22 in 2015

                  2,599

                  2,237

Inventories

                  1,915

                  1,705

Prepaid expenses and other current assets

                     176

                     135


 

 

Total current assets

                  5,122

                  4,289

Net property, plant and equipment

                     171

                     145

Goodwill

                     392

                     392

Other long-term assets

                       82

                       32


 

 

Total assets

$                5,767 

$                4,858 


 

 

Liabilities and Stockholders' Equity (Deficit)



Current liabilities:



Revolving credit facility

$                1,579

$                1,082

Current portion of long-term debt, net

                     975

                     878

Accounts payable

                  1,134

                  1,079

Accrued expenses

                  1,217

                  1,016


 

 

Total current liabilities

                  4,905

                  4,055

Long-term debt, net

                          -

                  1,038

Other long-term liabilities

                     178

                     178


 

 

Total liabilities

                  5,083

                  5,271


 

 




Stockholders' Equity (deficit):



Common stock, par value $0.001; shares authorized 250,000,000 at June 30, 2016 and at June 30, 2015; 83,665,402 shares issued and outstanding at June 30, 2016 and  at June 30, 2015

                       84

                       84

Paid-in capital

              111,958

              111,733

Accumulated deficit

             (112,326 )

             (113,187 )

Accumulated other comprehensive income

                     968

                     957


 

 

Total stockholders' equity (deficit)

                     684

                   (413) 


 

 

Total liabilities and stockholders' equity (deficit )

$               5,767

$               4,858


 

 

 

PROPHOTONIX LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands

(unaudited)

 





Six Months Ended
June 30,

 

2016

 

2015

 

Operations



Net Income (loss)

$    408 

$    (173) 




Adjustments to reconcile net loss to net cash provided by (used in) operating activities:



Stock based compensation

98

150

Depreciation and amortization

35

54

Foreign exchange (gain) loss

(32)

(25)

Amortization of debt discount and financing costs

51

86

Provision for inventories

47

34

Provision for bad debts

13

3

Other change in assets and liabilities:



Accounts receivable

209

145

Inventories

(405)

(207)

Prepaid expenses and other current assets

(36)

35

Accounts payable

(156)

(275)

Accrued expenses

165

118

Other assets and liabilities

(13)

(10)


 

 

Net cash provided by (used in) operating activities

384

(65)




Financing



Net borrowing of revolving credit facility

221

48

Principal repayment of long-term debt

(553)

(277)


 

 

Net cash used in financing activities

(332)

(229)




Investing



Purchase of plant and equipment

(70)

(29)


 

 

Net cash used in investing activities

(70)

(29)

Effect of exchange rate on cash

16

204


 

 

Net change in cash and equivalents

(2)

(119)

Cash and equivalents, beginning of period

434

331


 

 

Cash and equivalents, end of period

$        432

$        212


 

 

Supplemental disclosure of cash flow information:



Cash paid for interest

$            81

$          120

 

 










 

 

 

PROPHOTONIX LIMITED

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

 (in thousands)

(unaudited)

 

 









Common Stock

 

Paid in
Capital

 

Accumulated
Deficit

 

Accumulated Other Comprehensive Income

 

Total
Stockholders'
Equity
 

 

 


Shares

 

Par
$0.001

 

 


 

Balance December 31, 2015

83,665

$      84

$     111,860

$    (112,734)

$                 982

$               192

 

Net profit




                408


                            408

 

Translation adjustment





                   (14)

                            (14)

 








 

Share based compensation

           -

           -

               98

                    -

                            -

                   98

 


 

 

 

 

 

 

 

Balance June 30, 2016

83,665

$      84

$      111,958

$    (112,326)

$                 968

$               684

 


 

 

 

 

 

 

 









 

 

 

 

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, 2016 and 2015; (ii) the financial position at June 30, 2016 and June 30, 2015; and (iii) the cash flows for the six month period ended June 30, 2016 and 2015.  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 loss to EBITDA for the six months ended June 30, 2016 and 2015 is as follows:

 

 



(in thousands)



Six Months Ended June 30,



2016

2015

Net Income (Loss)

408

(173)

Plus:




Interest and other expense, net

284

209


Amortization of debt discount and financing costs

51

86


Depreciation

35

54


Stock based compensation

98

150

EBITDA

876

326

 

 

 

 

 

 

 

# # # # #


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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