International Commercial Television, Inc. Reports Fourth Quarter
and Year End 2013 Financial Results
Record $41 Million Revenues and $0.07 EPS for 2013; Expanded
Product Portfolio for 2014 Growth; Conference Call Begins Today at
4:30pm EDT
WAYNE, PA--(Marketwired - Mar 27, 2014) - International
Commercial Television, Inc. (OTCQB: ICTL) (or "ICTV"), a direct
response marketing and branding company focused on the health,
wellness and beauty sector, today reported financial results for
the three months and year ended December 31, 2013.
2013 Financial Highlights:
- Revenues of $41.0 million, up 79% from a year earlier
- Gross margins of 71.9%, up from 67.4% a year earlier
- Net income of $1.65 million versus a ($0.55) million loss a
year earlier
- Strengthened balance sheet with a current working capital ratio
of 2.54X, up from 1.1X at the end of 2012
- Increased cash balance to $1.43 million, from $0.91 million at
the end of 2012
- New product acquisition and development expense of
approximately $0.4 million
- Improved shareholders' equity to approximately $2.1 million, up
from a negative $0.4 million at the end of 2012
2013 Business Highlights:
- Continued success of DermaWand, surpassing 2 million units sold
to-date
- Continued expansion of DermaVital continuity line
- Expansion of categories and products in health and beauty
- Executed exclusive agreements and made investments for
proprietary products and systems, including Elastin RP,
DermaBrilliance and Coral Actives
- Progressed clinical studies and media production for various
projects in midst of launching or expected to launch in 2014,
including Elastin RP and DermaBrilliance
Kelvin Claney, Chairman and Chief Executive Officer, stated,
"While 2013 was a record year for ICTV, we continue to look to
build upon our flagship product DermaWand and invest for future
growth. Our DermaWand success has brought us many additional
opportunities in the health and beauty sector. We have successfully
negotiated and structured several exclusive agreements for new
projects and products that we are very excited about for 2014 and
years to come."
Revenues for the three and twelve months ended December 31, 2013
were approximately $9.8 million and $41.0 million, a decrease of 3%
and an increase of 79% when compared with revenues of approximately
$10.1 million and $22.9 million for the same periods in 2012. The
increase in revenue is primarily due to the continued success of
our DermaWand infomercial, the expansion our DermaVital brand, and
opening up new international distribution in Mexico and Canada. As
the Company continues to build the DermaWand brand and exposure,
media related expenditures increased to approximately $3.4 million
and $13.0 million for the three and twelve months ended December
31, 2013, compared to approximately $3.2 million and $7.6 million
for the three and twelve months ended December 31, 2012.
Net income (loss) for the three and twelve months ended December
31, 2013 was approximately ($272,000) and $1.65 million compared to
a net loss of approximately ($424,000) and ($550,000) for the same
periods in 2012. Contributing to the improvement was an increase in
airings of DermaWand infomercial as well as the growth in
continuity sales generated from the monthly shipments of the
Company's DermaVital skincare products.
Sales from DermaVital for the three and twelve months ended
December 31, 2013 were approximately $1.0 million and $4.2 million
as compared to approximately $767,000 and $1.5 million during the
three and twelve months ended December 31, 2012. Since the majority
of these sales occur after the expense of acquiring the customer
has already occurred (i.e. media expenses, telemarketing expenses,
etc.) as well as with lower materials costs, the profit margin on
these particular sales is high, compared to the initial DRTV sale
that results directly from the running of an infomercial. In
addition, the increase in DRTV revenue was in part due to the
launching of a new Spanish language version of the DermaWand show
in August 2012. ICTV generated revenues from the Spanish language
version of approximately $8.5 million in 2013, as compared to $3.6
million in 2012.
Included in our net income (loss) were new product acquisition,
infomercial production and product development expenses of
approximately $168,000 and $410,000 for the three and twelve months
ended December 31, 2013, as compared to approximately $49,000 and
$208,000 for the three and twelve months ended December 31,
2012.
Adjusted earnings before interest, taxes, depreciation, and
amortization (EBITDA) was approximately $61,000 and $2.5 million
for the three and twelve months ended December 31, 2013 as compared
with approximately ($240,000) and $337,000 for same periods in
2012. Diluted earnings per share three and twelve months ended
December 31, 2013 was ($0.01) and $0.07, up from a loss per share
of ($0.03) for the same periods in 2012.
As of December 31, 2013, the Company had $1.43 million in cash,
compared to $908,000 at December 31, 2012. We generated positive
cash flows from operations of approximately $648,000 and in the
twelve months ended December 31, 2013. As of December 31, 2013, the
Company had working capital of approximately $2.9 million, compared
to approximately $336,000 at December 31, 2012. Based on our
improved financial stability our auditors have removed any going
concern language from their audit opinion.
Richard Ransom, President, stated, "We are pleased to be
reporting a record year for ICTV in terms of $41 million revenues
and $1.6 million of net income. Our balance sheet continued to
improve throughout the year and finished at its strongest point
with $1.43 million cash and $2.1 million shareholders equity. We
are excited about the impact of our recently launched new products
and others under development and are confident the strong momentum
demonstrated in 2013 will continue. We are pleased to have shared
our 2013 success with rewarded shareholders, as our improved
business operations have been reflected in an improved stock price,
rising from a low of $0.08 to $0.90 during 2013. In conclusion, we
would like to thank our dedicated ICTV team, the over 2 million
consumers who have purchased one of our products and our
shareholders."
Conference Call
ICTV will hold a conference call to discuss the Company's fourth
quarter and year end 2013 results and answer questions today, March
27, 2013, beginning at 4:30pm EDT. The call will be open to the
public and will have a corporate update presented by ICTV's
Chairman and Chief Executive Officer, Kelvin Claney, President,
Richard Ransom and Chief Financial Officer, Ryan LeBon, followed by
a question and answer period.
The live conference call can be accessed by dialing (800)
862-9098 or (785) 424-1051. Participants should ask for the
International Commercial Television Earnings Conference Call.
Participants are recommended to dial-in approximately 10 minutes
prior to the start of the event. A replay of the call will be
available approximately two hours after completion through April
10, 2014. To listen to the replay, dial (800) 723-5792 (domestic)
or (402) 220-2664 (international). The conference call transcript
will be posted to the Company's corporate website
(http://www.ictvonline.com) for those who are unable to attend the
live call.
About International
Commercial Television, Inc. International Commercial
Television, Inc. sells various health, wellness and beauty products
through infomercials and other channels primarily in the United
States. ICTV utilizes a distinctive marketing strategy and
multi-channel distribution model to develop, market and sell
products through infomercials, live home shopping television,
specialty outlets and online shopping. It offers health and beauty
products, including DermaWand, a skin care device that reduces the
appearance of fine lines and wrinkles, and helps improves skin tone
and texture; and DermaVitál, a professional quality skin care range
that effects superior hydration. International Commercial
Television Inc. was founded in 1993 and headquartered in Wayne,
Pennsylvania.
Non-GAAP Financial
Information Adjusted EBITDA is defined as income from
continuing operations before depreciation, amortization, interest
expense, interest income, and stock-based compensation. Adjusted
EBITDA is not intended to replace operating income, net income,
cash flow or other measures of financial performance reported in
accordance with generally accepted accounting principles. Rather,
Adjusted EBITDA is an important measure used by management to
assess the operating performance of the Company. Adjusted EBITDA as
defined here may not be comparable to similarly titled measures
reported by other companies due to differences in accounting
policies.
Forward-Looking
Statements The matters discussed in this press release may
contain "forward-looking statements" (as defined in the Private
Securities Litigation Reform Act of 1995). The Company intends that
the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, apply to forward-looking statements made
by ICTV. Undue reliance should not be placed on forward-looking
statements as they may involve risks and uncertainties. The actual
results that ICTV achieves may differ materially from any
forward-looking statements due to such risks and uncertainties.
|
|
|
|
INTERNATIONAL COMMERCIAL TELEVISION INC. AND
SUBSIDIARY |
|
CONSOLIDATED BALANCE SHEETS |
|
AS OF DECEMBER 31, 2013 and 2012 |
|
|
2013 |
|
|
2012 |
|
ASSETS |
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,370,178 |
|
|
$ |
758,358 |
|
|
Cash held in escrow |
|
62,924 |
|
|
|
150,008 |
|
|
Accounts receivable, net of doubtful account reserves
of $446,307 and $623,061, respectively |
|
791,292 |
|
|
|
1,154,855 |
|
|
Inventories, net |
|
1,778,073 |
|
|
|
1,979,757 |
|
|
Prepaid expenses and other current assets |
|
733,427 |
|
|
|
324,991 |
|
|
|
Total
current assets |
|
4,735,894 |
|
|
|
4,367,969 |
|
|
|
|
|
|
|
|
|
|
Furniture and equipment |
|
81,507 |
|
|
|
71,258 |
|
|
Less accumulated depreciation |
|
(66,712 |
) |
|
|
(56,949 |
) |
|
|
Furniture and equipment, net |
|
14,795 |
|
|
|
14,309 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
21,297 |
|
|
|
57,950 |
|
|
|
Total
assets |
$ |
4,771,986 |
|
|
|
4,440,228 |
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT) |
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
1,391,342 |
|
|
$ |
3,360,745 |
|
|
Convertible note payable - short-term |
|
- |
|
|
|
30,169 |
|
|
Severance payable - short-term |
|
40,800 |
|
|
|
40,800 |
|
|
Deferred revenue - short-term |
|
242,827 |
|
|
|
281,774 |
|
|
Tax provision payable |
|
- |
|
|
|
48,600 |
|
|
Tax penalties payable |
|
190,000 |
|
|
|
270,000 |
|
|
|
Total
current liabilities |
|
1,864,969 |
|
|
|
4,032,088 |
|
|
|
|
|
|
|
|
|
Severance payable - long-term |
|
47,000 |
|
|
|
87,800 |
|
Deferred revenue - long-term |
|
386,821 |
|
|
|
129,986 |
|
Convertible note payable to shareholder- long-term |
|
393,723 |
|
|
|
590,723 |
|
|
|
Total
long-term liabilities |
|
827,544 |
|
|
|
808,509 |
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY (DEFICIT): |
|
|
|
|
|
|
|
|
Preferred stock 20,000,000 shares authorized, no shares
issued and outstanding |
|
- |
|
|
|
- |
|
|
Common stock, $0.001 par value, 100,000,000 shares
authorized, 21,826,650 and 20,722,756 shares issued and outstanding
as of December 31, 2013 and 2012, respectively |
|
11,616 |
|
|
|
10,562 |
|
|
Additional paid-in-capital |
|
7,676,177 |
|
|
|
6,843,267 |
|
|
Accumulated deficit |
|
(5,608,320 |
) |
|
|
(7,254,198 |
) |
|
Total shareholders' equity (deficit) |
|
2,079,473 |
|
|
|
(400,369 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity (deficit) |
$ |
4,771,986 |
|
|
$ |
4,440,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
For the three months ended (Unaudited) |
|
|
For the twelve months ended |
|
|
December 31, 2013 |
|
|
December 31, 2012 |
|
|
December 31, 2013 |
|
|
December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
9,808,466 |
|
|
$ |
10,138,976 |
|
|
$ |
40,964,127 |
|
|
$ |
22,920,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
2,911,748 |
|
|
|
3,130,109 |
|
|
|
11,508,854 |
|
|
|
7,480,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
6,896,718 |
|
|
|
7,008,867 |
|
|
|
29,455,273 |
|
|
|
15,439,598 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
2,126,894 |
|
|
|
2,109,494 |
|
|
|
7,867,497 |
|
|
|
4,347,052 |
|
|
Selling and marketing |
|
5,054,693 |
|
|
|
5,266,077 |
|
|
|
19,864,436 |
|
|
|
11,568,271 |
|
|
|
Total
operating expenses |
|
7,181,587 |
|
|
|
7,375,571 |
|
|
|
27,731,933 |
|
|
|
15,915,323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME (LOSS) |
|
(284,869 |
) |
|
|
(366,704 |
) |
|
|
1,723,340 |
|
|
|
(475,725 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE, NET |
|
(4,793 |
) |
|
|
(8,811 |
) |
|
|
(22,494 |
) |
|
|
(26,123 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX |
|
(289,662 |
) |
|
|
(375,515 |
) |
|
|
1,700,846 |
|
|
|
(501,848 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(PROVISION) BENEFIT FOR INCOME TAXES |
|
17,565 |
|
|
|
(48,600 |
) |
|
|
(54,968 |
) |
|
|
(48,600 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
$ |
(272,097 |
) |
|
$ |
(424,115 |
) |
|
$ |
1,645,878 |
|
|
$ |
(550,448 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.08 |
|
|
$ |
(0.03 |
) |
|
DILUTED |
$ |
(0.01 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.07 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
21,745,480 |
|
|
|
20,712,973 |
|
|
|
21,547,775 |
|
|
|
20,110,242 |
|
|
DILUTED |
|
23,500,494 |
|
|
|
20,712,973 |
|
|
|
24,726,718 |
|
|
|
20,110,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTERNATIONAL COMMERCIAL TELEVISION INC. AND
SUBSIDIARY |
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
FOR THE YEARS ENDED DECEMBER 31, 2013 and
2012 |
|
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
$ |
1,645,878 |
|
|
$ |
(550,448 |
) |
|
Adjustments to reconcile net income (loss) to net cash
and cash equivalents provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
9,763 |
|
|
|
14,250 |
|
|
|
Bad debt expense |
|
3,195,211 |
|
|
|
1,435,920 |
|
|
|
Stock based compensation |
|
723,694 |
|
|
|
838,388 |
|
|
Change in assets and liabilities |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(2,831,648 |
) |
|
|
(2,544,555 |
) |
|
|
Inventories |
|
201,684 |
|
|
|
(1,261,307 |
) |
|
|
Prepaid expenses and other assets |
|
(286,414 |
) |
|
|
(267,777 |
) |
|
|
Accounts payable and accrued liabilities |
|
(1,969,403 |
) |
|
|
2,504,203 |
|
|
|
Severance payable |
|
(40,800 |
) |
|
|
(40,800 |
) |
|
|
Tax provision payable |
|
(138,124 |
) |
|
|
48,600 |
|
|
|
Tax penalties payable |
|
(80,000 |
) |
|
|
- |
|
|
|
Deferred revenue |
|
217,888 |
|
|
|
386,632 |
|
|
|
|
Net
cash provided by operating activities |
|
647,729 |
|
|
|
563,106 |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
(10,249 |
) |
|
|
(8,310 |
) |
|
|
|
Net
cash used in investing activities |
|
(10,249 |
) |
|
|
(8,310 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
- |
|
|
|
388,500 |
|
|
Proceeds from exercise of options |
|
96,200 |
|
|
|
- |
|
|
Proceeds from exercise of warrants |
|
18,225 |
|
|
|
12,500 |
|
|
Proceeds from note payable |
|
- |
|
|
|
40,000 |
|
|
Payments on note payable |
|
(30,169 |
) |
|
|
(107,875 |
) |
|
Advances from related parties |
|
- |
|
|
|
50,000 |
|
|
Payments to related parties |
|
- |
|
|
|
(88,359 |
) |
|
Payments on convertible note payable to
shareholder |
|
(197,000 |
) |
|
|
- |
|
|
|
|
Net
cash (used in) provided by financing activities |
|
(112,744 |
) |
|
|
294,766 |
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
524,736 |
|
|
|
849,562 |
|
CASH AND CASH EQUIVALENTS, beginning of the year |
|
908,366 |
|
|
|
58,804 |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of the year |
$ |
1,433,102 |
|
|
$ |
908,366 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Capitalization of stock based compensation expense
related to nonforfeitable warrants |
$ |
- |
|
|
$ |
109,964 |
|
|
Fair value of warrants in connection with sale of
common stock |
|
- |
|
|
|
273,831 |
|
|
Interest paid |
|
23,048 |
|
|
|
26,490 |
|
Income taxes paid |
|
145,530 |
|
|
|
- |
|
Write off of fully depreciated assets |
|
- |
|
|
|
120,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact
Information International Commercial Television, Inc. Rich
Ransom Email Contact 484-598-2313 Stephen Hart Hayden IR Email
Contact 917-658-7878