Capstone Companies, Inc. Reports Record Revenue in 2013
March 27 2014 - 4:05PM
- Fourth quarter revenue increased 189% to $7.3 million;
Full-year revenue improved 75%
- Full-year gross profit more than doubled to $3.6
million or 24.7% of sales
- Full-year net income was $0.7 million compared with a
net loss of $0.6 million in 2012
Capstone Companies, Inc. (OTCQB:CAPC) ("Capstone" or the
"Company"), a leader in the design and manufacture of specialty
power failure lighting solutions and innovator of consumer safety
and security products for the Hospitality, Retail and Institutional
channels, reported fourth quarter unaudited 2013 financial
results.
Gerry McClinton, Capstone's CFO, commented, "As a result of the
successful implementation of our domestic distribution program and
product launches during the year, we achieved record revenue for
the fourth quarter and full year of 2013 as well as positive
operating and net income."
Fourth Quarter 2013 Highlights
- Revenue was $7.3 million, an increase of 189% from the
prior-year period.
- Gross profit increased $1.2 million, or 261%, to $1.7 million
compared with the fourth quarter of 2012.
- Net income improved significantly to $0.7 million compared with
net loss of $0.2 million in the fourth quarter 2012.
2013 Highlights
- Record revenue of $14.6 million, increased $6.2 million, or
75%, from 2012.
- Gross profit more than doubled to $3.6 million, or 24.7% of
sales, from $1.8 million, or 21.4% of sales, in 2013.
- Net income was $0.7 million compared with a net loss of $0.6
million in 2012.
Strategic Growth Initiatives Taking Hold
The strategic initiatives implemented during the last several
years have resulted in measurably improved top line results and
profitability. The Company is continuing to make incremental
investments in alignment with existing strategic goals, including
increasing brand awareness, the expansion of Capstone
International's Hong Kong operations and widening the product
distribution channels both domestically and into overseas markets.
Additionally, through investment and collaboration with AC
Kinetics, the Company has developed new intellectual property which
provides a roadmap for the expansion of power failure lighting
solutions into new and innovative applications, serving our
customers needs with more efficient and forward trending
designs.
Stewart Wallach, Capstone's CEO noted, "Our strategic
investments are beginning to yield favorable results and we have
several upcoming major milestones, providing a clear pathway to
additional growth on the horizon. I am particularly encouraged by
the new products that will utilize the patent pending technology
developed through our collaboration with AC Kinetics. We are
pressing to debut the initial round of these products ahead of this
year's Hardware Show on May 6th.
"2013 was clearly a year of accomplishments for Capstone and the
Company's momentum has never been stronger. 2014 will mark the
most exciting and extensive product roadmap in the Company's
history. While remaining focused on the safety and security
categories, we are extending our lighting applications which will
enable us to serve more departments within the retail
environment. Our company continues to execute its long-term
plan and maintain its commitment and belief in building value
through strong fundamental performance."
He added, "I encourage you all to join us on our webcast and
conference call tomorrow morning to learn more about the exciting
things we are doing to build on the successes of 2013 and drive
further growth."
Webcast and Teleconference to Review Results and
Outlook
The Company will host a live webcast and conference call on
Friday, March 28, 2014 at 11:30 a.m. ET. During the call,
management will review the financial and operating results and
discuss the Company's corporate strategy and outlook, followed by a
question-and-answer session. The conference call can be
accessed by dialling (201) 689-8562. The listen-only audio
webcast can be monitored at www.capstonecompaniesinc.com.
A telephonic replay will be available from 2:30 p.m. ET the day
of the teleconference until Friday April 4, 2014. To listen to
the replay of the call, dial (858) 384-5517 and enter replay pin
number 13577714. Alternatively, the archive of the webcast
will be available on the Company's website at
www.capstonecompaniesinc.com. A transcript will also be posted
to the website, once available.
About Capstone Companies, Inc.
Capstone Companies, Inc. is a public holding company that
engages, through its wholly-owned subsidiaries, Capstone
Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone
International HK, Ltd., in the development, manufacturing,
logistics, and distribution of consumer and institutional products
to accounts throughout North America and in international
markets. See www.capstonecompaniesinc.com for more information
about the Company and www.capstoneindustries.com for information on
our current product offerings.
FORWARD-LOOKING STATEMENTS:
This news release contains "forward-looking statements" as that
term is defined in the Private Securities Litigation Reform Act of
1995, as amended. Such statements consist of words like
"anticipate," "expect," "project," "continue" and similar
words. These statements are based on the Company's and its
subsidiaries' current expectations and involve risks and
uncertainties, which may cause results to differ materially from
those set forth in the forward-looking statements. Factors
that may cause actual results to differ materially from those
contemplated by such forward-looking statements, include consumer
acceptance of the Company's products, its ability to deliver new
products, the success of its strategy to broaden market channels
and the relationships it has with retailers and
distributors. Prior success in operations does not necessarily
mean success in future operations. The ability of the Company
to adequately and affordably fund operations and any growth will be
critical to achieving and sustaining any expansion of markets and
revenue. The introduction of new products or the expanded
availability of products does not mean that the Company will enjoy
better financial or business performance. The risks associated with
any investment in Capstone Companies, Inc., which is a small
business concern and a "penny-stock Company" and, as such, a highly
risky investment suitable for only those who can afford to lose
such investment, should be evaluated together with the risks and
uncertainties more fully described in the Company's Annual and
Quarterly Reports filed with the Securities and Exchange
Commission. Capstone Companies, Inc. undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events, or
otherwise. Contents of referenced URL's are not incorporated
into this press release.
FINANCIAL TABLES FOLLOW. THE FOLLOWING SUMMARY
FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-K
FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
CAPSTONE COMPANIES,
INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
For the Three Months
Ended |
For the Twelve Months
Ended |
|
December
31, |
December 31, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Revenues |
$7,253,037 |
$2,512,045 |
$14,593,826 |
$8,362,964 |
Cost of Sales |
(5,584,423) |
(2,050,019) |
(10,983,364) |
(6,574,912) |
Gross Profit |
1,668,614 |
462,026 |
3,610,462 |
1,788,052 |
Gross Margin |
23.0% |
18.4% |
24.7% |
21.4% |
|
|
|
|
|
Operating Expenses: |
|
|
|
|
Sales and marketing |
279,572 |
147,220 |
489,791 |
364,263 |
Compensation |
282,222 |
229,491 |
972,922 |
900,628 |
Professional fees |
56,402 |
94,487 |
326,077 |
269,335 |
Product Development |
68,165 |
35,033 |
225,754 |
227,087 |
Other general and
administrative |
175,684 |
99,851 |
479,298 |
359,795 |
Total
Operating Expenses |
862,045 |
606,082 |
2,493,842 |
2,121,108 |
|
|
|
|
|
Net Operating Income (Loss) |
806,569 |
(144,056) |
1,116,620 |
(333,056) |
Operating Margin |
11.1% |
-5.7% |
7.7% |
-4.0% |
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
Interest expense |
(123,776) |
(91,677) |
(389,486) |
(274,127) |
Total Other
Income (Expense) |
(123,776) |
(91,677) |
(389,486) |
(274,127) |
|
|
|
|
|
Net Income (Loss) |
$682,793 |
$ (235,733) |
$727,134 |
$ (607,183) |
|
|
|
|
|
Income (Loss) per Common Share |
$ -- |
$ -- |
$ -- |
$ -- |
|
|
|
|
|
Weighted Average Shares Outstanding |
|
|
|
|
Basic |
86,558 |
877,398 |
657,503,683 |
650,724,916 |
Diluted |
86,558 |
727,398 |
813,450,260 |
810,671,493 |
|
|
|
|
|
|
|
|
|
|
CAPSTONE COMPANIES,
INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
(Unaudited) |
|
|
December 31 , |
December 31, |
|
2013 |
2012 |
Assets: |
|
|
Current Assets: |
|
|
Cash |
$436,592 |
$411,259 |
Accounts receivable –
net |
6,927,238 |
2,673,555 |
Inventory |
298,099 |
584,370 |
Prepaid expense |
1,082,784 |
351,003 |
Total
Current Assets |
8,744,713 |
4,020,187 |
|
|
|
Fixed Assets: |
|
|
Computer equipment &
software |
66,448 |
66,448 |
Machinery and
equipment |
667,096 |
654,401 |
Furniture and
fixtures |
5,665 |
5,665 |
Less: Accumulated
depreciation |
(661,210) |
(597,042) |
Total Fixed
Assets |
77,999 |
129,472 |
|
|
|
Other Non-current Assets: |
|
|
Product development costs
– net |
19,664 |
27,280 |
Investment (AC
Kinetics) |
500,000 |
-- |
Goodwill |
1,936,020 |
1,936,020 |
Total Other
Non-current Assets |
2,455,684 |
1,963,300 |
Total Assets |
$11,278,396 |
$6,112,959 |
|
|
|
Liabilities and Stockholders' Equity: |
|
|
Current Liabilities: |
|
|
Accounts payable and
accrued expenses |
$1,931,527 |
$1,114,166 |
Note payable - Sterling
Factors |
4,237,144 |
1,245,159 |
Notes and loans payable
to related parties - current maturities |
3,220,074 |
602,148 |
Total
Current Liabilities |
9,388,745 |
2,961,473 |
|
|
|
Long-Term Liabilities |
|
|
Notes and loans payable
to related parties - Long Term |
-- |
2,023,283 |
Total
Liabilities |
9,388,745 |
4,984,756 |
|
|
|
Commitments and Contingent Liabilities (Note
5) |
|
|
|
|
|
Stockholders' Equity: |
|
|
Preferred Stock, Series
A, par value $.001 per share, authorized 100,000,000 shares,
issued -0- shares |
-- |
-- |
Preferred Stock, Series
B-1, par value $.0001 per share, authorized 50,000,000 shares,
issued -0- shares |
-- |
-- |
Preferred Stock, Series
C, par value $1.00 per share, authorized 1,000 shares, issued 1,000
shares |
1,000 |
1,000 |
Common Stock, par value
$.0001 per share, authorized 850,000,000 shares, 657,760,532 &
655,885,532 shares issued at December 31, 2013 & December
31, 2012 |
65,777 |
65,589 |
Additional paid-in
capital |
7,172,059 |
7,137,933 |
Accumulated deficit |
(5,349,185) |
(6,076,319) |
Total
Stockholders' Equity |
1,889,651 |
1,128,203 |
Total
Liabilities and Stockholders' Equity |
$11,278,396 |
$6,112,959 |
|
|
|
|
|
|
CAPSTONE COMPANIES,
INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
(Unaudited) |
|
|
|
|
For the Year Ended
December 31, |
|
2013 |
2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Continuing operations: |
|
|
Net Income (Loss) |
$727,134 |
$ (607,183) |
Adjustments necessary to
reconcile net loss to net cash used in operating activities: |
|
|
Stock
issued for expenses |
14,064 |
59,963 |
Depreciation and amortization |
95,756 |
71,153 |
Compensation expense from stock options |
20,250 |
36,750 |
(Increase)
decrease in accounts receivable |
(4,253,683) |
(1,196,276) |
(Increase)
decrease in inventory |
286,271 |
(525,653) |
(Increase)
decrease in prepaid expenses |
(731,781) |
66,740 |
(Increase)
decrease in other assets |
(23,972) |
(33,960) |
Increase
(decrease) in accounts payable and accrued expenses |
817,361 |
587,230 |
Increase
(decrease) in accrued interest on notes payable |
104,643 |
144,216 |
Net cash provided by
(used in) operating activities |
(2,943,957) |
(1,397,020) |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
Investment |
(500,000) |
-- |
Purchase of property and equipment |
(12,695) |
(109,883) |
Net cash provided by (used in) investing
activities |
(512,695) |
(109,883) |
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
Proceeds from notes payable |
12,737,405 |
7,568,000 |
Repayments of notes payable |
(9,745,420) |
(6,764,448) |
Proceeds from notes and loans payable to
related parties |
4,538,000 |
3,043,000 |
Repayments of notes and loans payable to
related parties |
(4,048,000) |
(2,093,000) |
Net cash provided by financing
activities |
3,481,985 |
1,753,552 |
|
|
|
Net (Decrease) Increase in Cash and Cash
Equivalents |
25,333 |
246,649 |
Cash and Cash Equivalents at Beginning of
Period |
411,259 |
164,610 |
Cash and Cash Equivalents at End of
Period |
$436,592 |
$411,259 |
|
|
|
CONTACT: For more information contact
Company:
Aimee Gaudet
Corporate Secretary
(954) 252-3440, ext 313
Investor Relations:
Garett Gough, Kei Advisors LLC
(716) 846-13352
ggough@keiadvisors.com
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