Capstone Companies, Inc. Reports First Quarter 2017 Revenue of $6.8 Million
May 15 2017 - 4:00PM
InvestorsHub NewsWire
·
First quarter revenue of $6.8
million more than tripled over the 2016 first quarter, and exceeded
guidance of $5.5 million provided on April 25,
2017
·
Strong backlog drives expectation
for another record setting second
quarter
·
Growth resulting from five new
product launches
DEERFIELD BEACH, FL -- May 15, 2017
-- InvestorsHub NewsWire -- Capstone Companies, Inc. (OTC:
CAPC) (“Capstone” or the “Company”), a designer of innovative
LED lighting solutions including power failure lighting, today
reported its financial results for the first quarter
2017.
Stewart Wallach, Capstone’s CEO,
commented, “Our brand strategy is working and
has created differentiation for retailers in competing channels
enabling the Company to expand penetration in the channel for long
term growth.
“The continued strong interest in
our LED lighting products produced another record backlog level at
the end of the first quarter. The order activity and
backlog level drives our expectation that the second quarter of
2017 will exceed the same prior-year period and be the strongest
second quarter in company’s history.”
First Quarter
Highlights
·
Revenue of $6.8 million exceeded
guidance of $5.5 million, and more than tripled from
$2.1 million in the prior-year period.
·
Gross profit more than doubled to
$1.6 million over the prior-year period
First quarter revenue of $6.8
million improved $4.7 million over the first quarter of 2016.
With this record quarter behind us, the trailing 12 performance
puts the revenue at $35 million which would be an increase of 15%
compared to 2016 year-end.
During the quarter, 5 new products
were shipped which represented 64% of revenue. With the
introduction of these new products, the quarter’s gross margin of
23.4% is a blended rate which reflects introductory promotional
pricing to introduce the new items. Gross profit doubled to
$1.6 million over the prior-year period.
Total Operating Expenses were $1.2
million up from $655 thousand in 2016. The operating expense
increases were mainly the result of increased royalty payments due
to higher revenues.
The Company repurchased and retired
$150 thousand of company stock and paid down $137 thousand of old
director loans during the quarter. Income from operations
increased to $387 thousand as compared from a loss of $41 thousand
in 2016. That is an operating improvement of $428 thousand
from the prior year period.
|
CAPSTONE COMPANIES, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2017
|
|
2016
|
|
|
(Unaudited)
|
|
|
|
Assets:
|
|
|
|
|
Current Assets:
|
|
|
|
|
Cash
|
$
1,176,440
|
|
$
1,646,128
|
|
Accounts receivable, net
|
5,732,730
|
|
4,449,179
|
|
Inventory
|
514,198
|
|
366,330
|
|
Prepaid expenses
|
544,381
|
|
330,020
|
|
Total Current
Assets
|
7,967,749
|
|
6,791,657
|
|
|
|
|
|
|
Property and Equipment:
|
|
|
|
|
Computer equipment and software
|
19,767
|
|
19,767
|
|
Machinery and equipment
|
339,184
|
|
325,750
|
|
Furniture and fixtures
|
5,665
|
|
5,665
|
|
Less: Accumulated depreciation
|
(267,961)
|
|
(250,465)
|
|
Total Property & Equipment
|
96,655
|
|
100,717
|
|
|
|
|
|
|
Other Non-current Assets:
|
|
|
|
|
Deposit
|
12,193
|
|
12,193
|
|
Note receivable
|
539,832
|
|
526,887
|
|
Goodwill
|
1,936,020
|
|
1,936,020
|
|
Total Other Non-current
Assets
|
2,488,045
|
|
2,475,100
|
|
Total
Assets
|
$
10,552,449
|
|
$
9,367,474
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity:
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
3,732,285
|
|
$
2,678,210
|
|
Income tax payable
|
1,588
|
|
1,588
|
|
Notes and loans payable to related parties
|
1,203,468
|
|
1,321,721
|
|
Total Current
Liabilities
|
4,937,341
|
|
4,001,519
|
|
|
|
|
|
|
Long Term Liabilities:
|
|
|
|
|
Deferred tax liabilities
|
344,000
|
|
216,000
|
|
Total Long Term Liabilities
|
344,000
|
|
216,000
|
|
Total
Liabilities
|
5,281,341
|
|
4,217,519
|
|
|
|
|
|
|
Commitments and Contingencies (Note 6)
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
Preferred Stock, Series A, par value $.001 per
share, authorized 6,666,667 shares, issued -0- shares
|
-
|
|
-
|
|
Preferred Stock, Series B-1, par value $.0001
per share, authorized 3,333,333 shares, issued -0- shares
|
-
|
|
-
|
|
Preferred Stock, Series C, par value $1.00 per
share, authorized 67 shares, issued -0- shares
|
-
|
|
-
|
|
Common Stock, par value $.0001 per share,
authorized 56,666,667 shares, issued 47,132,664 shares and
48,132,664 shares
|
4,713
|
|
4,813
|
|
Additional paid-in capital
|
7,281,747
|
|
7,411,172
|
|
Accumulated deficit
|
(2,015,352)
|
|
(2,266,030)
|
|
Total Stockholders' Equity
|
5,271,108
|
|
5,149,955
|
|
Total Liabilities and
Stockholders’ Equity
|
$
10,552,449
|
|
$
9,367,474
|
|
|
|
|
|
|
CAPSTONE COMPANIES, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF
CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2017
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
250,678
|
|
$
(98,929)
|
|
Adjustments necessary to reconcile net income (loss) to net cash
provided by (used in) operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
17,495
|
|
14,061
|
|
Accrued interest on note
receivable
|
|
(12,945)
|
|
-
|
|
Stock based compensation
expense
|
|
20,475
|
|
14,250
|
|
Provision for deferred
income tax
|
|
128,000
|
|
-
|
|
Accrued sales allowance
|
|
206,995
|
|
(94,203)
|
|
(Increase) decrease in accounts
receivable
|
|
(1,539,687)
|
|
3,835,576
|
|
(Increase) in inventory
|
|
(147,868)
|
|
(26,674)
|
|
(Increase) in prepaid expenses
|
|
(214,361)
|
|
(38,057)
|
|
Increase (decrease) in accounts
payable and accrued liabilities
|
|
1,103,216
|
|
(1,864,020)
|
|
Increase in accrued interest on
notes payable
|
|
(18,253)
|
|
31,282
|
|
Net cash provided by (used in) operating
activities
|
|
(206,255)
|
|
1,773,286
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
Purchase of property and equipment
|
|
(13,433)
|
|
(4,700)
|
|
Net cash (used in) investing activities
|
|
(13,433)
|
|
(4,700)
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from notes payable
|
|
5,280,373
|
|
3,643,356
|
|
Repayments of notes payable
|
|
(5,280,373)
|
|
(5,564,194)
|
|
Repurchase of shares from Involve, LLC
|
|
(150,000)
|
|
-
|
|
Proceeds from notes and loans payable to related parties
|
|
-
|
|
360,000
|
|
Repayments of notes and loans payable to related parties
|
|
(100,000)
|
|
(108,847)
|
|
Net cash (used in) financing activities
|
|
(250,000)
|
|
(1,669,685)
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash and Cash Equivalents
|
|
(469,688)
|
|
98,901
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
1,646,128
|
|
364,714
|
|
Cash and Cash Equivalents at End of Period
|
|
$
1,176,440
|
|
$
463,615
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
Cash paid during the year for:
|
|
|
|
|
|
Interest
|
|
$
39,983
|
|
$
60,301
|
|
Income taxes
|
|
$
-
|
|
$
7,500
|
|
|
|
|
|
|
|
CAPSTONE COMPANIES, INC. AND
SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS
OF OPERATIONS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Revenues, net
|
|
|
|
$ 6,752,196
|
|
$
2,078,214
|
|
Cost of sales
|
|
|
|
(5,172,729)
|
|
(1,464,658)
|
|
Gross Profit
|
|
|
|
1,579,467
|
|
613,556
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
376,756
|
|
62,977
|
|
Compensation
|
|
|
|
359,802
|
|
308,458
|
|
Professional fees
|
|
|
|
204,802
|
|
104,285
|
|
Product development
|
|
|
|
72,025
|
|
36,274
|
|
Other general and administrative
|
|
|
|
178,619
|
|
142,755
|
|
Total Operating
Expenses
|
|
|
|
1,192,004
|
|
654,749
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
387,463
|
|
(41,193)
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
12,945
|
|
-
|
|
Interest expense
|
|
|
|
(21,730)
|
|
(57,736)
|
|
Total Other Income (Expense)
|
|
|
|
(8,785)
|
|
(57,736)
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Tax Provision
|
|
|
|
378,678
|
|
(98,929)
|
|
|
|
|
|
|
|
|
|
Provision for Income Tax
|
|
|
|
128,000
|
|
-
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
|
|
$
250,678
|
|
$
(98,929)
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$0.005
|
|
($0.002)
|
|
Diluted
|
|
|
|
$0.005
|
|
($0.002)
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares Outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
|
47,621,553
|
|
48,132,664
|
|
Diluted
|
|
|
|
47,883,977
|
|
48,132,664
|
|
|
|
|
|
|
|
|
Webcast and Teleconference to Review
Results and Outlook
The Company will host a live webcast
and conference call on Tuesday, May 16, 2017 at
10:30 a.m. Eastern Time. 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 dialing (201) 689-8562. The listen-only audio webcast can
be monitored at www.capstonecompaniesinc.com.
A telephonic replay will be
available from 1:30 p.m. Eastern Time the day of the teleconference
until Tuesday, May 23, 2017.
To listen to the replay of the call,
dial (412) 317-6671 and
enter replay pin number 13659059. 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, including the
Hoover® HOME LED lighting product
line, 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 URLs are not incorporated into this press
release.
For more information,
contact
Company:
Aimee C.
Gaudet
Corporate
Secretary
Email: aimee@capstonecompaniesinc.com
Phone: (954) 252-3440, ext.
313
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