ICTV Brands, Inc. Reports First Quarter 2017 Financial
Results
Conference Call Begins Tomorrow at 10:00am EDT
WAYNE, PA-(Marketwired - May 15, 2017) - ICTV Brands, Inc.
(OTCQX: ICTV), (CSE: ITV), a digitally focused direct response
marketing and international branding company focused on the health,
wellness and beauty sector, today reported financial results for
the three months ended March 31, 2017.
First Quarter 2017 Highlights:
- Delivered revenue of approximately $7.65M, up 105% compared to
the prior year quarter.
- Achieved positive Adjusted EBITDA of $322.9K, up 190% compared
to prior year quarter.
- Total assets increased to approximately $20.8M up from
approximately $4.5M at December 31, 2016, which includes
approximately $8.0M in inventory and approximately $4.9M in cash
and equivalents.
- Began to successfully integrate newly acquired assets.
- Expanding DermaWand distribution into US retail, UK retail,
Hong Kong and certain airlines.
Management Commentary: Richard Ransom, President, stated, "I am
very pleased with our performance and execution this quarter. Our
team has worked tirelessly to integrate a substantial acquisition,
of both assets and personnel. The 105% increase in sales from the
prior year quarter, with just over two months of having these
assets under ICTV's control, is a testament to the readiness of our
very talented team to quickly integrate these new assets into
ICTV's global sales platform. In addition, expense levels were
higher this quarter, due to acquisition related expenses and
integration expenses. I fully expect these expenses to level off in
the future, and operating margins to expand from current levels.
Our balance sheet is the strongest that is has been in years and
enables us to operate from a position of strength. Our improved
working capital dynamic, fueled by increases in both cash and
inventory, positions ICTV to successfully convert this inventory to
sales in the coming quarters. Our cash balance provides us
tremendous flexibility as we execute on our strategic plan for
2017."
Reported Financial Results: First Quarter 2017 Compared to First
Quarter 2016: Revenues for the three months ended March 31, 2017
were approximately $7.6 million, compared to approximately $3.7
million for the three months ended March 31, 2016. For the three
months ended March 31, 2017, we generated approximately $5.5
million in gross profit, compared to approximately $2.5 million
during the three months ended March 31, 2016 as a result of the
addition of the no!no!™, Kyrobak™ and Cleartouch™ products acquired
in January 2017. Gross profit margin was 72% in the first quarter
2017 compared to 68% in the prior year quarter. The increase in
gross margin percentage is mainly attributable to changes in
product mix as we bring additional sales to market both
domestically and internationally. Total operating expenses
increased to approximately $5.9 million from approximately $2.6
million during the first quarter of 2016. The largest factor is an
increase in media expenditures. Media expenditures were
approximately $1.6 million and $0.8 million for the three months
ended March 31, 2017 and 2016, respectively. In addition, internet
marketing expense which increased to approximately $0.8 million for
the three months ended March 31, 2017 from approximately $0.3
million during the three months ended March 31, 2016, as well as
payroll expenses increased to approximately $0.7 million during the
three months ended March 31, 2017 from approximately $0.4 million
as a result of additional employees through the acquisition and
consulting expenses increased to approximately $0.2 million during
the three months ended March 31, 2017 compared to approximately
$64,000 during the three months ended March 31, 2016. Finally,
total share based compensation expenses increased to approximately
$0.4 million during the three months ended March 31, 2017, from
approximately $0.1 million for the prior year quarter.
Net loss for the first quarter was approximately ($368,000),
compared to a net loss of approximately ($89,000) in the prior year
quarter. The resulting EPS is ($0.01), as compared to ($0.00) in
the comparable quarter a year earlier. Adjusted earnings before
interest, taxes, depreciation, and amortization (Adjusted EBITDA)
was approximately $323,000 as compared to loss of approximately
$111,000.
Balance Sheet as of March 31, 2017
As of March 31, 2017, the Company had approximately $4.9 million
in cash and cash equivalents and approximately $7.0 million in
working capital compared to approximately $1.4 million and
approximately $1.3 million as of December 31, 2016, respectively.
Included in our cash balance of approximately $4.9 million at March
31, 2017, was $1.75 million that was subsequently paid to
PhotoMedex in April 2017 to satisfy the cash payment due to
PhotoMedex as detailed in the terms of our asset purchase
agreement. Additionally, the Company believes that our current cash
will be sufficient to meet the anticipated cash needs for working
capital for at least the next twelve months.
Conference Call ICTV will hold a conference call to discuss the
Company's first quarter 2017 results and answer questions on May
16, 2017, beginning at 10:00am 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, Ernest P. Kollias, Jr,
followed by a question and answer period. The live conference call
can be accessed by dialing (877) 876-9177 or (785) 424-1666.
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 May 30,
2017. To listen to the replay, dial (800) 839-4906 (domestic) or
(402) 220-2684 (international). The conference call transcript will
be posted to the Company's corporate website
(http://www.ictvbrands.com) for those who are unable to attend the
live call.
ICTV Brands, Inc. ICTV Brands, Inc. sells primarily health,
beauty and wellness products as well as various consumer products
through a multi-channel distribution strategy. ICTV utilizes a
distinctive marketing strategy and multi-channel distribution model
to develop, market and sell products through, including direct
response television, or DRTV, digital marketing campaigns, live
home shopping, traditional retail and e-commerce market places, and
our international third party distributor network. Its products are
sold in the North America and are available in over 65 countries.
Its products include DermaWand, a skin care device that reduces the
appearance of fine lines and wrinkles, and helps improve skin tone
and texture, DermaVital, a professional quality skin care line that
effects superior hydration, the CoralActives brand of acne
treatment and skin cleansing products, and Derma Brilliance, a
sonic exfoliation skin care system which helps reduce visible signs
of aging, Jidue, a facial massager device which helps alleviate
stress, and Good Planet Super Solution, a multi-use cleaning agent.
On January 23, 2017, we acquired several new brands, through the
PhotoMedex and Ermis Labs acquisitions and have begun (or, will
shortly begin) marketing and selling the following new products;
no!no! ® Hair, a home use hair removal device; no!no!® Skin, a home
use device that uses light and heat to calm inflammation and kill
bacteria in pores to treat acne; no!no! ® Face Trainer, a home use
mask that supports a series of facial exercises; no!no!® Glow, a
home use device that uses light and heat energy to treat skin; Made
Ya Look, a heated eyelash curler; no!no! ® Smooth Skin Care, an
array of skin care products developed to work with the devices to
improve the treated skin; Kyrobak, a home use device for the
treatment of non-specific lower back pain; ClearTouch ®, a home use
device for the safe and efficient treatment of nail fungus; and
Ermis Labs acne treatment cleansing bars. ICTV Brands, Inc. was
founded in 1998 and is headquartered in Wayne, Pennsylvania. For
more information on our current initiatives, please visit
www.ictvbrands.com.
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. The following tables present a
reconciliation of the non-GAAP financial measure of Adjusted EBITDA
to the GAAP financial measures of net income and net cash provided
by operating activities, respectively.
Adjusted EBITDA Reconciliation
|
|
|
|
(Unaudited)
|
|
|
For the three months ended
|
|
|
March 31, 2017
|
|
|
March 31, 2016
|
|
|
|
|
|
|
|
|
|
Net loss, as reported
|
$
|
(367,618
|
)
|
|
$
|
(88,678
|
)
|
|
Interest expense (income), net
|
|
49,047
|
|
|
|
3,782
|
|
|
Depreciation and amortization
|
|
223,468
|
|
|
|
74,609
|
|
|
Share based compensation expense
|
|
81,959
|
|
|
|
121,455
|
|
|
Issuance of stock for compensation
|
|
336,000
|
|
|
|
-
|
|
Adjusted EBITDA
|
$
|
322,856
|
|
|
$
|
111,168
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements
Forward-Looking Statements. This press release contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
(which Sections were adopted as part of the Private Securities
Litigation Reform Act of 1995). Statements preceded by, followed by
or that otherwise include the words "believe," "anticipate,"
"estimate," "expect," "intend," "plan," "project," "prospects,"
"outlook," and similar words or expressions, or future or
conditional verbs such as "will," "should," "would," "may," and
"could" are generally forward-looking in nature and not historical
facts. These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the
Company's actual results, performance or achievements to be
materially different from any anticipated results, performance or
achievements. The Company disclaims any intention to, and
undertakes no obligation to, revise any forward-looking statements,
whether as a result of new information, a future event, or
otherwise. For additional risks and uncertainties that could impact
the Company's forward-looking statements, please see the Company's
Annual Report on Form 10-K for the year ended December 31, 2016,
including but not limited to the discussion under "Risk Factors"
therein, which the Company has filed with the SEC and which may be
viewed at http://www.sec.gov.
- Financial Statement Schedules follow -
|
|
ICTV BRANDS INC. AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
AS OF
|
|
|
|
|
March 31, 2017
|
|
|
December 31, 2016
|
|
ASSETS
|
(Unaudited)
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
4,869,425
|
|
|
$
|
1,390,641
|
|
|
Accounts receivable, net of $270,947 and $123,109,
respectively
|
|
1,700,300
|
|
|
|
506,337
|
|
|
Other receivable
|
|
589,162
|
|
|
|
-
|
|
|
Inventories, net
|
|
7,973,244
|
|
|
|
1,499,270
|
|
|
Prepaid expenses and other current assets
|
|
541,053
|
|
|
|
254,303
|
|
|
|
Total current assets
|
|
15,673,184
|
|
|
|
3,650,551
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
978,881
|
|
|
|
74,098
|
|
|
Less accumulated depreciation
|
|
(82,904
|
)
|
|
|
(58,099
|
)
|
|
|
Property and equipment, net
|
|
895,977
|
|
|
|
15,999
|
|
|
|
|
|
|
|
|
|
|
|
Intangibles assets, net
|
|
4,234,762
|
|
|
|
872,864
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
20,803,923
|
|
|
$
|
4,539,414
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
2,882,588
|
|
|
$
|
1,644,899
|
|
|
Other payable
|
|
1,750,000
|
|
|
|
-
|
|
|
Deferred revenue - short-term
|
|
757,377
|
|
|
|
377,445
|
|
|
Contingent consideration - short term
|
|
2,783,279
|
|
|
|
-
|
|
|
Deferred consideration - short term
|
|
164,029
|
|
|
|
-
|
|
|
Other liabilities- current
|
|
289,529
|
|
|
|
288,525
|
|
|
Total current liabilities
|
|
8,627,313
|
|
|
|
2,310,869
|
|
|
|
|
|
|
|
|
|
Deferred revenue - long-term
|
|
258,070
|
|
|
|
274,374
|
|
Contingent consideration - long term
|
|
1,144,604
|
|
|
|
-
|
|
Deferred consideration - long term
|
|
1,014,672
|
|
|
|
-
|
|
Other liabilities - long-term
|
|
592,952
|
|
|
|
665,713
|
|
Total long-term liabilities
|
|
3,010,298
|
|
|
|
940,087
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
Preferred stock 20,000,000 shares authorized, no shares issued
and outstanding
|
|
-
|
|
|
|
-
|
|
|
Common stock, $0.001 par value, 100,000,000 shares authorized,
52,053,725 and 28,343,007 shares issued and outstanding as of March
31, 2017 and 2016, respectively
|
|
41,843
|
|
|
|
18,132
|
|
|
Additional paid-in-capital
|
|
19,773,982
|
|
|
|
11,546,804
|
|
|
Accumulated other comprehensive loss
|
|
(5,417
|
)
|
|
|
-
|
|
|
Accumulated deficit
|
|
(10,644,096
|
)
|
|
|
(10,276,487
|
)
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
9,166,312
|
|
|
|
1,288,458
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
$
|
20,803,923
|
|
|
$
|
4,539,414
|
|
See accompanying notes to the condensed consolidated financial
statements as filed on www.sec.gov.
|
|
|
|
|
|
ICTV BRANDS INC. AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and
COMPREHENSIVE LOSS
|
|
(Unaudited)
|
|
|
|
|
|
For the three months ended
|
|
|
March 31, 2017
|
|
|
March 31, 2016
|
|
|
|
|
|
|
|
|
|
NET SALES
|
$
|
7,647,119
|
|
|
$
|
3,723,644
|
|
|
|
|
|
|
|
|
|
COST OF SALES
|
|
2,153,580
|
|
|
|
1,196,696
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
5,493,539
|
|
|
|
2,526,948
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
General and administrative
|
|
2,482,269
|
|
|
|
959,317
|
|
Selling and marketing
|
|
3,389,944
|
|
|
|
1,652,527
|
|
Total operating expenses
|
|
5,872,213
|
|
|
|
2,611,844
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS
|
|
(378,674
|
)
|
|
|
(84,896
|
)
|
|
|
|
|
|
|
|
|
MISCELLANEOUS INCOME
|
|
60,103
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE, NET
|
|
(49,047
|
)
|
|
|
(3,782
|
)
|
|
|
|
|
|
|
|
|
LOSS BEFORE PROVISION FOR INCOME TAX
|
|
(367,618
|
)
|
|
|
(88,678
|
)
|
|
|
|
|
|
|
|
|
PROVISION (BENEFIT) FOR INCOME TAX
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
(367,618
|
)
|
|
|
(88,678
|
)
|
|
|
|
|
|
|
|
|
OTHER COMPRENSHIVE LOSS:
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
(5,417
|
)
|
|
|
-
|
|
COMPREHENSIVE LOSS
|
$
|
(373,035
|
)
|
|
$
|
(88,678
|
)
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE
|
|
|
|
|
|
|
|
BASIC
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
DILUTED
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
|
|
|
|
|
|
|
|
BASIC
|
|
44,067,195
|
|
|
|
28,148,074
|
|
DILUTED
|
|
44,067,195
|
|
|
|
28,148,074
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed consolidated financial
statements as filed on www.sec.gov.
|
|
|
|
|
|
ICTV BRANDS INC. AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE MONTHS ENDED MARCH 31, 2017 and 2016
|
|
(Unaudited)
|
|
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(367,618
|
)
|
|
$
|
(88,678
|
)
|
|
Adjustments to reconcile net loss to net cash and cash
equivalents provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
32,295
|
|
|
|
1,871
|
|
|
|
Amortization of intangible asset
|
|
191,173
|
|
|
|
72,738
|
|
|
|
Bad debt expense
|
|
319,330
|
|
|
|
189,950
|
|
|
|
Share based compensation
|
|
81,959
|
|
|
|
121,455
|
|
|
|
Issuance of stock for compensation
|
|
336,000
|
|
|
|
-
|
|
|
|
Change in fair value of contingent consideration
|
|
(20,142
|
)
|
|
|
-
|
|
|
|
Loss on disposal of property and equipment
|
|
3,228
|
|
|
|
-
|
|
|
|
Non-cash interest expense
|
|
50,122
|
|
|
|
4,219
|
|
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(1,513,293
|
)
|
|
|
(303,256
|
)
|
|
|
Inventories
|
|
(589,162
|
)
|
|
|
238,636
|
|
|
|
Prepaid expenses and other current assets
|
|
295,405
|
|
|
|
(79,874
|
)
|
|
|
Accounts payable and accrued liabilities
|
|
1,238,689
|
|
|
|
(189,136
|
)
|
|
|
Severance payable
|
|
-
|
|
|
|
(39,995
|
)
|
|
|
Deferred revenue
|
|
363,628
|
|
|
|
224,166
|
|
|
|
|
Net cash provided by operating activities
|
|
133,864
|
|
|
|
152,096
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
(57,076
|
)
|
|
|
-
|
|
|
Contingent consideration payments for acquisition
|
|
(249,507
|
)
|
|
|
-
|
|
|
Cash paid for acquisition of PhotoMedex, Inc.
|
|
(3,250,000
|
)
|
|
|
-
|
|
|
|
|
Net cash used in investing activities
|
|
(3,556,583
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of offering
costs
|
|
6,982,930
|
|
|
|
-
|
|
|
Payments of DermaWand asset purchase agreement
|
|
(75,000
|
)
|
|
|
(75,000
|
)
|
|
|
|
Net cash provided by (used in) financing activities
|
|
6,907,930
|
|
|
|
(75,000
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and cash equivalents
|
|
(6,427
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
3,478,784
|
|
|
|
77,096
|
|
CASH AND CASH EQUIVALENTS, beginning of the period
|
|
1,390,641
|
|
|
|
1,334,302
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of the period
|
$
|
4,869,425
|
|
|
$
|
1,411,398
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Taxes paid
|
$
|
-
|
|
|
$
|
-
|
|
|
Interest paid
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:
|
|
|
|
|
|
|
|
|
Cashless Exercise
|
$
|
23
|
|
|
$
|
-
|
|
|
DermaWand Asset Purchase Agreement
|
$
|
-
|
|
|
$
|
1,200,000
|
|
|
|
|
|
|
|
Acquisition of PhotoMedex on January 23, 2017:
|
|
|
|
|
|
|
|
|
Fair value of assets acquired
|
$
|
9,198,043
|
|
|
$
|
-
|
|
|
Fair of deferred consideration
|
|
(4,198,043
|
)
|
|
|
-
|
|
|
Other Payable
|
|
(1,750,000
|
)
|
|
|
-
|
|
|
Cash paid for acquisition
|
$
|
3,250,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Asset Acquisition of Ermis Labs on January 23, 2017:
|
|
|
|
|
|
|
|
|
Cost of assets acquired
|
$
|
1,981,822
|
|
|
$
|
-
|
|
|
Present value of deferred consideration
|
|
(1,131,822
|
)
|
|
|
-
|
|
|
Issuance of common stock
|
|
(850,000
|
)
|
|
|
-
|
|
|
Cash paid for acquisition
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed consolidated financial
statements as filed on www.sec.gov.
Contact Information: Rich Ransom ransom@ictvbrands.com
484-598-2313 Ernest P. Kollias, Jr. kollias@ictvbrands.com
484-598-2300, x318