Capstone Companies, Inc. Reports Record Third Quarter 2017 Revenue

Record year-to-date revenue of $30.8 million
Record quarterly and year-to-date gross profit
Record year-to-date operating income

Deerfield Beach, FL -- November 15, 2017 -- InvestorsHub NewsWire -- Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer of innovative LED lighting solutions including power failure lighting, yesterday reported its financial results for the third quarter 2017.

Stewart Wallach, Capstone’s Chairman and CEO, commented, “As evidenced by our third quarter results, the Companies’ branding and product strategies continue to deliver. Our product placement earlier in the year was strong resulting in five additional products finding retail shelves. We have broken our quarterly revenue record for Q3 and have surpassed our record 2016 revenues by over $2 million. Our product development efforts remain laser focused on continuing to deliver new and innovative products for 2018.”

Third Quarter Financial Summary
($ in thousands, except per share data)

	Q3 2017	Q3 2016	Change	% Change
Revenue	$ 13,818	$ 11,692	2,126	18.1%
Gross Profit	3,110	2,851	259	9.1%
Gross Margin (%)	22.5%	24.4%	-	-
Operating Income	1,450	1,604	(154)	(9.6%)
Operating Margin (%)	10.5%	13.7%	-	-
Net Income Before Tax	1,381	1,514	(133)	(8.8%)
Net Income Before Tax (%)	10.0%	12.9%	-	-
Earnings Per Diluted Share	$ 0.02	$ 0.03	-	-

2017 First Nine Months Financial Summary
($ in thousands, except per share data)

	Q3 2017 YTD	Q3 2016 YTD	Change	% Change
Revenue	$ 30,790	$ 22,673	8,117	35.8%
Gross Profit	7,333	5,593	1,740	31.1%
Gross Margin (%)	23.8%	24.7%	-	-
Operating Income	3,176	2,724	452	16.6%
Operating Margin (%)	10.3%	12.01%	-	-
Net Income Before Tax	3,063	2,510	553	22.0%
Net Income Before Tax %	9.9%	11.1%	-	-
Earnings Per Diluted Share	$ .045	$ .051	-	-

Record revenue growth in the third quarter of 2017 resulted from strong demand for the Company’s battery powered accent lighting products and the placement of 5 new lighting products. Products sold under Capstone Lighting^Ò, Hoover^Ò Home LED and Duracell^Ò brands experienced significantly higher revenue levels.

Record gross profit was driven by the record revenue volume. Gross margin as a percent to revenue declined slightly, when compared against the prior year quarter, however that is after the Company invested an additional $677 thousand in market promotional spending to support the launch of the new products.

Selling and marketing expense increased to $928 thousand from $488 thousand in the prior year quarter. During the quarter we expensed $514 thousand of Royalty payments for the branded licenses, resulting from the higher revenue levels.

Net Operating Income for the quarter 2017 and 2016 was $1.450 million and $1.604 million, respectively. With a $390 thousand tax provision for the quarter 2017 Net Income was $991 thousand compared to $1.490 million in 2016.

Record revenue for the 9 months 2017 of $30.8 million was $8.1 million or 35.8% higher than in 2016. Record gross profit for the 9 months 2017 of $7.3 million was $1.7 million or 31.1% higher than in 2016 and that is after investing $1.8 million in product promotional allowances.

Record Operating Income for the 9 months 2017 of $3.2 million was $452 thousand higher than in 2016.

Net Income for the 9 months 2017 was $2.1 million or $331 thousand lower than 2016, however that is after the Company provided for a tax provision of $920 thousand or $883 thousand higher than 2016.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Thursday, November 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, November 23, 2017. To listen to the replay of the call, dial (844) 512-2921 and enter replay pin number 13671616. 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.

Company:
Aimee Gaudet
Corporate Secretary
(954) 252-3440, ext. 313

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 INCOME
(Unaudited)

	For the Three Months Ended		For the Nine Months Ended
	September 30,		September 30,
	2017	2016	2017	2016

Revenues, net	$ 13,817,909	$ 11,692,146	$ 30,789,653	$ 22,672,551
Cost of sales	(10,707,657)	(8,841,148)	(23,457,070)	(17,079,271)
Gross Profit	3,110,252	2,850,998	7,332,583	5,593,280

Operating Expenses:
Sales and marketing	928,321	488,057	1,869,596	903,888
Compensation	351,915	325,283	1,065,621	949,753
Professional fees	109,257	111,339	429,440	286,681
Product development	80,991	127,367	219,464	227,552
Other general and administrative	189,780	195,046	572,461	501,458
Total Operating Expenses	1,660,264	1,247,092	4,156,582	2,869,332

Net Operating Income	1,449,988	1,603,906	3,176,001	2,723,948

Other Income (Expense):
Interest Income	(12,945)	13,664	-	13,664
Interest expense	(56,514)	(103,363)	(113,431)	(227,522)
Total Other Income (Expense)	(69,459)	(89,699)	(113,431)	(213,858)

Income Before Tax Provision	1,380,529	1,514,207	3,062,570	2,510,090

Provision for Income Tax	(390,000)	(24,412)	(920,000)	(37,012)

Net Income	$ 990,529	$ 1,489,795	$ 2,142,570	$ 2,473,078

Net Income per Common Share
Basic	$0.021	$0.031	$0.046	$0.051
Diluted	$0.021	$0.031	$0.045	$0.051

Weighted Average Common Shares Outstanding
Basic	46,660,456	48,132,664	46,989,940	48,132,664
Diluted	47,152,574	48,371,158	47,462,664	48,320,017

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

	September 30,	December 31,
	2017	2016
	(Unaudited)
Assets:
Current Assets:
Cash	$ 3,240,721	$ 1,646,128
Accounts receivable, net	4,660,203	4,449,179
Inventory	142,065	366,330
Prepaid expenses	349,410	330,020
Total Current Assets	8,392,399	6,791,657

Property and Equipment:
Computer equipment and software	19,767	19,767
Machinery and equipment	371,323	325,750
Furniture and fixtures	5,665	5,665
Less: Accumulated depreciation	(304,176)	(250,465)
Total Property & Equipment	92,579	100,717

Other Non-current Assets:
Deposit	13,616	12,193
Note receivable	-	526,887
Goodwill	1,936,020	1,936,020
Total Other Non-current Assets	1,949,636	2,475,100
Total Assets	$ 10,434,614	$ 9,367,474

Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities	$ 2,122,220	$ 2,678,210
Income tax payable	404,088	1,588
Notes and loans payable to related parties	688,384	1,321,721
Total Current Liabilities	3,214,692	4,001,519

Long Term Liabilities:
Deferred tax liabilities	362,000	216,000
Total Long Term Liabilities	362,000	216,000
Total Liabilities	3,576,692	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 47,046,364 shares and 48,132,664 shares	4,704	4,813
Additional paid-in capital	6,976,678	7,411,172
Accumulated deficit	(123,460)	(2,266,030)
Total Stockholders' Equity	6,857,922	5,149,955
Total Liabilities and Stockholders’ Equity	$ 10,434,614	$ 9,367,474

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Nine Months Ended
	September 30,
	2017	2016
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income	$ 2,142,570	$ 2,473,078
Adjustments necessary to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	55,725	44,400
Accrued interest on note receivable	26,887	(13,654)
Stock based compensation expense	66,594	46,581
Provision for deferred income tax	146,000	-
Accrued sales allowance	(831,731)	(94,203)
(Increase) decrease in accounts receivable	731,532	(6,755,174)
(Increase) decrease in inventory	224,265	(275,049)
(Increase) decrease in prepaid expenses	(20,813)	43,764
Increase (decrease) in accounts payable and accrued liabilities	(263,912)	958,580
(Decrease) in accrued interest on notes payable	(135,337)	(168,492)
Net cash provided by (used in) operating activities	2,141,780	(3,740,169)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(47,587)	(15,501)
Net cash (used in) investing activities	(47,587)	(15,501)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable	30,559,312	19,393,834
Repayments of notes payable	(30,559,312)	(15,049,345)
Repurchase of shares from Involve, LLC	(250,000)	-
Warrant issued	7,500	-
Proceeds from notes and loans payable to related parties	-	860,000
Repayments of notes and loans payable to related parties	(257,100)	(1,453,946)
Net cash provided by (used in) financing activities	(499,600)	3,750,543

Net Increase (decrease) in Cash and Cash Equivalents	1,594,593	(5,127)
Cash and Cash Equivalents at Beginning of Period	1,646,128	364,714
Cash and Cash Equivalents at End of Period	$ 3,240,721	$ 359,587

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	221,881	$ 396,014
Income taxes	$ 371,500	$ 31,912

Non-cash financing and investing activities:
Sale of Investment for Note receivable	$ -	$ 500,000

Shares issued in satisfaction of loan payable to related party	$ 240,900	$ -