RICHMOND, BC, Aug. 17, 2017 /CNW/ - Photon Control Inc.
("Photon Control" or the "Company") (TSX-V: PHO), a leading
developer of optical measurement technologies, has reported its
financial results for the three and six month periods ended
June 30, 2017.
Second Quarter and Year-to-Date 2017 Highlights
- Second quarter 2017 revenue of $8.9
million increased 23% versus the prior year quarter and
first half revenue of $20.8 million
increased 44% versus the prior year;
- Achieved provisional customer certification to ship product
from a newly designed, higher capacity and more efficient
manufacturing facility; and,
- Finalized the business combination with the former Photon
Control R&D Ltd. ("Photon R&D") business.
"The first half of 2017 has been transformational for the
Company. We increased revenue by 44% versus the prior year and more
importantly, strengthened our designed-in position with our key
customers allowing us to take advantage of opportunities for
revenue growth. This has resulted in an increase in our backlog to
$11.8 million from $8.8 million at the end of 2016." Said
Scott Edmonds, Chief Executive
Officer, continuing, "We transitioned to a new, more efficient and
scalable manufacturing facility which will enable increased
profitability and cash generation opportunities. Finally, we
strengthened our senior management team with the appointments of
Daniel Lee as Chief Financial
Officer and John Rydstrom as Senior
Vice President of Sales."
Second Quarter and Year-To-Date 2017 Financial
Results
Total revenue for the second quarter of 2017
increased 23% from $7.2 million to
$8.9 million, and for the first half
of 2017 revenue increased 44% from $14.4
million to $20.8 million
versus the prior year. The increase in revenue was primarily due to
strong market conditions in the semiconductor industry.
Gross profit in 2017 reflects the benefits of the stronger
revenue. Second quarter 2017 gross profit increased 31% to
$4.7 million versus the prior year
quarter and 2017 year-to-date gross profit increased 60% to
$11.8 million versus the prior year
period.
Operating expenses of $4.3 million
and $9.0 million for the three and
six months ended June 30, 2017
include significant one time charges of $1.8
million and $4.2 million,
primarily from three distinct activities. Corporate Changes related
to changes to the Board of Directors, CEO and the leadership team,
including certain litigation costs, totaled $0.8 million for the quarter and $2.8 million year-to-date. Charges related to the
acquisition of certain assets of Photon R&D and settlement of
all disputes with the former Photon R&D and its principals
totaled $0.6 million for the quarter,
and $1.0 million year-to-date, and
non-capital expenditures related to the Company's move to its new
manufacturing facility totaled $0.4
million for the quarter and year-to-date. Net of non-cash
charges and these one-time items, operating expenses were
$2.1 million and $4.1 million compared to $1.0 million and $1.9
million in the same year-ago period.
Net profit (loss) before taxes for the quarter was $(0.4) million compared to $1.9 million for the comparable period of 2016
while for the first six months of 2017, net income before taxes was
$2.0 million versus $4.0 million for the first half of 2016.
The table below reconciles the net (loss) income to adjusted
earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA"):
|
|
|
|
|
|
Three months
ended
June
30,
|
Six months
ended
June 30,
|
|
|
2017
|
2016
|
2017
|
2016
|
Net (loss) income for
the period
|
$
|
(331)
|
$
|
1,397
|
$
|
1,367
|
$
|
2,984
|
Add
(deduct)
|
|
|
|
|
|
Finance
income
|
(38)
|
(21)
|
(68)
|
(42)
|
|
Income tax (recovery)
expense
|
(62)
|
493
|
602
|
1,047
|
|
Depreciation of
property and equipment
|
161
|
38
|
227
|
71
|
|
Amortization of
intangible assets
|
9
|
14
|
16
|
27
|
|
Foreign exchange
loss
|
778
|
95
|
918
|
751
|
|
Corporate
Changes
|
945
|
384
|
2,953
|
384
|
|
Photon R&D
settlement
|
594
|
-
|
951
|
-
|
|
Facility
Move
|
411
|
-
|
411
|
-
|
Adjusted EBITDA
for the period
|
$
|
2,467
|
$
|
2,400
|
$
|
7,377
|
$
|
5,222
|
Net (loss) income and total comprehensive (loss) income was
($0.3) million or ($0.00) per diluted share and $1.4 million or $0.01 per diluted share for the three and six
months ended June 30, 2017 compared
to $1.4 million or $0.01 per diluted share and $3.0 million or $0.03 per diluted share in the prior comparable
period.
As at June 30, 2017, cash totaled
$25.1 million, a decrease of
$7.4 million vs. $32.5 million at December
31, 2016 as we invested into capital expenditures incurred
for the new manufacturing facility, costs incurred on non-recurring
operating expenses, an increase in inventories in anticipation of
the idle period occasioned by the move to the new facility, and the
acquisition costs for Photon R&D. Offsetting a portion of this
decrease was cash generated from normalized operations.
Order backlog (defined as the value of sales orders scheduled to
be shipped in the upcoming 12-month period) at quarter-end
increased 35% to $11.9 million from
$8.8 million at December 31, 2016.
Conference Call
Photon Control will hold a conference
call today (Thursday, August 17,
2017) at 11:00 a.m. Eastern
time (8:00 a.m. Pacific time)
to discuss these results. The call will be hosted by Scott Edmonds, Chief Executive Officer and
Daniel Lee, Chief Financial Officer,
followed by a question and answer period.
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization.
Toll-Free Number: 1-877-407-9716
International Number: 1-201-493-6779
The conference call will be broadcast simultaneously and
available for replay here.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release should be read in conjunction with the
Company's condensed interim consolidated financial statements and
related notes, and management's discussion and analysis for the
three and six months ending June 30,
2017, copies of which can be found at www.sedar.com.
About Photon Control Inc.
Photon Control Inc. designs,
manufactures and distributes a wide range of optical sensors and
instruments to measure temperature, position, and flow. These
products are used by Original Equipment Manufacturers (OEM) as well
as end users in the Semiconductor, Energy and Manufacturing
industries. Photon Control's products provide high levels of
accuracy and reliability in extreme conditions and are supported by
a team of experts that offer on-site installation, training, and
support. Photon Control Inc. also provides engineering services for
customized optical measurement systems. Headquartered in an ISO
9001:2008 manufacturing facility in Richmond, BC, Photon Control Inc. is listed on
the TSX Venture Exchange, trading under the symbol ''PHO."
Additional information about the company can be found at
www.photon-control.com/investorrelations.html.
Forward-Looking Statements
This news release
contains "forward-looking statements" within the meaning of
applicable Canadian securities legislation. These statements
generally can be identified by use of forward looking words such as
"may", "will", "expect", "estimate", "anticipate", "intend",
"consider", "believe" or "continue" or the negative thereof or
similar variations. Such forward-looking statements concern the
business and anticipated financial performance of the Company and
include, without limitation, the Company's expectations with
respect to the overall order activity for the balance of the year
and the Company's ability to build on its financial and operational
foundation in the future.
These forward-looking statements are based on certain factors
and assumptions, including, without limitation: the Company's
ability to successfully complete new purchase orders along the
timelines expected; continued and future demand for the Company's
products; continued sales to the Company's major customers; the
continued financial health of the semiconductor industry; and the
Company's ability to continue and further enhance revenue
diversification and open new market opportunities.
Forward-looking statements are subject to a variety of known
and unknown risks, uncertainties and other factors which could
cause actual events or results to differ from those expressed or
implied by the forward-looking statements, including, without
limitation: additional measures and controls may not be implemented
as expected or along the timelines anticipated; uncertainties
relating to the market for the Company's products and maintaining a
stable level of orders; fluctuations in revenue as a result of
volatility in the markets and product mix; risks relating to the
Company's present reliance on its major customers for the majority
of its sales; risks relating to the Company's reliance on the
financial health of the semiconductor industry; risks relating to
the development of competing technologies and the possibility of
increased competition; the effect of slow growth in the United States, the Company's principal
market, as well as other economies and other economic trends and
conditions in the markets that the Company and its customers serve;
risks associated with technical difficulties or delays in product
introductions, improvements, implementation; uncertainties in
product pricing or other initiatives of the Company and its
competitors; uncertainties in factors that may result in a
reduction in capital expenditures and/or delayed buying decisions
affecting demand for the Company's products; risks relating to
currency fluctuations, particularly between the Canadian and
United States dollars; and risks
in pursuing additional development projects to support existing
customers or pursue other business opportunities.
The foregoing assumptions, risks and uncertainties are not
exhaustive of the items that may affect our forward-looking
statements. Should underlying assumptions prove to be incorrect or
one or more of these risks and uncertainties materialize, actual
results may vary materially from those described in the
forward-looking statements. The Company's forward-looking
statements are based on beliefs, expectations and opinions of
management on the date the statements are made. For the reasons set
forth above, readers should not place undue reliance on
forward-looking statements. The Company undertakes no obligation to
update or revise any forward-looking statements included herein if
these beliefs, estimates and opinions or other circumstances should
change, except as otherwise required by applicable
law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Photon Control Inc.