Lightscape Technologies Inc. (OTCBB: LTSC), an operator of digital
out-of-home advertising media and provider of LED solutions, today
announced financial results for the fiscal year ending March 31,
2009.
Total net revenue for the twelve months ended March 31, 2009 was
$5.62 million, a 6% decrease from $5.96 million for the twelve
months ended March 31, 2008. Gross profit margin improved to 34%
for the twelve months ended March 31, 2009 as compared to 21% for
the twelve months ended March 31, 2008.
Net loss for the twelve months ended March 31, 2009 narrowed to
$4.58 million, or $0.08 per fully diluted share, compared to a net
loss of $9.42 million, or $0.22 per fully diluted share, for the
twelve months ended March 31, 2008.
Bondy Tan, President and CEO of Lightscape, said, "Our business
was severely impacted by the downturn in advertising spending that
began last year. Fortunately, Lightscape's ability to secure
top-quality locations for our LED OOH billboards, and our
relationships with leading advertising agencies, has allowed us to
sign top-tier international and Mainland Chinese clients and
content providers. Additionally, revenue from our LED Solutions
business supported the operations of the Company while the OOH
network is built out."
Continued Mr. Tan, "Of additional importance, Lightscape was
able to focus its exclusive OOH relationship with New World Group
to sign a MOU with New World Department Stores China. This
agreement will allow Lightscape to focus on a list of high-quality
LED billboard and LCD screen properties throughout China."
Business Highlights
-- Lightscape expanded its exclusive OOH advertising network
relationship with New World Group to focus on the New World
Department Stores China properties throughout Mainland China
-- The digital OOH network signed agreements with the following
international brands: Nokia, Philips, Warner Brothers, Panasonic,
Martell, Chivas, Linguaphone
-- Current Chinese content providers include: TVB, Universal
Music China, East Asia, Emperor Entertainment, Universe
International, Media Asia, CEInet
-- In April 2009, Lightscape secured $771,208 in bank financing
to support its operations
Results of Operations
Total net revenue for the year ended March 31, 2009 was
$5,620,360, representing a 6% decrease from the total net revenue
of $5,962,411 for the year ended March 31, 2008. The decrease in
net revenues is primarily attributable to the decrease in revenue
from non-core businesses, primarily the Company's HID lighting
products business segment.
Specifically, revenue related to the LED out-of-home advertising
business remained at $nil for the year ended March 31, 2009 as
compared to from $nil during the year ended March 31, 2008. The LED
out-of-home advertising business is expected to contribute
increased revenues in the foreseeable future as the Company ramps
up several key LED billboard installations which were completed
during the year ended March 31, 2009 and are expected to begin
generating advertising revenue in the near future. The Company has
formed strategic partnerships with Ogilvy & Mather Group, a
major advertising agency in Hong Kong, and LIME, a diversified
media conglomerate, to sell advertising space on the LED
billboards. The Company is also in the process of negotiating
strategic partnership agreements and contracts with other
advertising agencies and advertisers for the sales of advertising
space on the LED billboard network.
Revenue related to the LED solutions business increased to
$4,046,490 for the year ended March 31, 2009 from $3,564,537 during
the year ended March 31, 2008, or an increase of 14%. The increase
in revenues was due primarily to the completion of more LED
solutions contracts during the year ended March 31, 2009 as
compared to a smaller number of contracts completed during the year
ended March 31, 2008. The LED solutions business is expected to
contribute increased revenues in the foreseeable future as several
key projects are expected to be initiated in the near future.
Sales from other business, which includes the HID lighting
products business, were $1,573,870 for the year ended March 31,
2009 compared to $2,397,874 for the year ended March 31, 2008,
representing a decrease of 34%. The decrease in revenues from other
businesses was due primarily to a decrease in revenue from sales of
HID lighting products by subsidiary Beijing Illumination. The
decrease in sales by Beijing Illumination was due primarily to the
scaling back of overall operations, including reducing production
lines, production shifts and personnel, in order to focus on the
Company's core LED out-of-home advertising and LED solutions
businesses. Sales and revenue were also lower due to transport
restrictions in Beijing for approximately one month surrounding the
Beijing Olympics, which reduced flows of raw materials transported
to and finished goods shipped from the Company's Beijing factory.
The Company is currently reviewing its plans and strategic options
related to its HID lighting products business.
Total cost of revenues for the year ended March 31, 2009 was
$3,702,332, which represents a decrease of 21% as compared to total
cost of revenues of $4,694,766 for the year ended March 31, 2008.
The decrease in the total cost of revenues during the year ended
March 31, 2009 was due in part to the 6% decrease in sales
revenues, but also decreased due to improved cost control related
to the LED solutions business, namely supplies of LED modules and
video screens, and a higher portion of LED consultancy income which
is of a higher profit margin. The lower costs of supplies are a
result of general technological improvements and economies of scale
in the manufacture of LED hardware by the Company's OEM suppliers,
and the Company's ability to secure supply contracts on more
favorable terms. As a result, gross profit margin improved to 34%
for the year ended March 31, 2009 as compared to 21% for the year
ended March 31, 2008.
Operating expenses for the year ended March 31, 2009 were
$7,203,033, which represents a 5% increase in operating expenses
over $6,834,588 for the year ended March 31, 2008. Selling and
marketing expenses, general and administrative expenses,
amortization of intangible assets and bad debts constitute the main
components of operating expenses.
Selling and marketing expenses for the year ended March 31, 2009
increased approximately 5% to $698,116 from $662,628 for the year
ended March 31, 2008. The increase was mainly due to higher
marketing expenses associated with the Company's attendance and
booths at the Hong Kong International Lighting Fair 2008 held in
October 2008 as compared to attendance in October 2007, increased
staff costs incurred in order to build up the project pipeline of
LED solutions contracts, and to establish the sales network for the
Company's LED out-of-home advertising business. The Company
anticipates that selling and marketing expenses will remain steady
or increase in the future to support the Company's further
expansion in its core LED out-of-home advertising and LED solutions
businesses, however, such increases are expected to be limited as a
result of a company-wide cost-cutting initiative implemented in
January 2009.
General and administrative expenses increased by 15% during the
year ended March 31, 2009 to $4,070,944 from $3,526,970 for the
year ended March 31, 2008. The increase was mainly due to increased
staff, accounting, investor relations, public relations and
business development costs for the year ended March 31, 2009 to
provide the foundation to support anticipated overall business
growth, particularly the LED out-of-home advertising and LED
solutions businesses. The Company anticipates that general and
administrative costs will continue to increase in the foreseeable
future as the Company's operations continue to expand, however,
such increases are expected to be limited as a result of a
company-wide cost-cutting initiative implemented in January
2009.
Bad debt expenses increased to $1,019,285 during the year ended
March 31, 2009 from $414,897 for the year ended March 31, 2008. The
increase in bad debts was due primarily to the increase in
allowance for doubtful accounts of subsidiary Beijing Illumination.
The allowance for doubtful accounts is the Company's best estimate
of the amount of probable credit losses in its existing accounts
receivable.
As of March 31, 2009, the Company had a net working capital
surplus of $6,287,977 compared to a surplus of $11,490,237 as of
March 31, 2008, representing a decrease in working capital of
$5,202,260. The cash and cash equivalents of the Company
attributable to continuing operations decreased to $381,643 as at
March 31, 2009 as compared to $3,976,565 as of March 31, 2008. Cash
attributable to discontinued operations totaled $8,555 and $1,935
for the years ended March 31, 2009 and 2008, respectively.
Additional information regarding Lightscape Technologies'
financial performance as of and for the fiscal year ended March 31,
2009 and a comparison to the fiscal year ended March 31, 2008 can
be found in the financial tables below and in the Company's Annual
Report on Form 10-K which has been filed with the Securities and
Exchange Commission. The Company's Annual Report can also be
accessed through the Company's website at
www.lightscapetech.com.hk. Shareholders may receive a hard copy of
the Company's Annual Report free of charge upon request.
About Lightscape Technologies
Lightscape Technologies Inc. (OTCBB: LTSC) is a leading digital
media and LED solutions company in Asia. Lightscape is building a
digital out-of-home media network in greater China and Singapore
focused on LED billboards and LCD screens in prime locations. The
Company also designs, markets, sells and installs large-scale LED
video screens and LED systems. Lightscape is headquartered in Hong
Kong, and the Company has offices in Singapore, China and Macau.
For additional information, please visit
www.lightscapetech.com.hk.
Cautionary Disclaimer -- Forward-Looking Statements
This news release contains "forward-looking statements" as that
term is defined in Section 27A of the United States Securities Act
of 1933, as amended, and Section 21E of the United States
Securities Exchange Act of 1934, as amended. Such forward-looking
statements include, among others, the estimation, expectation
and/or claim, as applicable, that: Lightscape expects an MOU
agreement signed with New World Department Stores China to enable
the Company to expand its OOH advertising network at properties
throughout China; Lightscape expects its LED OOH advertising
business to contribute increased revenues in the foreseeable future
as the Company ramps up several key LED billboard installations
which were completed during the year ended March 31, 2009 and are
expected to begin generating advertising revenue in the near
future; Lightscape expects Ogilvy & Mather and LIME to sell
advertising space on its OOH LED advertising network; Lightscape
expects its LED solutions business to contribute increased revenues
in the foreseeable future as several key projects are expected to
be initiated in the near future; and Lightscape anticipates that
selling, marketing, general and administrative expenses will remain
steady or increase in the future to support the Company's further
expansion in its core LED out-of-home advertising and LED solutions
businesses, but such increases are expected to be limited as a
result of a company-wide cost-cutting initiative implemented in
January 2009. Actual results could differ from those projected in
any forward-looking statements due to a variety of risks,
uncertainties and other factors, including, but not limited to,
delays in the supply of LED modules, LED video screens and other
hardware; risks of downturns in economic conditions generally and
in Hong Kong and China specifically; competition with larger
companies with greater resources and more experience in providing
OOH advertising and LED solutions products and services; and the
availability of timely financing. These forward-looking statements
are made as of the date of this news release and the Company
assumes no obligation to update the forward-looking statements, or
to update the reasons why actual results could differ from those
projected in the forward-looking statements. Although the Company
believes that the beliefs, plans, expectations and intentions
contained in this press release are reasonable, there can be no
assurance those beliefs, plans, expectations, or intentions will
prove to be accurate. Investors should consider all of the
information set forth herein and should also refer to the risk
factors disclosed in the Company's periodic reports filed from
time-to-time with the Securities and Exchange Commission and
available at www.sec.gov.
LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Expressed in US dollars (except for number of common shares)
Year Ended March 31,
2009 2008
---------- ----------
$ $
---------- ----------
Revenues:
Advertising revenue - -
LED solutions revenue 4,046,490 3,564,537
Other revenue 1,573,870 2,397,874
---------- ----------
Total net revenues 5,620,360 5,962,411
---------- ----------
Cost of revenues:
Cost of sales of Advertising revenue (13,577) -
Cost of sales of LED solutions revenue (2,479,354) (2,979,087)
Costs of Other revenue (i) (1,209,401) (1,715,679)
---------- ----------
Total cost of revenues (3,702,332) (4,694,766)
---------- ----------
Gross profit 1,918,028 1,267,645
Bad debts (1,019,285) (414,897)
Amortization (758,871) (749,251)
Depreciation (223,297) (261,047)
Selling and marketing expenses (698,116) (662,628)
General and administrative expenses (4,070,944) (3,526,970)
Interest expense (27,554) (382,022)
Interest income 867 39,424
Other income 453,129 888,412
Other expenses (171,102) -
Impairment loss on intangible assets, net - (689,204)
Impairment on goodwill - (526,863)
Loss on disposal of plant and equipment (432,520) (3,728)
Loss on redemption of redeemable convertible notes
and options - (2,253,359)
---------- ----------
Loss from continuing operations before income tax
and minority interests (5,029,665) (7,274,488)
Income tax refund 239,912 -
---------- ----------
Net loss from continuing operations before minority
interests (4,789,753) (7,274,488)
Minority interests 314,817 444,215
---------- ----------
Net loss from continuing operations (4,474,936) (6,830,273)
---------- ----------
Discontinued operations
Net (loss) from discontinued operations, net of
income taxes (108,314) (244,131)
Loss on disposal of discontinued component - (2,341,671)
---------- ----------
(Loss) on discontinued operations (108,314) (2,585,802)
---------- ----------
Net loss attributable to common shareholders (4,583,250) (9,416,075)
Other comprehensive income (loss)
Foreign currency translation adjustment arising
during the period (5,088) 759,901
---------- ----------
Comprehensive loss (4,588,338) (8,656,174)
========== ==========
Loss per share
- Basic
Continuing operations (0.08) (0.16)
Discontinued operations 0.00 (0.06)
---------- ----------
Total (0.08) (0.22)
========== ==========
- Diluted
Continuing operations (0.08) (0.16)
Discontinued operations 0.00 (0.06)
---------- ----------
Total (0.08) (0.22)
========== ==========
Weighted average number of common shares
outstanding
- Basic 55,876,410 42,574,361
========== ==========
- Diluted 55,876,410 42,574,361
========== ==========
(i) Includes depreciation of plant and equipment of $288,916 and $243,197
for the year ended March 31, 2009 and 2008 respectively.
LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Expressed in US dollars
March 31, March 31,
2009 2008
----------- -----------
$ $
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents 381,643 3,976,565
Accounts receivable, net of allowance for
doubtful accounts of $1,287,843 on March 31,
2009 and $817,790 on March 31, 2008 2,239,228 4,438,207
Costs and estimated earnings in excess of
billings on uncompleted contracts 673,313 639,035
Prepaid expenses and other current assets 1,817,215 1,742,031
Inventories - LED, including valuation
allowance of $162,782 on March 31, 2009
and $158,987 on March 31, 2008 1,264,975 2,024,422
Inventories - others 2,274,552 1,879,376
Current assets of discontinued operations 591,921 699,847
----------- -----------
Total current assets 9,242,847 15,399,483
----------- -----------
Other investments, net of write-off amount of
$31,516 on March 31, 2009 and 2008 - -
Intangible assets, net 969,282 1,700,114
Goodwill 4,476,574 4,476,574
Plant and equipment, net 2,529,141 4,650,398
Out-of-home advertising equipment, net 2,213,808 -
Construction in progress - Out-of-home
advertising equipment 266,250 -
Deferred cost 111,132 -
Accounts receivable, due after one year and net
of allowance for doubtful accounts of $145,871
on March 31, 2009 and $Nil on March 31, 2008 200,890 -
Prepaid expenses and other current assets - due
after one year 511,277 -
Net investment in sales-type leases of
discontinued operations 36,359 126,521
----------- -----------
11,314,713 10,953,607
----------- -----------
TOTAL ASSETS 20,557,560 26,353,090
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings 55,266 -
Trade payables 689,945 2,413,203
Amount due to a director 745,501 -
Accrued expenses and other current liabilities 1,284,239 763,797
Obligations under capital leases - current
portion 2,904 1,774
Income tax payable 10,062 366,281
Current liabilities of discontinued operations 166,953 364,191
----------- -----------
Total current liabilities 2,954,870 3,909,246
----------- -----------
Non-current liabilities:
Obligations under capital leases - non-current
portion 5,313 5,469
Long-term bank borrowings 62,158 -
----------- -----------
Total non-current liabilities 67,471 5,469
----------- -----------
Total liabilities 3,022,341 3,914,715
----------- -----------
Minority interest 1,106,884 1,421,702
----------- -----------
Shareholders' equity:
Common stock
Authorized:
800,000,000 common shares, par value
$0.001 per share
100,000,000 preferred shares, par value
$0.001 per share
Issued and outstanding:
55,876,410 common shares at March 31, 2009
and at March 31, 2008 55,876 55,876
Additional paid-in capital 34,140,708 34,140,708
Common stock warrants 344,673 344,673
Other reserves 28,944 28,944
Accumulated other comprehensive income 1,077,354 1,082,442
Accumulated deficit (19,219,220) (14,635,970)
----------- -----------
Total shareholders' equity 16,428,335 21,016,673
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 20,557,560 26,353,090
=========== ===========
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