TIDMPPIR TIDMPPIX
RNS Number : 8629F
ProPhotonix Limited
04 May 2011
4 May 2011
ProPhotonix Limited
("ProPhotonix" or "the Company")
FIRST QUARTER TRADING UPDATE
ProPhotonix Limited, (London Stock Exchange - AIM: PPIX and
PPIR, OTC: STKR.PK), a designer and manufacturer of LED systems and
laser modules as well as a distributor of premium vendors' laser
diodes, announces its financial results for the first quarter ended
March 31, 2011.
First-Quarter 2011 Financial Highlights:
-- Revenue increased by 25% to $4.3 million (Q1 2010: $3.5
million), up 24% adjusting for impact of currency fluctuation
-- Revenue up 5% sequentially versus the fourth quarter of
2010
-- Six consecutive quarters of sequential growth
-- LED revenue increased 79% to $2.3 million (Q1 2010: $1.3
million)
-- Gross profit increased 38% from $1.2 million to $1.6
million
-- Gross margin 38.0% (Q1 2010: 34.2%) (Q4 2010: 39.0%)
-- EBITDA profit of $29,000 vs. $247,000 loss in 2010, adjusted
for an abandoned facility charge, and a loss of $48,000 in Q4 2010,
adjusted for AIM expenses of $50,000
-- Order bookings $4.9 million, ending backlog $6.4 million
-- Percentage revenue by market sectors: industrial 80%, medical
14% and homeland security & defense 6%;
-- Percentage revenue by geography: 53% Europe, 38% North
America and 9% Rest of World
Mark W. Blodgett, Chairman & CEO, said: "I am pleased to
announce these results for the first quarter ended March 31, 2011.
The Company grew 25% year over year and 5% sequentially, marking
the sixth straight quarter of sequential revenue growth.
Geographically, ProPhotonix achieved improved sales in the North
American market, where we had 53% year over year growth, and 45%
growth sequentially. We also achieved continued growth in the
European market led by strong sales to the German solar equipment
industry. The industrial and medical market sales were up year over
year at 35% and 9% respectively, however, homeland security &
defense sales were down 24% mainly due to lower laser diode sales
to one defense customer."
"Order bookings at $4.9 million were strong, particularly at the
end of the first quarter, which bodes well for continued growth,
particularly in the Company's LED business. Profitability improved
measurably as sales, general and administrative expenses were flat
year over year and the Company achieved EBITDA breakeven for the
period compared to a $0.2 million loss the prior year first
quarter."
Enquiries:
ProPhotonix Limited Tel: +44 (0)12 7971 7170
Mark W. Blodgett, CEO ir@prophotonix.com
Libertas Capital Corporate Finance Tel: +44 (0)20 7569 9650
Limited
Andrew McLennan / Thilo Hoffmann
Cubitt Consulting Tel: +44 (0) 20 7367 5100
Chris Lane / Alice Coubrough
RD:IR Tel: +44 (0) 20 7492 0500
Isabel Richardson / Thomas Churchill
About ProPhotonix
ProPhotonix Limited, headquartered in Salem, New Hampshire, is
an independent designer and manufacturer of diode-based laser
modules and LED systems for industry leading OEMs and medical
equipment companies. In addition, the Company distributes premium
diodes for Opnext, Sanyo & Sony. The Company serves a wide
range of markets including the machine vision, industrial
inspection, defense, sensors, and medical markets. ProPhotonix has
offices and subsidiaries in the U.S., Ireland, and Europe. For more
information about ProPhotonix and its innovative products, visit
the Company's web site at www.prophotonix.com.
First Quarter 2011 Financial Results
Total revenue for the first quarter of 2011 of $4.3 million
increased 25 percent (up 24%, adjusting for currency) from the
first quarter of 2010. The growth in revenue was comprised of an
increase in the LED segment of $1.0 million (+79%) over last year
and a decrease in the laser segment of approximately $0.1 million
(-6%). The growth in revenues is mainly attributable to increased
activities in the U.S.A. and Europe, where the Company saw
year-on-year increases of approximately 76% and 17% respectively.
Bookings for the first quarter of 2011 were $4.9 million and
backlog was $6.4 million at March 31, 2011.
Gross profit was $1.6 million for the first quarter of 2011, an
increase of 38% compared to $1.2 million in the first quarter of
2010. First quarter 2011 gross profit margin was 38.0% compared
with 34.2% in the comparable quarter in 2010 due to higher volumes,
a more favorable product mix, and productivity improvement
initiatives.
Operating expenses, excluding amortization charges, totaled $1.8
million for the first quarter of 2011, an increase of 5% versus
$1.7 million in the first quarter of 2010, net of the charges
related to an abandoned facility. General and Administrative
expenses decreased approximately $0.1 million, mainly due to a
decrease in facility depreciation costs related to the Salem
facility, and decreased stock compensation charges. Selling
expenses increased $0.1 million, or 26%, in line with the 25%
revenue growth; while R&D expenses increased 56%, or by
approximately $0.1 million. The net loss from continuing operations
was $0.2 million as compared to a net operating loss of $0.6
million for the first quarter 2010, net of the charges related to
the abandoned facility.
EBITDA was $29,000 for the quarter as compared to a $247,000
loss for the first quarter of 2010, net of a charge for an unused
facility of $0.1 million. Net loss of $0.3 million includes a gain
on foreign currency translation charges of $0.1 million. In
comparison, the 2010 net loss was $1.3 million, which includes a
loss on foreign currency translation charges of approximately $0.3
million.
Outlook
The Company continues to exhibit significant improvement in its
overall financial performance versus last year as evidenced by a
79% increase in the sales of the Company's LED products. LED
products, particularly those sold into medical and solar equipment
industries, exhibit robust gross margins, which when combined with
higher revenue volumes and improved capacity utilization, led to an
overall improvement in gross margin to 38% from 34% the prior year.
Sales in the laser division declined 6% year over year primarily
due to higher sales of laser diodes in the first quarter of 2010,
which benefited from a last time buy of several lines of
discontinued diodes by an Asian diode manufacturer. The significant
improvement in gross profit represents a significant accomplishment
for the Company, which when combined with lower corporate overhead
and ongoing cost management led to a significant improvement in
overall financial operating performance. Based on strong first
quarter order bookings and six consecutive quarters of sequential
revenue growth and improved profitability, the Company is well
positioned for 2011.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements
other than statements of historical fact, including without
limitation, those with respect to ProPhotonix's goals, plans and
strategies set forth herein are forward-looking statements. The
following important factors and uncertainties, among others, could
cause actual results to differ materially from those described in
these forward-looking statements: uncertainty that cash balances
may not be sufficient to allow ProPhotonix to meet all of its
business goals; uncertainty that ProPhotonix's new products will
gain market acceptance; the risk that delays and unanticipated
expenses in developing new products could delay the commercial
release of those products and affect revenue estimates; the risk
that one of our competitors could develop and bring to market a
technology that is superior to those products that we are currently
developing; and ProPhotonix's ability to capitalize on its
significant research and development efforts by successfully
marketing those products that the Company develops. Forward-looking
statements represent management's current expectations and are
inherently uncertain. All Company, brand, and product names are
trademarks or registered trademarks of their respective holders.
ProPhotonix undertakes no duty to update any of these
forward-looking statements.
Use of Non-GAAP Financial Measures
The Company provides non-GAAP financial measures, such as
EBITDA, to complement its consolidated financial statements
presented in accordance with GAAP. Non-GAAP financial measures do
not have any standardized definition and, therefore, are unlikely
to be comparable to similar measures presented by other reporting
companies. These non-GAAP financial measures are intended to
supplement the user's overall understanding of the Company's
current financial and operating performance and its prospects for
the future. Specifically, the Company believes the non-GAAP results
provide useful information to both management and investors by
identifying certain expenses, gains and losses that, when excluded
from the GAAP results, may provide additional understanding of the
Company's core operating results or business performance, which
management uses to evaluate financial performance for purposes of
planning for future periods. However, these non-GAAP financial
measures are not intended to supersede or replace the Company's
GAAP results.
The Company uses EBITDA (earnings before interest, taxes,
depreciation, amortization, stock-based compensation and impairment
charges) as a non-GAAP financial measure in this press release. A
reconciliation of EBITDA to net income / (loss) for the first
quarter ended 2011 is as follows:
Three Months Ended
---------------------
(in thousands)
March 31,
2011 2010
--------- ----------
Net Loss (263) (1,319)
Loss from discontinued operations 49 59
Plus:
Interest and other expense (net) 21 522
Depreciation 78 122
Intangible asset amortization 81 99
Stock based compensation 63 120
Tax benefit - (64)
Amortization of Debt Discount & Financing Costs - 99
EBITDA Profit / (Loss) 29 (362)
--------- ----------
Charges related to abandoned lease - 115
--------- ----------
Adjusted EBITDA Profit / (Loss) 29 (247)
--------- ----------
Consolidated Statements of Operations
($ In thousands except share and per share data)
(unaudited)
Three Months Ended
March 31,
2011 2010
------------ ------------
Net Sales $4,338 $3,482
Cost of Sales 2,690 2,290
------------ ------------
Gross Profit 1,648 1,192
------------ ------------
Research & Development Expenses 239 153
Selling, General & Administrative
Expenses 1,521 1,643
Amortization of Intangible Assets 81 99
------------ ------------
Operating Loss (193) (703)
------------ ------------
Other Income / (Expense), net 75 (328)
Amortization of Debt Discount and
Financing Costs - (99)
Interest Expense (96) (194)
------------ ------------
Loss Before Taxes from Continuing
Operations (214) (1,324)
Tax Benefit - (64)
------------ ------------
Net Loss from Continuing Operations (214) (1,260)
Loss from Discontinued Operations (49) (59)
------------ ------------
Net Loss $ ( 263) $ ( 1,319)
============ ============
Loss Per Share
Loss from Continuing Operations ($0.01) ($0.03)
Loss from Discontinued Operations ($0.00) ($0.00)
Net loss per share ($0.01) ($0.03)
Weighted Average Shares Outstanding 52,351,650 44,163,269
------------------------------------ ------------ ------------
PROPHOTONIX LIMITED
CONSOLIDATED BALANCE SHEETS
In thousands except share and per share data
Unaudited
March 31, December 31,
2011 2010
Assets
Current assets:
Cash and cash equivalents $ 1,029 $ 1,811
Accounts receivable less allowances of $34 at
March 31, 2011 and $47 at December 31, 2010 2,240 2,023
Inventories 2,086 1,892
Prepaid expenses and other current assets 234 229
Total current assets 5,589 5,955
Net property, plant and equipment 901 906
Goodwill 498 468
Acquired intangible assets, net 551 610
Other long-term assets 61 66
Total assets $ 7,600 $ 8,005
Liabilities and Stockholders' Deficit
Current liabilities:
Revolving credit facility $ 802 $ 641
Current portion of long-term debt 600 600
Current portion of capital lease obligations 17 24
Accounts payable 1,831 2,003
Accrued expenses 1,256 1,368
Total current liabilities 4,506 4,636
Long-term debt, net of current portion 3,424 3,407
Other long-term liabilities 178 150
Total liabilities 8,108 8,193
Stockholders' deficit:
Common stock, par value $0.001; shares authorized
100,000,000; 52,510,174 shares issued and
outstanding at March 31, 2011 and December 31,
2010 53 53
Paid-in capital 105,741 105,678
Accumulated other comprehensive income 136 256
Accumulated deficit (106,438) (106,175)
Total stockholders' deficit (508) (188)
Total liabilities and stockholders' deficit $ 7,600 $ 8,005
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
($ In thousands)
Three Months Ended
March 31,
2011 2010
Operations
Net loss $ (263) $ (1,319)
Loss from discontinued operations, net of tax (49) (59)
Loss from continuing operations (214) (1,260)
Adjustments to reconcile net loss to net cash used
in operating activities:
Stock based compensation 63 120
Depreciation and amortization 159 222
Amortization of debt discount and
financing costs - 99
Provision for inventories 9 7
Provision for bad debts - 4
Deferred income taxes - (64)
Other change in assets and liabilities:
Accounts receivable (113) (640)
Inventories (112) (48)
Prepaid expenses and other current assets 3 50
Accounts payable (258) 322
Accrued expenses (157) (101)
Net cash used in operating activities (592) (1,289)
Net cash used in discontinued operations (49) (59)
Net cash used in operating activities (641) (1,348)
Financing
Borrowing of revolving credit facility 137 304
Principal repayment of long-term debt (157) (903)
Net cash used in financing activities (20) (599)
Investing
Payment of financing obligation - (36)
Purchase of plant and equipment (32) (15)
Net cash used in investing activities (32) (51)
Effect of exchange rate on cash (89) 355
Net change in cash and equivalents (782) (1,643)
Cash and equivalents, beginning of period 1,811 4,478
Cash and equivalents, end of period $ 1,029 $ 2,835
Supplemental disclosure of cash flow information:
Cash paid for interest $ 96 $ 190
Cash paid for taxes $ 15 $ -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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