TIDMPPIX
RNS Number : 4671Y
ProPhotonix Limited
09 September 2015
September 9, 2015
ProPhotonix Limited
("ProPhotonix" or "the Company")
INTERIM RESULTS FOR THE HALF YEAR ENDED JUNE 30, 2015
ProPhotonix Limited (London Stock Exchange - AIM: PPIX , OTC:
STKR), a high technology designer and manufacturer of LED
illumination systems and laser diode modules, today announces its
unaudited interim results for the six months ended June 30,
2015.
Financial Highlights
-- Revenue decreased 19% to $6.7 million, 10% of which was due
to foreign currency rate fluctuation
-- Gross profit decreased 13.8% to $2.8 million
-- Gross profit margin increased to 41.2% (2014: 38.5%)
-- Operating income of $0.1 million (2014: $(0.1) million)
-- EBITDA of $0.3 million (2014: $0.1 million)
-- Order bookings of $7.7 million
-- 1.15 Book-to-Bill ratio (2014: 1.03)
-- Percentage revenue by market sectors: 81% industrial, 15% medical, and 4% security & defense
-- Percentage revenue by geography: 48% Europe, 39% North America and 13% Rest of World
-- Available credit lines of $1.8 million
Operating Highlights
-- Introduced 8 new products in the first half
-- Patent application filing for unique thermal management invention
-- Awarded two year supply agreement with pharmaceutical customer
-- Entered into technology license agreement with technology institute
Tim Losik, President & CEO, commented:
Financial
ProPhotonix Limited's results were impacted by continuing
foreign currency exchange rate changes which skew various
performance indicators. It is important to assess results in
constant dollars, as we did in our 2014 results by highlighting the
impact of foreign currency fluctuations last year.
Our constant dollar sales in the first half of 2015 were $7.5
million, as compared to the reported revenue of $6.7 million.
Currency fluctuations accounted for approximately 10% of our
year-on-year revenue decline. Other factors which influenced the
fall in revenues included: one significant distributed product
customer (which provided $500,000 of revenue at a lower margin in
2014) did not repeat in 2015; declines in two customers' demand
rates which we anticipated at the beginning of the year; and
expected sales from new customer engineering products which have
been delayed. We fully expect these delayed projects to generate
meaningful revenue in future periods.
Operating profit and EBITDA are much less impacted by currency
fluctuations. Many of our expenses are denominated in the same
currencies as revenue, a natural hedge, thus mitigating currency
translation impact. In addition, the cost reduction implemented by
the Company over the last two years significantly reduced our
expense structure and break-even point. The Company generated
constant dollar operating profit of $0.2 million (a $0.3 million
increase on H1 2014) and EBITDA of $0.4 million (an increase of
229% on H1 2014). These results mark the fourth consecutive
half-yearly positive EBITDA and second consecutive half-yearly
positive operating income, cementing the Company's continued
progress.
Our first half 2015 orders, in constant dollars, were $8.7
million (a 2% increase on H1 2014), while our backlog at the end of
the first half is $6.2 million (an increase of 11% over year-end
2014). In addition, since the end of the first half, the Company
has seen strong order bookings of $2.5M for the first two months of
the third quarter. Recent announcements of supply agreements are
not included in the June 30 or the third quarter-to-date order
book, unless firm orders were received from the customers in the
relevant periods.
The balance sheet continues to strengthen. Term debt of $277,000
was repaid in accordance with the various term loan facilities.
Total net available credit from the Company's loan facilities was
$1.8 million as of June 30, 2015. The Directors are comfortable
with the cash flow of the business considering its plans and
available credit facilities.
Strategy
As of June 2015, we mark the two year anniversary of the
recapitalization of the Company and the march toward a sustainable
business model. Since June 2013, we have focused our efforts on
eliminating costs in the business as we strive to win new customers
and improve margins.
Strategically, the Company is in transition. Historically, our
product development has been customer directed. This approach has
served us well for specific applications and we continue to offer
bespoke product solutions. Over the past two years, we have
assessed various markets and product features in order to develop a
product strategy focusing on specific markets to complement our
direct customer engagement. To this end, we are concentrating our
engineering talents in a couple of defined market areas that we
believe are poised for fast market expansion.
The first of these is the ultra violet (UV) LED and laser market
for various applications including: printing, curing, 3D printing,
bio-luminescence, medical microscopy, and other applications.
Today, we also announced our latest UV LED light within the Cobra
Cure(TM) family, which will be the first of several new products in
this line up. As stated in the Cobra Cure announcement, the UV LED
market is projected to grow at an annual rate of 40% between 2014
and 2019. For more information on Cobra Cure, please visit our
website at www.prophotonix.com/products/UV-Solutions/.
Our other focus is on the continuing market requirement for
multi-wavelength devices and systems; both laser and LED solutions.
More and more customers are calling for multi-wavelength solutions
requiring innovative optics, complex electronics, sensing
capabilities, and software control. We see obvious opportunities
which include a broad range of optical sensing and inspection
applications in microscopy, industrial and security markets. We are
in the research and development phase of these products and expect
to announce various laser and LED products in the coming
months.
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President & CEO ir@prophotonix.com
N+1 Singer Tel: +44 (0) 207 496
Ben Wright, Richard Salmond 3000
Nominated Adviser and Broker
About ProPhotonix
ProPhotonix Limited, headquartered in Salem, New Hampshire, is a
high technology 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 Ushio (formerly Oclaro), Osram, QSI,
Panasonic, and Sony. The Company serves a wide range of markets
including the machine vision, industrial inspection, security, and
medical markets. ProPhotonix has offices and subsidiaries in the
U.S., Ireland, U.K., and Europe. For more information about
ProPhotonix and its innovative products, visit the Company's web
site at www.prophotonix.com.
Half Year 2015 Financial Results
Revenue for the half year ended June 30 2015 was $6.7 million, a
decrease of 19% compared with $8.3 million in the same period of
2014. Gross profit was $2.8 million, a decrease of 14% compared to
$3.2 million in the first half of 2014. Gross profit margin
improved to 41.2% from 38.5% in the same period 2014 due to a shift
in product mix. Foreign currency exchange negatively impacted gross
profit by approximately $(0.3) million and operating income was
negatively impacted by approximately $(0.1) million.
Operating expenses, excluding intangible amortization charges,
totaled $2.6 million versus $3.3 million in 2014 for the comparable
period. Sales and marketing and research and development (R&D)
expenses were down $0.6 million in 2015 as compared to the first
half 2014 at $1.3 million, while general and administrative
expenses decreased 6% over the same period. The operating profit
was $0.1 million, as compared to a $0.1 million loss in the first
half of 2014. EBITDA was $0.3 million as compared to an EBITDA of
$0.1 million in 2014. The net loss was $0.2 million compared to the
first half 2014 net loss of $0.5 million.
On the balance sheet, foreign currency differences arise on
consolidation of subsidiaries whose functional currency is not the
U.S. dollar. Our June 30 2015, accumulated other comprehensive
income balance was $957,000, as compared to $(44,000) at June 30,
2014 and $812,000 at December 31, 2014.
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
In thousands except share and per share data
(unaudited)
Six Months Ended
June 30,
2015 2014
Revenue $ 6,703 $ 8,319
Cost of sales (3,941) (5,116)
Gross profit 2,762 3,203
Operating expenses:
Selling expenses (965) (1,343)
General and administrative (1,387) (1,476)
Research and development (288) (465)
Amortization of intangibles - (61)
Total operating expenses (2,640) (3,345)
(142
Gain (loss) from operations 122 )
Other expense, net (89) (91)
Interest expense (120) (149)
Amortization of debt discount and financing
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costs (86) (102)
Loss from operations before income tax (173 (484
provision (benefit) ) )
Income tax benefit - -
(173 (484
Net loss ) )
Other comprehensive income:
Foreign currency translation 145 102
Total comprehensive loss $ (28) $ (382)
$ (0.00 $ (0.01
Basic and diluted net loss per share ) )
Basic and diluted weighted average shares
outstanding 83,665 83,665
FINANCIAL STATEMENTS
PROPHOTONIX LIMITED
CONSOLIDATED BALANCE SHEETS
(unaudited)
($ in thousands except share and per share data)
For the Periods Ended June 30, 2015 and 2014 2015 2014
Assets
Current assets:
Cash and cash equivalents $ 212 $ 253
Accounts receivable, less allowances of $22 in 2015 and
$35 in 2014 2,237 2,648
Inventories 1,705 2,049
Prepaid expenses and other current assets 135 198
Total current assets 4,289 5,148
Net property, plant and equipment 145 230
Goodwill 392 482
Acquired intangible assets, net - 41
Other long-term assets 140 277
Total assets $ 4,966 $ 6,178
Liabilities and Stockholders' (Deficit)
Current liabilities:
Revolving credit facility $ 1,088 $ 1,219
Current portion of long-term debt net of unamortized
discount of $13 at June 30, 2015 and
$18 at June 30, 2014 955 570
Capital lease obligations - 5
Accounts payable 1,079 1,612
Accrued expenses 1,016 985
Total current liabilities 4,138 4,391
Long-term debt, unamortized discount of $3 at June 30,
2015 and $17 at June 30, 2014 1,063 2,310
Other long-term liabilities 178 178
Total liabilities 5,379 6,879
Stockholders' (deficit):
Common stock, par value $0.001; shares authorized
250,000,000 at June 30, 2015 and at June
30, 2014; 83,665,402 shares issued and outstanding at
June 30, 2015 and at June 30, 2014 84 84
Paid-in capital 111,733 111,417
Accumulated deficit (113,187 ) (112,158 )
Accumulated other comprehensive income 957 (44)
Total stockholders' (deficit) (413) (701)
Total liabilities and stockholders' deficit $ 4,966 $ 6,178
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands
(unaudited)
Six Months Ended
June 30,
2015 2014
Operations
Net loss $ (173) $ (484)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation 150 114
Depreciation and amortization 54 146
Foreign exchange gain (25) 88
Amortization of debt discount and financing costs 72 95
Loss on disposal of assets - 4
Provision for inventories 34 48
Provision for bad debts 3 22
Other change in assets and liabilities:
Accounts receivable 145 (132)
Inventories (207) (111)
Prepaid expenses and other current assets 35 22
Accounts payable (275) 82
Accrued expenses 118 (313)
Other assets and liabilities 4 -
Net cash used in operating activities (65) (419)
Financing
Net borrowing of revolving credit facility 48 101
Proceeds from long-term debt issuance - 175
Principal repayment of long-term debt (277) (4)
Net cash provided by (used in) financing activities (229) 272
Investing
Purchase of plant and equipment (29) (18)
Net cash used in investing activities (29) (18)
Effect of exchange rate on cash 204 16
Net change in cash and equivalents (119) (149)
Cash and equivalents, beginning of period 331 402
Cash and equivalents, end of period $ 212 $ 253
Supplemental disclosure of cash flow information:
Cash paid for interest $ 120 $ 149
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY / (DEFICIT)
(in thousands)
Common Stock
Total
Par Paid in Accumulated Accumulated Other Stockholders'
Shares $0.001 Capital Deficit Comprehensive Income Equity (Deficit)
Balance
December 31,
2014 83,665 $ 84 $ 111,583 $ (113,014) $ 812 $ (535)
Net loss (173) (173)
Translation
adjustment..
..... 145 145
Share based
compensation - - 150 - - 150
Balance June
30, 2015 ... 83,665 $ 84 $ 111,733 $ (113,187) $ 957 $ (413)
Values may not add due to rounding
Notes to unaudited Interim Results
Basis of Presentation
The Company financial reports are issued under the recognition
and measurement principles of United States Generally Accepted
Accounting Principles (GAAP). The Accompanying unaudited condensed
consolidated financial reports reflect all adjustments of a normal
recurring nature necessary for a fair statement of the (i) results
of operations and comprehensive income (loss) for the six month
periods ended June 30, 2015 and 2014; (ii) the financial position
at June 30, 2015 and June 30, 2014; and (iii) the cash flows for
the six month period ended June 30, 2015 and 2014. These interim
results are not necessarily indicative of results for a full year
or any other interim period.
Cautionary Statement
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