TIDMPPIX
RNS Number : 0611S
ProPhotonix Limited
15 March 2016
March 15, 2016
ProPhotonix Limited
("ProPhotonix" or "the Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED DECEMBER 31, 2015
Annual General Meeting Date
ProPhotonix Limited (London Stock Exchange - AIM: PPIX, OTC:
STKR), a high technology designer and manufacturer of LED
illumination systems and laser diode modules, with operations in
Ireland and the United Kingdom, today announces its unaudited
preliminary results for the year ended December 31, 2015.
Annual General Meeting
The Company will hold the Annual General Meeting of the
Shareholders on May 19, 2016 at 2:00 PM British Summer Time at the
offices of K&L Gates LLP, One New Change, London EC4M 9AF. The
Record date is set at March 24, 2016 for all shareholders of
record.
Financial Highlights
-- Net Income of $0.3 million (2014: net loss $1.3 million)
-- EBITDA profit doubled to $1.2 million (2014: $0.6 million)
-- Operating income increased substantially to $0.8 million (2014: $0.1 million)
-- Gross profit margin improved to 41.4% (2014: 39.1%)
-- Gross profit decreased 7.1% to $6.0 million (2014: $6.4 million)
-- Revenue decreased 12.3% to $14.4 million (2014: $16.4
million) impacted by foreign currency exchange rate
-- Percentage revenue by market sectors: industrial 81%, medical
15%, and homeland security & defense 4%
-- Percentage revenue by geography: 47% Europe, 41% North America and 12% Rest of World
-- Available borrowing capacity of $2.0 million from its loan facilities at December 31, 2015.
Tim Losik, President & CEO, Commented:
"We entered 2015 with positive financial momentum from the prior
year, but also with economic and foreign currency exchange rate
headwinds. Neither of these challenges abated during the year
making continuing financial success all the more meaningful. 2015
has again been a year of accomplishments in a number of respects -
including our first full year of positive net income since 1994. We
have now also achieved five consecutive half-yearly periods of
positive EBITDA and three consecutive half-yearly periods of
positive operating income. During 2015, operating income increased
sevenfold and EBITDA increased 84%. In addition, the ProPhotonix
team has been diligently pursuing new customers and new product and
market initiatives, which helps set the stage for 2016."
Full Year 2015 Financial Results
Revenue fell by 12% during 2015, the year over year comparatives
are significantly impacted by foreign currency conversion rates.
While revenue for 2015 was $14.4 million, this would have been
$15.8 million using constant currency exchange rates from 2014. Our
margin rate improved to 41.4% resulting from a better product mix
and continuing cost reductions. Operating expenses, excluding
intangible amortization charges, totalled $5.2 million (2014: $6.2
million). Approximately 39% of the expense improvement was due to
the impact of foreign currency fluctuations. Sales and marketing
expenses were down 25% compared to last year at $1.8 million, while
general and administrative and research and development expenses
were reduced by approximately $0.4 million, or 12% over 2014. The
Company achieved an operating profit of $0.8 million and EBITDA of
$1.2 million. These factors contributed to ProPhotonix's financial
improvement and positive net income of $0.3 million (2014: net loss
$1.3 million). The balance sheet also continued to improve in 2015.
Term debt declined $750,000 to $1,474,000 as at 31 December 2015,
which is the lowest outstanding balance in more than a decade.
During 2015, order bookings declined 2.4% to $15.7 million from
2014, but the book-to-bill ratio increased to 1.09 (2014: 0.98).
However, factoring in the impact of constant currency exchange
rates from 2014, our order rate for 2015 would have been $17.3
million (a 7.6% improvement). Our backlog at December 31, 2015 was
$5.6 million (2014: $5.6 million).
Customer and Product Development Initiatives:
In addition to the new customer activity in 2015, we entered
into three (3) three-year supply agreements with customers and have
received and fulfilled production orders for two of the three
agreements beginning in Q4, 2015. We will begin commercial
shipments on the third agreement in Q1 2016.
During the year, the ProPhotonix engineering team completed the
development of several products and implemented a number of new
technology capabilities. Furthermore, we announced eight new
manufactured products. The Company filed four provisional/patent
applications in 2015 as a continuation of intellectual property
protection on our unique inventions and solutions.
Building toward the future:
Strategically, the Company is in transition. Our product
development has historically been customer directed. This approach
has served us well for specific applications and we continue to
offer bespoke product solutions. However, we are now assessing
various markets and product features in order to develop a product
strategy focusing on specific markets to complement our direct
customer engagement. We have identified two promising opportunities
and we are concentrating our engineering talents in defined market
areas that we believe are poised for fast market expansion.
The first of these is the UV LED and laser market for various
applications including: printing, curing, 3D printing,
bio-luminescence, medical microscopy, and other applications.
Market research shows that the 2014 market size for UV LED
applications was approximately $90 million with projected growth to
$500 million by 2019, a compound average annual growth rate of
nearly 40%. We have announced new products addressing this rapidly
growing market and will continue with further product
development.
Our other focus is on the continuing market requirement for
multi-wavelength devices and systems; both laser and LED solutions.
Increasingly, customers are seeking multi-wavelength solutions
requiring innovative optics, complex electronics, on-board sensing
capabilities, and sophisticated software control. We see
opportunities which include a broad range of applications in
microscopy, industrial, embedded camera and sensor calibration,
solar simulators, optical sorting, 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 future.
Strategy and Markets
ProPhotonix consists of two business units: an LED systems
manufacturing business based in Ireland (Cork), and a laser modules
production and laser diode distribution business located in the
United Kingdom (Hatfield Broad Oak). Corporate headquarters and the
North American sales activities are based in Salem, New Hampshire,
USA. The fundamental strategy of the Company is growth in revenue
through its existing customers, new customer activity, and new
product and market expansion. ProPhotonix's short-term strategy has
been to reach sustained positive EBITDA, cash flow, and net income.
These continuing goals will be accomplished through a relentless
focus on cost management and most importantly through revenue
growth.
ProPhotonix's growth in the medium-term will be accomplished
with new customer wins and the conversion of development orders
into long run production orders. Prophotonix is also focused on
expansion into new markets and new products. The Company
continuously evaluates new product development and additions to the
sales offering in an effort to increase customer satisfaction and
provide solutions.
ProPhotonix sells its products principally into three markets:
industrial (primarily machine vision illumination), medical, and
homeland security and defense. The Company foresees growth
opportunities in all three markets it serves which are briefly
described below:
Industrial (Machine Vision)
Within the industrial market, machine vision is the term used to
describe computerized analysis for controlling manufacturing
processes, for example automated inspection. In terms of quality
and speed, lighting is often a critical component in machine vision
and the Company manufactures both LED systems and lasers designed
specifically for this market. The recently enhanced 3D Pro Laser
line generators and improved LED line light family specifically
address this market.
Medical
The Company has experienced successes in the medical (including
dental) market and has gained a foothold in the sector, supplying a
variety of applications with current customers, including the world
leader in stationary imaging equipment, a portable x-ray equipment
manufacturer, a dental imaging manufacturer and also a pioneer in
the manufacturing of devices offering eye tracking capability
utilizing ProPhotonix's custom infrared LED arrays. The Company
intends to broaden its product marketing effort in the medical
field since it offers significant long-term revenue growth
opportunities.
Homeland Security & Defense
LED systems, laser modules and laser diodes are used in a wide
variety of applications in the security and defense fields. The
Company currently supplies several defense sighting manufacturers
in the US and Europe, as well as leading manufacturers of Auto
Number Plate Recognition systems. This market offers significant
growth opportunities for ProPhotonix over the next several years
and the Company is currently marketing its laser and LED
capabilities to additional security and optical character
recognition systems companies in this market space.
Outlook
(MORE TO FOLLOW) Dow Jones Newswires
March 15, 2016 03:00 ET (07:00 GMT)
ProPhotonix begins 2016 in a strong position, having received
production orders from the three customers who have signed three
year supply agreements during 2015. We have also progressed our UV
product family to include the COBRA Cure FX1, an innovative UV LED
Curing system, which we recently announced. Recent booking trends,
the macroeconomic environment and foreign exchange rate impacts
cause us to be cautious for the first half of 2016, but we remain
very positive about our business pipeline and confident in our
ability to achieve continued positive momentum toward our
profitability objectives.
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President and CEO ir@prophotonix.com
Stockdale Securities Limited Tel: +44 (0) 20 7601
Tom Griffiths and David Coaten 6100
Nominated Adviser and Broker
About ProPhotonix
ProPhotonix Limited, headquartered in Salem, New Hampshire, is a
high technology 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.comhttp://www.prophotonix.com/
PROPHOTONIX LIMITED
Consolidated Statements of Operations and Comprehensive Income (Loss)
($ in thousands except share and per share data)
Years Ended
December 31,
----------------------------------------
2015 2014
(Unaudited) (Audited)
------------------- ------------------
Revenue $ 14,411 $ 16,431
Cost of Revenue (8,441) (10,006)
------------------- ------------------
Gross Profit 5,970 6,425
------------------- ------------------
Research & Development Expenses (654) (879)
Selling, General & Administrative Expenses (4,526) (5,350)
Amortization of Intangible Assets - (100)
Operating Income 790 96
Other Income, net 131 93
Foreign Currency Translation Losses (259) (1,031)
Warrant & Debt Acquisition Expense (158) (198)
Interest Expense (224) (300)
------------------- ------------------
Income (Loss) Before Taxes 280 (1,340)
Income Taxes - -
------------------- ------------------
Net Income (Loss) $ 280 $ ( 1,340)
Other Comprehensive Income:
Foreign currency translation 170 958
------------------- ------------------
Total Comprehensive Income / (Loss) $ 450 $ ( 382)
=================== ==================
Income (Loss) Per Share:
Basic and diluted:
Net Income (loss) per share $0.003 ($0.016)
Basic and diluted weighted average shares outstanding 83,665,402 83,665,402
------------------------------------------------------ ------------------- ------------------
FINANCIAL STATEMENTS
PROPHOTONIX LIMITED
CONSOLIDATED BALANCE SHEETS
($ in thousands except share and per share data)
2015 2014
December 31 (Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 434 $ 331
Accounts receivable, less allowances of $21 in 2015 and $20
in 2014 2,751 2,606
Inventories 1,550 1,686
Prepaid expenses and other current assets 140 180
Total current assets 4,875 4,803
Net property, plant and equipment 132 184
Goodwill 385 429
Other long-term assets 81 36
Total assets $ 5,473 $ 5,452
Liabilities and Stockholders' Equity / (Deficit)
Current liabilities:
Revolving credit facility $ 1,334 $ 1,128
Current portion of long-term debt 966 668
Accounts payable 1,260 1,463
Accrued expenses 1,035 965
Total current liabilities 4,595 4,224
Long-term debt, net of current portion 508 1,585
Other long-term liabilities 178 178
Total liabilities 5,281 5,987
Stockholders' Equity / (Deficit):
Common stock, par value $0.001; shares authorized
250,000,000 at December 31, 2015 and at
December 31, 2014; 83,665,402 shares issued and
outstanding at December 31, 2015 and at December
31, 2014 84 84
Additional paid-in capital 111,860 111,583
Accumulated deficit (112,734 ) (113,014 )
Accumulated other comprehensive income 982 812
Total stockholders' equity / (deficit) 192 (535)
Total liabilities and stockholders' equity $ 5,473 $ 5,452
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
2015 2014
Years Ended December 31 (Unaudited) (Audited)
Cash flows from operating
activities
Net income (loss) $ 280 $ (1,340)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Stock-based compensation
expense 277 280
Depreciation and
amortization 101 258
Foreign exchange (gain) /
loss (51) 1,066
Amortization of debt
discount and financing
costs 130 186
Loss on disposal of assets - 4
Provision for inventories 95 55
Provision for bad debts 4 5
Other changes in assets and
liabilities:
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