TIDMPPIX
RNS Number : 6358H
ProPhotonix Limited
14 March 2018
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
March 14, 2018
ProPhotonix Limited
("ProPhotonix" or "the Company")
PRELIMINARY RESULTS FOR THE YEARED DECEMBER 31, 2017
And Notice of Annual General Meeting
ProPhotonix Limited (London Stock Exchange - AIM: PPIX &
PPIR, 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, 2017.
Financial Highlights
-- Revenue increased 9% to $17.7 million (2016: $16.2 million)
-- Gross profit increased 7% to $7.9 million (2016: $7.4 million)
-- Gross profit margin decreased slightly to 44.6% (2016: 45.4%)
-- Operating profit decreased 19% to $1.2 million (2016: $1.5
million). Excluding stock compensation, operating profit increased
11% to $1.9 million (2016: $1.7 million)
-- Net income increased 63% to $2.0 million (2016: $1.3 million)
-- Available borrowing capacity of $0.4 million from its
revolving credit facility at December 31, 2017 (2016: $0.4
million)
-- Adjusted EBITDA increased 12% to $2.0 million (2016: $1.8 million)
-- Order bookings of $19.6 million (2016: $16.7 million)
-- Order backlog increased to $7.3 million (2016: $5.6 million)
Book-to-Bill ratio of 1.11 (2016: 1.03)
-- Percentage revenue by market sectors: industrial 75%, medical
21%, and homeland security & defense 4% (2016: industrial 82%,
medical 14%, and homeland security and defense 4%)
-- Percentage revenue by geography: 49% Europe,37% North America
and 14% Rest of World (2016: 48% Europe, 42% North America and 10%
Rest of World
Tim Losik, President & CEO, Commented:
"2017 has been a successful year for the Company and we have
continued our progressive financial momentum from the past two
years. We have achieved consecutive half-yearly periods of positive
operating income, net income, and Adjusted EBITDA and delivered
growth across key metrics. The year has also positioned us well for
2018, with a record order backlog.
"As compared to 2016, sales grew 9% to $17.7 million, gross
profit improved 7%, and operating income increased 11%, excluding
stock compensation expense. Net income increased 63% from increased
gross profit, R&D tax credits, the net benefit of various tax
attributes, and the change in foreign currency translation, which
were partially offset by a full year of expenses related to the
addition of sales personnel in late Q4 2016, and the increase in
stock compensation as noted above. Adjusted EBITDA also improved
12% over 2016. Order bookings of $19.6 million, represented a 17.7%
increase from 2016 bookings of $16.7 million, ending the year with
a book to bill ratio of 1.11 (2016: 1.03).
"The term debt of the Company was paid in full by June 2017
providing a stronger balance sheet and financial condition. Also
during 2017, the Company received a capital asset grant from the
Irish Development Authority ("IDA") through its Business Asset
Program, aimed at supporting the growth of IDA client companies
investing in new manufacturing capability and capacity. This grant
provides an element of funding for a new state-of-the-art UV LED
lamp production line. Finally, the ProPhotonix team continues to
execute on its long term strategies by successfully launching new
products, which we believe will produce positive results during
2018 and beyond."
Customer and Product Development Initiatives
During the year, the ProPhotonix engineering team completed the
development of several products and implemented a number of new
technology capabilities. The new Cobra Multispec line light of 12
Wavelengths was announced in January 2018. In addition, ProPhotonix
received the Vision Systems Design 2017 Innovators award in April
2017 for our previously announced Cobra RGB line light. ProPhotonix
is nearing completion of its laser development financed by a
European Union funded Fast Track to Innovation program. This
development effort has allowed the Company to develop a laser with
digital control, intense stability through thermal electric
cooling, and digital data logging and monitoring. The grant
provided the Company with up to EUR360,000 of funding when
originally awarded in 2016. The development project is expected to
complete by June 2018. In addition, we continued to work with many
of our major original equipment manufacturer ("OEM") customers in
new product development efforts to improve their products and
processes.
Strategy and Markets
ProPhotonix consists of two business units: the LED systems
manufacturing business based in Ireland (Cork), and the 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 to grow
revenues from existing customers, to win new customers, release new
products, and market expansion within existing market segments and
to select new market segments.
First, our existing customers and relationships are vital to our
continuing growth and success. Their success helps feed our success
and provides us with the opportunity to develop new products and
market solutions for other customers and applications. Second, the
Company's strategy remains established in its OEM heritage as well
as the development of products directed at specific markets.
ProPhotonix has made and will continue to make investments in
commercially attractive OEM opportunities and product development
including UV LED, multi-wavelength devices and laser technology
advances, in the fulfillment of our strategy. We continue to
concentrate our engineering capacity in these defined projects and
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, bonding, 3D printing,
bio-luminescence, medical microscopy and other applications. The
Company has launched several versions of its COBRA Cure(TM) product
and continues to work with many potential customers in their
applications using this technology. We plan to continue to launch
new higher power products while continuously enhancing our current
product lines to serve this market during 2018 and beyond.
ProPhotonix also continues to focus on the market requirements
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
printing, microscopy, industrial inspection and sorting, solar
simulation and security markets. As announced in January 2017, the
Company introduced the Cobra Multispec, a 12-wavelength modular
designed line light as a follow-on product to the Cobra RGB. We
intend to continue to enhance and expand this offering as market
demand dictates.
ProPhotonix sells its products principally into three markets:
industrial (primarily machine vision illumination), medical, and
homeland security and defense. The Company expects growth
opportunities in all three of these markets as described further
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.
Medical
The medical and dental market requires many different LED
systems and laser modules for unique processes, procedures, and
applications. The Company provides a variety of products for
medical and dental applications to current customers including a
world leader in stationary imaging equipment, a portable x-ray
equipment and dental imaging manufacturer and a surgical
illumination device manufacturer. 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 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
ProPhotonix begins 2018 with a strong order backlog and
continues to development products and capabilities with new and
existing customers. Development of the Cobra Cure UV LED products
continues with ever increasing intensity and progress is being made
with several potential major customers for these products. We
believe that these products will gain market acceptance during
2018. With the strong order book at the beginning of the year, the
Directors remain positive about our business pipeline and confident
in our ability to achieve continued positive momentum toward our
profitability objectives.
Annual General Meeting and Posting of Results
The Company will hold its Annual General Meeting on May 17, 2018
at 2:00 p.m. British Summer Time at the offices of K&L Gates
LLP, One New Change, London EC4M 9AF. The Company intends to
publish its final audited accounts for the year ended December 31,
2017 in April 2018.
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President and CEO ir@prophotonix.com
Cantor Fitzgerald Europe
(Nominated Adviser and Broker) Tel: +44 (0)207 894 7000
Andrew Craig
Richard Salmond
David Foreman
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.com.
PROPHOTONIX LIMITED
Condensed Consolidated Statements of Income and Comprehensive Income
(in thousands except share and per share data)
Years Ended
December 31,
-------------------------------------
2017 2016
(Unaudited) (Audited)
----------------- -----------------
Revenue $ 17,743 $ 16,245
Cost of Revenue (9,822) (8,862)
----------------- -----------------
Gross Profit 7,921 7,383
----------------- -----------------
Research & Development Expenses (763) (814)
Selling, General & Administrative Expenses (see impact of stock compensation
in our Non GAAP
financial reconciliation) (5,951) (5,077)
Operating Income 1,207 1,492
Other Income, net 375 344
Foreign Currency Translation Gain (Losses) 57 (360)
Warrant & Debt Acquisition Expense (18) (88)
Interest Expense (49) (133)
----------------- -----------------
Income Before Taxes 1,572 1,255
Income Tax Benefit 469 -
----------------- -----------------
Net Income $ 2,041 $ 1,255
Other Comprehensive Income:
Foreign currency translation 51 (19)
----------------- -----------------
Total Comprehensive Income $ 2,092 $ 1,236
================= =================
Net Income Per Share:
Basic and diluted:
Basic net income per share $0.022 $0.015
Diluted net income per share $0.020 $0.014
----------------- -----------------
Shares used in per share calculations - Basic 92,565,402 83,665,402
----------------- -----------------
Shares used in per share calculations - Diluted 104,193,859 90,740,402
----------------------------------------------------------------------------- ----------------- -----------------
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
2017 2016
December 31 (Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 2,150 $ 911
Accounts receivable, less allowances of $14 in 2017 and
$30 in 2016 3,114 2,302
Inventories 2,280 2,155
Prepaid expenses and other current assets 235 298
Total current assets 7,779 5,666
Net property, plant and equipment 633 342
Deferred tax asset 475 -
Goodwill 424 372
Other long-term assets 239 74
Total assets $ 9,550 $ 6,454
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ 1,293 $ 1,049
Current portion of long-term debt - 402
Accounts payable 1,638 1,454
Accrued expenses 1,788 1,823
Current portion of capital lease 95 68
Total current liabilities 4,814 4,796
Long-term capital lease obligations, net of current
portion 98 52
Total liabilities 4,912 4,848
Stockholders' Equity:
Common stock, par value $0.001; shares authorized
250,000,000 at December 31, 2017 and at
December 31, 2016; 92,565,402 shares issued and
outstanding at December 31, 2017 and 83,665,402
at December 31, 2016 93 84
Additional paid-in capital 112,969 112,038
Accumulated deficit (109,438 ) (111,479 )
Accumulated other comprehensive income 1,014 963
Total stockholders' equity 4,638 1,606
Total liabilities and stockholders' equity $ 9,550 $ 6,454
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
2017 2016
Years Ended December 31 (Unaudited) (Audited)
Cash flows from operating
activities
Net income $ 2,041 $ 1,255
Adjustments to reconcile net income
to net cash provided by operating
activities:
Stock-based compensation
expense 645 178
Depreciation 100 75
Foreign exchange (gain)/loss (264) 74
Amortization of debt
discount and financing
costs 7 60
Provision for inventories 33 120
Provision for bad debts 5 9
Other changes in assets and
liabilities:
Accounts receivable (553) 360
Inventories 141 (809)
Prepaid expenses and other
current assets 97 (168)
Deferred tax asset (475) -
Accounts payable (11) 246
Accrued expenses (150) 836
Other assets and liabilities (164) 6
Net cash provided by operating
activities 1,452 2,242
Investing
Purchase of property, plant and
equipment (170 ) (121 )
Net cash used in investing
activities (170 ) (121 )
Financing
Exercise of options and warrants 295 -
Borrowings of revolving credit 96 (237)
facilities, net
Capital lease (81) (66)
Principal repayment of long-term
debt (449 ) (1,100 )
Net cash used in financing
activities (139) (1,403)
Effect of exchange rate on cash 96 (241)
Net change in cash and equivalents 1,239 477
Cash and equivalents at beginning 911 434
of period
Cash and equivalents at end of
period $ 2,150 $ 911
Supplemental cash flow information:
Cash paid for interest $ 49 $ 133
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
Common Stock
-----------------------------------
Accumulated
Other Total
Paid in Deferred Accumulated Comprehensive Stockholders'
Shares Par $0.001 Capital Compensation Deficit Income Equity
----------------------- ---------- --------- ------------ ----------- ------------- -------------
Balance
December 31,
2015 83,665 $84 $111,860 - ($112,734) $982 $192
Net profit - - - - 1,255 - 1,255
Translation
adjustment - - - - - (19) (19)
Share based
compensation - - 178 - - - 178
Balance
December 31,
2016 83,665 $84 $112,038 - ($111,479) $963 $1,606
Net profit - - - - 2,041 - 2,041
Translation
adjustment - - - - - 51 51
Exercise of
options 6,700 7 231 - - - 238
Exercise of
warrants 1,900 2 55 - - - 57
Deferred
compensation 300 0 47 (47) - - 0
Share based
compensation - - 616 29 - - 645
Balance
December 31,
2017 92,565 $93 $112,987 ($18) ($109,438) $1,014 $4,638
======= ========== ========= ============ =========== ============= =============
14
Notes to unaudited Preliminary Results - Basis of
Presentation
The financial information set out in this document does not
constitute the Company's statutory accounts for 2016 and 2017 or
the Company's annual audited accounts for 2017 to be published and
sent to shareholders in accordance with Rule 19 of the AIM Rules
for Companies. The 2017 accounts included herein are unaudited and
therefore subject to change at the time the audited accounts are
issued. The 2017 unaudited preliminary financial statements were
prepared under US GAAP and were approved on March 13, 2018, by the
Directors for issue on March 14, 2018. A copy of this announcement
is available on the Company's website at www.prophotonix.com. It is
intended that the Company's 2017 annual report and audited accounts
will be available to shareholders in April 2018.
Cautionary 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
Adjusted 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 Adjusted EBITDA (earnings before interest,
taxes, depreciation, amortization, and stock-based compensation) as
a non-GAAP financial measure in this press release. A
reconciliation of net income to Adjusted EBITDA for the total year
2017 and 2016 is as follows:
(in thousands)
Year Ended December 31,
2017 2016
------------ ------------
Net income $ 2,041 $ 1,255
Plus:
Interest and other expense, net (365) 237
Taxes (469) -
Depreciation 100 75
Stock based compensation 645 178
Adjusted EBITDA $ 1,952 $ 1,745
------------ ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LFFLVVSIVLIT
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