International Commercial Television, Inc. Reports First Quarter
2014 Financial Results
Re-Branding Corporate Name to ICTV Brands; Expanded Product
Portfolio for Growth; Conference Call Begins Today at 4:30pm
EDT
WAYNE, PA--(Marketwired - May 13, 2014) - International
Commercial Television, Inc. (OTCQB: ICTL), (or "ICTV"), a direct
response marketing and branding company focused on the health,
wellness and beauty sector, today reported financial results for
the three months ended March 31, 2014.
First Quarter 2014 Highlights:
- Building product portfolio to achieve target of becoming a
$100mm+ revenue company in the next 2-3 years
- Operating loss included $436,000 of non-cash expenses and
incremental investment, which were immaterial in the comparable
year quarter
- DermaWand next-generation device on track to be ready in 2nd
half of 2014
- DermaWand DRTV launching directly in Canada; generating
$670,000 in revenue
- Mexico distribution partner's continued success with having
purchased 100,000 DermaWand units since October 2013
- Continued expansion of DermaVital continuity line;
demonstrating 19% revenue growth
- Elastin-rp launch
- Coral Actives exclusive licensing agreement
- Hiring Richard King, a seasoned retail director
- Derma Brilliance positive data from completed clinical
study
- Current working capital ratio remains at or above 2X
- Increased cash balance to $1.7 million, from $1.4 million at
the end of 2013
Kelvin Claney, Chairman and Chief Executive Officer, stated,
"Our optimism for the remainder of 2014 and into 2015 goes beyond
our existing portfolio of branded health and beauty products. Our
recent success has spawned numerous introductions and inquiries
from inventors and product people in the health and beauty sector.
Our pipeline for new products is greater and of higher quality than
at any other time in our corporate history. Both our current
portfolio of products and our pipeline of opportunities have a nice
mix of device with 'razor + razor blade' models and recurring
revenue continuity models. We do expect to continue to invest in
such for future growth as we believe that is the best way to reward
shareholders. We will continue to do so in a conservative and
cautious manner. While we expect to hit many singles and doubles,
we are optimistic another homerun, such as DermaWand, is within our
current portfolio."
Revenues for the first quarter ended March 31, 2014 were $9.8
million, compared to $12.4 million for the first quarter of 2013.
Approximately 10% of revenue was generated internationally, not
including Canada, which is sold directly and accounted for under
domestic revenue. Gross profit margin of 73.7 percent was realized
in the first quarter 2014, up from 71.7 percent. Operating loss for
the first quarter was $0.5 million, compared to an operating profit
of $1.5 million in the first quarter of 2013. Of note, the
operating loss for the first quarter 2014 included non-cash
expenses and incremental investment (research and development and
new production) of approximately $436,000, which were immaterial in
the first quarter of 2013. These first quarter 2014 expenses were
comprised of stock based compensation expense of approximately
$200,000, product development and clinical testing expenditures of
approximately $144,000, and new production expenses of $92,000.
Net loss for the first quarter was $0.5 million, compared to a
net profit of $1.2 million in the first quarter of 2013. The
resulting EPS is ($0.02), as compared to $0.05 in the comparable
quarter a year earlier. Adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA) was approximately
($304,000).
DermaVital, our continuity line of creams and lotions, designed
to enhance the DermaWand user results, has continued to ramp as
expected, demonstrating 19% growth year-over-year to contribute
revenue of approximately $1.2 million. During the first quarter we
also launched DermaWand DRTV in Canada, launched elastin-rp, a
branded system of cosmetic formulations and acquired the exclusive
worldwide rights to Coral Actives, a line of acne treatment and
skin cleansing products.
Elastin-rp, a branded system of cosmetic formulations designed
to help improve the elasticity of the skin, thereby diminishing the
appearance of fine lines and wrinkles, initially launched in
January 2014. In clinical studies, elastin-rp has proven to
increase skin elasticity by 50%, helping to repair, rejuvenate,
restore and naturally fill-in for flawless skin. After spending
approximately $40,000 in media testing on our initial re-edited
elastin-rp infomercial between mid-January and early March, we
completed our second edited version of the elastin infomercial,
including a 5 minute short-form version.
As of March 31, 2014, the Company had $1.7 million in cash,
compared to $1.4 million at December 31, 2013, and reflects
continued investment in expenditures on new product acquisition and
development. Our current working capital ratio remains at or above
2X, which demonstrates our solid short-term liquidity. We have also
reached a positive shareholders' equity of approximately $2.1
million, up from a negative $400,000 at year end 2012. The note
payable to shareholder was reduced by $200,000 in the first quarter
to a balance of $194,000, and subsequently further reduced to
$174,000. We generated positive cash flows from operations of
approximately $225,000 in the three months ended March 31,
2014.
Richard Ransom, President, stated, "I am extremely pleased about
the progress we have made in proving ourselves with a single
product, in DermaWand, and a single marketing/distribution channel
of DRTV to expanding to a portfolio of products and multiple
marketing/distribution channels in DRTV, Internet/digital,
e-commerce, live television shopping and retail. Our soon-to-be new
corporate identity of ICTV Brands is targeting continued growth in
2014 and a goal of becoming a $100mm+ revenue company in the next
2-3 years."
Conference Call
ICTV will hold a conference call to discuss the Company's first
quarter 2014 results and answer questions today, May 13, 2014,
beginning at 4:30pm EDT. The call will be open to the public and
will have a corporate update presented by ICTV's Chairman and Chief
Executive Officer, Kelvin Claney, President, Richard Ransom and
Chief Financial Officer, Ryan LeBon, followed by a question and
answer period.
The live conference call can be accessed by dialing (866) 952-1908 or
(785) 424-1827.
Participants should ask for the International Commercial Television
Earnings Conference Call. Participants are recommended to dial-in
approximately 10 minutes prior to the start of the event. A replay
of the call will be available approximately two hours after
completion through May 27, 2014. To listen to the replay, dial
(800) 839-3735
(domestic) or (402) 220-2977
(international). The conference call transcript will be posted to
the Company's corporate website (http://www.ictvonline.com) for
those who are unable to attend the live call.
About International
Commercial Television, Inc. International Commercial
Television, Inc. sells various health, wellness and beauty products
through infomercials and other channels primarily in the United
States. ICTV utilizes a distinctive marketing strategy and
multi-channel distribution model to develop, market and sell
products through infomercials, live home shopping television,
specialty outlets and online shopping. It offers health and beauty
products, including DermaWand, a skin care device that reduces the
appearance of fine lines and wrinkles, and helps improves skin tone
and texture; and DermaVitál, a professional quality skin care range
that effects superior hydration. International Commercial
Television Inc. was founded in 1993 and headquartered in Wayne,
Pennsylvania.
Non-GAAP Financial
Information Adjusted EBITDA is defined as income from
continuing operations before depreciation, amortization, interest
expense, interest income, and stock-based compensation. Adjusted
EBITDA is not intended to replace operating income, net income,
cash flow or other measures of financial performance reported in
accordance with generally accepted accounting principles. Rather,
Adjusted EBITDA is an important measure used by management to
assess the operating performance of the Company. Adjusted EBITDA as
defined here may not be comparable to similarly titled measures
reported by other companies due to differences in accounting
policies.
Forward-Looking
Statements The matters discussed in this press release may
contain "forward-looking statements" (as defined in the Private
Securities Litigation Reform Act of 1995). The Company intends that
the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, apply to forward-looking statements made
by ICTV. Undue reliance should not be placed on forward-looking
statements as they may involve risks and uncertainties. The actual
results that ICTV achieves may differ materially from any
forward-looking statements due to such risks and uncertainties.
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INTERNATIONAL COMMERCIAL TELEVISION INC. AND
SUBSIDIARY |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
|
AS OF |
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|
|
|
March 31, |
|
|
December 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
(Unaudited) |
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|
|
ASSETS |
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,721,716 |
|
|
$ |
1,370,178 |
|
Cash held in escrow |
|
|
28,171 |
|
|
|
62,924 |
|
Accounts receivable, net of doubtful account reserves
of $482,248 and $446,307, respectively |
|
|
|
|
|
|
|
|
|
1,074,168 |
|
|
|
791,292 |
|
Inventories, net |
|
|
1,915,805 |
|
|
|
1,778,073 |
|
Prepaid expenses and other current assets |
|
|
708,816 |
|
|
|
733,427 |
|
Total current assets |
|
|
5,448,676 |
|
|
|
4,735,894 |
|
|
|
|
|
|
|
|
|
|
Furniture and equipment |
|
|
60,007 |
|
|
|
81,507 |
|
Less accumulated depreciation |
|
|
(37,033 |
) |
|
|
(66,712 |
) |
Furniture and equipment, net |
|
|
22,974 |
|
|
|
14,795 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
12,132 |
|
|
|
21,297 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
5,483,782 |
|
|
$ |
4,771,986 |
|
|
|
|
|
|
|
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LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
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CURRENT LIABILITIES: |
|
|
|
|
|
|
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|
Accounts payable and accrued liabilities |
|
$ |
2,377,820 |
|
|
$ |
1,391,342 |
|
Severance payable - short-term |
|
|
40,800 |
|
|
|
40,800 |
|
Deferred revenue - short-term |
|
|
297,613 |
|
|
|
242,827 |
|
Tax penalties payable |
|
|
- |
|
|
|
190,000 |
|
Total current liabilities |
|
|
2,716,233 |
|
|
|
1,864,969 |
|
|
|
|
|
|
|
|
|
|
Severance payable - long-term |
|
|
36,800 |
|
|
|
47,000 |
|
Deferred revenue - long-term |
|
|
464,138 |
|
|
|
386,821 |
|
Convertible note payable to shareholder - long-term |
|
|
193,723 |
|
|
|
393,723 |
|
Total long-term liabilities |
|
|
694,661 |
|
|
|
827,544 |
|
|
|
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS' EQUITY: |
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|
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|
Preferred stock 20,000,000 shares authorized, no shares issued and
outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value, 100,000,000 shares
authorized, 23,163,316 and 21,826,650 shares issued and
outstanding as of March 31, 2014 and December 31, 2013,
respectively |
|
|
12,952 |
|
|
|
11,616 |
|
Additional paid-in-capital |
|
|
8,183,497 |
|
|
|
7,676,177 |
|
Accumulated deficit |
|
|
(6,123,561 |
) |
|
|
(5,608,320 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
2,072,888 |
|
|
|
2,079,473 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
|
$ |
5,483,782 |
|
|
$ |
4,771,986 |
|
|
|
|
|
|
|
|
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|
See notes to condensed consolidated financial
statements. |
|
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INTERNATIONAL COMMERCIAL TELEVISION INC. AND
SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 |
|
(Unaudited) |
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
9,822,500 |
|
|
$ |
12,400,233 |
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
2,579,632 |
|
|
|
3,506,857 |
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
7,242,868 |
|
|
|
8,893,376 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
1,948,306 |
|
|
|
1,893,339 |
|
|
Selling and marketing |
|
|
5,799,848 |
|
|
|
5,468,993 |
|
|
|
Total operating expenses |
|
|
7,748,154 |
|
|
|
7,362,332 |
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME (LOSS) |
|
|
(505,286 |
) |
|
|
1,531,044 |
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE, NET |
|
|
(3,370 |
) |
|
|
(6,705 |
) |
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX |
|
|
(508,656 |
) |
|
|
1,524,339 |
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME TAXES |
|
|
(6,585 |
) |
|
|
(355,780 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(515,241 |
) |
|
$ |
1,168,559 |
|
|
|
|
|
|
|
|
|
|
BASIC NET INCOME (LOSS) PER SHARE |
|
$ |
(0.02 |
) |
|
$ |
0.06 |
|
DILUTED NET INCOME (LOSS) PER SHARE |
|
$ |
(0.02 |
) |
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
|
|
|
|
|
|
|
|
BASIC |
|
|
22,555,242 |
|
|
|
21,011,274 |
|
DILUTED |
|
|
22,555,242 |
|
|
|
22,713,762 |
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial
statements. |
|
|
|
|
|
|
|
|
|
|
|
|
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|
INTERNATIONAL COMMERCIAL TELEVISION INC. AND
SUBSIDIARY |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR
THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(515,241 |
) |
|
$ |
1,168,559 |
|
|
Adjustments to reconcile net income (loss) to net cash
and cash equivalents provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
1,249 |
|
|
|
3,634 |
|
|
|
Bad debt expense |
|
|
631,275 |
|
|
|
963,441 |
|
|
|
Share based compensation |
|
|
199,777 |
|
|
|
(20,125 |
) |
|
|
Reduction in tax penalties payable |
|
|
(85,933 |
) |
|
|
- |
|
|
Change in assets and liabilities |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(914,151 |
) |
|
|
(1,385,565 |
) |
|
|
Inventories |
|
|
(137,732 |
) |
|
|
(154,540 |
) |
|
|
Prepaid expenses and other assets |
|
|
41,792 |
|
|
|
36,529 |
|
|
|
Accounts payable and accrued liabilities |
|
|
986,478 |
|
|
|
(1,106,218 |
) |
|
|
Severance payable |
|
|
(10,200 |
) |
|
|
(10,200 |
) |
|
|
Tax provision payable |
|
|
- |
|
|
|
307,655 |
|
|
|
Tax penalties payable |
|
|
(104,067 |
) |
|
|
- |
|
|
|
Deferred revenue |
|
|
132,103 |
|
|
|
93,174 |
|
|
|
|
Net cash provided by (used in) operating activities |
|
|
225,350 |
|
|
|
(103,656 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Purchase of fixed assets |
|
|
(9,428 |
) |
|
|
(4,000 |
) |
|
|
Net cash used in investing activities |
|
|
(9,428 |
) |
|
|
(4,000 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of options |
|
|
46,280 |
|
|
|
96,200 |
|
|
Proceeds from exercise of warrants |
|
|
129,583 |
|
|
|
- |
|
|
Payments on note payable |
|
|
- |
|
|
|
(30,169 |
) |
|
Payments on convertible note payable to
shareholder |
|
|
(75,000 |
) |
|
|
(55,000 |
) |
|
|
Net cash provided by financing activities |
|
|
100,863 |
|
|
|
11,031 |
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS |
|
|
316,785 |
|
|
|
(96,625 |
) |
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, beginning of the period |
|
|
1,433,102 |
|
|
|
908,366 |
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of the period |
|
$ |
1,749,887 |
|
|
$ |
811,741 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Taxes paid |
|
$ |
6,585 |
|
|
$ |
- |
|
|
Tax penalties and interest paid |
|
$ |
104,067 |
|
|
$ |
- |
|
|
Interest paid |
|
$ |
3,759 |
|
|
$ |
6,839 |
|
|
Write off of fully depreciated assets |
|
$ |
30,928 |
|
|
$ |
- |
|
|
Conversion of shareholder note payable |
|
$ |
125,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
See notes to condensed consolidated financial
statements. |
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|
Contact
Information International Commercial Television, Inc. Rich
Ransom Email Contact 484-598-2313 Hayden
IR Email Contact 917-658-7878