TIDMPPIX
RNS Number : 3311Z
ProPhotonix Limited
14 March 2017
March 14, 2017
ProPhotonix Limited
("ProPhotonix" or "the Company")
PRELIMINARY RESULTS FOR THE YEARED DECEMBER 31, 2016
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, 2016.
Annual General Meeting and Posting of Results
The Company will hold the Annual General Meeting of the
Shareholders on May 18, 2017 at 2:00 PM British Summer Time at the
offices of K&L Gates LLP, One New Change, London EC4M 9AF. Only
shareholders who hold shares at the close of business on the record
date of March 23, 2017 may vote at the Annual General Meeting. The
Company intends to publish the audited accounts for 2016 and post
them to the Company's web site on or about April 6, 2017.
Financial Highlights
-- Revenue increased 13% to $16.2 million (2015: $14.4 million)
-- Net Income increased 348% to $1.3 million (2015: $0.3 million)
-- EBITDA increased 49% to $1.8 million (2015: $1.2 million)
-- Operating profit increased 89% to $1.5 million (2015: $0.8 million)
-- Gross profit margin improved to 45.4% (2015: 41.4%)
-- Gross profit increased 24% to $7.4 million (2015: $6.0 million)
-- Order bookings of $16.7 million (2015: $15.7 million)
-- 1.03 Book-to-Bill ratio (2015: 1.09)
-- Percentage revenue by market sectors: industrial 82%, medical
14%, and homeland security & defense 4% (2015: industrial 79%,
medical 17%, and homeland security and defense 4%)
-- Percentage revenue by geography: 48% Europe,42% North America
and 10% Rest of World (2015: 47% Europe, 41% North America and 12%
Rest of World)
-- Term debt declined $1.1 million to $0.4 million at December 31, 2016
-- Available borrowing capacity of $0.4 million from its
revolving credit facility at December 31, 2016 (2015: $0.5
million)
Tim Losik, President & CEO, Commented:
"We continued our positive financial momentum from the prior
year and have now achieved seven consecutive half-yearly periods of
positive EBITDA, five consecutive half-yearly periods of positive
operating income, and a second year of net income. As compared to
2015, sales grew 13% to $16.2 million, operating income increased
89%, EBITDA increased 49%, and net income increased 348% as a
result of the improvement in operating income, reduced financing
costs and a contingent tax benefit. We also paid down $1.1 million
of term debt in accordance with the various loan provisions. In
addition, the ProPhotonix team continues to execute on its long
term strategies by successfully launching new products, which we
believe will help set the stage for 2017 and beyond."
Full Year 2016 Financial Results
Revenue increased by 13% during 2016 and the gross margin rate
improved to 45% resulting from a volume increase and better product
mix. Operating expenses totaled $5.9 million (2015: $5.2 million)
with sales and marketing expenses up 15% compared to last year at
$2.1 million, research and development expenses up $0.2 million,
approximately 25%, while general and administrative expenses
increased by approximately $0.3 million, 11% over 2015. The Company
achieved an operating profit of $1.5 million (2015: $0.8 million)
and EBITDA of $1.8 million (2015: $1.2 million). These factors
contributed to ProPhotonix's financial improvement and positive net
income of $1.3 million (2015: $0.3 million). The balance sheet also
continued to improve in 2016. Term debt declined by $1,100,000 to
$402,000 as at December 31, 2016.
During 2016, order bookings increased 6% to $16.7 million (2015:
$15.7 million), with the book-to-bill ratio at
1.03 (2015: 1.09). Our order book at December 31, 2016 was $5.6 million (2015: $5.6 million).
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. Furthermore, we announced the Company's
Cobra (TM) Cure FX2 and FX3 products, as well as our new Cobra (TM)
RGB LED line light. We signed a services agreement with a major
medical company in 2016, working to develop a lighting solution for
their application. In addition, we entered into an EU funded Fast
Track to Innovation program to partner with other participants,
including the end customer, in the development of a high power
digital laser for a railway industry inspection system. The grant
estimate is for up to EUR360,000 with completion of the entire
development project on June 1, 2018.
Building toward the future:
As noted in the Statement to the Shareholders in last year's
annual report, the Company's longer term strategy continues to be
one of strategic repositioning to include a market(s) directed
product portfolio complementing our robust OEM centered business.
During 2016, a substantial amount of R&D costs were incurred
relating to the development of Cobra Cure products and the
multispectral LED products. ProPhotonix has and will continue to
make such investments in fulfillment of our strategy. On December
6, 2016, ProPhotonix announced the expansion of its sales team to
increase our world-wide sales coverage; with expected further
expansion in 2017.
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.
We continue to focus on two promising opportunities,
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, bonding, 3D printing, bio-luminescence, medical
microscopy and other applications. As noted above, the Company
continued its progress in this area with the follow-on COBRA
Cure(TM) product releases. We plan to launch new higher power
products while continuously evolving our current product lines to
serve this market in 2017 and beyond.
Our remaining 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
printing, microscopy, industrial inspection and sorting, embedded
camera and sensor calibration, solar simulation and security
markets. As noted, the Company has introduced two new products
addressing this market (RGB and Multispec). We intend 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 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.
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 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
ProPhotonix begins 2017 with a strong order book, and is working
with several prospective customers utilizing the Cobra (TM) Cure FX
series of products for their specific applications. However, there
are many complexities and uncertainties which may adversely affect
ProPhotonix: economic slowdown, Brexit uncertainty and an ever
changing world-wide political landscape. Our management does not
dwell on these uncontrollable matters, but remains acutely aware of
the necessity for swift response and change if needed. With the
backdrop of uncertainty, we remain 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.com
PROPHOTONIX LIMITED
Condensed Consolidated Statements of Income and Comprehensive Income
($ in thousands except share and per share data)
Years Ended
December 31,
---------------------------------------
2016 2015
(Unaudited) (Audited)
----------------- -------------------
Revenue $ 16,245 $ 14,411
Cost of Revenue (8,862) (8,441)
----------------- -------------------
Gross Profit 7,383 5,970
----------------- -------------------
Research & Development Expenses (814) (654)
Selling, General & Administrative Expenses (5,077) (4,526)
Operating Income 1,492 790
Other Income, net 344 131
Foreign Currency Translation Losses (360) (259)
Warrant & Debt Acquisition Expense (88) (158)
Interest Expense (133) (224)
----------------- -------------------
Income Before Taxes 1,255 280
Income Taxes - -
----------------- -------------------
Net Income $ 1,255 $ 280
Other Comprehensive Income:
Foreign currency translation (19) 170
----------------- -------------------
Total Comprehensive Income $ 1,236 $ 450
================= ===================
Net Income Per Share:
Basic and diluted:
Basic net income per share $0.015 $0.003
Diluted net income per share $0.014 $0.003
----------------- -------------------
Shares used in per share calculations - Basic 83,665,402 83,665,402
----------------- -------------------
Shares used in per share calculations - Diluted 90,740,402 83,665,402
------------------------------------------------ ----------------- -------------------
FINANCIAL STATEMENTS
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands except share and per share data)
2016 2015
December 31 (Unaudited) (Audited)
Assets
Current assets:
Cash and cash equivalents $ 911 $ 434
Accounts receivable, less allowances of $30 in 2016 and
$21 in 2015 2,302 2,751
Inventories 2,155 1,550
Prepaid expenses and other current assets 298 140
Total current assets 5,666 4,875
Net property, plant and equipment 342 132
Goodwill 372 385
Other long-term assets 74 81
Total assets $ 6,454 $ 5,473
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ 1,049 $ 1,334
Current portion of long-term debt 402 966
Accounts payable 1,454 1,260
Accrued expenses 1,823 1,035
Current portion of capital lease 68 -
Total current liabilities 4,796 4,595
Long-term debt, net of current portion - 508
Long-term capital lease obligations, net of current
portion 52 -
Other long term liabilities - 178
Total liabilities 4,848 5,281
Stockholders' Equity:
Common stock, par value $0.001; shares authorized
250,000,000 at December 31, 2016 and at
December 31, 2015; 83,665,402 shares issued and
outstanding at December 31, 2016 and at December
31, 2015 84 84
Additional paid-in capital 112,038 111,860
Accumulated deficit (111,479 ) (112,734 )
Accumulated other comprehensive income 963 982
Total stockholders' equity 1,606 192
Total liabilities and stockholders' equity $ 6,454 $ 5,473
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
2016 2015
Years Ended December 31 (Unaudited) (Audited)
Cash flows from operating
activities
Net income $ 1,255 $ 280
Adjustments to reconcile net income
to net cash provided by operating
activities:
Stock-based compensation
expense 178 277
Depreciation and
amortization 75 101
Foreign exchange (gain) 74 (51)
Amortization of debt
discount and financing
costs 60 130
Provision for inventories 120 95
Provision for bad debts 9 4
Other changes in assets and
liabilities:
Accounts receivable 360 (362)
Inventories (809) (127)
Prepaid expenses and other
current assets (168) 22
Accounts payable 246 (58)
Accrued expenses 836 136
Other assets and liabilities 6 (47)
Net cash provided by operating
activities 2,242 400
Investing
Purchase of property, plant and
equipment (121 ) (77 )
Net cash used in investing
activities (121 ) (77 )
Financing
Borrowings of revolving credit
facilities, net (237) 312
Capital lease (66) -
Principal repayment of long-term
debt (1,100 ) (750 )
Net cash used in financing
activities (1,403) (438)
Effect of exchange rate on cash (241) 218
Net change in cash and equivalents 477 103
Cash and equivalents at beginning 434 331
of period
Cash and equivalents at end of
period $ 911 $ 434
Supplemental cash flow information:
Cash paid for interest $ 133 $ 224
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(in thousands)
Common Stock
Additional Accumulated Other Total
Par Paid in Accumulated Comprehensive Stockholders'
Shares $0.001 Capital Deficit Income Equity (Deficit)
Balance December 31, 2014
...................................... 83,665 $ 84 $ 111,583 $ (113,014) $ 812 $ (535)
Share based compensation, net of
forfeitures .................... - - 277 - - 277
Translation adjustment ..... - - - - 170 170
Net Income ....................... - - - 280 - 280
Balance December 31, 2015
...................................... 83,665 $ 84 $ 111,860 $ (112,734) $ 982 $ 192
Share based compensation, net of
forfeitures .................... - - 178 - - 178
Translation adjustment ..... - - - - (19) (19)
Net Income ....................... - - - 1,255 - 1,255
Balance December 31, 2016
...................................... 83,665 $ 84 $ 112,038 $ (111,479) $ 963 $ 1,606
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 2015 and 2016 or
the Company's annual audited accounts for 2016 to be published and
sent to its shareholders in accordance with Rule 19 of the AIM
Rules for Companies. The 2016 accounts included herein are
unaudited and therefore subject to change at the time the audited
accounts are issued. The 2016 unaudited preliminary financial
statements were prepared under US GAAP and were approved on March
13, 2017, by the Directors for issue on March 14, 2017. A copy of
this announcement is available on the Company's website at
www.prophotonix.com. It is intended that the Company's 2016 annual
report and audited accounts will be available to shareholders on or
about April 6, 2017.
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
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, and stock-based compensation) as a
non-GAAP financial measure in this press release. A reconciliation
of net income to EBITDA for the total year 2016 and 2015 is as
follows:
(in thousands)
Year Ended December 31,
2016 2015
------------- -----------
Net Income $ 1,255 $ 280
Plus:
Interest and other expense, net 237 510
Depreciation 75 101
Stock based compensation 178 277
EBITDA $ 1,745 $ 1,168
------------- -----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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