RICHMOND, BC,
Nov. 9, 2017 /CNW/ - Photon
Control Inc. ("Photon Control" or the "Company") (TSX-V: PHO), a
leading developer and supplier of optical measurement technologies
to the global semiconductor industry, has reported its financial
results for the three and nine month periods ended September 30, 2017.
Third Quarter and Year-to-Date 2017
Highlights
- Third quarter 2017 revenue of $12.0 million increased 38% versus the prior year
quarter and year-to-date revenue of $32.8
million increased 42% versus the prior year;
- Achieved customer certification and successful completion
of the Company's relocation to its newly designed manufacturing
facility; and,
- Appointed Michele Klein,
an accomplished executive, investor and governance expert, to the
Board of Directors.
"We achieved record revenues for the quarter as a result
of continuing strong industry growth and customer demand,"
said Scott
Edmonds, Chief Executive Officer. "These record
results drove strong cash flow in the quarter. As we look to the
fourth quarter, our operations are running efficiently and we
believe we are well positioned to meet the demand from our
backlog which is also at an all-time high."
Third Quarter and Year-To-Date 2017 Financial
Results
Total revenue for the third quarter of 2017 increased 38%
from $8.7 million to a record
$12.0 million, and year-to-date 2017
revenue increased 42% from $23.2
million to $32.8 million
versus the prior year. The increase in revenue was primarily due to
strong overall market conditions in the semiconductor industry and
increased share of our customers' spend on fiber optic
sensors.
Gross profit in 2017 reflects the benefits of the stronger
revenue. Third quarter 2017 gross profit increased 43% to
$6.6 million versus the prior year
quarter and 2017 year-to-date gross profit increased 54% to
$18.3 million versus the prior year
period. Gross profit margin increased to 54.5% and 55.9% for the
three and nine months ended September 30,
2017, which reflects the change in accounting for the
royalties paid to the former R&D.
Operating expenses of $2.9
million and $11.9 million for
the three and nine months ended September
30, 2017 include significant one-time charges of
$0.2 million and $4.5 million respectively, primarily from three
distinct activities. Non-capital expenditures related to the
Company's relocation to its new manufacturing facility totaled
$0.2 million for the quarter and
$0.6 million year-to-date; Corporate
Changes related to changes to the Board of Directors, CEO and
leadership team, including certain litigation costs, totaled $Nil
for the quarter and $2.9 million
year-to-date; and charges related to the acquisition of certain
assets of Photon R&D and settlement of all disputes with the
former Photon R&D and its principals totaled $Nil for the
quarter, and $1.0 million
year-to-date. Net of non-cash charges and these one-time items,
operating expenses were $2.3 million
and $6.4 million compared to
$1.3 million and $3.2 million in the same year-ago period, with
the run rate increase reflecting investments made to enhance the
Company's ability to service its existing revenues and to benefit
from future growth opportunities.
Net income before taxes for the quarter was $2.4 million compared to $2.9 million for the comparable period of 2016
while for the first nine months of 2017, net income before taxes
was $4.3 million versus $7.0 million for same year-ago period.
The table below reconciles the net income to adjusted
earnings before interest, taxes, depreciation and amortization,
foreign exchange and non-recurring items ("Adjusted
EBITDA"):
|
|
|
|
|
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
|
2017
|
2016
|
2017
|
2016
|
Net income for the
period
|
$
|
1,672
|
$
|
2,181
|
$
|
3,039
|
$
|
5,165
|
Add
(deduct)
|
|
|
|
|
|
Finance
income
|
(73)
|
(71)
|
(141)
|
(113)
|
|
Income tax
expense
|
700
|
766
|
1,302
|
1,813
|
|
Depreciation of
property and equipment
|
263
|
40
|
490
|
111
|
|
Amortization of
intangible assets
|
12
|
15
|
28
|
41
|
|
Foreign exchange loss
(gain)
|
1,264
|
(167)
|
2,182
|
584
|
|
Relocation
costs
|
160
|
-
|
571
|
-
|
|
Corporate
Changes
|
-
|
-
|
2,953
|
384
|
|
Photon R&D
settlement
|
-
|
390
|
951
|
390
|
Adjusted EBITDA(1) for the period
|
$
|
3,998
|
$
|
3,154
|
$
|
11,375
|
$
|
8,375
|
Net income and total comprehensive income was $1.7 million or $0.01 per diluted share and $3.0 million or $0.03 per diluted share for the three and nine
months ended September 30, 2017
compared to $2.2 million or
$0.02 per diluted share and
$5.2 million or $0.05 per diluted share in the prior comparable
period.
As at September 30, 2017,
cash totaled $27.0 million versus
$25.1 million at June 30, 2017 and $32.5
million at December 31, 2016.
Although cash decreased from December 31,
2016 due to capital expenditures for the new manufacturing
facility, costs incurred on non-recurring operating expenses and
the acquisition of Photon R&D; the Company generated
$1.9 million in cash for the three
months ended September 30, 2017 as a
result of its strong revenue performance and impact of improved
quality and efficiencies.
Order backlog (defined as the value of sales orders
scheduled to be shipped in the upcoming 12-month period) at
quarter-end increased to $12.6
million from $11.9 million at
June 30, 2017 and $8.8 million at December
31, 2016.
Stock Option and Restricted Share Unit Grants to
Directors and Employees
The Company announces
that it has approved a grant of Stock Options and Restricted Share
Units in the ordinary course to certain directors and employees,
under its Stock Option and Restricted Share Unit Plans to purchase
an aggregate of 282,000 common shares of the Company. The exercise
price of the options granted will be set at the closing price per
share on November 13, 2017. The stock
options and restricted share units are subject to the terms of the
Company's Stock Option and Restricted Share Unit Plans and any
necessary regulatory approvals.
Conference Call
Photon Control will
hold a conference call today (Thursday,
November 9, 2017) at 11:00 a.m.
Eastern time (8:00 a.m. Pacific
time) to discuss these results. The call will be hosted by
Scott Edmonds, Chief Executive
Officer and Daniel Lee, Chief
Financial Officer, followed by a question and answer
period.
Please call the conference telephone number 10 minutes
prior to the start time. An operator will register your name and
organization.
Toll-Free Number:
1-877-407-9716
International Number:
1-201-493-6779
The conference call will be broadcast simultaneously and
available for replay here.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release should be read in conjunction with the
Company's condensed interim consolidated financial statements and
related notes, and management's discussion and analysis for the
three and nine months ending September 30,
2017, copies of which can be found at
www.sedar.com.
About Photon Control Inc.
Photon
Control Inc. designs, manufactures and distributes a wide range of
optical sensors and instruments to measure temperature, position,
and flow. These products are used by global Original Equipment
Manufacturers (OEM) and end users in the semiconductor and other
industries. Photon Control Inc.'s high quality products provide
industry leading accuracy and reliability in extreme conditions and
are backed by a team of experts providing a variety of on-site and
remote services including custom design, installation, training and
support. Headquartered in an ISO 9001:2008 manufacturing facility
in Richmond, BC, Photon Control
Inc. is listed on the TSX Venture Exchange, trading under the
symbol ''PHO." Additional information about the company can be
found at
www.photon-control.com/investors.html.
Forward-Looking
Statements
This news release contains
"forward-looking statements" within the meaning of applicable
Canadian securities legislation. These statements generally can be
identified by use of forward looking words such as "may", "will",
"expect", "estimate", "anticipate", "intend", "consider", "believe"
or "continue" or the negative thereof or similar variations. Such
forward-looking statements concern the business and anticipated
financial performance of the Company and include, without
limitation, the Company's expectations with respect to the overall
order activity for the balance of the year and the Company's
ability to build on its financial and operational foundation in the
future.
These forward-looking statements are based on certain
factors and assumptions, including, without limitation: the
Company's ability to successfully complete new purchase orders
along the timelines expected; continued and future demand for the
Company's products; continued sales to the Company's major
customers; the continued financial health of the semiconductor
industry; and the Company's ability to continue and further enhance
revenue diversification and open new market
opportunities.
Forward-looking statements are subject to a variety of
known and unknown risks, uncertainties and other factors which
could cause actual events or results to differ from those expressed
or implied by the forward-looking statements, including, without
limitation: additional measures and controls may not be implemented
as expected or along the timelines anticipated; uncertainties
relating to the market for the Company's products and maintaining a
stable level of orders; fluctuations in revenue as a result of
volatility in the markets and product mix; risks relating to the
Company's present reliance on its major customers for the majority
of its sales; risks relating to the Company's reliance on the
financial health of the semiconductor industry; risks relating to
the development of competing technologies and the possibility of
increased competition; the effect of slow growth in the United States, the Company's principal
market, as well as other economies and other economic trends and
conditions in the markets that the Company and its customers serve;
risks associated with technical difficulties or delays in product
introductions, improvements, implementation; uncertainties in
product pricing or other initiatives of the Company and its
competitors; uncertainties in factors that may result in a
reduction in capital expenditures and/or delayed buying decisions
affecting demand for the Company's products; risks relating to
currency fluctuations, particularly between the Canadian and
United States dollars; and risks
in pursuing additional development projects to support existing
customers or pursue other business opportunities.
The foregoing assumptions, risks and uncertainties are
not exhaustive of the items that may affect our forward-looking
statements. Should underlying assumptions prove to be incorrect or
one or more of these risks and uncertainties materialize, actual
results may vary materially from those described in the
forward-looking statements. The Company's forward-looking
statements are based on beliefs, expectations and opinions of
management on the date the statements are made. For the reasons set
forth above, readers should not place undue reliance on
forward-looking statements. The Company undertakes no obligation to
update or revise any forward-looking statements included herein if
these beliefs, estimates and opinions or other circumstances should
change, except as otherwise required by applicable
law.
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Photon Control Inc.