TIDMPPIX
RNS Number : 4040X
ProPhotonix Limited
10 August 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.
August 10, 2018
ProPhotonix Limited
("ProPhotonix" or the "Company")
Trading update and De-restriction of Restricted Stock Line
ProPhotonix Limited (London Stock Exchange - AIM: PPIX and 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 a trading update
for the six months ended June 30, 2018 (H1-2018) and pending move
of restricted shares (PPIR) to free-trading unrestricted shares
(STKR/PPIX).
Trading Update
Revenue for H1-2018 is expected to be approximately $8.8
million, an increase of 4% over the 2017 comparable figure
(H1-2017: $8.5 million). Increased revenue was generated from
higher sales to several major customers, although this was less
than internal Company expectations. These gains were partly offset
by a decrease in sales from one large customer that converted to an
alternate technology in the second quarter of 2017 (as previously
announced on July 14, 2017). Finally, the first half revenue was
impacted by delayed shipments of products valued at approximately
$0.5 million that had been expected to be recognized in H1-2018 but
will instead be recognized in H2-2018.
A competitive market environment, revenue mix and higher
component costs have contributed to gross profit margins declining
to approximately 39% in H1-2018 (H1-2017: 44%). Higher SG&A
expenses, mainly in respect of stock based compensation expense,
have adversely impacted the operating and net income for H1-2018 as
compared to H1-2017. Operating loss (unaudited) for H1-2018 is
expected to be approximately $0.5million (H1-2017: $0.6 million
profit).
Earnings before interest, taxes, depreciation, amortization, and
stock-based compensation (adjusted EBITDA) for H1-2018 are expected
to be approximately $0.2 million (unaudited), compared to $0.7
million in H1-2017 due to the matters set out above.
Outlook
The order book as of June 30, 2018 is $7.3 million (2017: $6.0
million) and was $7.3 million as of December 31, 2017. The Board
currently expects full year 2018 revenue of approximately $19.0
million, gross profit margin at approximately 41%, adjusted EBITDA
of between $1.25 and $1.50 million, and net income of
break-even.
The Company's unaudited interim results for the six months to
June 30, 2018 will be released in early September 2018.
De-restriction of Restricted Stock Line
As a company domiciled in the US, ProPhotonix is subject to the
Securities Act of 1933, the Securities Exchange Act of 1934 and the
jurisdiction and rules of the US Securities Exchange Commission
("SEC"). Among those rules is Regulation S which requires the
Company, as a US issuer, to issue shares that bear restrictive
legends for a 12 month period. The 22,042,143 ProPhotonix
restricted common shares of $0.001 each trade under the ISIN
USU743121142 and with the ticker AIM:PPIR ("Restricted
Shares").
The Restricted Shares which were issued to trading on AIM on
August 21, 2017 are eligible for transfer on September 1, 2018 to
the unrestricted line (ISIN: US7434651060, tickers OTC:STKR and
AIM:PPIX). Shareholders who wish to transfer their Restricted
Shares should contact the Company or Computershare for further
instructions.
Tim Losik, CEO, Commented:
"We remain very optimistic about 2019 and beyond. Whilst revenue
recognized has been slower than expected in this first half of
2018, our opportunity pipeline for laser and LED OEM products and
UV LED product sales is stronger than at any time. Also, during the
first half of 2018 we secured our sixth development project with a
Fortune 50 original equipment manufacturer ("OEM"), and signed a
large engineering design project, valued in excess of $0.4 million,
which will be delivered between Q4 2018 and Q2 2019, with
production expected thereafter. We continue to invest in production
capacity and technical capability as we take on additional new
customers and OEM products. These investments will occur in advance
of realized revenue to complete the production build out necessary
for the UV LED products."
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President and CEO ir@prophotonix.com
Cantor Fitzgerald Europe Tel: +44 (0)207 894 7000
(Nominated Adviser and Broker)
Richard Salmond
David Foreman
About ProPhotonix
ProPhotonix Limited, headquartered in Salem, New Hampshire, is a
high technology designer and manufacturer of LED illumination
systems and laser diode modules for industry leading OEMs and
medical equipment companies. In addition, the Company distributes
premium diodes for Ushio, 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.
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.
######
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END
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