TIDMPPIX
RNS Number : 5261Y
ProPhotonix Limited
10 September 2020
September 10, 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
ProPhotonix Limited
("ProPhotonix" or "the Company")
INTERIM RESULTS FOR THE HALF YEARED JUNE 30, 2020
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
interim results for the six months ended June 30, 2020.
Financial Highlights
-- Revenue decreased 3.7% to $6.9 million (H1-2019: $7.2 million)
-- Gross profit increased 21.7% to $3.3 million (H1-2019: $2.7 million)
-- Operating income (excluding stock compensation expense of
$50,000) of $0.3 million (H1-2019: $0.6 million operating loss,
excluding stock compensation credit $0.5 million).
-- Net income of $0.3 million (H1-2019: $0.2 million net loss)
-- Adjusted EBITDA of $0.4 million (H1-2019: $0.5 million loss).
-- Order bookings of $6.8 million (H1-2019: $7.5 million)
-- Book-to-Bill ratio of 0.99 (H1-2019: 1.04)
-- Percentage revenue by market sectors: 84% industrial, 15%
medical and 1% security & defense (H1-2019: 73% industrial, 23%
medical and 4% security & defense)
-- Percentage revenue by geography: 41% Europe, 53% North
America and 6% Rest of World (H1-2019: 40% Europe, 58% North
America and 2% Rest of World)
Tim Losik, President & CEO, commented:
Financial
"Revenues in the first half of 2020 decreased 3.7% over the same
period 2019 primarily due to a decrease of $0.8 million in LED
product sales offset by a net increase in Laser and Diode product
sales of $0.5 million . Gross profit margin improved to 47.1%
compared with 37.2% for the same period in 2019, mainly due to a
shift in product mix and the absorption of manufacturing overhead
into inventory. In the first half of 2020 we experienced an
operating profit of $0.3 million compared to operating loss of $0.1
million in 2019. The operating profit for first half of 2020 was
primarily a result of higher profit margins and cost reduction
measures put in place to lower the cost structure in response to
the Director's concern over the potential negative economic impact
associated with COVID-19. Excluding the stock option
expense/benefit, operating income in the first half 2020 was $0.3
million as compared to an operating loss of $0.6 million in 2019.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation and impairment charges) was
a profit of $0.4 million, as compared to a loss of $0.5 million in
the first half of 2019.
The cash position of the Company improved to $1.9 million as
compared to $1.5 million at year end, due to increased operating
profits, strict working capital management, and various Covid-19
related State aid. The debt position of the Company improved
substantially in the first half of 2020 as it repaid the $0.9
million revolving credit facility in full. As of June 30, 2020, the
Company held a net cash position of $1.3 million versus a net debt
position as of December 31, 2019 of $0.1 million."
Trading update
Given the inherent uncertainties surrounding COVID-19, the Board
continues to believe it is inappropriate to provide forward looking
guidance to investors and analysts at the current time.
Enquiries:
ProPhotonix Limited Tel: +1 603 893 8778
Tim Losik, President & CEO ir@prophotonix.com
WH Ireland Limited
Katy Mitchell Nominated Adviser and Broker
Matthew Chan Tel: +44 (0) 20 7220 1666
Half Year 2020 Financial Results
Revenue for the half year ended June 30, 2020 was $6.9 million,
a decrease of 3.7% compared with $7.2 million in the same period of
2019 primarily due to a net decrease in LED product sales offset by
a net increase in Laser and Diode product sales.
Gross profit was $3.2 million, an increase of 21.8% compared to
$2.7 million in the first half of 2019. Gross profit margin
improved to 47.1% compared with 37.2% for the same period in 2019,
mainly due to a shift in product mix and absorption of
manufacturing overhead expenses into inventory.
Operating expenses totaled $3.0 million versus $2.8 million for
the comparable period in 2019; inclusive a benefit in 2019 of $0.5
million for stock compensation. Selling, general and administrative
expenses increased $0.2 million to $2.4 million primarily due to
increased stock compensation as there was a stock compensation
credit of $0.5 million in 2019 that was not repeated in 2020.
Research and development expenses remained relatively flat compared
with the prior year at $0.5 million compared to $0.6 million in
2019.
The improved gross profit resulted in an operating profit of
$0.3 million ($0.3 million profit excluding stock compensation
expense), compared with an operating loss of $0.1 million in the
first half of 2019 ($0.6 million loss excluding stock compensation
credit).
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation and impairment charges) was
a profit of $0.4 million, as compared to a loss of $0.5 million in
the first half of 2019.
Net income was $0.3 million, as compared to a $0.1 million net
loss in the first half 2019.
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF Income AND COMPREHENSIVE
INCOME
$ In thousands except share and per share data
(unaudited)
Six Months Ended
June 30,
2020 2019
Revenue $ 6,902 $ 7,165
Cost of revenue (3,654) (4,497)
Gross profit 3,248 2,668
Selling, general and administrative expenses (2,430) (2,192)
Research and development expenses (544) (603)
Operating income (loss) 274 (127)
Other income (expense), net 31 (16)
Interest expense (33) (55)
Warrant and debt acquisition expense (6) (8)
Income (loss) before income tax 266 (206)
Income tax - -
Net income (loss) 266 (206)
Other comprehensive income:
Foreign currency translation (26) 73
Total comprehensive income (loss) $ 240 $ (133)
Net income (loss) per share:
Basic net income (loss) per share $ 0.003 $ (0.002)
Diluted net income (loss) per share $ 0.003 $ (0.002)
Shares used in per share calculation - basic 93,150,402 93,075,402
Shares used in per share calculation - diluted 93,150,402 93,075,402
PROPHOTONIX LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
$ In thousands except share data
(unaudited)
For the six months ended June 30, 2020 and 2019 2020 2019
Assets
Current assets:
Cash and cash equivalents $ 1,937 $ 1,615
Accounts receivable, less allowances of $10 in 2020 and $53
in 2019 1,680 3,120
Inventories, less allowances of $782 in 2020 and $716 in
2019 2,738 2,953
Prepaid expenses and other current assets 603 383
Total current assets 6,958 8,071
Net property, plant and equipment 528 597
Operating lease right-of-use asset 236 -
Deferred tax assets - 451
Goodwill 397 402
Intangible assets, net 397 346
Other long-term assets 116 81
Total assets $ 8,632 $ 9,948
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ - $ 1,107
Current portion of long-term debt 158 197
Accounts payable 1,605 2,151
Accrued payroll, benefits and incentive compensation 301 354
Deferred revenue 690 283
Accrued warranty expenses 156 168
Operating lease liabilities, current 111 -
Other accrued expenses 617 1,125
Current portion of finance lease obligations 55 57
Total current liabilities 3,693 5,442
Deferred revenue, noncurrent 145 284
Operating lease liabilities, noncurrent 124 -
Long term debt obligations, net of current portion 364 478
Long term finance lease obligations, net of current portion 26 69
Total liabilities 4,352 6,273
Stockholders' Equity:
Common stock, par value $0.001; shares authorized
250,000,000 at June 30, 2019 and June 30,
2018; 93,150,402 shares issued and outstanding at June 30,
2019 and 93,150,402 shares issued
and outstanding at June 30, 2018 93 93
Additional paid-in capital 112,885 113,584
Deferred compensation - (5)
Accumulated deficit (109,484) (110,952)
Accumulated other comprehensive income 786 955
Total stockholders' equity 4,280 3,675
Total liabilities and stockholders' equity $ 8,632 $ 9,948
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
$ In thousands
(unaudited)
Six Months Ended
June 30,
2020 2019
Operations
Net income (loss) $ 266 $ (206)
Adjustments to reconcile net loss to net cash used in operating
activities:
Stock based compensation 49 (469)
Depreciation and amortization 113 103
Foreign exchange (gain)/loss (31) 13
Amortization of debt discount and financing costs 6 8
Provision for inventories 55 103
Provision for bad debts (7) 5
Other change in assets and liabilities:
Accounts receivable 989 (270)
Inventories (277) (672)
Deferred Revenue 54 -
Prepaid expenses and other current assets 48 (96)
Operating lease right-of-use asset 75
Accounts payable (252) 371
Accrued expenses 419 887
Other assets and liabilities 26 (17)
Net cash used in operating activities 1,533 (240)
Financing
Exercise of options and warrants - -
Net borrowing (repayment) of revolving credit facility (874) 17
Capital lease (16) (30)
Net borrowing (principal repayment) of long-term debt (85) (120)
Net cash (used in) provided by financing activities (975) (133)
Investing
Purchase of plant and equipment (59) (94)
Net cash used in investing activities (59) (94)
Effect of exchange rate on cash (39) 143
Net change in cash and equivalents 460 (324)
Cash and equivalents, beginning of period 1,477 1,939
Cash and equivalents, end of period $ 1,937 $ 1,615
Supplemental disclosure of cash flow information:
Cash paid for interest $ 33 $ 56
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
In thousands
(unaudited)
Common Stock
-------------------
Accumulated
Other Total
Paid in Deferred Accumulated Comprehensive Stockholders'
Shares Par $0.001 Capital Compensation Deficit Income Equity
------- ---------- --------------- ------------ ----------- ------------- -------------
Balance
December
31, 2019 93,150 $93 $112,838 $(2) ($109,750) $813 $3,992
Net loss - - - - 266 - 266
Translation
adjustment - - - - - (26) (26)
Deferred
compensation - - (2) 2 - - -
Share based
compensation - - 48 - - - 48
Balance June
30, 2019 93,150 93 $112,884 $ - ($109,484) $787 $4,280
======= ========== =============== ============ =========== ============= =============
Notes to unaudited Interim Results
Basis of Presentation
The Company financial reports are issued under the recognition
and measurement principles of United States Generally Accepted
Accounting Principles (GAAP). The accompanying unaudited condensed
consolidated financial reports reflect all adjustments of a normal
recurring nature necessary for a fair statement of the (i) results
of operations and comprehensive loss for the six month periods
ended June 30, 2020 and 2019; (ii) the financial position at June
30, 2020 and June 30, 2019; and (iii) the cash flows for the six
month period ended June 30, 2020 and 2019. These unaudited interim
results are not necessarily indicative of results for a full year
or any other interim period. This announcement is available on the
Company's website 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
will 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, stock-based compensation and
impairment charges) as a non-GAAP financial measure in this press
release. A reconciliation of net income to adjusted EBITDA for the
six months ended June 30, 2020 and 2019 is as follows:
In thousands
Six Months Ended June
30,
2020 2019
------------------- ------------
Net income (loss) $266 $(206)
Plus (minus):
Interest and other (income) expense,
net 2 71
Amortization of debt discount and
financing costs 6 8
Depreciation and amortization 113 103
Stock based compensation 48 (469)
Adjusted EBITDA $435 $(493)
------------------- ------------
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, Osram, QSI, Panasonic, and Sony. The Company
serves a wide range of markets including the machine vision,
industrial inspection, ultra violet (UV) curing, 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 .
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