/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
MISSISSAUGA, ON, May 25, 2018 /CNW/ - Pioneering Technology
Corp. (TSXV: PTE), ("Pioneering" or the
"Company"), a technology company and North America's leader in cooking fire
prevention technology and products reports today its unaudited
financial results for the second quarter and the six months ended
March 31, 2018. Pioneering's
unaudited condensed interim financial statements and MD&A are
available on SEDAR (www.sedar.com).
Financial Highlights:
- Revenue in Q2 was down 40% vs. previous year and is down 33%
year to date vs. same period year ago.
- Net loss in Q2 was ($681,587) vs.
($45,366) during the same quarter
year ago
- Net loss for the six-month period improved to ($619,385) from a loss of ($1,106,240) in 2017
- Gross margins remained strong at 52% and 53% respectively.
- Strong balance sheet and business fundamentals
After delivering three consecutive years of over 50%
year-over-year revenue growth and profitability, the Company having
raised capital in 2017 is now without debt and has a strong balance
sheet. While the Company has recently experienced some longer
than normal sales cycles, the Company's sales pipeline remains
strong. Some of the recent revenue decline may also be
attributed to recent investments in time and money the Company has
been making in revamping its business model in 2018 to support its
long-term growth. Over the past six months the Company has invested
in: strengthening its management team (CFO and VP Marketing) and
sales and marketing support/activities; educating its distributor
network; research and development (by developing new complementary
products and existing product enhancements); preparing SmartBurner
for US retail market launch; strengthening overseas partnerships;
increasing its operational capabilities; and moving to a new
facility all in an effort to help manage and prepare for future
growth.
The Company is committed to its distributor model, which
provides an efficient way of reaching a broad range of customer
relationships and channels and is focused on further developing its
relationship with its three U.S. anchor distribution partners (HD
Supply, Interline-Home Depot Commercial and Staples Business
Advantage). In Q2, these anchor distributors began including
the Company's products in their catalogues and the Company has also
developed marketing programs (advertising, training, incentives,
etc.) that will help the distributors further penetrate their
customer relationships to create sustainable revenue growth.
Major success stories and case studies are now being shared with
these distributors to demonstrate the value the Company's products
can bring to their customers. The Company is also in the process of
establishing additional U.S. and Canadian distributors (national
and regional) to help expand the Company's market reach and brand
awareness.
Pioneering CEO Kevin Callahan
said of the results, "The Company believes that these longer than
normal sales cycles are temporary growing pains and that we will
deliver growth in 2018 and beyond as we deepen our relationships
with key distributors and end customers, build awareness for our
product solutions, introduce new products and look to potential
acquisition opportunities that are consistent with the Company's
mandate of 'protecting people and property'."
Selected Financial Highlights for the Second Quarter &
Six-months Ended March 31, 2018 &
2017:
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|
|
|
|
|
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Three
Months
Ended March 31
2018
|
Three
Months
Ended March 31
2017
|
|
Six
Months
Ended March 31
2018
|
Six
Months
Ended March 31
2017
|
Revenue
|
1,362,103
|
2,255,757
|
|
3,124,157
|
4,636,518
|
Total Comprehensive
Income (loss) †
|
(523,035)
|
(45,366)
|
|
(373,066)
|
(1,106,240)
|
Total Comprehensive
Income per share †
|
(0.01)
|
0.00
|
|
(0.01)
|
(0.03)
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Adjusted EBITDA
#
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(561,943)
|
584.762
|
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(623,863)
|
1,347,704
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Total
Assets
|
12,354,304
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13,889,790
|
|
12,354,304
|
13,889,790
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Financial liabilities
†
|
448,470
|
4,913,172
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|
448,470
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4,913,172
|
†
Includes non-cash items (fair value movement/derivative
liability of warrants). See the MD&A for further
explanation.
|
#
Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures"
below for further explanation.
|
Q2 2018 Business Highlights
Strong Balance Sheet
As a result of the $6.6 million private placement completed in
April 2017, the subsequent repayment
of all third-party indebtedness and cash generated from ongoing
operations, the Company now has a very strong balance sheet. As at
March 31, 2018, the Company had
approximately $7 million in cash and
short-term investments, $10.6 million
in current assets and is well positioned for future growth.
Expansion in Core Channels
The Company continued to
focus on increasing its penetration into the multi-family public
and affordable housing and rental housing channels, the university
and college channel, the hotel and motel channel, the U.S. military
and the retail channel. Through its growing distributor
relationships, the Company believes that there are significant
opportunities for further market expansion in these channels.
The Company expects that additional sales opportunities with its
current large multi-residential housing customers will help it
achieve its 2018 sales objectives. Growing relationships with
its distribution partners and the realignment of its sales
resources will also serve to give the Company greater penetration
into the cooking fire safety market in 2018 and in the years
come.
Insurance Premium Reductions
In Q2, the Company
developed additional opportunities with U.S. based insurance
providers to offer rebates and/or annual insurance premium
reductions to their respective clients who equip their properties
with SmartBurner product. The Company expects to finalize
some of these agreements in Q3 and begin to work with the insurers
to market and create awareness for SmartBurner and the associated
insurance benefits – a key focus for the Company's product/ROI
story going forward.
Introduction of New After-Market Solution for Smooth Top
Electric Stove Category
In June
2017, the Company finalized a definitive partnership
agreement with Innohome OY, a leading European cooking fire
prevention company, with the objective of generating incremental
revenue and profit by enabling sales of each company's products in
the other's markets while reducing duplication of effort in
R&D, sales/marketing, manufacturing and logistics. Pioneering
executed an initial trial the Innohome product at an Ivy League university in Q4 2017. In Q1
2018 the Company initiated additional trial installations at
prominent schools in upstate New
York, Utah and
Michigan. The results have been very positive. The
Company is receiving strong interest for this new product and
expects to initiate more installations in the remainder of
2018. This new product – marketed under the name SmartRange -
is strategic in nature and provides the Company with a proven
aftermarket smooth top cooking fire solution for its customers.
About Pioneering Technology Corp.: Pioneering Technology
is an "energy smart" technology company and North America's leader in innovative cooking
fire prevention technologies and products. Our mission is
simple: To help save lives and property from the number one
cause of household fire – cooking fires. We do this by
engineering and bringing to market energy-smart solutions that make
consumer appliances safer, smarter, and more efficient. Our
patented cooking-fire prevention products address the
multi-billion-dollar problem of cooking fires. According to
the National Fire Protection Association, stovetop cooking is the
number one cause of household fire and fire injuries in
North America. Pioneering's
patented temperature limiting control (TLC) technology is now
installed in over 250,000 multi-residential housing units across
North America without a single
cooking fire being reported, delivering peace of mind and a solid
return on investment for its customers. Pioneering's
proprietary cooking fire prevention solutions include
Safe-T-element, SmartBurner, RangeMinder & Safe-T-sensor and
are suitable for the majority of the more than 140 million
stoves/ranges and over 140 million microwave ovens in use
throughout North America. For more information, visit
www.pioneeringtech.com.
Forward Looking Statements
The statements made in this
press release include forward-looking statements that involve a
number of risks and uncertainties. These statements relate to
future events or future performance and reflect management's
current expectations and assumptions. A number of factors could
cause actual events, performance or results to differ materially
from the events, performance and results discussed in the
forward-looking statements, such as the economy, generally,
competition in Pioneering's target markets, the demand for
Pioneering's products, the availability of funding and the efficacy
of Pioneering's technology and governmental regulation. These
forward-looking statements are made as of the date hereof an,
except as required by applicable law, Pioneering does not assume
any obligation to update or revise them to reflect new events or
circumstances. Actual events or results could differ materially
from Pioneering's expectations and projections.
Non-IFRS Measures
Adjusted EBITDA is a measure not
recognized under International Financial Reporting Standards
("IFRS"). However, management of Pioneering believes that most
shareholders, creditors, other stakeholders and investment analysts
prefer to have these measures included as reported measures of
operating performance, a proxy for cash flow, and to facilitate
valuation analysis. Adjusted EBITDA is defined as earnings before
interest income, taxes, depreciation and amortization, impairment
losses, stock-based compensation, restructuring costs included in
general and administration expense, fair value movement –
derivative liability and other non-recurring gains or losses
including transaction costs related to acquisition.
Management believes Adjusted EBITDA is a useful measure
that facilitates period-to-period operating comparisons.
Adjusted EBITDA does not have any standard meanings prescribed by
IFRS and therefore may not be comparable to similar measures
presented by other issuers. Readers are cautioned that Adjusted
EBITDA is not an alternative to measures determined in accordance
with IFRS and should not, on its own, be construed as indicators of
performance, cash flow or profitability. References to the
Pioneering's Adjusted EBITDA should be read in conjunction with the
financial statements and management's discussion and analysis of
Pioneering posted on SEDAR (www.sedar.com). For a reconciliation of
Adjusted EBITDA as presented by Pioneering to net income, please
refer to Pioneering's management's discussion and analysis.
This news release contains certain
forward-looking statements reflecting the Company's current views
or expectations on its performance, business and future events.
Such statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary
significantly.
The TSX Venture Exchange Inc. has not reviewed
and does not accept responsibility for the adequacy and accuracy of
this release.
SOURCE Pioneering Technology Corp.