TIDMPPIX
RNS Number : 0343L
ProPhotonix Limited
08 September 2021
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.
September 8, 2021
ProPhotonix Limited
("ProPhotonix" or the "Company")
INTERIM RESULTS FOR THE HALF YEARED JUNE 30, 2021
ProPhotonix Limited (London Stock Exchange - AIM: PPIX, OTC:
STKR), a leading technology designer and manufacturer of LED
illumination systems and laser diode modules, with operations in
Ireland and the United Kingdom, today announces its unaudited
results for the six months ended June 30, 2021.
Half Year 2021 Financial Results
Revenue for the half year ended June 30, 2021 was $7.9 million,
an increase of 14%, on a reported basis, compared with $6.9 million
in the same period of 2020. On a constant currency basis, revenue
increased 5% over the same period of 2020. The increase is
primarily due to increases in LED product sales.
Reported gross profit for the half year ended June 30, 2021was
$3.3 million, an increase of 2.2% compared to $3.3 million in the
first half of 2020. Gross profit margin for the half year ended
June 30, 2021 declined to 42.2% from 47.1% compared to the same
period in 2020, mainly due to product mix, increased material
costs, and the benefit in 2020 of various COVID-19 related
government aid.
Operating expenses for the six months ended June 30, 2021
totaled $2.7 million versus $3.0 million for the comparable period
in 2020. Selling, general and administrative expenses for the six
months ended June 30, 2021 decreased by $0.2 million to $2.2
million compared to the same period in 2020 due primarily to lower
headcount costs and COVID-19 travel restrictions. Research and
development expenses for each of the six month periods ended June
30, 2021 and 2020 were $0.5 million.
The improved gross profit and lower operating expenses resulted
in an operating profit of $0.6 million for the six months ended
June 30, 2021, doubling the operating profit of $0.3 million
recognized in the first half of 2020.
Adjusted EBITDA (earnings before interest, taxes, depreciation,
amortization, stock-based compensation and impairment charges) for
the six months ending June 30, 2021 was $0.7 million, as compared
to $0.4 million for the same period in 2020.
Net income was $0.5 million for the six months ended June 30,
2021, as compared to $0.3 million in net income in the first half
of 2020.
Cash and cash equivalents at June 30, 2021 were $3.0 million as
compared to $2.6 million at December 31, 2020 and $1.9 million at
June 30, 2020. Detailed financial results and notes follow.
Key metrics
-- Order bookings of $9.5 million (H1-2020: $6.8 million)
-- Book-to-Bill ratio of 1.21 (H1-2020: 0.99)
-- Backlog (order book) of $7.1 million (H1-2020: $6.4million)
-- Percentage revenue by market sectors: 79% industrial, 20%
medical and 1% security & defense (H1-2020: 84% industrial, 15%
medical and 1% security & defense)
-- Percentage revenue by geography: 43% Europe, 46% North
America and 11% Rest of World (H1-2020: 41% Europe, 54% North
America and 5% Rest of World)
Tim Losik, President & CEO, commented:
Financial
"Overall, I am pleased with our results for the first half of
2021. The Company experienced improvement in virtually every
financial metric, including revenue, gross profit, operating
income, net income and adjusted EBITDA as compared to the first
half of 2020. Further, we increased our cash balance to $3.0
million, while further paying down debt.
The $1.0 million or 14% increase in reported revenue in the
first half of 2021 compared to the first half of 2020 resulted from
increases of $0.8 million, or 26%, in LED product revenue and $0.2
million, or 5%, in Laser and Diode product revenue. While we expect
to experience mounting pressure towards increased operating
expenses as the broader economic recovery continues, I'm pleased
that we were able to decrease our operating expenses by $0.2
million, or 8%, during the first half of 2021 as compared to the
first half of 2020. We will continue to prudently invest in the
resources that are necessary to deliver the highest quality
products and services to our customers throughout the world and are
therefore likely to see some increase in our operating expenses in
the second half of 2021 as compared to the first half."
Covid-19
The outbreak of the COVID-19 pandemic and the measures adopted
by local governments to mitigate its spread impacted the Company
much more in 2020 than in 2021. The Company has not as yet suffered
operations shutdowns in 2021 versus the pandemic caused shut down
of its facilities for brief periods in 2020. However, risks in the
supply chain have heightened as many components are in short supply
with extended delivery lead-time. Although there have been no
substantial delays or negative consequences to the business from
supply chain issues, this remains a significant risk for the
foreseeable future.
Trading update
With a strong order book, the Directors believe at this time
that the second half trading will be in line with the first half
trading subject to further disruptions by COVID-19 and/or supply
chain and logistics challenges. The Directors caution that the
risks in the supply chain are substantial and there will very
likely be disruptions impacting the business.
For further information:
ProPhotonix Limited
Tim Losik President and CEO
Tel: +1 603 893 8778
Email: ir@prophotonix.xom
WH Ireland Limited
Katy Mitchell Nominated Adviser and Broker
Ben Good Tel: +44 (0) 20 7220 1666
PROPHOTONIX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF Income AND COMPREHENSIVE
INCOME
$ In thousands except share and per share data
(unaudited)
Six Months Ended
June 30,
2021 2020
Revenue $ 7,867 $ 6,902
Cost of revenue (4,548) (3,654)
Gross profit 3,319 3,248
Selling, general and administrative
expenses (2,202) (2,430)
Research and development expenses (548) (544)
Operating income 569 274
Other income (expense), net (46) 31
Interest expense (29) (33)
Warrant and debt acquisition expense (4) (6)
Income before income tax 490 266
Income tax - -
Net income 490 266
Other comprehensive loss:
Foreign currency translation (108) (26)
Total comprehensive income $ 382 $ 240
Net income per share:
Basic net income per share $ 0.004 $ 0.003
Diluted net income per share $ 0.005 $ 0.003
Shares used in per share calculation -
basic 93,300,402 93,150,402
Shares used in per share calculation -
diluted 101,442,902 93,150,402
PROPHOTONIX LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
$ In thousands except share data
(unaudited)
As of June 30 2021 2020
Assets
Current assets:
Cash and cash equivalents $ 3,001 $ 1,937
Accounts receivable, less allowances of $11 in 2021 and $10 in
2020 2,451 1,680
Inventories, less allowances of $838 in 2021 and $782 in 2020 2,565 2,738
Prepaid expenses and other current assets 413 603
Total current assets 8,430 6,958
Net property, plant and equipment 415 528
Operating lease right-of-use asset 30 236
Deferred tax assets - -
Goodwill 420 397
Intangible assets, net 518 397
Other long-term assets 116 116
Total assets $ 9,929 $ 8,632
Liabilities and Stockholders' Equity
Current liabilities:
Revolving credit facility $ 54 $ -
Current portion of long-term debt 279 158
Accounts payable 1,759 1,605
Accrued payroll, benefits and incentive compensation 313 301
Deferred revenue 591 690
Accrued warranty expenses 202 156
Operating lease liabilities, current 30 111
Other accrued expenses 626 617
Current portion of finance lease obligations 25 55
Total current liabilities 3,879 3,693
Deferred revenue, noncurrent 229 145
Operating lease liabilities, noncurrent - 124
Long term debt obligations, net of current portion 212 364
Long term finance lease obligations, net of current portion 16 26
Total liabilities 4,336 4,352
Stockholders' Equity:
Common stock, par value $0.001; shares authorized 250,000,000
at June 30, 2021 and June 30,
2020; 93,300,402 shares issued and outstanding at June 30,
2021 and 93,150,402 shares issued
and outstanding at June 30, 2020 93 93
Additional paid-in capital 112,894 112,885
Deferred compensation - -
Accumulated deficit (108,168) (109,484)
Accumulated other comprehensive income 774 786
Total stockholders' equity 5,593 4,280
Total liabilities and stockholders' equity $ 9,929 $ 8,632
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
$ In thousands
(unaudited)
Six Months Ended
June 30,
2021 2020
Operations
Net income $ 490 $ 266
Adjustments to reconcile net loss to net cash used in operating
activities:
Stock based compensation - 49
Depreciation and amortization 108 113
Foreign exchange (gain)/loss 132 (31)
Amortization of debt discount and financing costs 4 6
Provision for inventories (27) 55
Provision for bad debts 2 (7)
Other change in assets and liabilities:
Accounts receivable (252) 989
Inventories 78 (277)
Deferred Revenue (119) 54
Prepaid expenses and other current assets 41 48
Intangible assets, net (71) -
Intercompany accounts payable (5) -
Operating lease right-of-use asset - 75
Accounts payable 313 (252)
Accrued expenses (114) 419
Other assets and liabilities 11 26
Net cash provided by operating activities 591 1,533
Financing
Exercise of options and warrants - -
Net borrowing (repayment) of revolving credit facility (32) (874)
Capital lease (23) (16)
Net borrowing (principal repayment) of long-term debt (108) (85)
Net cash used by financing activities (163) (975)
Investing
Purchase of plant and equipment - (59)
Net cash used in investing activities - (59)
Effect of exchange rate on cash (68) (39)
Net change in cash and equivalents 360 460
Cash and equivalents, beginning of period 2,641 1,477
Cash and equivalents, end of period $ 3,001 $ 1,937
Supplemental disclosure of cash flow information:
Cash paid for interest $ 35 $ 33
PROPHOTONIX LIMITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
In thousands
(unaudited)
Common Stock
---------------
Accumulated
Other Total
Par Paid in Deferred Accumulated Comprehensive Stockholders'
Shares $0.001 Capital Compensation Deficit Income Equity
------- ------ --------- ------------ ----------- ------------- -------------
Balance
December
31, 2020 93,300 $93 $112,894 $- ($108,658) $882 $5,211
Net income - - - - 490 - 490
Translation
adjustment - - - - - (108) (108)
Balance June
30,
2021 93,300 $93 $112,894 $ - ($108,168) $774 $5,593
======= ====== ========= ============ =========== ============= =============
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, 2021 and 2020; (ii) the financial position at June
30, 2021 and June 30, 2020; and (iii) the cash flows for the six
month period ended June 30, 2021 and 2020. 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 of business disruption relating to COVID-19;
uncertainty of supply chain stability and availability of
components used in the Company's products; 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, 2021 and 2020 is as follows:
In thousands
Six Months Ended June
30,
2021 2020
---------------- -------------
Net income $490 $266
Plus:
Interest and other expense, net 75 2
Amortization of debt discount and
financing costs 4 6
Depreciation and amortization 126 113
Stock based compensation - 48
Adjusted EBITDA $695 $435
---------------- -------------
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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