MONTREAL, QUEBEC — (Marketwired) — 03/11/15 — Lumenpulse Inc. (TSX: LMP), a leading manufacturer of high-performance, specification-grade LED lighting solutions, released today its financial results for the third quarter and nine-month period ended January 31, 2015.
“The third quarter of 2015 was another solid quarter for Lumenpulse, with strong growth in revenue, gross margin and EBITDA. Lumenpulse Product revenues grew by 81% over last year with a significant contribution from international revenues, representing 37% of our total revenues for the third quarter.
We are pleased with the integration of AlphaLED, which continues to have a positive impact, contributing revenues of $5.3 million for the third quarter, especially when taking seasonality into account. As planned, we launched the Lumenalpha family of products in early February. The launch introduced AlphaLED–s most successful products – accounting for 70% of its revenues – to the North American market, giving our clients stateside access to a full, well-established product offering.
This solid revenue growth, emerging profitability and sustained momentum in international markets demonstrate our ability to execute our strategic plan,” said Francois-Xavier Souvay, President and CEO.
“For the second consecutive quarter, we reached profitability with an Adjusted EBITDA of $1.3 million and an Adjusted Net Income of $1.8 million. This is a key milestone and a strong indication of our capacity to increase our margins as planned. In addition, we have a robust balance sheet with $48 million in cash to support our growth and acquisition program,” said Robert Comeau, Executive Vice President and CFO.
“The acquisition of Ariane Controls in early February will add unique skills and expertise, and will enhance our intellectual property portfolio with a key patent in modulation technology.
Our objective remains to continue growing Lumenpulse–s business at a rate that exceeds the growth rate in the general lighting market for LED products, and, within the next five years, to converge towards market growth, reaching Adjusted Gross Margins that approach 50% and Adjusted EBITDA margins of approximately 18% to 20%,” concluded Mr. Souvay.
“As it generally requires a six- to twelve-month period to introduce new products and gain market acceptance, we expect upcoming quarters to fully benefit from the introduction of new products launched last May at Lightfair, as well as from the recent launch of the Lumenalpha family in North America which is expected to have a market acceptance period on the lower end of our guidance range,” concluded Mr. Comeau.
Financial Highlights
Revenues
For its third quarter of Fiscal 2015 ended January 31, 2015, revenues increased by $8.3 million, or 49%, to $25.5 million compared with $17.2 million for the corresponding period last year. This increase is entirely due to the increase of the Lumenpulse Product segment, which achieved significant year-over-year growth of 81% with revenues of $22.7 million from $12.5 million for the same period last year. For the nine-month period, Lumenpulse recorded revenues of $69.7 million, representing an increase of 54% compared to revenues of $45.2 million for the same period last year.
For both periods, the increase in revenues was attributable to the solid growth from the Lumenpulse Product segment, which was fueled by the acquisition of AlphaLED; the ongoing leveraging of our existing product line; the addition of complementary products to our existing product portfolio; further penetration of our existing network of agents in North America and in international markets; and the impact of a net favorable change in foreign currency exchange rates, primarily due to a stronger US dollar.
International revenues were an important contributor to the third quarter and nine-month period ended January 31, 2015, representing 37% and 33% of total revenues, respectively.
Adjusted Gross Margin
For the third quarter and the nine-month period ended January 31, 2015, the consolidated Adjusted Gross Margin increased to 43.6% from 41.0% and to 43.3% from 40.9%, respectively. For both periods, the increases were primarily related to the larger proportion of revenues derived from higher margin Lumenpulse Products and also from continued margin improvements in this product segment.
For the third quarter and the nine-month period ended January 31, 2015, the Adjusted Gross Margin on Lumenpulse Products increased to 45.2% from 43.7% and to 44.9% from 42.9%, respectively. The progress in Lumenpulse Product margin is due to improved manufacturing efficiency, improving economies of scale and a favorable impact from foreign exchange rate fluctuations mainly related to the strengthening of the U.S. dollar against the Canadian dollar partly offset by lower margins on a major contract delivered in the Middle East and by the lower margin contribution of AlphaLED associated to its business model. This upward trend is in line with our 5-year objective of reaching Lumenpulse Product gross margins in the range of 50%.
For the third quarter ended January 31, 2015, when excluding AlphaLED, the Lumenpulse Product Adjusted Gross Margin rose to 47.3% from 43.7% last year.
Adjusted EBITDA
For the third quarter ended January 31, 2015, Adjusted EBITDA increased to $1.3 million from $0.9 million for the same period last year. For the nine-month period, Adjusted EBITDA increased to $1.7 million from $0.4 million for the same period last year. For both periods, the increases in Adjusted EBITDA are mainly attributable to increased revenues, higher gross margins partially offset by the higher level of operating expenses needed to support growth and the requirements of being a public company.
Adjusted Net Income (Net Loss)
For the third quarter and the nine-month period ended January 31, 2015, the Adjusted Net Income increased to $1.8 million from a $0.4 million loss and to $1.0 million from a $3.2 million loss for the corresponding periods last year. The improvement was primarily due to a favorable variance in interest and other financing income which was tied to a net favorable change in foreign currency rates and to the improved Adjusted EBITDA.
Conference Call
Lumenpulse has scheduled a conference call to discuss these results on Thursday, March 12, 2015, beginning at 11:00 A.M. (ET). This conference call will be broadcast live on the Internet at the following link: . A slideshow presentation intended for real-time viewing with the conference call will also be available. Alternatively, North American investors may join by dialing: 1-844-825-4409 (conference ID: 85478163). The webcast will be archived at .
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management–s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
We use non-IFRS measures including EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Selling and Marketing Expenses, Adjusted Research and Development Expenses, Adjusted General and Administrative Expenses and Adjusted Earnings (Loss) per share- basic and diluted to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. EBITDA is defined as earnings before interest and other financing costs, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA less unusual and non-recurring items, and non-cash share-based compensation. Unusual and non-recurring items is defined as expenses incurred for the initial public offering (“IPO”) and acquisition-related costs. Adjusted Net Income (Loss) is defined as net income (loss) before net change in carrying value of the redeemable shares at the option of the holders and related financial derivative liability, early repayment fee on long-term debt, unusual and non-recurring items net of taxes, and non-cash share-based compensation. Adjusted Gross Profit is defined as gross profit before non-cash share-based compensation and depreciation and amortization. Adjusted Operating Expenses is defined as operating expenses less non-cash share-based compensation, depreciation and amortization, and unusual and non-recurring items. Adjusted Selling and Marketing Expenses is defined as selling and marketing expenses less non-cash share-based compensation, and depreciation and amortization. Adjusted Research and Development Expenses is defined as research and development expenses less non-cash share-based compensation, and depreciation and amortization. Adjusted General and Administrative Expenses is defined as general and administrative expenses less non-cash share-based compensation, depreciation and amortization, and unusual and non-recurring items. Adjusted Earnings (Loss) per share- basic is defined as the Adjusted Net Income (Loss) on the weighted average number of ordinary shares outstanding during the period. Adjusted Earnings per share- diluted is defined as the Adjusted Net Income on the weighted average number of ordinary shares outstanding during the period and all potentially dilutive stock options. Adjusted Loss per share- diluted is defined as the Adjusted Net Income on the weighted average number of ordinary shares outstanding during the period. As a result of net losses incurred, in the periods presented other than the three-month period ended January 31, 2015, all potentially dilutive stock options have been excluded from the calculation of diluted loss per share. All outstanding share options could potentially dilute earnings per share in the future.
For a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss), a reconciliation of gross profit to Adjusted Gross Profit, a reconciliation of operating expenses to Adjusted Operating Expenses, a reconciliation of selling and marketing expenses to Adjusted Selling and Marketing Expenses, a reconciliation of research and development expenses to Adjusted Research and Development Expenses and a reconciliation of general and administrative expenses to Adjusted General and Administrative Expenses, please refer to “Reconciliation of Non-IFRS Measures” in the Company–s Management–s Discussion and Analysis for the Third Quarter Fiscal 2015 filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at .
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in the Company–s annual information form filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at . There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information. Forward-Looking information is provided for the purposes of assisting the reader in understanding the Company–s financial performance, financial position, cash flows, its business, operations, prospects and risks at a point in time, and to present information about management–s current expectations and plans relating to the future and therefore the reader is cautioned that such information may not be appropriate for other purposes.
About Lumenpulse Inc.
Founded in 2006, Lumenpulse designs, develops, manufactures and sells a wide range of high performance and sustainable specification-grade LED lighting solutions for commercial, institutional and urban environments. Lumenpulse is a leading pure-play specification-grade LED lighting solutions provider and has earned many awards and recognitions, including several Product Innovation Awards (PIA), three Next Generation Luminaires Design Awards, a Red Dot Product Design Award and a Lightfair Innovation Award. Lumenpulse has more than 397 employees worldwide, with corporate headquarters in Montreal, Canada, and offices in Boston, Paris, London and Manchester. Lumenpulse is listed on the Toronto Stock Exchange under the symbol LMP.
Additional information about Lumenpulse, including its 2014 Annual Information Form, is available at and on the SEDAR website at .
Contacts:
Yvon Roy
Vice-President – Investor Relations
Merger & Acquisition
(514) 937-3003 ext. 307
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