SALEM, NH — (Marketwired) — 09/09/15 — ProPhotonix Limited (OTC PINK: STKR) (LSE: PPIX) (LSE: PPIR)
(Salem, New Hampshire, September 9, 2015) ProPhotonix Limited (OTC: STKR; LSE: PPIX), a high technology designer and manufacturer of LED illumination systems and laser diode modules, today announces its unaudited interim results for the six months ended June 30, 2015.
Revenue decreased 19% to $6.7 million, 10% of which was due to foreign currency rate fluctuation
Gross profit decreased 13.8% to $2.8 million
Gross profit margin increased to 41.2% (2014: 38.5%)
Operating income of $0.1 million (2014: $(0.1) million)
EBITDA of $0.3 million (2014: $0.1 million)
Order bookings of $7.7 million
1.15 Book-to-Bill ratio (2014: 1.03)
Percentage revenue by market sectors: 81% industrial, 15% medical, and 4% security & defense
Percentage revenue by geography: 48% Europe, 39% North America and 13% Rest of World
Available credit lines of $1.8 million
Introduced 8 new products in the first half
Patent application filing for unique thermal management invention
Awarded two year supply agreement with pharmaceutical customer
Entered into technology license agreement with technology institute
ProPhotonix Limited–s results were impacted by continuing foreign currency exchange rate changes which skew various performance indicators. It is important to assess results in constant dollars, as we did in our 2014 results by highlighting the impact of foreign currency fluctuations last year.
Our constant dollar sales in the first half of 2015 were $7.5 million, as compared to the reported revenue of $6.7 million. Currency fluctuations accounted for approximately 10% of our year-on-year revenue decline. Other factors which influenced the fall in revenues included: one significant distributed product customer (which provided $500,000 of revenue at a lower margin in 2014) did not repeat in 2015; declines in two customers– demand rates which we anticipated at the beginning of the year; and expected sales from new customer engineering products which have been delayed. We fully expect these delayed projects to generate meaningful revenue in future periods.
Operating profit and EBITDA are much less impacted by currency fluctuations. Many of our expenses are denominated in the same currencies as revenue, a natural hedge, thus mitigating currency translation impact. In addition, the cost reduction implemented by the Company over the last two years significantly reduced our expense structure and break-even point. The Company generated constant dollar operating profit of $0.2 million (a $0.3 million increase on H1 2014) and EBITDA of $0.4 million (an increase of 229% on H1 2014). These results mark the fourth consecutive half-yearly positive EBITDA and second consecutive half-yearly positive operating income, cementing the Company–s continued progress.
Our first half 2015 orders, in constant dollars, were $8.7 million (a 2% increase on H1 2014), while our backlog at the end of the first half is $6.2 million (an increase of 11% over year-end 2014). In addition, since the end of the first half, the Company has seen strong order bookings of $2.5M for the first two months of the third quarter. Recent announcements of supply agreements are not included in the June 30 or the third quarter-to-date order book, unless firm orders were received from the customers in the relevant periods.
The balance sheet continues to strengthen. Term debt of $277,000 was repaid in accordance with the various term loan facilities. Total net available credit from the Company–s loan facilities was $1.8 million as of June 30, 2015. The Directors are comfortable with the cash flow of the business considering its plans and available credit facilities.
As of June 2015, we mark the two year anniversary of the recapitalization of the Company and the march toward a sustainable business model. Since June 2013, we have focused our efforts on eliminating costs in the business as we strive to win new customers and improve margins.
Strategically, the Company is in transition. Historically, our product development has been customer directed. This approach has served us well for specific applications and we continue to offer bespoke product solutions. Over the past two years, we have assessed various markets and product features in order to develop a product strategy focusing on specific markets to complement our direct customer engagement. To this end, we are concentrating our engineering talents in a couple of defined market areas that we believe are poised for fast market expansion.
The first of these is the ultra violet (UV) LED and laser market for various applications including: printing, curing, 3D printing, bio-luminescence, medical microscopy, and other applications. Today, we also announced our latest UV LED light within the Cobra Cure family, which will be the first of several new products in this line up. As stated in the Cobra Cure announcement, the UV LED market is projected to grow at an annual rate of 40% between 2014 and 2019. For more information on Cobra Cure, please visit our website at .
Our other focus is on the continuing market requirement for multi-wavelength devices and systems; both laser and LED solutions. More and more customers are calling for multi-wavelength solutions requiring innovative optics, complex electronics, sensing capabilities, and software control. We see obvious opportunities which include a broad range of optical sensing and inspection applications in microscopy, industrial and security markets. We are in the research and development phase of these products and expect to announce various laser and LED products in the coming months.
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