ProPhotonix Limited (AIM: PPIX & PPIR), 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, 2018.
Financial Highlights
- Revenue increased 3.9% to $8.8 million (H1-2017: $8.5 million)
- Gross profit decreased 9.7% to $3.4 million (H1-2017: $3.8 million) mainly due to a reduction in gross margin of 38.6% (H1-2017: 44.4%)
- Operating loss of $0.4 million (H1-2017: $0.6 million operating income) excluding stock compensation expense and operating income of $0.1 million (H1-2017: $0.7 million)
- Net loss of $0.5 million (H1-2017: $0.6 million net income)
- Adjusted EBITDA of $0.2 million (H1-2017: $0.7 million). Please see the reconciliation of net income to adjusted EBITDA below.
- Order bookings of $9.0 million (H1-2017: $8.8 million)
- Book-to-Bill ratio of 1.03 (H1-2017: 1.01)
- Percentage revenue by market sectors: 81% industrial, 16% medical and 3% security & defense (H1-2017: 75% industrial, 22% medical and 3% security & defense)
- Percentage revenue by geography: 56% Europe, 31% North America and 13% Rest of World (H1-2017: 43% Europe, 44% North America and 13% Rest of World)
Recent Operational Highlights
- Vision Systems Design 2018 awarded ProPhotonix its Innovators Silver Award in April 2018
- Expansion of product offering and market applications with new high powered 405nm and 638nm laser diodes and 3 meter COBRA RGB line light
- New four year £0.7 million term loan secured for additional machinery and equipment and expansion of the Company’s manufacturing operations
- Ed Dolan appointed as CFO in March 2018
Tim Losik, President & CEO, commented:
Financial
“Sales in the first half of 2018 were up 3.9% primarily due to an increase in Laser & Diode product sales offsetting a modest decline in LED sales. Gross profit margin fell to 38.6% compared with 44.4% for the same period in 2017, mainly due to a shift in product mix. Gross margins are expected to range between 40-45% going forward but this depends on the mix and volume of sales. In the first half of 2018 we experienced an operating loss of $0.4 million compared to operating income of $0.6 million in 2017. The operating loss mainly resulted from increased stock compensation expense as well as lower profit margins from a shift in product mix and continued investment to support future growth of the business.”
“On June 14, 2018, the Company announced it had entered into a £700,000 four-year term loan facility with SQN Secured Income Fund PLC (“SQN”). The proceeds from the loan are to provide additional working capital and capital expenditure investments in support of our growth initiatives. Also, as of June 30, 2018, the Company had $382,000 borrowing availability on its Sales Finance facility through Barclays Bank. The Directors are comfortable with the cash flow of the business considering its plans and available credit facilities.”
Strategy
“The strategy of the Company remains established in its OEM heritage as well as the development of products directed at specific markets. ProPhotonix has made and will continue to make investments in commercially attractive OEM opportunities and product development including UV LED, multi-wavelength devices and laser technology advances. We continue to concentrate our engineering capacity in these defined projects and areas that we believe are poised for fast market expansion.”
“The first of these is the UV LED and laser market for various applications including: printing, curing, bonding, 3D printing, bio-luminescence, medical microscopy and other applications. The Company has launched several versions of its COBRA CureTM product and continues to work with many potential customers in their applications using this technology. We plan to continue to launch new higher power products while continuously enhancing our current product lines to serve this market during 2018 and beyond.”
“ProPhotonix also continues to focus on market requirements for multi-wavelength devices and systems, both laser and LED solutions. Increasingly, customers are seeking multi-wavelength solutions requiring innovative optics, complex electronics, on-board sensing capabilities and sophisticated software control. We see opportunities which include a broad range of applications in printing, microscopy, industrial inspection and sorting, solar simulation and security markets.“
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