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Photon Control Reports Second Quarter and Half-Year 2017 Financial Results - Revenue Up Sharply
Monday, August 21, 2017Company Profile | Follow Company
Richmond, BC, August 21, 2017--(T-Net)--Photon Control Inc. (TSX-V: PHO), a leading developer of optical measurement technologies, has reported its financial results for the three and six month periods ended June 30, 2017.
Second Quarter and Year-to-Date 2017 Highlights
“The first half of 2017 has been transformational for the Company. We increased revenue by 44% versus the prior year and more importantly, strengthened our designed-in position with our key customers allowing us to take advantage of opportunities for revenue growth. This has resulted in an increase in our backlog to $11.8 million from $8.8 million at the end of 2016.” said Scott Edmonds, Chief Executive Officer.
“We transitioned to a new, more efficient and scalable manufacturing facility which will enable increased profitability and cash generation opportunities. Finally, we strengthened our senior management team with the appointments of Daniel Lee as Chief Financial Officer and John Rydstrom as Senior Vice President of Sales.”
Second Quarter and Year-To-Date 2017 Financial Results
Total revenue for the second quarter of 2017 increased 23% from $7.2 million to $8.9 million, and for the first half of 2017 revenue increased 44% from $14.4 million to $20.8 million versus the prior year. The increase in revenue was primarily due to strong market conditions in the semiconductor industry.
Gross profit in 2017 reflects the benefits of the stronger revenue. Second quarter 2017 gross profit increased 31% to $4.7 million versus the prior year quarter and 2017 year-to-date gross profit increased 60% to $11.8 million versus the prior year period.
Operating expenses of $4.3 million and $9.0 million for the three and six months ended June 30, 2017 include significant one time charges of $1.8 million and $4.2 million, primarily from three distinct activities. Corporate Changes related to changes to the Board of Directors, CEO and the leadership team, including certain litigation costs, totaled $0.8 million for the quarter and $2.8 million year-to-date. Charges related to the acquisition of certain assets of Photon R&D and settlement of all disputes with the former Photon R&D and its principals totaled $0.6 million for the quarter, and $1.0 million year-to-date, and non-capital expenditures related to the Company's move to its new manufacturing facility totaled $0.4 million for the quarter and year-to-date. Net of non-cash charges and these one-time items, operating expenses were $2.1 million and $4.1 million compared to $1.0 million and $1.9 million in the same year-ago period.
Net profit (loss) before taxes for the quarter was $(0.4) million compared to $1.9 million for the comparable period of 2016 while for the first six months of 2017, net income before taxes was $2.0 million versus $4.0 million for the first half of 2016.
The table below reconciles the net (loss) income to adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”):
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Three months ended |
Six months ended |
||||||
|
|
June 30, |
|
|
June 30, |
|
||
|
2017 |
2016 |
2017 |
2016 |
||||
Net (loss) income for the period |
$ |
(331) |
$ |
1,397 |
$ |
1,367 |
$ |
2,984 |
Add (deduct) |
|
|
|
|
|
|
|
|
Finance income |
|
(38) |
|
(21) |
|
(68) |
|
(42) |
Income tax (recovery) expense |
|
(62) |
|
493 |
|
602 |
|
1,047 |
Depreciation of property and equipment |
|
161 |
|
38 |
|
227 |
|
71 |
Amortization of intangible assets |
|
9 |
|
14 |
|
16 |
|
27 |
Foreign exchange loss |
|
778 |
|
95 |
|
918 |
|
751 |
Corporate Changes |
|
945 |
|
384 |
|
2,953 |
|
384 |
Photon R&D settlement |
|
594 |
|
- |
|
951 |
|
- |
Facility Move |
|
411 |
|
- |
|
411 |
|
- |
Adjusted EBITDA for the period |
$ |
2,467 |
$ |
2,400 |
$ |
7,377 |
$ |
5,222 |
Net (loss) income and total comprehensive (loss) income was ($0.3) million or ($0.00) per diluted share and $1.4 million or $0.01 per diluted share for the three and six months ended June 30, 2017 compared to $1.4 million or $0.01 per diluted share and $3.0 million or $0.03 per diluted share in the prior comparable period.
As at June 30, 2017, cash totaled $25.1 million, a decrease of $7.4 million vs. $32.5 million at December 31, 2016 as we invested into capital expenditures incurred for the new manufacturing facility, costs incurred on non-recurring operating expenses, an increase in inventories in anticipation of the idle period occasioned by the move to the new facility, and the acquisition costs for Photon R&D. Offsetting a portion of this decrease was cash generated from normalized operations.
Order backlog (defined as the value of sales orders scheduled to be shipped in the upcoming 12-month period) at quarter-end increased 35% to $11.9 million from $8.8 million at December 31, 2016.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release should be read in conjunction with the Company's condensed interim consolidated financial statements and related notes, and management's discussion and analysis for the three and six months ending June 30, 2017, copies of which can be found at www.sedar.com.
About Photon Control Inc.
Photon Control Inc. designs, manufactures and distributes a wide range of optical sensors and instruments to measure temperature, position, and flow. These products are used by Original Equipment Manufacturers (OEM) as well as end users in the Semiconductor, Energy and Manufacturing industries. Photon Control's products provide high levels of accuracy and reliability in extreme conditions and are supported by a team of experts that offer on-site installation, training, and support. Photon Control Inc. also provides engineering services for customized optical measurement systems. Headquartered in an ISO 9001:2008 manufacturing facility in Richmond, BC, Photon Control Inc. is listed on the TSX Venture Exchange, trading under the symbol ‘'PHO.” Additional information about the company can be found at www.photon-control.com/investorrelations.html.
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