Date Announced: 19 Aug 2010
Sales Increase 41%, Gross Profits Up 106% and EBITDA Neutral Before One-Time Charge
Salem, N.H. — August 19, 2010 — ProPhotonix Limited, formerly StockerYale, Inc. (Pink Sheet OTC: STKR), a designer and manufacturer of LED arrays and light engines, produces laser modules and distributes laser diodes for industrial OEMs, medical and defense markets, today announced its financial results for the second quarter ended June 30, 2010. Results are reported from continuing operations and exclude discontinued operations, unless otherwise stated.
Second Quarter 2010 Financial Results
Total revenue for the second quarter of 2010 of $3.7 million increased 41% (up 45%, adjusting for currency) from the second quarter of 2009. The increase in sales was due to a $0.9 million increase in the LED segment (up $1.0 million excluding the impact of foreign currency exchange), and a $0.1 million increase in the Photonic Products segment.
Gross profit was $1.5 million for the three months ended June 30, 2010, a 106% increase compared to the second quarter of 2009. During the three months ended June 30, 2010, gross margin was 40% compared with 27% in the second quarter of 2009, mainly due to increased volumes, mix of products and improved productivity in our LED segment.
Operating expenses totaled $2.2 million for the second quarter of 2010, an increase of 44% as compared to the second quarter of 2009. The 2010 operating expenses include one-time costs of approximately $511,000 related to the efforts to admit the Company’s shares to the London Stock Exchange’s AIM Market and a favorable impact of approximately $46,000 in foreign currency exchange rates versus the second quarter of 2009. Non-cash amortization of intangible assets decreased to $96,000 versus $187,000 for the second quarter of 2009. Sales and marketing expenses increased by approximately $97,000, or 26%, as the Company increased advertising and added marketing and product management personnel.
Research and development expenses were 56% higher at $203,000 due to hiring engineering resources in the Company’s LED business. General and administrative expenses, excluding one-time charges, were flat to the second quarter of 2009, despite an increase of $45,000 related to non-cash stock based compensation expenses. EBITDA loss was $504,000 for the quarter compared to a loss of $600,000 for the second quarter of 2009.
Excluding one-time AIM Admission expenses, adjusted EBITDA was $7,000, a significant improvement over both the prior year and the $244,000 loss in for the first quarter 2010, adjusted for the one-time facilities cost expense. Net loss from continuing operations, excluding the one-time fees relating to AIM, were $0.4 million, or $0.01 per share. Net loss including discontinued operations was $1.0 million or $0.02 per share. This compares to net loss of $0.7 million or $0.02 per share for the second quarter of 2009.
“Since the business was refocused last year, we have seen significant improvement in both our LED and laser business units,” stated Mark W. Blodgett, Chairman and CEO. “During the second quarter, the Company made significant progress on all fronts including sales growth, profitability, and product marketing and development. We are pleased to achieve EBITDA neutrality in the second quarter. This achievement was led by the sales growth and profitability of our LED operation. We were particularly pleased with the overall improvement in gross margin to 40%, which demonstrates both continued cost management and the positive operating leverage associated with our business model,” added Blodgett.
“As part of the sale of the Company’s North American operations last October, senior management and the Board have refocused the business strategy of the Company. The strategy is to significantly grow the LED business over the coming several years by leveraging the Company’s strengths, including its expertise in designing high intensity and energy efficient LED devices, for new markets such as medical and general illumination.
Various estimates indicate that the market for LEDs in general illumination today represents less than 3% penetration of the $100 billion general illumination market. As such, significant opportunities exist for the Company to leverage both its technology and manufacturing capability in the LED market. With that in mind we are doubling our LED product manufacturing capacity by the end of the fourth quarter 2010. We intend to also make further investments in our laser module business unit to continue the growth in this market space.
“Since the Company now effectively operates in Ireland and the UK, the Board decided to seek admission on AIM, which is the London Stock Exchange’s international market for smaller growing companies. The Company will seek admission of all outstanding common shares on AIM,” stated Blodgett.
For full details, visit the ProPhotonix site.
Web Site: www.ProPhotonix.com