Capstone Companies Delivers Record 2017 Revenue
28 Mars 2018 - 10:15PM
InvestorsHub NewsWire
- Total revenue increased 20% to
$36.8 million
- Gross profits increased 20% to
$8.8 million
- Capstone debt free at
year-end
Deerfield Beach, FL -- March 28,
2018 -- InvestorsHub NewsWire
-- Capstone Companies, Inc. (OTC:
CAPC) (“Capstone” or the “Company”), a designer of innovative
LED lighting solutions today reported its financial results for the
fourth quarter and full year 2017.
Stewart Wallach, Capstone’s Chairman
and CEO, commented, “2017
was an excellent year for Capstone. We exceeded $36.8 million
in revenue, a record, increased our gross profit, a record.
Revenue increased by 20% over 2016. Management has continued
to demonstrate its abilities to execute the Company’s
strategy. User demand has expanded and as a result our
revenues increased through our big box channel
partners.”
“As we enter 2018, the Company is
fortifying its resources in R&D and product development
areas. While the Company’s focus has been strictly on LED
lighting products, we continue to explore new areas where, like
LED, we can bring a level of innovation and excitement to emerging
categories. We look forward to expanding on our core success
as our increased R&D and product development effort yields
results.”
Full Year 2017
Highlights
- - Total revenue increased 20% to
$36.8 million from $30.6 million in 2016.
- Gross profit increased 20% to $8.8
million from $7.4 million in 2016.
- Operating income remained
consistent at $3.2 million.
- Provision for income tax increased
to $1.03 million from $0.3 million in 2016.
- Net income was $2.08 million from
$2.82 million in 2016, due to the tax provision
increase.
- The Company was debt free
year-end, fully paid off old director loans and bank line fully
paid down.
- Year-end cash balance increased
$2.0 million.
Gross profit was $1.5 million
compared to $1.8 million in 2016. Financial results for 2017
continued to be very strong. For the year, total revenue
improved due to continuing performance in the Accent Light Category
under Capstone Lighting®, Hoover®
Home LED and Duracell®
brands.
The Company continued to build
momentum within its existing channels. Increased product
assortment generated expanded product placements and revenue
expansion.
Webcast and Teleconference to Review
Results and Outlook
The Company will host a live webcast
and conference call on Thursday, March 29, 2018 at
10:30 a.m. Eastern Time. During the call, management
will review the financial and
operating results and discuss the Company’s corporate strategy and
outlook, followed by a question-and-answer
session. The
conference call can be accessed by dialing (201) 689-8562.
The listen-only audio webcast can be monitored at
www.capstonecompaniesinc.com.
A telephonic replay will be
available from 1:30 p.m. ET the day of the call until
Tuesday,
April 5, 2018.
To listen to the archived call, dial (844) 512-2921
and enter conference ID number
13674858. Alternatively, the archive of the
webcast will be available on the Company’s website at
www.capstonecompaniesinc.com,
along with a transcript, once
available.
About Capstone Companies,
Inc.
Capstone Companies, Inc. is a
designer of innovative LED lighting solutions including power
failure lighting, for consumers and institutions. The
Company’s products are sold under the Capstone Lighting®
and Hoover® HOME LED brands, to big box retailers,
wholesale clubs, and home improvement stores throughout North
America and in international markets. Capstone’s strategy is
to utilize its low-cost manufacturing base to provide high-quality
consumer products to its customers at a reasonable price, using
primarily direct import distribution.
Visit www.capstonecompaniesinc.com
for more information about the
Company and www.capstoneindustries.com
for information on our current
product offerings.
FORWARD-LOOKING
STATEMENTS:
This news release contains
"forward-looking statements" as that term is defined in the Private
Securities Litigation Reform Act of 1995, as amended. Such
statements consist of words like “anticipate,” “expect,” “project,”
“continue” and similar words. These statements are based on
the Company’s and its subsidiaries’ current expectations and
involve risks and uncertainties, which may cause results to differ
materially from those set forth in the forward-looking
statements. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking
statements, include consumer acceptance of the Company’s products,
its ability to deliver new products, the success of its strategy to
broaden market channels and the relationships it has with retailers
and distributors. Prior success in operations does not
necessarily mean success in future operations. The ability of
the Company to adequately and affordably fund operations and any
growth will be critical to achieving and sustaining any expansion
of markets and
revenue. The introduction of new products or the expanded
availability of products does not mean that the Company will enjoy
better financial or business performance. The risks associated with
any investment in Capstone Companies, Inc., which is a small
business concern and a "penny-stock Company” and, as such, a highly
risky investment suitable for only those who can afford to lose
such investment, should be evaluated together with the risks and
uncertainties more fully described in the Company’s Annual and
Quarterly Reports filed with the Securities and Exchange
Commission. Capstone Companies, Inc. undertakes no obligation
to publicly update or revise any forward-looking statement, whether
as a result
of new information, future events, or otherwise. Contents of
referenced URLs are not incorporated into this press
release.
Company:
Aimee Gaudet
Corporate
Secretary
(954) 252-3440, ext.
313
FINANCIAL TABLES FOLLOW. THE
FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE
FORM 10-K FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CAPSTONE COMPANIES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
For
the Years Ended |
|
|
|
|
December
31, |
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
Revenues, net |
|
|
|
$ 36,752,813 |
|
$
30,630,368 |
Cost of sales |
|
|
|
27,910,869 |
|
23,232,605 |
Gross Profit |
|
|
|
8,841,944 |
|
7,397,763 |
|
|
|
|
|
|
|
Operating
Expenses: |
|
|
|
|
|
|
Sales and
marketing |
|
|
|
2,266,601 |
|
1,223,798 |
Compensation |
|
|
|
1,612,480 |
|
1,434,154 |
Professional
fees |
|
|
|
549,844 |
|
365,396 |
Product
development |
|
|
|
376,981 |
|
326,820 |
Other general and
administrative |
|
|
|
805,077 |
|
704,957 |
Total Operating Expenses |
|
|
|
5,610,983 |
|
4,055,125 |
|
|
|
|
|
|
|
Operating
Income |
|
|
|
3,230,961 |
|
3,342,638 |
|
|
|
|
|
|
|
Other Income
(Expense): |
|
|
|
|
|
|
Interest
income |
|
|
|
- |
|
26,897 |
Interest
expense |
|
|
|
(122,091) |
|
(281,447) |
Total Other
(Expense) |
|
|
|
(122,091) |
|
(254,550) |
|
|
|
|
|
|
|
Income Before Tax
Provision |
|
|
|
3,108,870 |
|
3,088,088 |
|
|
|
|
|
|
|
Provision for
Income Tax |
|
|
|
(1,029,694) |
|
(267,000) |
|
|
|
|
|
|
|
Net Income |
|
|
|
$
2,079,176 |
|
$
2,821,088 |
|
|
|
|
|
|
|
Net Income per Common
Share |
|
|
|
|
|
|
Basic |
|
|
|
$0.044 |
|
$0.059 |
Diluted |
|
|
|
$0.044 |
|
$0.058 |
|
|
|
|
|
|
|
Weighted Average Shares
Outstanding |
|
|
|
|
|
|
Basic |
|
|
|
47,007,296 |
|
48,132,664 |
Diluted |
|
|
|
47,188,450 |
|
48,342,030 |
CAPSTONE
COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
|
December
31, |
|
December
31, |
|
2017 |
|
2016 |
Assets: |
|
|
|
Current Assets: |
|
|
|
Cash |
$
3,668,196 |
|
$
1,646,128 |
Accounts receivable,
net |
4,367,721 |
|
4,449,179 |
Inventory |
140,634 |
|
366,330 |
Prepaid
expenses |
239,150 |
|
330,020 |
Total
Current Assets |
8,415,701 |
|
6,791,657 |
|
|
|
|
Property and
Equipment: |
|
|
|
Computer equipment and
software |
9,895 |
|
19,767 |
Machinery and
equipment |
318,801 |
|
325,750 |
Furniture and
fixtures |
5,665 |
|
5,665 |
Less: Accumulated
depreciation |
(266,997) |
|
(250,465) |
Total
Property & Equipment |
67,364 |
|
100,717 |
|
|
|
|
Other Non-current
Assets: |
|
|
|
Deposit |
13,616 |
|
12,193 |
Note
receivable |
- |
|
526,887 |
Goodwill |
1,936,020 |
|
1,936,020 |
Total
Other Non-current Assets |
1,949,636 |
|
2,475,100 |
Total Assets |
$
10,432,701 |
|
$
9,367,474 |
|
|
|
|
Liabilities and Stockholders’
Equity: |
|
|
|
Current
Liabilities: |
|
|
|
Accounts payable and
accrued liabilities |
$
2,733,516 |
|
$
2,678,210 |
Income tax
payable |
624,782 |
|
1,588 |
Notes and loans payable
to related parties |
- |
|
1,321,721 |
Total
Current Liabilities |
3,358,298 |
|
4,001,519 |
|
|
|
|
Long Term
Liabilities: |
|
|
|
Deferred tax
liabilities |
251,000 |
|
216,000 |
Total Long
Term Liabilities |
251,000 |
|
216,000 |
Total
Liabilities |
3,609,298 |
|
4,217,519 |
|
|
|
|
Commitments and Contingencies (Note
6) |
|
|
|
|
|
|
|
Stockholders'
Equity: |
|
|
|
Preferred Stock, Series
A, par value $.001 per share, authorized 6,666,667 shares, issued
-0- shares |
- |
|
- |
Preferred Stock, Series
B-1, par value $.0001 per share, authorized 3,333,333 shares,
issued -0- shares |
- |
|
- |
Preferred Stock, Series
C, par value $1.00 per share, authorized 67 shares, issued -0-
shares |
- |
|
- |
Common Stock, par value
$.0001 per share, authorized 56,666,667 shares, issued 47,046,364
and 48,132,664 shares |
4,704 |
|
4,813 |
Additional paid-in
capital |
7,005,553 |
|
7,411,172 |
Accumulated
deficit |
(186,854) |
|
(2,266,030) |
Total
Stockholders' Equity |
6,823,403 |
|
5,149,955 |
Total
Liabilities and Stockholders’ Equity |
$
10,432,701 |
|
$
9,367,474 |
|
|
|
|
CAPSTONE
COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
For
the Years Ended |
|
|
December
31, |
|
|
2017 |
|
2016 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Net
income |
|
$
2,079,176 |
|
$
2,821,088 |
Adjustments necessary to reconcile
net income to net cash provided by (used in) operating
activities: |
|
|
|
|
Depreciation and amortization |
|
80,940 |
|
63,678 |
Accrued interest on note receivable |
|
26,887 |
|
(26,887) |
Stock
based compensation expense |
|
95,469 |
|
67,057 |
Provision for deferred income tax |
|
35,000 |
|
216,000 |
Increase (decrease) in accrued sales allowance |
|
(1,006,731) |
|
527,502 |
Decrease in accounts receivable |
|
1,090,898 |
|
100,501 |
(Increase)
decrease in inventory |
|
225,696 |
|
(160,623) |
Decrease in prepaid expenses |
|
90,869 |
|
236,441 |
(Increase)
in other assets |
|
(1,423) |
|
- |
Increase in accounts payable and accrued
liabilities |
|
55,306 |
|
513,926 |
Increase (decrease) in accrued income tax
payable |
|
623,194 |
|
(5,912) |
Increase (decrease) in accrued interest on notes
payable |
|
56,554 |
|
(148,367) |
Net cash provided by operating
activities |
|
3,451,835 |
|
4,204,404 |
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
Purchase of property and
equipment |
|
(47,587) |
|
(53,510) |
Net cash (used in) investing
activities |
|
(47,587) |
|
(53,510) |
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Proceeds from notes
payable |
|
30,559,312 |
|
27,856,207 |
Repayments of notes
payable |
|
(30,559,312) |
|
(30,131,741) |
Repurchase of shares from Involve,
LLC |
|
(250,000) |
|
- |
Warrants issued |
|
7,500 |
|
- |
Proceeds from notes and loans payable
to related parties |
|
- |
|
860,000 |
Repayments of notes and loans payable
to related parties |
|
(1,139,680) |
|
(1,453,946) |
Net cash (used in) financing
activities |
|
(1,382,180) |
|
(2,869,480) |
|
|
|
|
|
Net increase in Cash and Cash
Equivalents |
|
2,022,068 |
|
1,281,414 |
Cash and Cash Equivalents at
Beginning of Year |
|
1,646,128 |
|
364,714 |
Cash and Cash Equivalents at End of
Year |
|
$
3,668,196 |
|
$
1,646,128 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION: |
|
|
|
|
Cash paid during the year
for: |
|
|
|
|
Interest |
|
$
418,925 |
|
$
429,814 |
Income taxes |
|
$
371,500 |
|
$
56,912 |
|
|
|
|
|
Non-cash financing
activities: |
|
|
|
|
Sale of Investment
for Note receivable |
|
$
- |
|
$
500,000 |
|
|
|
|
|
Shares issued in satisfaction of loan
payable to related party |
|
$
240,900 |
|
$
- |
|
|
|
|
|
Note receivable used to repurchase
shares from Involve L.L.C. |
|
$
500,000 |
|
$
- |
|
|
|
|
|
Capstone Companies (QB) (USOTC:CAPC)
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