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Capstone Companies Delivers Record 2017 Revenue
- Total revenue increased 20% to $36.8 million
- Gross profits increased 20% to $8.8 million
- Capstone debt free at year-end
DEERFIELD BEACH, Fla.–(BUSINESS WIRE)–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.
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 | $ | – |
Contacts
Capstone Companies, Inc.
Aimee Gaudet, 954-252-3440, ext. 313
Corporate
Secretary
