StockerYale Announces Third Quarter 2006 Financial Results.Company Reports 10% Revenue Increase, 21% Improvement in Gross Profit, 81% Improvement in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results, including Photonic Dealing with light (photons). See photon and photonics. Products Ltd Acquisition, Raises Revenues to $6.9 Million with an EBITDA of $0.4 million SALEM, N.H. -- StockerYale, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : STKR), a leading independent provider of photonics-based products, today announced its financial results for the third quarter ended September 30, 2006. All 2005 and 2006 numbers have been adjusted for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and do not include financial results from the acquisition of Photonic Products Ltd., which was completed on October 31, 2006. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the third quarter of 2006 were $4.5 million, representing a 10% comparable increase over the third quarter of 2005. Specialty optical fiber continues to drive revenue growth. The optical components product line, mainly optical fiber, increased 17% over the quarter ended September 30, 2005. Comparable laser and LED revenues increased 9% and 13%, respectively. Gross profit increased 21% to $1.6 million in the third quarter versus $1.3 million in the comparable quarter of 2005. Gross margin was 34%. Gross profit was negatively impacted by higher material cost, as well as a decline in the value of the U.S. dollar versus the Canadian dollar Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . The operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the third quarter was $0.7 million versus $1.1 million in 2005, excluding stock-based compensation expense of $0.1 million, a 40% improvement. Research and development expenses of $0.6 million were 6% lower than the third quarter of 2005. Selling expenses increased 4% to $0.6 million. General and administrative expense declined 4% due to a reduction in legal fees, and lower compensation, offset partially by the expensing of stock based compensation resulting from the Company's adoption of FAS123R. EBITDA loss declined 81% to $86,000 in the third quarter 2006 compared to a loss of $460,000 in the same period in 2005 and 57% compared to a loss of $198,000 in the previous quarter. "Our year-over-year laser revenue showed moderate growth, tracking the machine vision market," said Marianne Molleur, StockerYale's Chief Financial Officer. "We were able to demonstrate effective management of expenses and operations, resulting in a continued reduction in our operating and EBITDA loss this quarter. In addition, higher margins and growth in optical component revenues have contributed to improved overall financial performance this year. We expect that the acquisition of Photonic Products, Ltd. will increase the Company's revenue growth, margins and profitability," added Molleur. "Had Photonic Products results been included in the third quarter, pro-forma consolidated revenues would have been approximately $6.8 million with EBITDA of about $400,000. We expect the Photonics Products acquisition to be slightly accretive to earnings this year and meaningfully accretive in 2007. THIRD QUARTER HIGHLIGHTS * Revenues increased 10% to $4.5 million due to strong performance in the optical components product line and LEDs. * Gross profit increased 21% to $1.6 million versus $1.3 million. Gross margins improved to 34% from 31%. * Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. decreased 6% including $0.1 million related to foreign currency exchange rates. Selling expense rose by $22,000, general and administrative expense decreased 4% largely due a reduction in legal and compensation expenses, offset partially by the expensing of stock based compensation resulting from the Company's adoption of FAS123R. Research and development expenditures represented 14% of revenues. * Operating loss declined 31% to $0.7 million from the comparable quarter due to higher revenue, higher margin rates, and lower operating expenses. * EBITDA loss was reduced 81% to $86,000 versus $460,000 loss reported in the comparable quarter of the prior year. YEAR-TO-DATE HIGHLIGHTS * Revenues increased 12% to $13.5 million due to the strong performance in specialty optical fiber, lasers and LEDs. * Gross profit increased 22% to $5.0 million versus $4.1 million. Gross margins improved to 37% from 33%. * Operating expenses were flat compared to the first nine months of 2005, excluding asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges. Selling expense rose by $177,000, of which $92,000 is related to the effect of foreign currency exchange rates. Research and development expenditures represented 15% of revenues. * Operating loss declined 29% to $2.4 million from the comparable first nine months, excluding asset impairment charges, due to higher revenue and sale of higher margin products. * EBITDA loss was reduced 68% to $0.5 million versus the $1.6 million loss reported in the comparable first nine months of last year. OUTLOOK "We expect the combination of StockerYale and Photonic Products, Ltd to result in a measurable improvement in financial results in the year to come," said Mark W. Blodgett, Chairman and Chief Executive Officer. "Given the numerous cross-selling opportunities between our respective customers that we expect will drive future revenue growth, combined with a small public company's fixed cost structure, we anticipate improved margins and a notable improvement in bottom line performance in 2007," added Blodgett. USE OF NON-GAAP FINANCIAL MEASURES The Company provides non-GAAP financial measures, such as EBITDA, to complement its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Non-GAAP financial measures do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. definition and, therefore, are unlikely to be comparable to similar measures presented by other reporting companies. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial and operating performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses, gains and losses (such as amortization of intangibles, stock-based compensation, impairment charges, acquisition-related costs and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and related costs) that when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance, which management uses to evaluate financial performance for purposes of planning for future periods. However, these non-GAAP financial measures are not intended to supersede To obliterate, replace, make void, or useless. Supersede means to take the place of, as by reason of superior worth or right. A recently enacted statute that repeals an older law is said to supersede the prior legislation. or replace the Company's GAAP results. The company uses EBITDA (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
[TABLE OMITTED] Pro-forma Non-GAAP reconciliation including Photonic Products Ltd. [TABLE OMITTED] [TABLE OMITTED] ABOUT STOCKERYALE StockerYale, Inc., headquartered in Salem, New Hampshire Salem is a town in Rockingham County, New Hampshire, United States. The population was 28,112 at the 2000 census. Salem is a marketing and distributing center, with several colleges, recreation attractions and a large shopping mall, the Mall at Rockingham Park. , is an independent designer and manufacturer of structured light lasers, LED modules, and specialty optical fibers for industry leading OEMs. In addition, the company manufactures fluorescent fluorescent having the quality of fluorescence. fluorescent antibody see fluorescence microscopy. fluorescent antibody test see fluorescence microscopy. lighting products and phase masks. The Company serves a wide range of markets including the machine vision, industrial inspection, defense, telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. , sensors
For more information about StockerYale and their innovative products, visit the Company's web site at www.stockeryale.com or contact StockerYale, Inc., at 32 Hampshire Rd., Salem, NH, 03079. Call 800-843-8011, Fax 603-893-5604, Email: info@stockeryale.com. NOTICE TO INVESTORS: Photonic Products' financial statements are unaudited and have been prepared in accordance with UK generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . As such, statements included herein regarding Photonic Products' financial and operating results are estimates only. StockerYale expects to complete an audit of Photonic Products' financial statements within approximately 75 days. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including without limitation, those with respect to StockerYale's goals, plans and strategies set forth herein are forward-looking statements. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: uncertainty that cash balances may not be sufficient to allow StockerYale to meet all of its business goals; uncertainty that StockerYale's new products will gain market acceptance; the risk that delays and unanticipated expenses in developing new products could delay the commercial release of those products and affect revenue estimates; the risk that one of our competitors could develop and bring to market a technology that is superior to those products that we are currently developing; and StockerYale's ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. its significant research and development efforts by successfully marketing those products that the Company develops. Forward-looking statements represent management's current expectations and are inherently uncertain. You should also refer to the discussion under "Factors Affecting Operating Results" in StockerYale's annual report on Form 10-KSB and most recent quarterly report on Form 10-QSB for additional matters to be considered in this regard. Thus, actual results may differ materially. All Company, brand, and product names are trademarks or registered trademarks of their respective holders. StockerYale undertakes no duty to update any of these forward-looking statements. The third quarter results have not been reviewed by our auditors, Vitale, Caturano & Company. A quarterly review will be performed prior to the Company filing its 2006 third quarter Form 10-QSB. |
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