DEERFIELD BEACH, Fla., May 15, 2015 (GLOBE NEWSWIRE) -- Capstone Companies, Inc. (OTC:CAPC) ("Capstone" or the "Company"), a designer of innovative LED lighting solutions including power failure lighting, today reported its financial results for the first quarter of 2015.
Stewart Wallach, Capstone's CEO, commented, "The first quarter results came in about where we anticipated they would. The transition from Capstone branded products to the new Hoover® LED Home lighting products brand resulted in a disruption to sales that was required to minimize product buyback expenses before rolling out the new brand. We expect to see some additional impact from this process again in the second quarter.
"As you may know, we also debuted our largest product expansion in the history of Capstone just last week during the 2015 National Hardware Show in Las Vegas. I am pleased with the reactions our new products received. It was very gratifying to see first-hand the positive response to our innovative and unique offerings."
First Quarter Review
Revenue was $0.7 million for the first quarter, down from the prior year's first quarter mostly because of the cancelation of retailer promotional opportunities due to the West Coast ports dispute, the Company's decisions to exit the book light category in 2014 and the transition to the new Hoover® branded product lines.
Gross profit was $1.2 million in the first quarter of 2014. Gross profit margin as a percent of sales was 43.1%. First quarter 2015 gross profit margin included the reversal of an accrual related to product promotion allowances, which benefited gross profit margin by approximately 19 percentage points.
Operating expenses were $0.7 million compared with $0.8 million in the first quarter of 2014.
Net loss of $0.4 million compared with net income of $0.3 million in 2014's first quarter.
Webcast and Teleconference to Review Results and Outlook
The Company will host a live webcast and conference call on Monday, May 18, 2015 at 10:30 a.m. ET. During the call, management will review the financial and operating results and discuss the Company's corporate strategy and outlook. The conference call can be accessed by dialling (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 teleconference until Monday, May 25, 2015. To listen to the replay of the call, dial (858) 384-5517 and enter replay pin number 13608259. Alternatively, the archive of the webcast will be available on the Company's website at www.capstonecompaniesinc.com. A transcript will also be posted to the website, once available.
About Capstone Companies, Inc.
Capstone Companies, Inc. is a public holding company that engages, through its wholly-owned subsidiaries, Capstone Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone International HK, Ltd., in the development, manufacturing, logistics, and distribution of consumer and institutional products, including the Hoover® LED Home lighting product line, to accounts throughout North America and in international markets. See 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 URL's 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 | ||
| UNAUDITED | ||
| For the Three Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| Revenues | $ 713,517 | $ 3,962,369 |
| Cost of sales | (406,167) | (2,781,829) |
| Gross profit | 307,350 | 1,180,540 |
| Gross margin | 43.1% | 29.8% |
| Operating Expenses: | ||
| Sales and marketing | 36,672 | 174,672 |
| Compensation | 361,108 | 295,327 |
| Professional fees | 96,173 | 73,781 |
| Product development | 45,658 | 132,330 |
| Other general and administrative | 121,355 | 142,540 |
| Total operating expenses | 660,966 | 818,650 |
| Net operating (loss) income | (353,616) | 361,890 |
| Operating margin | -49.6% | 9.1% |
| Other expense: | ||
| Interest expense | (37,156) | (101,125) |
| Total other expense | (37,156) | (101,125) |
| (Loss) income before tax provision | (390,772) | 260,765 |
| Provision for income tax | -- | -- |
| Net (loss) income | $ (390,772) | $ 260,765 |
| Net (loss) income per common share | ||
| Basic | $ -- | $ -- |
| Diluted | $ -- | $ -- |
| Weighted average shares outstanding | ||
| Basic | 654,010,532 | 656,093,865 |
| Diluted | 654,010,532 | 815,190,442 |
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS | ||
| UNAUDITED | ||
| March 31, | December 31, | |
| 2015 | 2014 | |
| Assets: | ||
| Current assets: | ||
| Cash | $ 147,868 | $ 313,856 |
| Accounts receivable - net | 417,588 | 977,597 |
| Advances | -- | 14,456 |
| Due from sterling factors | 355,053 | -- |
| Inventory | 186,455 | 128,984 |
| Prepaid expense | 370,125 | 358,046 |
| Total current assets | 1,477,089 | 1,792,939 |
| Fixed assets: | ||
| Computer equipment & software | 14,557 | 12,272 |
| Machinery and equipment | 299,693 | 299,693 |
| Furniture and fixtures | 5,665 | 5,665 |
| Less: accumulated depreciation | (236,277) | (223,589) |
| Total fixed assets | 83,638 | 94,041 |
| Other non-current assets: | ||
| Deposit | 12,193 | 12,193 |
| Investment (AC Kinetics) | 500,000 | 500,000 |
| Goodwill | 1,936,020 | 1,936,020 |
| Total other non-current assets | 2,448,213 | 2,448,213 |
| Total assets | $ 4,008,940 | $ 4,335,193 |
| Liabilities and Stockholders' Equity: | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 731,968 | $ 644,629 |
| Note payable - sterling factors | -- | 286,945 |
| Notes and loans payable to related parties - current maturities | 2,171,371 | 1,936,679 |
| Total current liabilities | 2,903,339 | 2,868,253 |
| Commitments and Contingent Liabilities | ||
| Stockholders' equity: | ||
| Preferred stock, series A, par value $.001 per share, authorized 100,000,000 shares, issued -0- shares | -- | -- |
| Preferred stock, series B-1, par value $.0001 per share, authorized 50,000,000 shares, issued -0- shares | -- | -- |
| Preferred stock, series C, par value $1.00 per share, authorized 1,000 shares, issued 1,000 shares | 1,000 | 1,000 |
| Common stock, par value $.0001 per share, authorized 850,000,000 shares, issued 654,010,532 shares | 65,401 | 65,401 |
| Additional paid-in capital | 7,216,491 | 7,187,058 |
| Accumulated deficit | (6,177,291) | (5,786,519) |
| Total stockholders' equity | 1,105,601 | 1,466,940 |
| Total liabilities and stockholders' equity | $ 4,008,940 | $ 4,335,193 |
| CAPSTONE COMPANIES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| UNAUDITED | ||
| For the Three Months Ended | ||
| March 31, | ||
| 2015 | 2014 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net (loss) income | $ (390,772) | $ 260,765 |
| Adjustments necessary to reconcile net loss to net cash used in operating activities: | ||
| Stock cancellation | -- | (28,875) |
| Depreciation and amortization | 12,687 | 19,254 |
| Compensation expense from stock options | 29,433 | 17,672 |
| Accrued sales allowance | (181,978) | 257,632 |
| Decrease in accounts receivable | 747,014 | 2,720,364 |
| Increase in inventory | (57,470) | (3,728) |
| (Increase) decrease in prepaid expenses | (12,083) | 731,136 |
| Decrease (increase) in other assets | 14,456 | (33,831) |
| Increase (decrease) in accounts payable and accrued expenses | 82,314 | (839,367) |
| Increase in accrued interest on notes payable | 34,692 | 43,239 |
| Net cash provided by operating activities | 278,293 | 3,144,261 |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchase of property and equipment | (2,284) | (10,406) |
| Net cash (used in) investing activities | (2,284) | (10,406) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Proceeds from notes payable | 607,276 | 4,012,828 |
| Repayments of notes payable | (1,249,273) | (6,507,313) |
| Proceeds from notes and loans payable to related parties | 200,000 | -- |
| Repayments of notes and loans payable to related parties | -- | (624,077) |
| Net cash (used in) financing activities | (441,997) | (3,118,562) |
| Net (decrease) increase in cash and cash equivalents | (165,988) | 15,293 |
| Cash and cash equivalents at beginning of year | 313,856 | 436,592 |
| Cash and cash equivalents at end of year | $ 147,868 | $ 451,885 |