Lumenpulse Reports First Quarter of Fiscal 2016 Results

MONTREAL, QUEBEC--(Marketwired - Sept. 10, 2015) - Lumenpulse Inc. (TSX:LMP)

• Total revenues of $31.9 million for Q1 2016; up 72% over Q1 Fiscal 2015, including $29.1 million of Lumenpulse Products Revenue
  
  
• Strong North America Q1 revenue with growth at 89% over Q1 Fiscal 2015
  
  
• Solid Q1 Consolidated Adjusted Gross Margin at 47%, a 5% increase compared to Q1 Fiscal 2015. Q1 Lumenpulse Products Adjusted Gross Margin at 49% compared to 43% last year within range of the Company's long-term goal
  
  
• Q1 Adjusted EBITDA of $2.0 million, or 6.3% of revenues, an improvement of $3.0 million compared to Q1 Fiscal 2015
  
  
• Q1 Adjusted Net Income of $2.3 million compared to an Adjusted Net Loss of $1.4 million for the same period last year
  
  
• Q1 Adjusted diluted EPS of $0.09

Lumenpulse Inc. (TSX:LMP), a leading manufacturer of high performance, specification-grade LED lighting solutions, released today its first quarter of Fiscal 2016 results for the period ended July 31, 2015.

"We had a very good start to Fiscal 2016, delivering another record revenue quarter for the Company. Our team's solid execution allows us to continue to deliver outstanding revenue growth and excellent margin expansion," said François-Xavier Souvay, the Company's President and CEO.

"Lumenpulse Products revenues grew by 88% compared to last year with a very significant contribution from North America which grew 89%.

Q1 Lumenpulse Products Adjusted Gross Margin reached a solid 49%, a 6 percentage point increase over the same period last year. The expansion of our gross margin is a clear indication that our investments in infrastructure and our productivity initiatives are working. We have consistently delivered positive Adjusted EBITDA and Adjusted Net Earnings for four consecutive quarters while we continued to invest significantly to support our growth," added Mr. Souvay.

"We are starting the second quarter with a very robust balance sheet, including $43 million in cash. This gives us flexibility in pursuing our disciplined acquisition strategy as we continue to search for high-impact growth opportunities," stated Robert Comeau, Chief Financial Officer.

"Our objectives remain to continue growing Lumenpulse's business at a rate that exceeds the growth rate in the general lighting market for LED products, and, within the next four years, to converge towards market growth, reaching Adjusted Gross Margins that approach 50% and Adjusted EBITDA margins of approximately 18% to 20%.

"For the remaining of Fiscal 2016, we are confident that we are well positioned to seize opportunities and continue to gain market share while driving further value creation through solid revenue growth, gross margin expansion and EBITDA growth as a percentage of sales," concluded Mr. Souvay.

Financial Highlights

(Unaudited, in millions of Canadian dollars, except per share amounts)

For the First Quarter ended July 31, 2015
		Q1 2016		Q1 2015		Change
Revenues - Consolidated		31.9		18.6		13.3
	Growth	72	%
Revenues - Lumenpulse products (LP)		29.1		15.5		13.6
	Growth	88	%
Adjusted Gross Profit % - Consolidated1		47	%	42	%	5 pts
Adjusted Gross Profit % - LP1		49	%	43	%	6 pts
Adjusted EBITDA1		2.0		(1.0	)	3.0
Net Income (Loss)		1.5		(2.3	)	3.8
Adjusted Net Income (loss)1		2.3		(1.4	)	3.7
Ajusted EPS (loss per share) - Diluted1, 2		0.09		(0.06	)	0.15

1	See the Non-IFRS financial measures section below.
2	The calculations for the first quarter of Fiscal 2016 include 1,408,293 stock options, which are deemed to be dilutive. In the periods where the Company incurred net losses, all potentially dilutive stock options have been excluded from the calculation of diluted loss per share. All outstanding share options could potentially dilute earnings per share in the future.

Revenues

For its first quarter of Fiscal 2016 ended July 31, 2015, Lumenpulse revenues increased by $13.3 million, or 72%, to $31.9 million compared with $18.6 million for the corresponding period last year. This increase is entirely due to the increase of the Lumenpulse Product segment, which achieved significant year-over-year growth of 88% with revenues of $29.1 million from $15.5 million for the same period last year.

The increase in Lumenpulse Product revenues was mainly attributable to solid organic growth of $8.8 million, or 64%. This growth was fueled by a strong performance in North America with year-over-year growth of 89%. Specifically, this growth was driven by the leveraging of our existing line of products, the introduction of new complementary products to our existing product portfolio, a net favorable foreign exchange impact and further penetration of our existing network of agents and VARs in North America.

International revenues continued to be an important and increasingly large contributor to the first quarter performance representing 25% of total revenues.

Adjusted Gross Margin

For the first quarter ended July 31, 2015, the consolidated Adjusted Gross Margin increased to 47.1% from 41.9% for the same period last year. The increase was primarily related to the greater proportion of Lumenpulse Products which generate a higher gross margin which has improved year-over-year.

For the first quarter of Fiscal 2016, the Adjusted Gross Margin on Lumenpulse Products increased to 48.6% from 43.3% for the same period last year. The Lumenpulse Products Adjusted Gross Margin reached 52.4%, when excluding the contribution from product portfolios acquired in Fiscal 2015. The improvement in native Lumenpulse Products Adjusted Gross Margin is due to a combination of improved manufacturing efficiency, higher capacity utilization, favorable product mix and the impact of a net favorable change in foreign currency rates. This upward trend is a strong validation of our long-term objective of reaching a Lumenpulse Products Adjusted Gross Margin in the range of 50%.

Adjusted EBITDA

For the first quarter of Fiscal 2016, Adjusted EBITDA increased to $2.0 million from an Adjusted Loss of $1.0 million for the same period last year. For the first quarter, the increase in Adjusted EBITDA is mainly attributable to increased revenues, improved gross margins partially offset by the higher level of operating expenses needed to support growth.

Adjusted Net Income (Net Loss)

For the first quarter of Fiscal 2016, the Adjusted Net Income increased to $2.3 million from a $1.4 million loss for the corresponding period last year. The improvement was primarily due to the improved Adjusted EBITDA and includes a net foreign exchange gain.

Conference Call

Lumenpulse has scheduled a conference call to discuss these results on Thursday, September 10, 2015, beginning at 11:00 A.M. (ET). This conference call will be broadcast live on the Internet at the following link: Q1 2016 Earnings Conference Call. A slideshow presentation intended for real-time viewing with the conference call will also be available. Alternatively, investors may join by dialing in North America: 1-844-825-4409 (conference ID: 12724791). The webcast will be archived at www.lumenpulse.com/en/investors/quarterly-results.

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Selling and Marketing Expenses, Adjusted Research and Development Expenses, Adjusted General and Administrative Expenses and Adjusted Earnings (Loss) per share- basic and diluted to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. EBITDA is defined as earnings before net financing (income) costs, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA less unusual and non-recurring items, and non-cash share-based compensation. Unusual and non-recurring items is defined as expenses incurred for the initial public offering ("IPO"), acquisition-related costs and restructuring costs.

Adjusted Net Income (Loss) is defined as net income (loss) before net change in carrying value of the redeemable shares at the option of the holders and related financial derivative liability, early repayment fee on long-term debt, unusual and non-recurring items net of taxes, unusual and non-recurring tax recoveries and non-cash share-based compensation. Unusual and non-recurring tax recoveries is defined as tax recoveries resulting from estimated values of acquired assets and liabilities. Adjusted Gross Profit is defined as gross profit before non-cash share-based compensation and depreciation and amortization. Adjusted Operating Expenses is defined as operating expenses less non-cash share-based compensation, depreciation and amortization, and unusual and non-recurring items. Adjusted Selling and Marketing Expenses is defined as selling and marketing expenses less non-cash share-based compensation, and depreciation and amortization. Adjusted Research and Development Expenses is defined as research and development expenses less non-cash share-based compensation, and depreciation and amortization. Adjusted General and Administrative Expenses is defined as general and administrative expenses less non-cash share-based compensation, depreciation and amortization, and unusual and non-recurring items. Adjusted Earnings (Loss) per share - basic is defined as the Adjusted Net Income (Loss) on the weighted average number of ordinary shares outstanding during the period. Adjusted Earnings per share - diluted is defined as the Adjusted Net Income on the weighted average number of ordinary shares outstanding during the period and all potentially dilutive stock options. Adjusted Loss per share- diluted is defined as the Adjusted Net Income on the weighted average number of ordinary shares outstanding during the period. In the periods where the Company incurred net losses, all potentially dilutive stock options have been excluded from the calculation of diluted loss per share. All outstanding share options could potentially dilute earnings per share in the future.

For a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted Net Income (Loss), a reconciliation of gross profit to Adjusted Gross Profit, a reconciliation of operating expenses to Adjusted Operating Expenses, a reconciliation of selling and marketing expenses to Adjusted Selling and Marketing Expenses, a reconciliation of research and development expenses to Adjusted Research and Development Expenses and a reconciliation of general and administrative expenses to Adjusted General and Administrative Expenses, please refer to "Reconciliation of Non-IFRS Measures" in the Company's Management's Discussion & Analysis for the First Quarter Fiscal 2016 filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at www.SEDAR.com.

Forward-Looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", or "continue", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in the Company's Management's Discussion and Analysis for the fiscal year ended April 30, 2015 and the Company's annual information form dated June 18, 2015 filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at www.sedar.com. There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information. Forward-Looking statements are provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to help investors measure progress towards management's objectives and the reader is cautioned that such statements may not be appropriate for other purposes.

Additional information about the Company, including our 2015 Annual Information Form, is available on our website at www.lumenpulse.com and on the SEDAR website at www.sedar.com.

About Lumenpulse Inc.

Founded in 2006, Lumenpulse designs, develops, manufactures and sells a wide range of high performance and sustainable specification-grade LED lighting solutions for commercial, institutional and urban environments. Lumenpulse is a leading pure-play specification-grade LED lighting solutions provider and has earned many awards and recognitions, including several Product Innovation Awards (PIA), three Next Generation Luminaires Design Awards, a Red Dot Product Design Award and a Lightfair Innovation Award. Lumenpulse has more than 437 employees worldwide, with corporate headquarters in Montreal, Canada, and offices in Québec City, Boston, Paris, London and Manchester. Lumenpulse is listed on the Toronto Stock Exchange under the symbol LMP.