- Revenue increased 80% versus Q2 2016 - well ahead of plan
- Income from Operations up 355% and Adjusted EBITDA up 234%
MISSISSAUGA, ONTARIO--(Marketwired - May 31, 2017) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Pioneering Technology Corporation (TSX VENTURE:PTE) ("Pioneering" or the "Company"), a technology company and North America's leader in cooking fire prevention technologies and products, is pleased to report its unaudited financial results for the second quarter and the six months ended March 31, 2017. The Company's unaudited financial statements and Management's Discussion and Analysis ("MD&A") are available for review at www.sedar.com.
In addition, during the quarter the new UL858 industry standard for electric coiled cooktops and ranges was published. This new standard, which includes a new cooking fire prevention requirement, is a very significant change and SmartBurner is believed to be the first and only product to meet this new standard.
Pioneering CEO Kevin Callahan said of the results, "We continue to grow our business profitably and create value. We are ahead of plan year to date and believe 50% year over year growth again in 2017 is achievable. The market for our product solutions is massive, awareness is growing and we are just in the early stages of market penetration. We are also pursuing new opportunities that we believe will enable the Company to continue to deliver further results and shareholder value."
Selected Financial Highlights for the Second Quarter & Six months Ended March 31, 2017 & 2016:
Ended March 31
Ended March 31
Ended March 31
Ended March 31
|Income from Operations||748,867||164,772||1,281,135||425,030|
|Income from Operations per share||0.02||0.00||0.03||0.01|
|Total Comprehensive Income (loss) †||(45,366||)||85,061||(1,106,240||)||276,320|
|Total Comprehensive Income per share †||0.00||0.00||(0.02||)||0.01|
|Adjusted EBITDA #||584,762||175,369||1,347,704||572,343|
|Financial liabilities †||4,948,172||2,000,864||4,948,172||2,000,864|
|†Includes non-cash (fair value movement/derivative liability of warrants). See below for further explanation.|
|#Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" below for further explanation.|
Derivative Liability of Warrants and Impact on Financial Statements
On September 6, 2016, the Company's functional currency changed from Canadian to US dollars. In accordance with IFRS requirements, warrants issued in March 2016 (expiring September 2017) had to be reclassified as a financial (or "derivative") liability because the Company's share price has increased substantially and is now significantly higher than the exercise price of these warrants. As such, the Company's financial statements currently include this derivative liability (a "non-cash item") and will continue to be included until these warrants are either exercised or expire in September 2017.
This non-cash item has a significant impact on the Company's reported comprehensive net income (and liabilities). The impact of this non-cash, IFRS requirement on the Company's Income Statement is a deficit of ($791,284) for Q2 2017 and a deficit for the six months ending March 31, 2017 of ($2,606,358).
Thus, the Company believes that "Income from Operations" and "Adjusted EBITDA" are the best measures of Company performance and therefore the Company will continue to report on these measures quarterly going forward. (See Financial Statements and MDA for more information).
Q2 2017 Highlights
Hotel/Motel Channel Validation. In Q2 2017, Pioneering received a follow-on purchase order from one of its new channel partners for one of North America's largest suite style hotel chains to equip an additional 159 hotel properties (19,300 hotel rooms) with Pioneering's SmartBurner. The new purchase order represents the second phase of major installations for this hotel chain which will now have equipped 297 of its over 700 hotel properties. This repeat hotel channel purchase reinforces the effectiveness of Pioneering's product with this customer as well as its potential in this new channel.
More Insurance Premium Reductions. Ontario's Housing Services Corporation (HSC) now provides an annual discount of 4% off property insurance premiums to all Ontario social housing operators in its insurance program who install either the SmartBurner or Safe-T-element products in their properties. HSC delivers services to over 100,000 housing units in Ontario. HSC's insurance program is one of the largest group programs in North America.
Pioneering's SmartBurner Added to HD Supply's U.S. National Distribution Program. Pioneering announced a new national distribution program in the United States with HD Supply Corporation of Atlanta, GA, one of the largest industrial & facility distributors in the U.S. This program includes HD Supply purchasing inventory to stock 12 distribution centers nationwide, inclusion in HD Supply's 2017 catalogue, and a sales and marketing program to drive awareness/support for SmartBurner.
Pioneering Completes $6 Million Bought Deal Private Placement. On March 22, 2017, the Company completed a private placement of 5,668,631 common shares and 2,834,315 warrants for gross proceeds of $6,235,494.10. On April 20, 2017, the underwriter for the offering exercised its over-allotment option to purchase an additional 327,000 common shares and 163,500 warrants. As a result, a total of 5,995,631 common shares and 2,997,815 warrants were issued for total gross proceeds of $6,595,194.10. The net proceeds will be used to repay existing indebtedness, fund business expansion, invest in product development and sales & marketing and for general corporate and working capital purposes. The financing included several institutional buyers.
Pioneering Recognized as One of the Top Performing Stocks on the TSX Venture Exchange - Pioneering was selected for inclusion to the 2017 TSX Venture 50 as one of the top performers on the TSX Venture Exchange. The 2017 TSX Venture 50 is a ranking of the top fifty performers of 1,791 issuers listed on the TSX Venture based on trading volume, market capitalization growth and share price appreciation. In 2016, Pioneering's trading volume was 25,176,449, its market capitalization increased by 1,170% and its share price appreciated by 725% meaning Pioneering was the 2nd best performer on the TSXV in 2016.
New Industry Standard. Pioneering announced that the new UL858 industry standard for electric coiled cooktops and ranges, which now includes a new cooking fire prevention requirement, has been published and that Pioneering's SmartBurner has passed this new testing requirement and is now listed as meeting the new industry standard for sale in the United States. As of April 2019, electric coil ranges that don't meet the new standard cannot be listed for sale. SmartBurner is believed to be the only solution to meet the new industry standard. This is a very significant development for the Company and the industry and sets a new benchmark for household cooking fire safety.
Hotel/Motel Channel Expansion. Pioneering announced that another major suite style hotel chain in North America will equip approximately 5,700 hotel rooms with Pioneering's SmartBurner product. The sale was led by one of Pioneering's new distribution partners. This new order is further validation of the successful execution of the Company's new distributor strategy and its expansion and deeper sales penetration into this new, large and relevant channel. The Company expects to announce further hotel opportunities soon.
Analyst Coverage Initiated - Echelon Private Wealth initiated coverage on Pioneering Technology Corp. on April 26, 2017.
About Pioneering Technology Corp: Pioneering, based in Mississauga, Ontario is an "energy smart" technology company and North America's leader in innovative cooking fire prevention technologies. Pioneering engineers and brings to market energy-smart solutions for everyday consumer appliances making them safer, smarter, and more efficient. The company's patented technologies/products address a multi-billion-dollar problem - cooking fires. According to the National Fire Protection Association, stovetop cooking is the number one cause of household fire and fire injuries in North America (48% of all household fires - up from 20% in 1980). Pioneering's temperature limiting control (TLC) technology is now installed in approximately 200,000 multi-residential housing units across North America without a single cooking fire being reported and delivering a return on investment for its customers. Pioneering has proprietary cooking fire prevention solutions, including its trademarked Safe-T-element, SmartBurner, RangeMinder & Safe-T-sensor, for the majority of the more than 140 million stoves/ranges and over 140 million microwave ovens throughout North America. For more info, go to www.pioneeringtech.com.
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in Pioneering's target markets, the demand for Pioneering's products, the availability of funding and the efficacy of Pioneering's technology and governmental regulation. These forward-looking statements are made as of the date hereof an, except as required by applicable law, Pioneering does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from Pioneering's expectations and projections.
Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization ("Adjusted EBITDA) is a measure not recognized under Canadian generally accepted accounting principles ("GAAP"). However, management of Pioneering believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. Adjusted EBITDA is defined as earnings before interest income, taxes, depreciation and amortization, impairment losses, stock-based compensation, restructuring costs included in general and administration expense, fair value movement - derivative liability and other non-recurring gains or losses including transaction costs related to acquisition. Management believes Adjusted EBITDA is a useful measure that facilitates period-to-period operating comparisons. Adjusted EBITDA does not have any standard meanings prescribed by GAAP and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that Adjusted EBITDA is not an alternative to measures determined in accordance with GAAP and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Pioneering's Adjusted EBITDA should be read in conjunction with the financial statements and management's discussion and analysis of Pioneering posted on SEDAR (www.sedar.com).
This news release contains certain forward-looking statements reflecting the Company's current views or expectations on its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.