StockerYale Reports 2009 Fourth Quarter and Full-Year Financial Results
STOCKERYALE REPORTS 2009 FOURTH QUARTER AND FULL-YEAR FINANCIAL RESULTS
Fourth-Quarter 2009:
• Revenue $2.7 million vs. $3.3 million in fourth quarter 2008, a 19% decrease year (down 24% adjusting for impact of currency fluctuation);
• Revenue up 13% sequentially versus the third quarter of 2009;
• Gross margin 35.6% vs.31.6% in 2008 and 30.6% in Q3, 2009;
• EBITDA loss $0.2 million vs. $0.4 million loss in 2008 and a $0.5 million loss in Q3, 2009;
• Order bookings $4.2 million, ending backlog $6.0 million;
• Percentage Revenue by Market Sectors: industrial 84%, defense 11% and medical 5%;
• Percentage Revenue by Geography: 48% Europe, 41% North America and 11% Rest of World.
Full-Year 2009:
• Revenue $10.5 million vs. $14.8 million, a 29% decrease year (down 20% adjusting for impact of currency fluctuation) ;
• Gross margin 30.2% vs. 31.4%;
• EBITDA (excluding one-time expenses) $2.0 million loss vs. $1.8 million loss;
• Order bookings $10 million;
• Realized cumulative cost savings in continuing operations during 2009 of $1.2 million;
• Percentage Revenue by Market Sectors: industrial 80%, defense 12% and medical 8%;
• Percentage Revenue by Geography: 49% Europe, 43% North America and 8% Rest of World.
2009 Business Highlights
• Divesture of North America assets for $15.0 million, resulting in a gain of $8.5 million, and cash proceeds used to paydown debt of $7.1 million.
• Goodwill impairment $4.4 million;
• Bookings improved significantly in Q4; up 64% versus Q4 2008 and 68% versus Q3 2009;
• Backlog improved 30% versus Q4 2008;
• Introduced expansion of line light product line from LED Systems business;
• Reduced costs and improved efficiencies throughout the business.
Salem, N.H. — March 18, 2010 — StockerYale, Inc. (Pink Sheet OTC: STKR), a leading designer and manufacturer of diode-based laser modules and LED systems for industrial OEMs, medical and defense markets, today announced its financial results for the fourth quarter and year ended December 31, 2009. Results are reported from continuing operations and exclude discontinued operations unless otherwise stated.
Fourth Quarter 2009 Financial Results
Total revenue for the fourth quarter of 2009 of $2.7 million decreased 19 percent (down 24%, adjusting for currency) from the fourth quarter of 2008. The year-over-year decrease was due to the recession and the appreciation of the US dollar versus the British pound. Bookings for the fourth quarter of 2009 were $4.2 million and backlog was $6.0 million at December 31, 2009.
Gross profit was $0.9 million for the fourth quarter of 2009, a decrease of 8% compared to $1.0 million in the fourth quarter of 2008. Fourth quarter 2009 gross profit margin was 35.6% compared with 31.6% in the comparable year-ago quarter due to the benefit of foreign currency exchange and various cost reduction initiatives during 2009.
Operating expenses totaled $5.9 million. Included in the operating expenses is a goodwill impairment charge of $4.4 million. Net of the impairment, the operating expenses totaled $1.5 million for the fourth quarter of 2009, versus $1.6 million in the fourth quarter of 2008. The net loss from continuing operations was $5.4 million; but, excluding the asset impairment charge of $4.4 million for the fourth quarter was $1.1 million compared to a net operating loss of $2.8 million for the fourth quarter 2008. EBITDA loss for the quarter was $(215,000) compared to $(434,000) for the fourth quarter of 2008. Net income of $2.6 million includes a gain on sale of discontinued operations in the amount of $8.5 million and a loss from discontinued operations in the amount of $0.5 million; included in the net income is the impairment charge of $4.4 million. In comparison, the 2008 net loss was $2.7 million, which includes a nil amount from discontinued operations.
Full-Year 2009 Financial Results
Total revenue for 2009 was $10.5 million, a decrease of 29% (20.0%, adjusting for currency) compared with $14.8 million in 2008. Gross profit was $3.2 million, a decrease of 32% compared to $4.6 million in 2008. Gross profit margin decreased to 30% from 31% in 2008 due to product mix, lower absorption of fixed over head costs, and offset by efficiency improvements and cost containment, and a positive impact from foreign currency of 5.2 percentage points.
Operating expenses totaled $11.3 million. Included in the operating expenses is a goodwill impairment charge of $4.4 million. Excluding the impairment charge, the operating expenses decreased 26% to $6.9 million from $9.3 million in 2008. Included in the 2008 expenses are one-time expenses associated with an attempted acquisition of $0.8 million. The net loss from continuing operations was $9.0 million; but, excluding a goodwill impairment charge of $4.4 million, was $4.6 million compared to $9.8 million in 2008. EBITDA loss was $2.0 million and included $0.8 million of favorable foreign exchange impact. This compares with an EBITDA loss of $1.8 million in 2008, excluding one-time acquisition expenses of $0.8 million. Net loss of $1.2 million includes a gain on the sale of discontinued operations in the amount of $8.5 million and a loss from discontinued operations in the amount of $0.7 million; included in the net loss is the impairment charge of $4.4 million. In comparison, the 2008 net loss was $10.3 million and includes a loss from discontinued operations in the amount of $0.5 million plus one-time acquisition expenses of $0.8 million.
Outlook
“During the fourth quarter, and accelerating into the first quarter of 2010, the Company has experienced a substantial increase in order bookings across all product lines” stated Mark W. Blodgett, Chairman and CEO. “Fourth quarter orders increased 64% over the prior year and increased 68% sequentially over the third quarter of 2009. Based on this trend we expect a continuation of sequential revenue growth in the first quarter of 2010. The Company has begun to selectively add resources to meet the increased demand in both the laser module and LED system businesses.
Blodgett added, “Moving forward, the Company will continue to invest in R&D for new product development in both LED systems and laser modules, as evidenced by the recent introduction of our high end structured light laser line, InViso™, at Photonics West in January. Further, we are currently evaluating several strategic opportunities that would enhance the overall business outlook, improve profitability through increased overhead absorption with the ultimate goal of increasing shareholder value. While we remain cautiously optimistic regarding the overall economy, we are heartened by the recent improvements in our business outlook and view StockerYale’s future with optimism,” concluded Blodgett.
CONFERENCE CALL INFORMATION:
StockerYale will host a conference call today at 4:30 PM EST (Thursday, March 18, 2010) to discuss its 2009 results and strategic outlook. Interested parties may participate in the live conference call by dialing 877-941-4774 (U.S. toll-free) or 480-629-9764 (international dial-in). No pass code is required for the call.
ABOUT STOCKERYALE
StockerYale, Inc., headquartered in Salem, New Hampshire, is an independent designer and manufacturer of diode-based laser modules and LED systems for industry leading OEMs. In addition, the Company distributes premium diodes for Opnext, Sanyo & Sony. The Company serves a wide range of markets including the machine vision, industrial inspection, defense, sensors, and medical markets. StockerYale has offices and subsidiaries in the U.S., Ireland, and Europe. For more information about StockerYale and their innovative products, visit the Company’s web site at www.stockeryale.com
SAFE HARBOR STATEMENT
This press release contains forward-looking statements 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 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-K, filed with the SEC on March 31, 2009 and the Company’s quarterly reports on Form 10-Q, most recently filed with the SEC on November 20, 2009, 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.
Investor Relations Contact:
Mark W. Blodgett
StockerYale, Inc.
603-893-8778
IRInfo@stockeryale.com
Use of Non-GAAP Financial Measures
The Company provides non-GAAP financial measures, such as EBITDA, to complement its consolidated financial statements presented in accordance with GAAP. Non-GAAP financial measures do not have any standardized 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 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 or replace the Company’s GAAP results.
The Company uses EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation and impairment charges) as a non-GAAP financial measure in this press release. A reconciliation of EBITDA to net income / (loss) for the fourth quarter and year ended 2009 is as follows:
Three Months Ended Twelve Months Ended
($ in thousands Unaudited)
December 31,
2009 2008 2009 2008
-----------------------------------------
Net Income / (Loss) $ 2,598 $ (2,736) $(1,177) $(10,285)
Gain on sale of discontinued operations (8,519) - (8,519) -
(Income) /loss from discontinued operations 487 (24) 700 490
Plus:
Interest and other expense/(income), net 274 2,224 (535) 3,292
Depreciation 132 141 544 622
Intangible asset amortization 135 190 694 999
Asset Impairment 4,377 - 4,377 -
Stock based compensation (credit) 87 (224) 514 508
Taxes (108) (164) (322) (367)
Amortization debt discount and financing costs 322 159 1,704 2,183
-----------------------------------------
EBITDA Loss (215) (434) (2,019) (2,558)
One-time expenses associated attempted acquisition - - - 784
-----------------------------------------
Adjusted EBITDA Loss (215) (434) (2,019) (1,774)
Consolidated Statements of Operations
($ In thousands except share and per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
----------------------------------------------------
Net Sales $2,655 $3,258 $10,456 $14,751
Cost of Sales 1,710 2,230 7,298 10,112
----------------------------------------------------
Gross Profit 945 1,028 3,158 4,639
----------------------------------------------------
Research & Development Expenses 131 148 555 536
Selling, General & Administrative Expenses 1,248 1,231 5,680 7,791
Amortization of Intangible Assets 135 190 694 999
Asset Impairment 4,377 - 4,377 -
----------------------------------------------------
Operating Loss (4,946) (541) (8,148) (4,687)
Interest & Other Income /(Expense) (2) (2,076) 928 (3,029)
Amortization of Debt Discount & Financing
Costs (322) (159) (1,704) (2,183)
Interest Expense (272) (148) (393) (263)
----------------------------------------------------
Loss before taxes from Continuing
Operations (5,542) (2,924) (9,317) (10,162)
Tax benefit (108) (164) (322) (367)
----------------------------------------------------
Net Loss from Continuing Operations (5,434) (2,760) (8,995) (9,795)
----------------------------------------------------
Gain on sale of discontinued operations (8,519) - (8,519) -
Income / (loss) from Discontinued Operations (487) 24 (701) (490)
----------------------------------------------------
Net Income (Loss) $2,598 $(2,736) $(1,177) $(10,285)
====================================================
Income (Loss) Per Share
Loss from Continuing Operations ($0.12) ($0.07) $(0.21) ($0.25)
Income from Gain on Sale of discontinued
operations $0.19 $0.00 $0.20 $0.00
Income/(Loss)from Discontinued Operations ($0.01) $0.00 ($0.02) ($0.01)
Net Income / (Loss) Per Share $0.06 ($0.07) ($0.03) ($0.27)
Weighted Average Shares Outstanding 44,124,936 40,590,710 43,641,373 38,522,858
Consolidated Condensed Balance Sheets
(Unaudited)
($ in Thousands)
December 31,
ASSETS 2009 2008
------------ -------------
Cash $4,478 $1,635
Other Current Assets 3,257 3,212
Other Current Assets - discontinued - 4,900
Property, Plant & Equipment, Net 3,835 4,241
Other Assets 1,806 6,641
Other Assets - discontinued - 6,813
------------ -------------
$13,376 $27,442
============ =============
LIABILITIES AND STOCKHOLDERS EQUITY
Total Current Liabilities $7,123 $12,295
Total Current Liabilities - discontinued - 2,638
Long Term Liabilities 6,568 10,178
Long Term Liabilities - discontinued - 52
Stockholders Equity (Deficit) (315) 2,279
------------ -------------
Total Liabilities & Stockholders Equity $13,376 $27,442
============ =============
Contact
StockerYale, Inc.
Mark W. Blodgett, 603-893-8778