|
TCP Reports First Quarter 2015 Financial Results
AURORA, Ohio, May 4, 2015 /PRNewswire/ -- TCP International Holdings Ltd. (NYSE: TCPI), a leading global manufacturer and distributor of energy efficient lighting technologies, today announced financial results for its first quarter ended March 31, 2015.
Net sales for the first quarter of 2015 were $98.8 million, a 35% decrease compared with $153.1 million in the fourth quarter of 2014 and a 2% decrease compared with $101.1 million in the first quarter of 2014. Net loss in the first quarter of 2015 was $1.2 million, or $0.04 per diluted share, compared to net income of $2.1 million, or $0.07 per diluted share, in the fourth quarter of 2014 and net income of $3.9 million, or $0.19 per diluted share, in the first quarter of 2014. Adjusted earnings per share were $0.00 for the first quarter of 2015, compared to $0.13 in the fourth quarter of 2014.
"While revenues were tempered by our decision to perform a safety review of all products shipped in March, we were pleased that our cost reduction roadmap resulted in strong margins for the quarter, demonstrating TCP's position as a market leader in energy-efficient lighting," said Ellis Yan, TCP's Chairman and CEO.
First Quarter 2015 Summary
Following is a summary of certain key financial measures for the first quarter of 2015:
- Net sales were $98.8 million, a decrease of $54.3 million, or 35%, from the fourth quarter of 2014 and a decrease of $2.3 million, or 2%, from the first quarter of 2014.
- LED sales were $40.6 million, a decrease of $14.3 million, or 26%, from the fourth quarter of 2014, largely due to reduced sales from seasonal buying practices among all sales channels, as well as lower volume in 2015 attributable to voluntary shipping delays associated with our product validation review. Our LED sales increased $4.3 million, or 12%, compared with the first quarter of 2014, driven by higher sales with Walmart and higher sales in our C&I channel.
- CFL sales were $52.6 million, a decrease of $37.9 million, or 42% from the fourth quarter of 2014, primarily due to significantly lower sales with The Home Depot, and a decrease of $6.9 million, or 12%, from the first quarter of 2014, mainly due to lower sales in our C&I channel and with Walmart.
- Gross margin was 24.5%, an increase from 17.7% in the fourth quarter of 2014, and level with the first quarter of 2014. The increase from the fourth quarter of 2014 mainly is due to favorable product and channel mix from a higher proportion of LED and C&I sales, as well as the non-recurrence of a write-down of Connected by TCPTM inventory, which adversely impacted gross margin in fourth quarter of 2014.
- Selling, general and administrative expenses were $21.0 million, flat with the fourth quarter of 2014, but an increase of $4.0 million from the first quarter of 2014. The increase from the first quarter of 2014 is primarily due to share-based compensation expense associated with restricted share units granted in connection with our IPO and an increase in professional fees largely related to our previously disclosed litigation.
- Our effective income tax rate of 229.2% primarily was due to a $1.3 million shortfall charged to income tax expense from the issuance of common shares underlying RSUs with a fair value at issuance that was less than the fair value at grant date.
- Net loss was $1.2 million, compared with net income of $2.1 million in the fourth quarter of 2014 and net income of $3.9 million in the first quarter of 2014. Diluted net loss per share was $0.04, compared with diluted net income per share of $0.07 in the fourth quarter of 2014 and diluted net income per share of $0.19 in the first quarter of 2014.
At March 31, 2015, cash and cash equivalents were $58.0 million, up from $31.4 million at December 31, 2014, primarily resulting from the collections of account receivables from record 2014 fourth quarter sales. Combined short-term loans and long-term debt was $90.3 million at March 31, 2015, up from $80.0 million at December 31, 2014 largely due to additional borrowings used to finance our anticipated working capital needs.
Conference Call and Webcast Information
The Company will host a conference call today, May 4, 2015, at 4:30 p.m. Eastern Time. Chief Executive Officer Ellis Yan and Chief Financial Officer Brian Catlett will present an overview of the first quarter 2015 financial results, discuss current business conditions, and respond to questions. The call will be available, live, to interested parties by dialing (888) 220-8746. For international callers, please dial (913) 312-0653. The Conference ID number is 8265677. A live webcast will also be available in the Investors Relations section of the TCP website at: http://investors.tcpi.com. A replay of the webcast will be available through the Investor Relations section of the Company's web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.
Non-GAAP Adjusted EBITDA and Adjusted EPS
We present the non-GAAP financial measures "Adjusted EBITDA" and "Adjusted EPS" as supplemental measures of our performance. These non-GAAP financial measures are not measures of financial performance or liquidity calculated in accordance with accounting principles generally accepted in the United States, referred to herein as U.S. GAAP, and should be viewed as a supplement to, not a substitute for, our results of operations and balance sheet information presented on the basis of U.S. GAAP.
We define EBITDA as net (loss) income before interest expense, income taxes, depreciation and amortization, and Adjusted EBITDA as EBITDA before net foreign exchange losses (gains), litigation settlements, share-based compensation expense and other nonrecurring items.
We define Adjusted EPS as net (loss) income per share, diluted, from continuing operations excluding net foreign exchange losses (gains), litigation settlements, share-based compensation expense and other nonrecurring items.
Adjusted EBITDA and Adjusted EPS are not necessarily comparable to similarly titled measures reported by other companies. Adjusted EBITDA may exclude certain financial information that some may consider important in evaluating our financial performance. Adjusted EBITDA and Adjusted EPS may not be indicative of historical operating results, and we do not intend for either of them to be predictive of future results of operations. We believe that our use of Adjusted EBITDA and Adjusted EPS as metrics assists our board, management and investors in comparing our operating performance on a consistent basis. Factors in this determination include removing the impact of our capital structure (specifically interest expense, net), asset base (specifically depreciation and amortization) and tax structure, as well as certain items that affect inter-period comparability, such as variability due to unrealized foreign exchange losses (gains), litigation settlements, non-cash share-based compensation expense and other nonrecurring items, which affect results in a given period or periods.
About TCP
TCP is a leading global manufacturer and distributor of energy efficient lighting technologies. TCP's extensive product offerings include LED and CFL lamps and fixtures, internet-based lighting control solutions and other energy efficient lighting products. TCP has the largest combined number of LED and CFL ENERGY STAR® compliant lighting products. TCP's products are currently offered through thousands of retail and C&I distributors. Since TCP's inception, it has sold more than one billion energy efficient lighting products. For more information, visit http://www.tcpi.com.
Forward Looking Statements
Certain statements in this release may constitute "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 based on management's current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. Forward looking statements in this press release include, but are not limited to, the Company's expectation regarding its future profitability. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While TCP believes that its assumptions are reasonable, it is very difficult to predict the impact of known factors, and, of course, it is impossible to anticipate all factors that could affect actual results. There are a number of risks and uncertainties that could cause actual results to differ materially from forward-looking statements made herein. Such forward-looking statements are made only as of the date of this release. TCP expressly disclaims any obligation or undertaking to release any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or changes in events, conditions or circumstances on which any statement is based.
Contact
Brian Catlett
Chief Financial Officer
330-954-7689
[email protected]
Mike Funari
Sapphire Investor Relations, LLC
415-471-2700
[email protected]
|
TCP INTERNATIONAL HOLDINGS LTD. AND SUBSIDIARIES
|
|
Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(Amounts in thousands, except per share data)
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
57,967
|
|
$
|
31,354
|
|
Restricted cash
|
6,885
|
|
7,367
|
|
Accounts receivable, net
|
62,154
|
|
95,089
|
|
Inventories
|
126,801
|
|
122,342
|
|
Prepaids and other current assets
|
15,663
|
|
28,217
|
|
Deferred income taxes
|
14,152
|
|
17,557
|
|
Total current assets
|
283,622
|
|
301,926
|
|
Property, plant and equipment, net
|
70,925
|
|
72,037
|
|
Land rights, net
|
4,085
|
|
4,126
|
|
Deferred costs
|
16,360
|
|
16,145
|
|
Intangible assets, net
|
2,127
|
|
2,345
|
|
Deferred income taxes, long-term
|
7,360
|
|
7,094
|
|
Other long-term assets
|
1,629
|
|
1,737
|
|
Total assets
|
$
|
386,108
|
|
$
|
405,410
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Short-term loans and current portion of long-term debt
|
$
|
85,003
|
|
$
|
74,637
|
|
Accounts payable
|
117,763
|
|
129,194
|
|
Accrued expenses and other current liabilities
|
58,285
|
|
77,826
|
|
Total current liabilities
|
261,051
|
|
281,657
|
|
Long-term debt, net of current portion
|
5,288
|
|
5,340
|
|
Income taxes payable, long-term
|
8,076
|
|
7,891
|
|
Legal settlements, net of current portion
|
24,404
|
|
24,311
|
|
Other long-term liabilities
|
501
|
|
508
|
|
Total liabilities
|
299,320
|
|
319,707
|
|
Commitments and contingencies
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Common stock
|
30,587
|
|
30,101
|
|
Additional paid-in capital
|
69,333
|
|
68,063
|
|
Treasury shares
|
(418)
|
|
—
|
|
Accumulated other comprehensive income
|
10,272
|
|
9,290
|
|
Retained deficit
|
(22,986)
|
|
(21,751)
|
|
Total shareholders' equity
|
86,788
|
|
85,703
|
|
Total liabilities and shareholders' equity
|
$
|
386,108
|
|
$
|
405,410
|
|
TCP INTERNATIONAL HOLDINGS LTD. AND SUBSIDIARIES
|
|
Consolidated Statements of Comprehensive Income
|
|
(Unaudited)
|
|
(Amounts in thousands, except per share data)
|
|
|
|
Three Months Ended March 31,
|
|
2015
|
|
2014
|
|
Net sales
|
$
|
98,775
|
|
$
|
101,117
|
|
Cost of goods sold
|
74,617
|
|
76,330
|
|
Gross profit
|
24,158
|
|
24,787
|
|
Selling, general and administrative expenses
|
21,000
|
|
16,963
|
|
Litigation settlements
|
90
|
|
100
|
|
Operating income
|
3,068
|
|
7,724
|
|
Other expense (income):
|
|
|
|
|
Interest expense
|
1,651
|
|
2,307
|
|
Interest income
|
(89)
|
|
(27)
|
|
Foreign exchange losses (gains), net
|
550
|
|
(674)
|
|
Income before income taxes
|
956
|
|
6,118
|
|
Income tax expense
|
2,191
|
|
2,197
|
|
Net (loss) income
|
$
|
(1,235)
|
|
$
|
3,921
|
|
Other comprehensive (loss) income:
|
|
|
|
|
Foreign currency translation adjustments
|
982
|
|
(656)
|
|
Comprehensive (loss) income
|
$
|
(253)
|
|
$
|
3,265
|
|
Net (loss) income per share-basic and diluted
|
$
|
(0.04)
|
|
$
|
0.19
|
|
Diluted average shares outstanding
|
27,837
|
|
20,553
|
|
TCP INTERNATIONAL HOLDINGS LTD. AND SUBSIDIARIES
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(Amounts in thousands)
|
|
|
|
Three Months Ended March 31,
|
|
2015
|
|
2014
|
|
Cash flows from operating activities:
|
|
|
|
|
Net (loss) income
|
$
|
(1,235)
|
|
$
|
3,921
|
|
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
|
|
|
|
|
Depreciation and amortization
|
2,131
|
|
2,190
|
|
Deferred income tax expense
|
2,969
|
|
790
|
|
Share-based compensation expense
|
1,756
|
|
—
|
|
Loss on disposal of equipment
|
15
|
|
18
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable
|
33,758
|
|
432
|
|
Inventories
|
(5,082)
|
|
3,002
|
|
Prepaid expenses and other assets
|
12,910
|
|
2,132
|
|
Accounts payable
|
(8,272)
|
|
(11,860)
|
|
Accrued and other liabilities
|
(19,059)
|
|
(10,117)
|
|
Net cash provided by (used in) operating activities
|
19,891
|
|
(9,492)
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property, plant and equipment
|
(3,824)
|
|
(4,084)
|
|
Decrease (increase) in restricted cash
|
455
|
|
(2,062)
|
|
Repayment of related party finance receivables
|
—
|
|
84
|
|
Other investing activities, net
|
—
|
|
2
|
|
Net cash used in investing activities
|
(3,369)
|
|
(6,060)
|
|
Cash flows from financing activities:
|
|
|
|
|
Borrowings under foreign short-term bank loans
|
52,877
|
|
43,627
|
|
Repayments of foreign short-term bank loans
|
(28,884)
|
|
(32,994)
|
|
(Repayment) borrowings on line of credit agreement, net
|
(13,432)
|
|
6,372
|
|
Repayments of long-term debt
|
(51)
|
|
(67)
|
|
Payment of related party finance liability
|
—
|
|
(74)
|
|
Payment of debt issuance costs
|
(245)
|
|
—
|
|
Net cash provided by financing activities
|
10,265
|
|
16,864
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(174)
|
|
(194)
|
|
Increase in cash and cash equivalents
|
26,613
|
|
1,118
|
|
Cash and cash equivalents at beginning of period
|
31,354
|
|
21,903
|
|
Cash and cash equivalents at end of period
|
$
|
57,967
|
|
$
|
23,021
|
|
TCP INTERNATIONAL HOLDINGS LTD. AND SUBSIDIARIES
|
|
Net Sales by Region and by Product Line
|
|
(Unaudited)
|
|
(Amounts in thousands)
|
|
|
|
Three Months Ended
|
|
March 31,
2015
|
|
December 31,
2014
|
|
March 31,
2014
|
|
United States and Canada
|
$
|
84,864
|
|
$
|
135,061
|
|
$
|
85,271
|
|
Asia
|
4,684
|
|
6,258
|
|
6,659
|
|
EMEA
|
6,024
|
|
9,680
|
|
5,859
|
|
Latin America
|
3,203
|
|
2,062
|
|
3,328
|
|
Total net sales
|
$
|
98,775
|
|
$
|
153,061
|
|
$
|
101,117
|
|
|
|
Three Months Ended
|
|
March 31,
2015
|
|
December 31,
2014
|
|
March 31,
2014
|
|
CFL
|
$
|
52,555
|
|
$
|
90,456
|
|
$
|
59,405
|
|
LED
|
40,611
|
|
54,932
|
|
36,322
|
|
Linear and fixtures
|
2,089
|
|
2,487
|
|
3,687
|
|
Other
|
3,520
|
|
5,186
|
|
1,703
|
|
Total net sales
|
$
|
98,775
|
|
$
|
153,061
|
|
$
|
101,117
|
|
TCP INTERNATIONAL HOLDINGS LTD. AND SUBSIDIARIES
|
|
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
|
|
and Adjusted EPS to Diluted EPS
|
|
(Unaudited)
|
|
(Amounts in thousands)
|
|
|
|
Three Months Ended
|
|
March 31,
2015
|
|
December 31,
2014
|
|
March 31,
2014
|
|
Net (loss) income
|
$
|
(1,235)
|
|
$
|
2,069
|
|
$
|
3,921
|
|
Adjustments:
|
|
|
|
|
|
|
Interest expense, net
|
1,562
|
|
1,826
|
|
2,280
|
|
Income tax expense
|
2,191
|
|
819
|
|
2,197
|
|
Depreciation and amortization
|
2,131
|
|
2,099
|
|
2,190
|
|
EBITDA
|
4,649
|
|
6,813
|
|
10,588
|
|
Adjustments:
|
|
|
|
|
|
|
Foreign exchange losses (gains), net
|
550
|
|
847
|
|
(674)
|
|
Litigation settlements
|
90
|
|
400
|
|
100
|
|
Share-based compensation expense
|
1,756
|
|
1,962
|
|
—
|
|
Refund of U.S. Customs import tariffs
|
(1,042)
|
|
(550)
|
|
—
|
|
Adjusted EBITDA
|
$
|
6,003
|
|
$
|
9,472
|
|
$
|
10,014
|
|
Three Months Ended
March 31, 2015
|
|
Three Months Ended
December 31, 2014
|
|
Three Months Ended
March 31, 2014
|
|
Net
Loss
|
Per
Share
(Diluted)
|
|
Net
Income
|
Per
Share
(Diluted)
|
|
Net
Income
|
Per
Share
(Diluted)
|
|
Net (loss) income and net (loss) income per share, diluted
|
$
|
(1,235)
|
$
|
(0.04)
|
|
$
|
2,069
|
$
|
0.07
|
|
$
|
3,921
|
$
|
0.19
|
|
Adjustments, net of tax:
|
|
|
|
|
|
|
|
|
|
Foreign exchange losses (gains), net
|
595
|
0.02
|
|
447
|
0.01
|
|
(522)
|
(0.03)
|
|
Litigation settlements
|
57
|
—
|
|
254
|
0.01
|
|
63
|
—
|
|
Share-based compensation expense
|
1,187
|
0.04
|
|
1,275
|
0.05
|
|
—
|
—
|
|
Refund of U.S. Customs import tariffs
|
(662)
|
(0.02)
|
|
(351)
|
(0.01)
|
|
—
|
—
|
|
Adjusted net (loss) income and Adjusted EPS
|
$
|
(58)
|
$
|
—
|
|
$
|
3,694
|
$
|
0.13
|
|
$
|
3,462
|
$
|
0.16
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/tcp-reports-first-quarter-2015-financial-results-300076937.html
SOURCE TCP International Holdings Ltd.
[ Back To TMCnet.com's Homepage ]
|
