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ICTV Brands, Inc. Reports Second Quarter 2015 Financial Results
Conference Call Begins Today at 4:30pm EDT
August 06, 2015 4:00 PM EDT | Source: ICTV Brands Inc.
Wayne, Pennsylvania--(Newsfile Corp. - August 6, 2015) - ICTV Brands, Inc. (OTCQX: ICTV), (CSE: ITV), a direct response marketing and branding company focused on the health, wellness and beauty sector, today reported financial results for the quarter ended June 30, 2015.
Second Quarter 2015 Highlights:
Operating income of $287,000
Increased current working capital of $2.4MM compared to $1.9MM at year end
Adjusted EBITDA of $455,000, excluding non-cash stock-based compensation
Revenue from new brands of $425,000
Live Home Shopping sales of $222,000
Opened up additional sales channels including The Shopping Channel Canada and Groupon
Reduced G&A expenses from $1.9MM to $1.4MM
Management Commentary:
Richard Ransom, President, stated, "We are excited with our profitable first half of 2015 and continued investment in the future of ICTV Brands. During Q2, we had live home shopping events with DermaWand, Derma Brilliance, and Jidue, and are encouraged by additional airings and growth opportunities to come in 2015. Further, we had our first international third party distributor sale for our Super Solution brand and are hopeful we will continue to open up new markets for all of our brands as the year progresses. Additionally, we are continuing to invest in new creative, production and packaging for both our Jidue and CoralActives brands and expect to relaunch these products with new marketing campaigns in the second half of 2015.
Our team is proud of the progress we've made with our portfolio of brands outside of DermaWand, which includes revenues of $660,000 for the first six months of the year. Further, we have made a conscious effort to reduce our overall operating costs. With our proven track record with DermaWand, we feel that our operating platform and team in place are positioned to promote sustained growth with multiple brands. While we recognize the short term challenges of launching additional brands and opening new sales channels, we are confident that we are on the right path to bring a significant reward to our long term shareholders."
Reported Financial Results:
Second Quarter 2015 Compared to Second Quarter 2014:
Revenues for the three months ended June 30, 2015 were $7.2 million, compared to $7.8 million for the three months ended June 30, 2014. Gross profit margin of 67% was realized in the second quarter 2015, which decreased from 69% in the prior year quarter as a result of changes in the product mix. Total operating expenses decreased to $4.6 million from $5.2 million during the second quarter of 2014. When comparing the second quarter of 2015 to 2014, significant quarterly decreases include share based compensation decreases of $225,000, consulting expense reductions of $183,000, customer service expense decreases of $57,000, legal and travel related expenditure decreases of $65,000, merchant fee decreases of $39,000, and product testing decreases of $44,000. Net income for the second quarter was $287,000, compared to net income of $159,000 in the second quarter of 2014. The resulting EPS for both periods was $0.01. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was $455,000 as compared to $552,000 for the second quarter of 2014.
Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014:
Revenues for the six months ended June 30, 2015 were $16.1 million, compared to $17.6 million for the six months ended June 30, 2014. Gross profit margin of 69% was realized in the first half of 2015, which decreased from 71% in the prior year period as a result of changes in the product mix. Total operating expenses decreased to $11.1 million from $12.9 million during the six months ended June 30, 2014. When comparing the six months ended June 30, 2015 to 2014, significant year to date decreases include share based compensation decreases of $262,000, consulting expense reductions of $398,000, customer service expense decreases of $129,000, legal and travel related expenditure decreases of $97,000, merchant fee decreases of $132,000, and product testing decreases of $165,000. Net income for the six months ended June 30, 2015 was $16,000, compared to a net loss of $356,000 in the six months ended June 30, 2014. The resulting EPS is $0.00, as compared to an EPS loss ($0.02) in the six months ended June 30, 2014. Adjusted EBITDA was $349,000 as compared to $248,000 for six months ended June 30, 2014.
Balance Sheet as of June 30, 2015
As of June 30, 2015, the Company had $957,000 in cash and cash equivalents compared to $1.1 million as of December 31, 2014. The Company's current working capital increased from $1.9 million at December 31, 2014 to $2.4 million as of June 30, 2015, which demonstrates our strong short term liquidity. Additionally, the Company had no debt obligations at both June 30, 2015 and December 31, 2014.
Conference Call
ICTV will hold a conference call to discuss the Company's second quarter 2015 results and answer questions today, August 6, 2015, beginning at 4:30pm EDT. The call will be open to the public and will have a corporate update presented by ICTV's Chairman and Chief Executive Officer, Kelvin Claney, President, Richard Ransom and Chief Financial Officer, Ryan LeBon, followed by a question and answer period.
The live conference call can be accessed by dialing (866) 952-1907 or (785) 424-1826. Participants should ask for the ICTV Brands Earnings Conference Call. Participants are recommended to dial-in approximately 10 minutes prior to the start of the event. A replay of the call will be available approximately two hours after completion through August 20, 2015. To listen to the replay, dial (800) 839-2871 (domestic) or (402) 271-9155 (international). The conference call transcript will be posted to the Company's corporate website (http://www.ictvbrands.com) for those who are unable to attend the live call.
ICTV Brands, Inc.
ICTV Brands, Inc. sells various health, wellness and beauty products through a multi-channel distribution strategy. ICTV utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell products through direct response television (DRTV), Internet/digital, e-commerce, live television shopping and retail. Its products are primarily sold in the U.S. and available in over 60 countries. Its products include DermaWand, a skin care device that reduces the appearance of fine lines and wrinkles, and helps improve skin tone and texture, DermaVital, a professional quality skin care line that effects superior hydration, the CoralActives brand of acne treatment and skin cleansing products, and Derma Brilliance, a skin care resurfacing device that helps reduce visible signs of aging, and Good Planet Super Solution, a multi-use cleaning agent. ICTV Brands, Inc. was founded in 1998 and headquartered in Wayne, Pennsylvania.
Non-GAAP Financial Information
Adjusted EBITDA is defined as income from continuing operations before depreciation, amortization, interest expense, interest income, and stock-based compensation. Adjusted EBITDA is not intended to replace operating income, net income, cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles. Rather, Adjusted EBITDA is an important measure used by management to assess the operating performance of the Company. Adjusted EBITDA as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies.
Forward-Looking Statements
Forward-Looking Statements. This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words "believe," "anticipate," "estimate," "expect," "intend," "plan," "project," "prospects," "outlook," and similar words or expressions, or future or conditional verbs such as "will," "should," "would," "may," and "could" are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any anticipated results, performance or achievements. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company's forward-looking statements, please see the Company's Annual Report on Form 10-K for the year ended December 31, 2015, including but not limited to the discussion under "Risk Factors" therein, which the Company has filed with the SEC and which may be viewed at http://www.sec.gov.
-- Financial Statement Schedules follow --
ICTV BRANDS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
| June 30, | December 31, | |||||
| 2015 | 2014 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| CURRENT ASSETS: | ||||||
| Cash and cash equivalents | $ | 957,124 | $ | 1,097,008 | ||
| Cash held in escrow | - | 547,975 | ||||
| Accounts receivable, net of allowances for returns and doubtful accounts of $226,689 and $316,643, respectively | 814,427 | 948,014 | ||||
| Inventories, net | 2,192,005 | 1,978,001 | ||||
| Prepaid expenses and other current assets | 650,398 | 631,814 | ||||
| Total current assets | 4,613,954 | 5,202,812 | ||||
| Furniture and equipment | 72,008 | 72,008 | ||||
| Less accumulated depreciation | (46,339 | ) | (42,186 | ) | ||
| Furniture and equipment, net | 25,669 | 29,822 | ||||
| Total assets | $ | 4,639,623 | $ | 5,232,634 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Accounts payable and accrued liabilities | $ | 1,679,863 | $ | 2,582,936 | ||
| Severance payable - short-term | 26,600 | 40,800 | ||||
| Deferred revenue - short-term | 464,495 | 660,564 | ||||
| Total current liabilities | 2,170,958 | 3,284,300 | ||||
| Severance payable - long-term | - | 6,200 | ||||
| Deferred revenue - long-term | 476,242 | 480,693 | ||||
| Total long-term liabilities | 476,242 | 486,893 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| SHAREHOLDERS' EQUITY: | ||||||
| Preferred stock 20,000,000 shares authorized, no shares issued and outstanding | - | - | ||||
| Common stock, $0.001 par value, 100,000,000 shares authorized, 24,693,678 and 23,569,399 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 14,483 | 13,359 | ||||
| Additional paid-in-capital | 9,854,058 | 9,340,645 | ||||
| Accumulated deficit | (7,876,118 | ) | (7,892,563 | ) | ||
| Total shareholders' equity | 1,992,423 | 1,461,441 | ||||
| Total liabilities and shareholders' equity | $ | 4,639,623 | $ | 5,232,634 | ||
See accompanying notes to condensed consolidated financial statements as filed on www.sec.gov.
ICTV BRANDS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| (Unaudited) | (Unaudited) | |||||||||||
| For the three | For the six | |||||||||||
| months ended | months ended | |||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| NET SALES | $ | 7,260,016 | $ | 7,817,060 | $ | 16,123,932 | $ | 17,639,560 | ||||
| COST OF SALES | 2,359,966 | 2,454,307 | 5,013,098 | 5,033,939 | ||||||||
| GROSS PROFIT | 4,900,050 | 5,362,753 | 11,110,834 | 12,605,621 | ||||||||
| OPERATING EXPENSES: | ||||||||||||
| General and administrative | 1,413,117 | 1,874,491 | 3,070,310 | 3,822,797 | ||||||||
| Selling and marketing | 3,200,416 | 3,327,820 | 8,024,276 | 9,127,668 | ||||||||
| Total operating expenses | 4,613,533 | 5,202,311 | 11,094,586 | 12,950,465 | ||||||||
| OPERATING INCOME (LOSS) | 286,517 | 160,442 | 16,248 | (344,844 | ) | |||||||
| INTEREST (EXPENSE) INCOME, NET | 113 | (1,526 | ) | 247 | (4,896 | ) | ||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX | 286,630 | 158,916 | 16,495 | (349,740 | ) | |||||||
| PROVISION FOR INCOME TAXES | - | - | 50 | 6,585 | ||||||||
| NET INCOME (LOSS) | $ | 286,630 | $ | 158,916 | $ | 16,445 | $ | (356,325 | ) | |||
| NET INCOME (LOSS) PER SHARE | ||||||||||||
| BASIC | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | (0.02 | ) | |||
| DILUTED | $ | 0.01 | $ | 0.01 | $ | 0.00 | $ | (0.02 | ) | |||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||||||||
| BASIC | 24,340,451 | 23,163,316 | 24,130,481 | 22,860,959 | ||||||||
| DILUTED | 26,561,329 | 25,995,925 | 26,370,421 | 22,860,959 | ||||||||
See accompanying notes to condensed consolidated financial statements as filed on www.sec.gov.
ICTV BRANDS INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014
(Unaudited)
| 2015 | 2014 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net income (loss) | $ | 16,445 | $ | (356,325 | ) | |
| Adjustments to reconcile net income (loss) to net cash and cash equivalents (used in) provided by operating activities: | ||||||
| Depreciation | 4,153 | 2,764 | ||||
| Bad debt expense | 970,136 | 1,015,856 | ||||
| Share based compensation | 328,724 | 590,295 | ||||
| Reduction in tax penalties payable | - | (85,933 | ) | |||
| Change in assets and liabilities | ||||||
| Accounts receivable | (836,549 | ) | (906,691 | ) | ||
| Inventories | (214,004 | ) | (332,994 | ) | ||
| Prepaid expenses and other current assets | (36,911 | ) | 65,498 | |||
| Accounts payable and accrued liabilities | (903,073 | ) | 51,089 | |||
| Severance payable | (20,400 | ) | (20,400 | ) | ||
| Tax penalties payable | - | (104,067 | ) | |||
| Deferred revenue | (200,520 | ) | 557,417 | |||
| Net cash provided by (used in) operating activities | (891,999 | ) | 476,509 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Purchase of furniture and equipment | - | (10,995 | ) | |||
| Net cash used in investing activities | - | (10,995 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from exercise of options | 91,640 | 46,280 | ||||
| Proceeds from exercise of warrants | 112,500 | 129,583 | ||||
| Release of collateral on line of credit | 500,000 | - | ||||
| Payments on convertible note payable to shareholder | - | (115,000 | ) | |||
| Net cash provided by financing activities | 704,140 | 60,863 | ||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (187,859 | ) | 526,377 | |||
| CASH AND CASH EQUIVALENTS, beginning of the period | 1,144,983 | 1,433,102 | ||||
| CASH AND CASH EQUIVALENTS, end of the period | $ | 957,124 | $ | 1,959,479 | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||
| Taxes paid | $ | 50 | $ | 6,585 | ||
| Tax penalties and interest paid | $ | - | $ | 104,067 | ||
| Interest paid | $ | - | $ | 5,819 | ||
| Write off of fully depreciated furniture and equipment | $ | - | $ | 30,928 | ||
| Conversion of shareholder note payable | $ | - | $ | 125,000 | ||
See accompanying notes to condensed consolidated financial statements as filed on www.sec.gov.
Contact Information
Rich Ransom
ransom@ictvbrands.com
484-598-2313
Ryan LeBon
lebon@ictvbrands.com
484-598-2300, x318