SOURCE: International Commercial Television, Inc.

International Commercial Television, Inc.

March 27, 2014 16:00 ET

International Commercial Television, Inc. Reports Fourth Quarter and Year End 2013 Financial Results

Record $41 Million Revenues and $0.07 EPS for 2013; Expanded Product Portfolio for 2014 Growth; Conference Call Begins Today at 4:30pm EDT

WAYNE, PA--(Marketwired - Mar 27, 2014) - International Commercial Television, Inc. (OTCQB: ICTL) (or "ICTV"), a direct response marketing and branding company focused on the health, wellness and beauty sector, today reported financial results for the three months and year ended December 31, 2013.

2013 Financial Highlights:

  • Revenues of $41.0 million, up 79% from a year earlier
  • Gross margins of 71.9%, up from 67.4% a year earlier
  • Net income of $1.65 million versus a ($0.55) million loss a year earlier
  • Strengthened balance sheet with a current working capital ratio of 2.54X, up from 1.1X at the end of 2012
  • Increased cash balance to $1.43 million, from $0.91 million at the end of 2012
  • New product acquisition and development expense of approximately $0.4 million
  • Improved shareholders' equity to approximately $2.1 million, up from a negative $0.4 million at the end of 2012

2013 Business Highlights:

  • Continued success of DermaWand, surpassing 2 million units sold to-date
  • Continued expansion of DermaVital continuity line
  • Expansion of categories and products in health and beauty
  • Executed exclusive agreements and made investments for proprietary products and systems, including Elastin RP, DermaBrilliance and Coral Actives
  • Progressed clinical studies and media production for various projects in midst of launching or expected to launch in 2014, including Elastin RP and DermaBrilliance

Kelvin Claney, Chairman and Chief Executive Officer, stated, "While 2013 was a record year for ICTV, we continue to look to build upon our flagship product DermaWand and invest for future growth. Our DermaWand success has brought us many additional opportunities in the health and beauty sector. We have successfully negotiated and structured several exclusive agreements for new projects and products that we are very excited about for 2014 and years to come."

Revenues for the three and twelve months ended December 31, 2013 were approximately $9.8 million and $41.0 million, a decrease of 3% and an increase of 79% when compared with revenues of approximately $10.1 million and $22.9 million for the same periods in 2012. The increase in revenue is primarily due to the continued success of our DermaWand infomercial, the expansion our DermaVital brand, and opening up new international distribution in Mexico and Canada. As the Company continues to build the DermaWand brand and exposure, media related expenditures increased to approximately $3.4 million and $13.0 million for the three and twelve months ended December 31, 2013, compared to approximately $3.2 million and $7.6 million for the three and twelve months ended December 31, 2012.

Net income (loss) for the three and twelve months ended December 31, 2013 was approximately ($272,000) and $1.65 million compared to a net loss of approximately ($424,000) and ($550,000) for the same periods in 2012. Contributing to the improvement was an increase in airings of DermaWand infomercial as well as the growth in continuity sales generated from the monthly shipments of the Company's DermaVital skincare products.

Sales from DermaVital for the three and twelve months ended December 31, 2013 were approximately $1.0 million and $4.2 million as compared to approximately $767,000 and $1.5 million during the three and twelve months ended December 31, 2012. Since the majority of these sales occur after the expense of acquiring the customer has already occurred (i.e. media expenses, telemarketing expenses, etc.) as well as with lower materials costs, the profit margin on these particular sales is high, compared to the initial DRTV sale that results directly from the running of an infomercial. In addition, the increase in DRTV revenue was in part due to the launching of a new Spanish language version of the DermaWand show in August 2012. ICTV generated revenues from the Spanish language version of approximately $8.5 million in 2013, as compared to $3.6 million in 2012.

Included in our net income (loss) were new product acquisition, infomercial production and product development expenses of approximately $168,000 and $410,000 for the three and twelve months ended December 31, 2013, as compared to approximately $49,000 and $208,000 for the three and twelve months ended December 31, 2012.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was approximately $61,000 and $2.5 million for the three and twelve months ended December 31, 2013 as compared with approximately ($240,000) and $337,000 for same periods in 2012. Diluted earnings per share three and twelve months ended December 31, 2013 was ($0.01) and $0.07, up from a loss per share of ($0.03) for the same periods in 2012.

As of December 31, 2013, the Company had $1.43 million in cash, compared to $908,000 at December 31, 2012. We generated positive cash flows from operations of approximately $648,000 and in the twelve months ended December 31, 2013. As of December 31, 2013, the Company had working capital of approximately $2.9 million, compared to approximately $336,000 at December 31, 2012. Based on our improved financial stability our auditors have removed any going concern language from their audit opinion.

Richard Ransom, President, stated, "We are pleased to be reporting a record year for ICTV in terms of $41 million revenues and $1.6 million of net income. Our balance sheet continued to improve throughout the year and finished at its strongest point with $1.43 million cash and $2.1 million shareholders equity. We are excited about the impact of our recently launched new products and others under development and are confident the strong momentum demonstrated in 2013 will continue. We are pleased to have shared our 2013 success with rewarded shareholders, as our improved business operations have been reflected in an improved stock price, rising from a low of $0.08 to $0.90 during 2013. In conclusion, we would like to thank our dedicated ICTV team, the over 2 million consumers who have purchased one of our products and our shareholders."

Conference Call
ICTV will hold a conference call to discuss the Company's fourth quarter and year end 2013 results and answer questions today, March 27, 2013, 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 (800) 862-9098 or (785) 424-1051. Participants should ask for the International Commercial Television 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 April 10, 2014. To listen to the replay, dial (800) 723-5792 (domestic) or (402) 220-2664 (international). The conference call transcript will be posted to the Company's corporate website (http://www.ictvonline.com) for those who are unable to attend the live call.

About International Commercial Television, Inc.
International Commercial Television, Inc. sells various health, wellness and beauty products through infomercials and other channels primarily in the United States. ICTV utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell products through infomercials, live home shopping television, specialty outlets and online shopping. It offers health and beauty products, including DermaWand, a skin care device that reduces the appearance of fine lines and wrinkles, and helps improves skin tone and texture; and DermaVitál, a professional quality skin care range that effects superior hydration. International Commercial Television Inc. was founded in 1993 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
The matters discussed in this press release may contain "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). The Company intends that the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by ICTV. Undue reliance should not be placed on forward-looking statements as they may involve risks and uncertainties. The actual results that ICTV achieves may differ materially from any forward-looking statements due to such risks and uncertainties.

   
   
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY  
CONSOLIDATED BALANCE SHEETS  
AS OF DECEMBER 31, 2013 and 2012  
  2013     2012  
ASSETS  
CURRENT ASSETS:              
  Cash and cash equivalents $ 1,370,178     $ 758,358  
  Cash held in escrow   62,924       150,008  
  Accounts receivable, net of doubtful account reserves of $446,307 and $623,061, respectively   791,292       1,154,855  
  Inventories, net   1,778,073       1,979,757  
  Prepaid expenses and other current assets   733,427       324,991  
    Total current assets   4,735,894       4,367,969  
               
  Furniture and equipment   81,507       71,258  
  Less accumulated depreciation   (66,712 )     (56,949 )
    Furniture and equipment, net   14,795       14,309  
               
  Other assets   21,297       57,950  
    Total assets $ 4,771,986       4,440,228  
               
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)  
CURRENT LIABILITIES:              
  Accounts payable and accrued liabilities $ 1,391,342     $ 3,360,745  
  Convertible note payable - short-term   -       30,169  
  Severance payable - short-term   40,800       40,800  
  Deferred revenue - short-term   242,827       281,774  
  Tax provision payable   -       48,600  
  Tax penalties payable   190,000       270,000  
    Total current liabilities   1,864,969       4,032,088  
               
Severance payable - long-term   47,000       87,800  
Deferred revenue - long-term   386,821       129,986  
Convertible note payable to shareholder- long-term   393,723       590,723  
    Total long-term liabilities   827,544       808,509  
               
COMMITMENTS AND CONTINGENCIES              
               
SHAREHOLDERS' EQUITY (DEFICIT):              
  Preferred stock 20,000,000 shares authorized, no shares issued and outstanding   -       -  
  Common stock, $0.001 par value, 100,000,000 shares authorized, 21,826,650 and 20,722,756 shares issued and outstanding as of December 31, 2013 and 2012, respectively   11,616       10,562  
  Additional paid-in-capital   7,676,177       6,843,267  
  Accumulated deficit   (5,608,320 )     (7,254,198 )
  Total shareholders' equity (deficit)   2,079,473       (400,369 )
                 
    Total liabilities and shareholders' equity (deficit) $ 4,771,986     $ 4,440,228  
               
               
   
   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
   
 

 For the three months ended (Unaudited)
   

 For the twelve months ended
 
  December 31, 2013     December 31, 2012     December 31, 2013     December 31, 2012  
                       
NET SALES $ 9,808,466     $ 10,138,976     $ 40,964,127     $ 22,920,386  
                               
COST OF SALES   2,911,748       3,130,109       11,508,854       7,480,788  
                               
GROSS PROFIT   6,896,718       7,008,867       29,455,273       15,439,598  
                               
OPERATING EXPENSES:                              
  General and administrative   2,126,894       2,109,494       7,867,497       4,347,052  
  Selling and marketing   5,054,693       5,266,077       19,864,436       11,568,271  
    Total operating expenses   7,181,587       7,375,571       27,731,933       15,915,323  
                               
OPERATING INCOME (LOSS)   (284,869 )     (366,704 )     1,723,340       (475,725 )
                               
                               
INTEREST EXPENSE, NET   (4,793 )     (8,811 )     (22,494 )     (26,123 )
                               
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX   (289,662 )     (375,515 )     1,700,846       (501,848 )
                               
(PROVISION) BENEFIT FOR INCOME TAXES   17,565       (48,600 )     (54,968 )     (48,600 )
                               
NET INCOME (LOSS) $ (272,097 )   $ (424,115 )   $ 1,645,878     $ (550,448 )
                               
                               
NET INCOME (LOSS) PER SHARE                          
  BASIC $ (0.01 )   $ (0.02 )   $ 0.08     $ (0.03 )
  DILUTED $ (0.01 )   $ (0.02 )   $ 0.07     $ (0.03 )
                               
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                          
  BASIC   21,745,480       20,712,973       21,547,775       20,110,242  
  DILUTED   23,500,494       20,712,973       24,726,718       20,110,242  
                               
                               
   
   
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY      
   
CONSOLIDATED STATEMENTS OF CASH FLOWS      
FOR THE YEARS ENDED DECEMBER 31, 2013 and 2012      
   
  2013     2012  
           
CASH FLOWS FROM OPERATING ACTIVITIES:          
  Net income (loss) $ 1,645,878     $ (550,448 )
  Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by operating activities:              
    Depreciation   9,763       14,250  
    Bad debt expense   3,195,211       1,435,920  
    Stock based compensation   723,694       838,388  
  Change in assets and liabilities              
    Accounts receivable   (2,831,648 )     (2,544,555 )
    Inventories   201,684       (1,261,307 )
    Prepaid expenses and other assets   (286,414 )     (267,777 )
    Accounts payable and accrued liabilities   (1,969,403 )     2,504,203  
    Severance payable   (40,800 )     (40,800 )
    Tax provision payable   (138,124 )     48,600  
    Tax penalties payable   (80,000 )     -  
    Deferred revenue   217,888       386,632  
      Net cash provided by operating activities   647,729       563,106  
               
CASH FLOWS FROM INVESTING ACTIVITIES:              
  Purchase of fixed assets   (10,249 )     (8,310 )
      Net cash used in investing activities   (10,249 )     (8,310 )
               
CASH FLOWS FROM FINANCING ACTIVITIES:              
  Proceeds from issuance of common stock   -       388,500  
  Proceeds from exercise of options   96,200       -  
  Proceeds from exercise of warrants   18,225       12,500  
  Proceeds from note payable   -       40,000  
  Payments on note payable   (30,169 )     (107,875 )
  Advances from related parties   -       50,000  
  Payments to related parties   -       (88,359 )
  Payments on convertible note payable to shareholder     (197,000     -  
      Net cash (used in) provided by financing activities   (112,744 )     294,766  
               
NET INCREASE IN CASH AND CASH EQUIVALENTS   524,736       849,562  
CASH AND CASH EQUIVALENTS, beginning of the year   908,366       58,804  
               
CASH AND CASH EQUIVALENTS, end of the year $ 1,433,102     $ 908,366  
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:              
  Capitalization of stock based compensation expense related to nonforfeitable warrants $ -     $ 109,964  
  Fair value of warrants in connection with sale of common stock   -       273,831  
  Interest paid   23,048       26,490  
Income taxes paid   145,530       -  
Write off of fully depreciated assets   -       120,169  
               
               

Contact Information

  • Contact Information
    International Commercial Television, Inc.
    Rich Ransom
    Email Contact
    484-598-2313

    Stephen Hart
    Hayden IR
    Email Contact
    917-658-7878