SOURCE: International Commercial Television, Inc.

International Commercial Television, Inc.

November 13, 2013 14:30 ET

International Commercial Television, Inc. Reports Third Quarter 2013 Financial Results

Conference Call Begins Today at 4:30 p.m. Eastern Time

WAYNE, PA--(Marketwired - Nov 13, 2013) - International Commercial Television, Inc. (OTCQB: ICTL), (or "ICTV"), a direct response marketing and branding company focused on the health and beauty sector, today reported financial results for the three and nine months ended September 30, 2013. 

Third Quarter 2013 Highlights:

  • Revenues of $8.3 million, up 32% from a year earlier
  • Gross margins of 74.1%, up from 69.7% a year earlier
  • Net income of $0.1 million versus a ($0.2) million loss a year earlier
  • 3rd consecutive profitable quarter
  • Strengthened balance sheet with a current working capital ratio of 2.35X, up from 1.1X at the end of 2012
  • Improved shareholders' equity to approximately $2.0 million, up from a negative $0.4 million at the end of 2012
  • Continued roll-out and expansion of DermaVital® continuity line
  • Solidifying future projects pipeline to build upon DermaWand™ success

Revenues for the three and nine months ended September 30, 2013 were approximately $8.3 million and $31.2 million, increases of 32% and 144% when compared with revenues of approximately $6.3 million and $12.8 million for the same periods in 2012. The increase in revenue is primarily due to the continued success of our DermaWand™ infomercial. As the Company continues to build the DermaWand™ brand and exposure, media related expenditures increased to approximately $2.8 million and $9.5 million for the three and nine months ended September 30, 2013, compared to approximately $2.4 million and $4.3 million for the three and nine months ended September 30, 2012. 

Net income for the three and nine months ended September 30, 2013 was approximately $101,000 and $1.9 million compared to a net loss of approximately $217,000 and $126,000 for the same periods in 2012. Contributing to the increase was the growth in continuity sales generated from the monthly shipments of the Company's DermaVital® skincare products. Sales from DermaVital® for the three and nine months ended September 30, 2013 were approximately $1.1 million and $3.2 million as compared to approximately $381,000 and $752,000 during the three and nine months ended September 30, 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.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was approximately $184,000 and $2.4 million for the three and nine months ended September 30, 2013 as compared with approximately $244,000 and $576,000 for same periods in 2012. Basic earnings per share three and nine months ended September 30, 2013 was $0.00 and $0.09, up from a loss per share of ($0.01) for the same periods in 2012.

As of September 30, 2013, the Company had $903,000 in cash (including cash held in escrow), compared to $908,000 at December 31, 2012. We generated positive cash flows from operations of approximately $76,000 in the nine months ended September 30, 2013. As of September 30, 2013, the Company had a working capital of approximately $2,756,000, compared to approximately $336,000 at December 31, 2012. 

Richard Ransom, President and Chief Financial Officer, stated, "I am pleased to be reporting ICTV's third consecutive profitable quarter. Through the first nine months of 2013, the Company has already surpassed revenue and earnings for all of 2012. In addition, our working capital is the highest it's been in the last several years. We are excited about the impact of our new products under development and are confident the strong momentum over the past nine months will continue."

Conference Call

ICTV will hold a conference call to discuss the Company's third quarter 2013 results and answer questions today, November 13, 2013, beginning at 4:30 p.m. Eastern time. 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, and ICTV's President and Chief Financial Officer, Richard Ransom, followed by a question and answer period.

The live conference call can be accessed by dialing (877) 407-9039 or (201) 689-8470. 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 November 27, 2013. To listen to the replay, dial (877) 870-5176 (domestic) or (858) 384-5517 (international), and enter conference ID # 13572742. The call will be recorded and 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 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  
   
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF
 
    September 30,
2013
    December 31,
2012
 
    (Unaudited)        
ASSETS  
                 
CURRENT ASSETS:                
  Cash and cash equivalents   $ 752,743     $ 758,358  
  Cash held in escrow     150,021       150,008  
  Accounts receivable, net of allowance for returns and doubtful accounts of $334,157 and $623,061, respectively     1,139,332       1,154,855  
  Inventories, net     2,140,186       1,979,757  
  Prepaid expenses and other current assets     608,576       324,991  
    Total current assets     4,790,858       4,367,969  
                 
  Furniture and equipment     81,507       71,258  
  Less accumulated depreciation     (65,644 )     (56,949 )
    Furniture and equipment, net     15,863       14,309  
                   
  Other assets     30,461       57,950  
                   
      Total assets   $ 4,837,182     $ 4,440,228  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)  
                 
CURRENT LIABILITIES:                
  Accounts payable and accrued liabilities   $ 1,514,687     $ 3,360,745  
  Convertible note payable     -       30,169  
  Severance payable     40,800       40,800  
  Deferred revenue     289,195       281,774  
  Income tax payable     -       48,600  
  Tax penalties payable     190,000       270,000  
    Total current liabilities     2,034,682       4,032,088  
  Severance payable - long-term     57,200       87,800  
  Deferred revenue - long-term     325,923       129,986  
  Convertible note payable to shareholder     453,723       590,723  
    Total long-term liabilities     836,846       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, 21,743,587 and 20,772,756 shares issued andoutstanding as of September 30, 2013 and December 31, 2012, respectively     11,533       10,562  
  Additional paid-in-capital     7,290,344       6,843,267  
  Accumulated deficit     (5,336,223 )     (7,254,198 )
                   
    Total shareholders' equity (deficit)     1,965,654       (400,369 )
                   
      Total liabilities and shareholders' equity (deficit)   $ 4,837,182     $ 4,440,228  
                 
   
   
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY  
   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
   
    (Unaudited)     (Unaudited)  
             
    For the three months ended     For the nine months ended  
    September 30, 2013     September 30, 2012     September 30, 2013     September 30, 2012  
                                 
NET SALES   $ 8,300,312     $ 6,289,601     $ 31,155,661     $ 12,781,410  
                                 
COST OF SALES     2,146,270       1,905,767       8,597,106       4,350,680  
                                 
GROSS PROFIT     6,154,042       4,383,834       22,558,555       8,430,730  
                                 
OPERATING EXPENSES:                                
  General and administrative     1,785,146       1,066,533       5,740,604       2,237,558  
  Selling and marketing     4,258,875       3,526,341       14,809,742       6,302,193  
    Total operating expenses     6,044,021       4,592,874       20,550,346       8,539,751  
                                 
OPERATING INCOME (LOSS)     110,021       (209,040 )     2,008,208       (109,021 )
                                 
                                 
INTEREST EXPENSE, NET     (5,025 )     (8,160 )     (17,700 )     (17,313 )
                                 
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX     104,996       (217,200 )     1,990,508       (126,334 )
                                 
PROVISION FOR INCOME TAXES     4,488       -       72,533       -  
                                 
NET INCOME (LOSS)   $ 100,508     $ (217,200 )   $ 1,917,975     $ (126,334 )
                                 
                                 
NET INCOME (LOSS) PER SHARE                                
  BASIC   $ 0.00     $ (0.01 )   $ 0.09     $ (0.01 )
  DILUTED   $ 0.00     $ (0.01 )   $ 0.08     $ (0.01 )
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                                
  BASIC     21,718,315       20,647,756       21,481,149       19,898,741  
  DILUTED     24,252,780       20,647,756       24,660,092       19,898,741  
                                 
   
   
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY  
   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
 
   
(Unaudited)  
             
    2013     2012  
                 
CASH FLOWS FROM OPERATING ACTIVITIES:                
  Net income (loss)   $ 1,917,975     $ (126,334 )
  Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities:                
    Depreciation     8,695       10,586  
    Bad debt expense     2,381,968       311,499  
    Share based compensation     379,339       674,834  
    Tax penalties payable     (80,000 )     -  
  Change in assets and liabilities                
    Accounts receivable     (2,366,445 )     (968,140 )
    Inventories     (160,429 )     (323,590 )
    Prepaid expenses, other current assets and other assets     (210,804 )     (167,820 )
    Accounts payable and accrued liabilities     (1,846,058 )     978,538  
    Severance payable     (30,600 )     (30,600 )
    Income tax payable     (121,381 )     -  
    Accrued interest to shareholder     -       14,030  
    Deferred revenue     203,358       84,240  
    Net cash provided by operating activities     75,616       457,243  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of furniture and equipment     (10,250 )     (2,471 )
  Net cash used in investing activities     (10,250 )     (2,471 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
  Proceeds from issuance of common stock     -       388,500  
  Proceeds from exercise of options     96,200       -  
  Proceeds from note payable     -       40,000  
  Payments on convertible note payable     (30,169 )     (86,113 )
  Payments on convertible note payable to shareholder     (137,000 )     -  
  Advances from related parties     -       50,000  
  Payments to related parties     -       (77,581 )
  Net cash (used in) provided by financing activities     (70,969 )     314,806  
                 
   
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS     (5,603 )     769,578  
                 
CASH AND CASH EQUIVALENTS, beginning of the period     908,366       58,804  
                 
CASH AND CASH EQUIVALENTS, end of the period   $ 902,764     $ 828,382  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                
  Taxes paid   $ 145,530     $ -  
  Fair value of warrants in connection with sale of common stock   $ -     $ 273,831  
  Interest paid   $ 17,700     $ 3,432  
  Write off of fully depreciated assets   $ -     $ 108,183  
                   
                 

Contact Information

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

    Stephen Hart
    Hayden IR
    Email Contact
    917-658-7878