Lumenpulse Reports First Quarter of Fiscal 2015 Results

MONTREAL, QUEBEC--(Marketwired - Sept. 11, 2014) - Lumenpulse Inc. (TSX:LMP)

• Total revenues of $18.6 million for Q1 2015; up 45.5% over Q1 Fiscal 2014
  
  
• Solid Q1 Adjusted Gross Margin on Lumenpulse Products of 45.1%¹ compared to 40.7% in Q1 Fiscal 2014
  
  
• Adjusted Net Loss of $1.4 million compared to $1.9 million in Q1 Fiscal 2014
  
  
• Negative Adjusted EBITDA of $1.0 million compared to negative $0.7 million in Q1 Fiscal 2014
  
  
• Successfully completed the acquisition of the assets of Projection Lighting Limited and the AlphaLED brand
  
  
• Strong balance sheet with no debt² and cash balance of $51.2 million
  
  

Lumenpulse Inc. (TSX:LMP), a leading manufacturer of high performance, specification-grade LED lighting solutions, released today its first quarter of Fiscal 2015 results for the period ended July 31, 2014.

"The first quarter of 2015 was a solid quarter on many fronts. Lumenpulse Products revenues grew by 62% compared to last year with an important contribution from international revenues reaching a record level and representing close to 24% of our total revenues for the quarter. International revenue level reflects solid organic growth and the impact of our acquisition of the assets of Projection Lighting Limited. Our integration plan is progressing well. AlphaLED products will be commercialized progressively in North America in the later part of the year," said François-Xavier Souvay, the Company's founder and CEO.

"While total revenues grew 46% over last year, the solid momentum in our business was somewhat slowed by challenges in our manufacturing and supply chain during the first quarter translating in revenues below our internal expectations. A number of these issues have already been resolved and we are focused on resolving all remaining issues by the end of the second quarter.

In early June, we presented 15 new products to the lighting community at Lightfair³ in Las Vegas. Our dedication to continue developing exceptional technology and innovative features remains one of the key pillars of our growth strategy. To this end, I can tell you that the market response to the Lumencove Nano and its integrated Lumendrive technology is well beyond our initial expectations.

Our objectives are to continue growing Lumenpulse's business at a rate exceeding the growth rate in the general lighting market for LED products and, over time, converging towards market growth, and to reach Adjusted Gross Margins approaching 50% and Adjusted EBITDA margins of approximately 18% to 20% within the next five years," concluded Mr. Souvay.

Financial Highlights

(Unaudited, in millions of Canadian dollars, except per share amounts)

		Q1 2015		Q1 2014		Change
Revenues - Consolidated		18.6		12.8		5.8
	Growth	46	%
Revenues - Lumenpulse products		15.5		9.6		5.9
	Growth	62	%
Adjusted Gross Margin % - Consolidated 1		42	%	40	%	2 pts
Adjusted Gross Margin % - Lumenpulse Products 1		43	%	41	%	2 pts
Adjusted EBITDA1		(1.0	)	(0.7	)	(0.3	)
Net loss		(2.3	)	(5.6	)	3.3
Adjusted Net loss1		(1.4	)	(1.9	)	0.5
Ajusted EPS (loss per share) - Basic 1, 2		($0.06	)	($0.17	)	0.11

1. See the Non-IFRS financial measures section
2. Per share amounts reflects retroactively the 8.4 to 1 consolidation of the common shares, that occurred in the fourh quarter of Fiscal 2014. Preceding the IPO, redeemable shares at the option of the holders were not included in the loss per share calculation.

Revenues

For its first quarter of Fiscal 2015 ended July 31 2014, Lumenpulse recorded revenues of $18.6 million. This represents a 45.5% increase compared to revenues of $12.8 million for the same period last year, primarily due to the increase of the Lumenpulse Products segment which achieved a significant year-over-year growth of 61.7%. Excluding revenues from AlphaLED, Lumenpulse Products revenues reached $13.8 million, representing an increase of 43.4% compared to the same period last year.

The revenue growth was mainly attributable to the solid performance of the Lumenpulse Products segment which was fueled by the introduction of new products complementing the existing product portfolio, and by further penetration of the North American and international network of agents and VARs. International revenues represented 27.4% of the first quarter Lumenpulse Products revenues.

Adjusted Gross Margin

Consolidated Adjusted Gross Margin increased by over two percentage points from 39.7% to 41.9% for the first quarter of Fiscal 2015 compared to the same period last year. This increase was primarily driven by margin improvements mainly within the Lumenpulse Products segment, as well as the larger proportion of revenues derived from this segment. The Adjusted Gross Margin on Lumenpulse Products increased more than 4 percentage points from 40.7% to 45.1%, when excluding AlphaLED, compared to the same period last year and almost three percentage points from 40.7% to 43.3% when including Alphaled. The Lumenpulse Products margin improvement is primarily due to lower direct costs, a higher manufacturing capacity utilization and improved manufacturing efficiencies. The improvement occurred despite the impact of a lower margin contribution from AlphaLED revenues, a temporary disruption in the manufacturing and supply chain and an unfavorable product and geographical mix.

Adjusted EBITDA

Adjusted EBITDA loss increased to $1.0 million for the first quarter ended July 31, 2014 from a $0.7 million Adjusted EBITDA loss for the same period in 2014. As a percentage of revenues, Adjusted EBITDA margin remained stable at negative 5.3% compared to last year.

Adjusted Net Loss

Adjusted Net Loss decreased to $1.4 million for the first quarter ended July 31, 2014 from a $1.9 million loss for the same period in 2014. The Adjusted Net Loss decrease is primarily due to $0.3 million of interest and other financing income generated in the first quarter compared to $0.5 million of financing costs for the same period in 2014.

Conference Call

Lumenpulse has scheduled a conference call to discuss these results on Thursday, September 11, 2014, beginning at 11:00 A.M. (ET). This conference call will be broadcast live on the Internet at the following link: Q1 2015 Earnings Conference Call. A slideshow presentation intended for real-time viewing with the conference call will also be available. Alternatively, investors may join by dialing in North America: 1-844-825-4409 (conference ID: 92520045). The webcast will be archived at www.lumenpulse.com/en/investors/quarterly-results.

Non-IFRS Measures

This press release makes reference to certain non-IFRS measures These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures including EBITDA, Adjusted EBITDA, Adjusted Net Loss, Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Selling and Marketing Expenses, Adjusted Research and Development Expenses and Adjusted General and Administrative Expenses to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. EBITDA is defined as earnings before interest and other financing costs, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA less unusual and non-recurring items and non-cash share-based compensation. Unusual and non-recurring items is defined as expenses incurred for the initial public offering and acquisition related costs. Adjusted Net Loss is defined as net loss before net change in carrying value of the redeemable shares at the option of the holders and related financial derivative liability, early repayment fee on long-term debt, unusual and non-recurring items net of taxes, non-cash share-based compensation. Adjusted Gross Profit is defined as gross profit before non-cash share-based compensation and depreciation and amortization. Adjusted Operating Expenses is defined as operating expenses less non-cash share-based compensation, depreciation and amortization and unusual non-recurring items. Adjusted Selling and Marketing Expenses is defined as selling and marketing expenses less non-cash share-based compensation, depreciation and amortization. Adjusted Research and Development Expenses is defined as research and development expenses less non-cash share-based compensation, depreciation and amortization. Adjusted General and Administrative Expenses is defined as general and administrative expenses less non-cash share-based compensation, depreciation and amortization and unusual and non-recurring items.

For a reconciliation of net loss to EBITDA, Adjusted EBITDA and Adjusted Net Loss, a reconciliation of gross profit to Adjusted Gross Profit, a reconciliation of operating expenses to Adjusted Operating Expenses, a reconciliation of selling and marketing expenses to Adjusted Selling and Marketing Expenses, a reconciliation of research and development expenses to Adjusted Research and Development Expenses and a reconciliation of general and administrative expenses to Adjusted General and Administrative Expenses, please refer to "Reconciliation of Non-IFRS Measures" in the Company's Management's Discussion & Analysis for the First Quarter Fiscal 2015 filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at www.sedar.com.

Forward-Looking Information

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", or "continue", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors identified in the Company's annual information form filed with the Canadian securities regulatory authorities, which is available on the SEDAR website at www.sedar.com. There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information. Forward-Looking statements are provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to help investors measure progress towards management's objectives and the reader is cautioned that such statements may not be appropriate for other purposes.

Additional information about the Company, including our 2014 Annual Information Form, is available on our website at www.lumenpulse.com and on the SEDAR website at www.sedar.com.

About Lumenpulse Inc.

Founded in 2006, Lumenpulse designs, develops, manufactures and sells a wide range of high performance and sustainable specification-grade LED lighting solutions for commercial, institutional and urban environments. Lumenpulse is a leading pure-play specification-grade LED lighting solutions provider and has earned many awards and recognitions, including several Product Innovation Awards (PIA), three Next Generation Luminaires Design Awards, a Red Dot Product Design Award and a Lightfair Innovation Award. Lumenpulse has more than 353 employees worldwide, with corporate headquarters in Montreal, Canada, and offices in Boston, Massachusetts, London, UK and Manchester, UK. Lumenpulse is listed on the Toronto Stock Exchange under the symbol LMP.

¹ Excluding revenues from the operations resulting from the asset acquisition of Projection Lighting Limited.

² Except for financial lease obligations.

³ Lightfair is the world's largest annual architectural and commercial lighting trade show and conference.