Lumenpulse Inc.
TSX : LMP

Lumenpulse Inc.

June 18, 2015 06:45 ET

Lumenpulse Reports Record Fourth Quarter and Fiscal Year 2015 Results

Lumenpulse Product Revenues Increased 92% and 83% over Last Year respectively for Q4 and Full Fiscal 2015

MONTREAL, QUEBEC--(Marketwired - June 18, 2015) - Lumenpulse Inc. (TSX:LMP)

  • Total revenues of $100.7 million for Fiscal 2015; up 62% over 2014

  • Revenues of $31.0 million for Q4 2015; up 82% over last year, including $28.4 million of Lumenpulse Product Revenues

  • Adjusted Gross Margin on Lumenpulse Products at 46.7% for Q4 2015, excluding in-year acquisitions

  • International revenues representing 32% of Fiscal 2015 revenues with Q4 International revenues at $8.9 million

  • Q4 Adjusted EBITDA of $2.0 million or 6.5% of revenues; $3.7 million for Fiscal 2015 or 3.7% of revenues

  • Fiscal 2015 Adjusted Diluted EPS of $0.07

Lumenpulse Inc. (TSX:LMP), a leading manufacturer of high performance, specification-grade LED lighting solutions, released today its fourth quarter and full year results for the periods ended April 30, 2015.

"In Fiscal 2015 we attained an important milestone with revenues reaching $100 million. We are pleased with the results delivered for the year and solid fourth quarter finish," said François-Xavier Souvay, the Company's President and CEO.

The exceptional growth achieved in Fiscal 2015 reflects significant investments in technological innovation, manufacturing operations, and sales coverage expansion, as well as in the operating structure put in place to support growth.

"Three strategic acquisitions were completed during Fiscal 2015 that significantly broadened our addressable market and geographical coverage. In addition, the acquisitions brought a significant knowledge-base that allowed us to strengthen our position as a leader in specification-grade LED lighting solutions. The integration of AlphaLED was successfully completed and the revenue contribution exceeded our expectations. As we finalize the integration of our last two acquisitions, we look forward to repeating the success of AlphaLED," added Mr. Souvay.

"Solid top-line growth, combined with manufacturing and operating leverage, lead to a significant increase in Adjusted EBITDA and Adjusted EBITDA Margin, which reached 3.7% for the year and 6.5% for the fourth quarter," stated Robert Comeau, Chief Financial Officer.

"Our balance sheet remains solid with cash and cash equivalents of $43.5 million at year- end, which will allow us to pursue our disciplined acquisition program," concluded Mr. Comeau.

"Our objectives remain to continue growing Lumenpulse's business at a rate that exceeds the growth rate in the general lighting market for LED products and, within the next four years, converge towards market growth, reaching Adjusted Gross Margins that approach 50% and Adjusted EBITDA margins of approximately 18% to 20%.

"For Fiscal 2016, we will continue to execute our customer-centric strategy and unlock further value through a solid top-line increase, gross margin expansion and EBITDA growth," concluded Mr. Souvay.

Financial Highlights

(In millions of Canadian dollars, except per share amounts)

Q4 20154 Q4 20144 Change FY 2015 FY 2014 Change
Revenues - Consolidated 31.0 17.0 14.0 100.7 62.2 38.5
Growth 82 % 62 %
Revenues - Lumenpulse products (LP) 28.4 14.8 13.6 88.5 48.5 40.0
Growth 92 % 83 %
Adjusted Gross Profit % - Consolidated1 44 % 45 % -1 pts 43 % 42 % 1 pts
Adjusted Gross Profit % - LP1 45 % 46 % -1 pts 45 % 44 % 1 pts
Adjusted EBITDA1 2.0 0.1 1.9 3.7 0.4 3.3
Net Loss - (35.7 ) 35.7 (0.4 ) (49.2 ) 48.8
Adjusted Net Income (loss)1 0.8 (1.3 ) 2.1 1.8 (4.5 ) 6.3
Ajusted EPS (loss per share) - Diluted1, 2, 3 0.03 (0.10 ) 0.13 0.07 (0.38 ) 0.45
1 See the Non-IFRS financial measures section below.
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.
3 The calculation for the fourth quarter and the full year ended April 30, 2015 include 1,549,825 and 1,775,167 stock options respectively, which are deemed to be dilutive. As a result of net losses incurred, in the periods presented other than the three-month period ended April 30, 2015, all potentially dilutive stock options have been excluded from the calculation of diluted loss per share. All outstanding share options could potentially dilute earnings per share in the future.
4 Unaudited

Revenues

For the year ended April 30, 2015, Lumenpulse recorded revenues of $100.7 million, representing an increase of 62% compared to revenues of $62.2 million in Fiscal 2014. For its fourth quarter ended April 30 2015, Lumenpulse recorded revenues of $31.0 million. This represents an 82% increase compared to revenues of $17.0 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 92%.

For both periods, the Lumenpulse Product revenues increase was mainly attributable to solid organic growth of $20.3 million and $6.9 million, or 42% and 47%, for Fiscal 2015 and the fourth quarter respectively. This growth was driven by the leveraging of our existing line of products, the introduction of new complementary products to our existing portfolio and further penetration of our existing network of agents and VARs in North America and in international markets. The growth is also due to the $19.7 million of revenues related to in-year acquisitions in Fiscal 2015 and $6.7 million in the fourth quarter.

International revenues continued to be an important and increasingly large contributor, representing 32% and 29% of total revenues for Fiscal 2015 and for the fourth quarter respectively.

Adjusted Gross Margin

For Fiscal 2015, the consolidated Adjusted Gross Margin increased to 43.4% from 42.0% in Fiscal 2014. The increase was primarily related to the greater proportion of Lumenpulse Products, which generated higher and improved gross profit margin. For the fourth quarter, the consolidated Adjusted Gross Margin decreased to 43.6% from 45.3% for the same period last year. This decrease is attributable to the integration of in-year acquisitions which follow a different profitability model and, to a lesser extent, a decrease in Other Manufacturers Products gross profit margin.

For Fiscal 2015, Lumenpulse Products Adjusted Gross Margin increased to 44.8% from 44.0%. The Lumenpulse Products margin improvement reflects improved manufacturing efficiency, higher manufacturing capacity utilization, and a favorable foreign exchange impact mainly related to the strengthening of the U.S. dollar against the Canadian dollar. For the fourth quarter, the Adjusted Gross Margin on Lumenpulse Products decreased to 44.7% from 46.3% for the same period last year. This decrease is mainly due to the expected lower margin contribution of in-year acquisitions.

For Fiscal 2015 and for the fourth quarter, when excluding in-year acquisitions, the Lumenpulse Products Adjusted Gross Margin rose to 46.7% from 44.0% and to 46.7% from 46.3%, respectively, for the same periods last year.

Adjusted EBITDA

For Fiscal 2015, Adjusted EBITDA increased to $3.7 million from $0.4 million for the same period last year. For the fourth quarter, Adjusted EBITDA increased to $2.0 million from $0.1 million for the same period last year. For both periods, the increases in Adjusted EBITDA are mainly attributable to greater increases in Adjusted Gross Profit than the increases in operating spending required to support our growth.

Adjusted Net Income (Net Loss)

For Fiscal 2015 and for the fourth quarter, the Adjusted Net Income reached $1.8 million and $0.8 million from losses of $4.5 million and $1.3 million for the corresponding periods last year. The change was primarily due to an improvement in Adjusted EBITDA and to a favorable variance in interest and other financing income, slightly offset by higher depreciation and amortization related to in-year acquisitions and additional investments.

Conference Call

Lumenpulse has scheduled a conference call to discuss these results on Thursday, June 18, 2015, beginning at 11:00 A.M. (ET). The call will be webcast, with the accompanying Q4 results presentation at the following link: Q4 2015 Earnings Conference Call (also found in the Investor Relations section of the Company website under "Events/Calendar"). Alternatively, investors in North America may join by dialing: 1-844-825-4409 (conference ID: 47727437). 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 Income (Loss), Adjusted Gross Profit, Adjusted Operating Expenses, Adjusted Selling and Marketing Expenses, Adjusted Research and Development Expenses, Adjusted General and Administrative Expenses and Adjusted Earnings (Loss) per share- basic and diluted 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, and 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 are defined as expenses incurred for the initial public offering ("IPO") and acquisition-related costs. Adjusted Net Income (Loss) is defined as net income (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, and 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 and non-recurring items. Adjusted Selling and Marketing Expenses is defined as selling and marketing expenses less non-cash share-based compensation, and depreciation and amortization. Adjusted Research and Development Expenses is defined as research and development expenses less non-cash share-based compensation, and 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. Adjusted Earnings (Loss) per share- basic is defined as the Adjusted Net Income (Loss) on the weighted average number of ordinary shares outstanding during the period. Adjusted Earnings (Loss) per share- diluted is defined as the Adjusted Net Income (Loss) on the weighted average number of ordinary shares outstanding during the period and the dilutive potential ordinary shares.

For a reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted Net Income (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 and Analysis for the Fourth 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.

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 445 employees worldwide, with corporate headquarters in Montreal, Canada, and offices in Québec City, Boston, Paris, London and Manchester. Lumenpulse is listed on the Toronto Stock Exchange under the symbol LMP.

Additional information about Lumenpulse, including its 2015 Annual Information Form, is available at www.lumenpulse.com and on the SEDAR website at www.sedar.com.

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