Attached files
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| 8-K - FORM 8-K CURRENT REPORT - ICTV Brands Inc. | f8k111213_8k.htm |
Exhibit 99.1
International Commercial Television, Inc. Reports Third Quarter 2013 Financial Results
Conference Call Begins Today at 4:30 p.m. Eastern Time
Wayne, PA -- (GLOBE NEWSWIRE) – via PRWEB – November 13, 2013 – International Commercial Television, Inc. (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 DermaWandTM 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 DermawandTM infomercial. As the Company continues to build the DermawandTM 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 DermaWandTM 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.
-- Financial Statements follow --
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY | ||||
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF | ||||
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| September 30, |
| December 31, |
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| 2013 |
| 2012 |
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| (Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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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 |
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Furniture and equipment |
| 81,507 |
| 71,258 |
Less accumulated depreciation |
| (65,644) |
| (56,949) |
Furniture and equipment, net |
| 15,863 |
| 14,309 |
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Other assets |
| 30,461 |
| 57,950 |
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Total assets | $ | 4,837,182 | $ | 4,440,228 |
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) |
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CURRENT LIABILITIES: |
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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 |
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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 |
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COMMITMENTS AND CONTINGENCIES |
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SHAREHOLDERS’ EQUITY (DEFICIT): |
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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 and outstanding 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) |
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Total shareholders’ equity (deficit) |
| 1,965,654 |
| (400,369) |
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Total liabilities and shareholders’ equity (deficit) | $ | 4,837,182 | $ | 4,440,228 |
INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
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| (Unaudited) |
| (Unaudited) | ||||
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| For the three months ended |
| For the nine months ended | ||||
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| September 30, 2013 |
| September 30, 2012 |
| September 30, 2013 |
| September 30, 2012 |
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NET SALES | $ | 8,300,312 | $ | 6,289,601 | $ | 31,155,661 | $ | 12,781,410 |
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COST OF SALES |
| 2,146,270 |
| 1,905,767 |
| 8,597,106 |
| 4,350,680 |
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GROSS PROFIT |
| 6,154,042 |
| 4,383,834 |
| 22,558,555 |
| 8,430,730 |
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OPERATING EXPENSES: |
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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 |
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OPERATING INCOME (LOSS) |
| 110,021 |
| (209,040) |
| 2,008,208 |
| (109,021) |
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INTEREST EXPENSE, NET |
| (5,025) |
| (8,160) |
| (17,700) |
| (17,313) |
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INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX |
| 104,996 |
| (217,200) |
| 1,990,508 |
| (126,334) |
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PROVISION FOR INCOME TAXES |
| 4,488 |
| - |
| 72,533 |
| - |
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NET INCOME (LOSS) | $ | 100,508 | $ | (217,200) | $ | 1,917,975 | $ | (126,334) |
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NET INCOME (LOSS) PER SHARE |
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BASIC | $ | 0.00 | $ | (0.01) | $ | 0.09 | $ | (0.01) |
DILUTED | $ | 0.00 | $ | (0.01) | $ | 0.08 | $ | (0.01) |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
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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 | ||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 | ||||
(Unaudited) | ||||
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| 2013 |
| 2012 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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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: |
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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 |
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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 |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of furniture and equipment |
| (10,250) |
| (2,471) |
Net cash used in investing activities |
| (10,250) |
| (2,471) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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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 |
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NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
| (5,603) |
| 769,578 |
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CASH AND CASH EQUIVALENTS, beginning of the period |
| 908,366 |
| 58,804 |
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CASH AND CASH EQUIVALENTS, end of the period | $ | 902,764 | $ | 828,382 |
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
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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
International Commercial Television
Rich Ransom
ransom@ictvonline.com
484-598-2313
Stephen Hart
Hayden IR
hart@haydenir.com
917-658-7878