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Capstone Companies, Inc. Reports Record Third Quarter 2017 Revenue

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November 15, 2017

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  • Record year-to-date revenue of $30.8 million
  • Record quarterly and year-to-date gross profit
  • Record year-to-date operating income

DEERFIELD BEACH, FL, November 15, 2017Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer of innovative LED lighting solutions including power failure lighting, yesterday reported its financial results for the third quarter 2017.

Stewart Wallach, Capstone’s Chairman and CEO, commented, “As evidenced by our third quarter results, the Companies’ branding and product strategies continue to deliver. Our product placement earlier in the year was strong resulting in five additional products finding retail shelves. We have broken our quarterly revenue record for Q3 and have surpassed our record 2016 revenues by over $2 million. Our product development efforts remain laser focused on continuing to deliver new and innovative products for 2018.”

Third Quarter Financial Summary ($ in thousands, except per share data)

Q3 2017 Q3 2016 Change % Change
Revenue $ 13,818 $   11,692     2,126     18.1%
Gross Profit       3,110         2,851        259     9.1%
Gross Margin (%)      22.5%        24.4%           –         –
Operating Income        1,450      1,604       (154)    (9.6%)
Operating Margin (%)      10.5%       13.7%           –         –
Net Income Before Tax        1,381        1,514       (133)     (8.8%)
Net Income Before Tax (%)      10.0%       12.9%           –         –
Earnings Per Diluted Share  $    0.02 $   0.03           –         –

2017 First Nine Months Financial Summary ($ in thousands, except per share data)

Q3 2017 YTD

Q3 2016 YTD Change

% Change

Revenue

$   30,790

$     22,673 8,117

35.8%

Gross Profit

         7,333

           5,593    1,740

31.1%

Gross Margin (%)

       23.8%

           24.7%

Operating Income

         3,176

      2,724    452

16.6%

Operating Margin (%)

        10.3%         12.01%

Net Income Before Tax

         3,063

       2,510    553

22.0%

Net Income Before Tax (%)

         9.9%

          11.1%

Earnings Per Diluted Share

$        .045

$     .051

Record revenue growth in the third quarter of 2017 resulted from strong demand for the Company’s battery powered accent lighting products and the placement of 5 new lighting products. Products sold under Capstone LightingÒ, HooverÒ Home LED and DuracellÒ brands experienced significantly higher revenue levels.

Record gross profit was driven by the record revenue volume. Gross margin as a percent to revenue declined slightly, when compared against the prior year quarter, however that is after the Company invested an additional $677 thousand in market promotional spending to support the launch of the new products.

Selling and marketing expense increased to $928 thousand from $488 thousand in the prior year quarter. During the quarter we expensed $514 thousand of Royalty payments for the branded licenses, resulting from the higher revenue levels.

Net Operating Income for the quarter 2017 and 2016 was $1.450 million and $1.604 million, respectively. With a $390 thousand tax provision for the quarter 2017 Net Income was $991 thousand compared to $1.490 million in 2016.

Record revenue for the 9 months 2017 of $30.8 million was $8.1 million or 35.8% higher than in 2016. Record gross profit for the 9 months 2017 of $7.3 million was $1.7 million or 31.1% higher than in 2016 and that is after investing $1.8 million in product promotional allowances.

Record Operating Income for the 9 months 2017 of $3.2 million was $452 thousand higher than in 2016.

Net Income for the 9 months 2017 was $2.1 million or $331 thousand lower than 2016, however that is after the Company provided for a tax provision of $920 thousand or $883 thousand higher than 2016.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Thursday, November 16, 2017 at 10:30 a.m. Eastern Time. During the call, management will review the financial and operating results and discuss the Company’s corporate strategy and outlook, followed by a question-and-answer session. The conference call can be accessed by dialing (201) 689-8562. The listen-only audio webcast can be monitored at www.capstonecompaniesinc.com.

A telephonic replay will be available from 1:30 p.m. Eastern Time the day of the teleconference until Tuesday, November 23, 2017. To listen to the replay of the call, dial (844) 512-2921 and enter replay pin number 13671616. Alternatively, the archive of the webcast will be available on the Company’s website at www.capstonecompaniesinc.com. A transcript will also be posted to the website, once available.

About Capstone Companies, Inc. Capstone Companies, Inc. is a public holding company that engages, through its wholly-owned subsidiaries, Capstone Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone International HK, Ltd., in the development, manufacturing, logistics, and distribution of consumer and institutional products, including the Hoover® HOME LED lighting product line, to accounts throughout North America and in international markets. See www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com for information on our current product offerings.

FORWARD-LOOKING STATEMENTS:

This news release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements consist of words like “anticipate,” “expect,” “project,” “continue” and similar words. These statements are based on the Company’s and its subsidiaries’ current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company’s products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors. Prior success in operations does not necessarily mean success in future operations. The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue. The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a “penny-stock Company” and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company’s Annual and Quarterly Reports filed with the Securities and Exchange Commission. Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Contents of referenced URLs are not incorporated into this press release.

Company:                                        

Aimee Gaudet                                    
Corporate Secretary
(954) 252-3440, ext. 313
 

 

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