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Capstone Companies, Inc. Reports Second Quarter 2015 Results

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August 14, 2015

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FOR IMMEDIATE RELEASE         

Capstone Companies, Inc. Reports Second Quarter 2015 Results

DEERFIELD BEACH, FL, August 14, 2015Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer of innovative LED lighting solutions including power failure lighting, today reported its financial results for the second quarter of 2015.

Stewart Wallach, Capstone’s CEO, commented, “Second quarter results were in-line with our expectations, reflecting the strategic brand change from Capstone to Hoover® HOME LED, the lingering effects of the west coast port strike that was resolved earlier this year, and our focus on new product introductions.  With those issues now behind us and a strong backlog, revenue will ramp up significantly in the third quarter 2015.”   

Second Quarter Review

Revenue was $0.3 million for the second quarter, down from the prior year’s second quarter primarily due to the previously disclosed transition to the new Hoover® HOME LEDbranded product lines and the impact of the west coast port labor dispute.   

Gross profit was $0.1 million in the second quarter of 2015.  Gross profit margin as a percent of sales was 18.4%.  Second quarter 2015 gross profit and margin included a cost accrual of approximately $35 thousand for allowances from a previous period, which was the driver of lower gross profit margin when compared with the prior-year period

Operating expenses totaled $0.7 million, flat with the second quarter of 2014.  

For the second quarter, the Company recorded a net loss of $0.7 million compared with a net loss of $0.4 million in 2014.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Friday, August 14, 2015 at 10:30 a.m. ET.  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 sessionThe 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. ET the day of the teleconference until Friday, August 21, 2015.  To listen to the replay of the call, dial (858) 384-5517 and enter replay pin number 13614276.  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 URL’s are not incorporated into this press release.

FINANCIAL TABLES FOLLOW.  THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-K FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

For more information, contact

Company:                                                      

Aimee Gaudet                                                

Corporate Secretary                                      

(954) 252-3440, ext 313

Investor Relations:

Garett Gough, Kei Advisors LLC

(716) 846-1352

ggough@keiadvisors.com    

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

Revenues, net

 $     289,984

 $  1,181,379

 $   1,003,501

 $  5,269,748

Cost of sales

     (236,725)

     (828,537)

      (642,892)

   (3,610,366)

        Gross profit

          53,259

        352,842

         360,609

     1,659,382

        Gross margin

18.4%

29.9%

35.9%

31.5%

Operating expenses:
  Sales and marketing

        131,841

          73,327

         168,512

        373,999

  Compensation

        332,281

        374,803

         693,390

        670,130

  Professional fees

          49,389

          32,244

         145,562

        106,025

  Product development

          60,752

          84,601

         106,409

        216,931

  Other general and administrative

        126,963

        144,443

         248,319

        286,983

       Total operating expenses

        701,226

        709,418

      1,362,192

     1,654,068

Net operating (loss) income

     (647,967)

     (356,576)

   (1,001,583)

            5,314

Other expense:
  Interest expense

       (57,123)

      (52,445)

        (94,279)

      (153,570)

     Total other expense

       (57,123)

       (52,445)

        (94,279)

      (153,570)

Loss before  tax provision

     (705,090)

    (409,021)

   (1,095,862)

      (148,256)

    Provision for income tax

                    –

         (4,258)

                    –

          (4,258)

Net loss

 $   (705,090)

 $  (413,279)

 $(1,095,862)

 $   (152,514)

Net loss per common share
Basic

$0.00

$0.00

$0.00

$0.00

Diluted

$0.00

$0.00

$0.00

$0.00

Weighted Average Shares Outstanding
Basic

696,591,051

654,010,532

675,042,840

655,046,444

Diluted

696,591,051

654,010,532

675,042,840

655,046,444

 


 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2015

2014

Assets:

(Unaudited)

Current Assets:
   Cash

 $               807,466

 $           313,856

   Accounts receivable – net

                  186,483

              977,597

   Advances

                              –

                14,456

   Inventory

                  194,976

              128,984

   Prepaid expense

               1,609,630

              358,046

     Total Current Assets

               2,798,555

           1,792,939

Fixed Assets:
   Computer equipment and software

                    15,608

                12,272

   Machinery and equipment

                  333,393

              299,693

   Furniture and fixtures

                      5,665

                  5,665

   Less: Accumulated depreciation

                 (252,829)

             (223,589)

     Total Fixed Assets

                  101,837

                94,041

Other Non-current Assets:
   Deposit

                    12,193

                12,193

   Investment (AC Kinetics)

                  500,000

              500,000

   Goodwill

               1,936,020

           1,936,020

      Total Other Non-current Assets

               2,448,213

           2,448,213

         Total Assets

 $            5,348,605

 $        4,335,193

Liabilities and Stockholders’ Equity:
Current Liabilities:
   Accounts payable and accrued expenses

 $               416,367

 $           644,629

   Note payable – Sterling Factors

                  184,115

286,945

   Notes and loans payable to related parties – current maturities

               4,318,179

           1,936,679

     Total Current Liabilities

4,918,661

2,868,253

Commitments and Contingent Liabilities (Note 5)
Stockholders’ Equity:
   Preferred Stock, Series A, par value $.001 per share, authorized
100,000,000 shares, issued -0- shares

                              –

                          –

   Preferred Stock, Series B-1, par value $.0001 per share, authorized
50,000,000 shares, issued -0- shares

                              –

                          –

   Preferred Stock, Series C, par value $1.00 per share, authorized
1,000 shares, issued -0- shares at June 30, 2015 and 1,000 shares at
December 31, 2014

                              –

1,000

   Common Stock, par value $.0001 per share, authorized 850,000,000
shares, issued 721,989,957 shares at June 30, 2015 and
654,010,532 at December 31, 2014

66,081

65,401

   Additional paid-in capital

7,246,244

7,187,058

   Accumulated deficit

(6,882,381)

(5,786,519)

     Total Stockholders’ Equity

                  429,944

           1,466,940

     Total Liabilities and Stockholders’ Equity

 $            5,348,605

 $        4,335,193

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

For the  Six Months Ended

June 30,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss

 $      (1,095,862)

 $         (152,514)

Adjustments necessary to reconcile net loss to net cash used in
operating activities:
      Stock cancellation

                         –

              (28,876)

      Depreciation and amortization

               29,239

               39,910

      Compensation expense from stock options

               58,866

               35,344

      Accrued sales allowance

            (196,977)

              (36,505)

      Decrease in accounts receivable

             988,091

          6,117,314

     (Increase) decrease in inventory

              (65,990)

               18,326

     (Increase) decrease in prepaid expenses

         (1,251,586)

             344,118

      Decrease (increase) in other assets

               14,456

              (97,910)

      Decrease in accounts payable and accrued expenses

            (228,262)

         (1,568,338)

      Increase in accrued interest on notes payable

               81,500

               98,035

  Net cash (used in) provided by operating activities

(1,666,525)

4,768,904

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment

(37,036)

(23,028)

Net cash used in investing activities

              (37,036)

              (23,028)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable

          1,588,827

          6,385,914

Repayments of notes payable

         (1,691,656)

       (10,623,058)

Proceeds from notes and loans payable to related parties

          2,500,000

             950,000

Repayments of notes and loans payable to related parties

            (200,000)

         (1,439,600)

Net cash provided by (used in) financing activities

2,197,171

(4,726,744)

Net Increase in Cash and Cash Equivalents

493,610

19,372

Cash and Cash Equivalents at Beginning of Period

313,856

436,592

Cash and Cash Equivalents at End of Period

 $          807,466

 $          455,964

 

 

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