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Capstone Companies Reports Second Quarter Record Revenues of $10.2 Million

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August 15, 2017

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Company News

  • Achieved record half year revenues of $17 million
  • Gross margin expanded 2 points to 25.9% of sales
  • Operating leverage drove operating income growth to $1.3 million
  • Strong backlog sets expectation for another record setting third quarter

DEERFIELD BEACH, FL, August 14, 2017Capstone 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 2017.

Stewart Wallach, Capstone’s CEO, commented, “Our record revenue and solid profitability delivered in the quarter, further demonstrates Capstone’s abilities to execute its growth strategy. The Company’s momentum continues to strengthen as our product placements continue to expand.”

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

Q2 2017 Q2 2016 Change % Change
Revenue $10,220 $8,902 1,318 14.8%
Gross profit 2,643 2,129 514 24.1%
Gross margin 25.9%   23.9%  
Operating income 1,339 1,161 178 15.3
Operating margin 13.1% 13.0%
Net income before tax $ 1,303 1,094 209 19.1%
     Net income 901 1,082 (181) (16.7%)
Earnings per diluted share $   0.019 ($0.022) NM NM

 

Revenue growth in the second quarter of 2017 was the result of strong demand for the Company’s branded products including Capstone Lighting, Hoover Home LED and Duracell

Gross profit was 25.9% of revenue up 2% from the prior year period, resulting from the improved blended margin with the launch of the new products. Total operating expenses increased to $1.3 million from $967 thousand in the prior year period, due to the higher revenue volume and increased investment in promoting our licensed brands.

Diluted earnings per share was $0.019 in the second quarter of 2017.

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

1H 2017 1H 2016 Change % Change
Total revenue $16,972 $10,980 5,992 54.6%
Gross profit 4,222 2,742 1,480 54.0%
Gross margin 24.9%   25.0%  
Operating income 1,726 1,120 606 54.1%
Operating margin 10.2% 10.2%
Net income before tax $ 1,682 996 686 68.9%
   Net income 1152 983 169 17.2%
Earnings (loss) per diluted share $   0.024 $0.020 NM NM

 

Financial results for the first half of 2017 improved significantly over the prior-year period, reflecting the successful introduction of new products and the consumer acceptances of Hoover Home LED and Duracell brands. Compared to the same period 2016, revenue increased by nearly $6 million or 54.6%, Gross profit increased by $1.480 million or 54% up to $4.2 million and Net income before tax increased by $68 thousand or 68.9% up to $1.682 million.

Diluted earnings per share was $.024 up from $.020 in the same period last year.

Mr. Wallach added, “Our expanded product portfolio and related branding strategy drove record setting revenues and strong gross profit year to date. We are particularly pleased to report stable gross margins as our growth strategy is executed. Moreover, management is encouraged by the backlog buildup and look forward to maintaining momentum thru Q3. This is an exciting time for Capstone as the challenge of delivering growth, profitability continues to be met.”

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Tuesday, August 15, 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.  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, August 22, 2017. To listen to the replay of the call, dial (412) 317-6671 and enter replay pin number 13664215. 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.

The Hoover trademark and logo are registered trademarks of Techtronic Floor Care Technology Limited and are used under license by Capstone Industries, Inc. All rights reserved.

© 2017 DURACELL Bethel, CT 06801. DURACELL is a registered trademark of Duracell U.S. Operations, Inc., used under license. All rights reserved.

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.

For more information, contact
Company:                                                    
Aimee Gaudet
Corporate Secretary
(954) 252-3440, ext. 313
 

 

 

 

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