North Coast Solar Stocks

September 14, 2009

ICP Solar Announces Fiscal 2010 Second Quarter Financial Results

Filed under: ICPR — Tags: , , , , , — Jason @ 8:00 am

Margin Improvement Continues as New Products Set for Launch

Monday September 14, 2009, 8:00 am EDT

MONTREAL–(BUSINESS WIRE)–ICP Solar Technologies Inc. (ICPR.OB), a developer, manufacturer and marketer of proprietary solar panels and products, today announced financial results for its second fiscal quarter ended July 31, 2009.

Highlights for the Quarter

* ICP Solar posted sales of $1.4 million for the fiscal second quarter and gross profit of $0.4 million, or 26% of sales, versus a gross margin of 17% in the prior year period even as revenues fell due to the global recession and supply chain issues.
* Shipments were negatively affected during the quarter by vendor constraints in China, where many traditional suppliers have gone out of business in the current economic environment. ICP Solar worked to quickly switch to larger, more established vendors and ship products to customers, but the transition resulted in lower revenue and a negative impact to gross margins.
* SG&A expenses declined 50% in the quarter ended July 31, 2009 versus the second quarter of fiscal 2009 and were down 14% sequentially from the fiscal 2010 first quarter.
* ICP Solar also recently announced a number of initiatives to expand its product line and accelerate growth, including new solar chargers with Konarka, a global licensing agreement with Energizer®, and an upcoming line of portable power products sold under the iSun® brand.

“While ICP Solar initiated several new product developments this quarter and made further progress towards profitability, we were disappointed with the Company’s overall financial results,” said Sass Peress, CEO. “Anticipating that the global economic slowdown would have an impact on end-user demand, we managed our inventory levels judiciously and conserved cash. However, orders were higher than expected, and we thus found it necessary to make and ship products to our distributors via air freight and other less attractive methods, negatively impacting our gross margins. Furthermore, quite a few of our suppliers in China had become unreliable in the current environment or gone out of business altogether, so ICP Solar found it necessary to switch to other vendors during the period – costing both time and money. While these factors were unanticipated, we are now better positioned with stronger suppliers and better forecasting tools to manage working capital requirements.

“During the quarter and afterwards, ICP Solar announced a number of exciting new product rollout initiatives that we believe will strengthen our industry position and bolster our growth rate going forward. Our relationship with Konarka brings cutting edge, inexpensive solar chargers utilizing their patented Power Plastic® solar cells, and the global licensing agreement with Energizer Holdings will broaden our product portfolio across a number of new markets. In addition, the upcoming launch of the Energizersolar.com and Energizersolar.eu websites will provide valuable exposure and increased awareness for ICP Solar. We expect to see products from both the Konarka and Energizer partnerships become available during the fourth quarter. Our GreenMeter® global rollout continues, and we recently also announced that our iSun® brand of portable solar chargers will soon be available for sale as well. ICP Solar is clearly laying out a strategy to rapidly grow the Company in the quarters to come.

“We remain dedicated to becoming profitable as soon as possible and believe the Company would have reached breakeven this past quarter if not for the supply chain issues encountered. We are now better prepared for the anticipated growth and see continued financial improvement as our new product introductions gain traction this year and next.”

Financial Results

Revenue for the second quarter of fiscal 2010 was $1.4 million, as compared with $1.9 million for the second quarter of fiscal 2009, reflecting global economic conditions and supply chain constraints. Gross profit was $0.4 million, or 26% of sales, versus $0.3 million, or 17% of sales, in the prior year period. The Company’s operating loss for the quarter was $(0.6) million versus $(1.4) million in the second quarter of fiscal 2009, with the decrease primarily due to lower SG&A expense. The Company posted a comprehensive net loss for the second quarter of $(7.1) million, or $(0.19) per diluted share, compared with a net loss of $(3.6) million, or $(0.11) per diluted share, for the second quarter of fiscal 2009. Results for the current period include approximately $6.5 million in non-cash charges related to the Company’s warrants and convertible debentures.

Conference Call

ICP Solar will host a conference call at 10:00 a.m. Eastern on September 14, 2009 for the fiscal second quarter ended July 31, 2009. During the call, Sass Peress, CEO, will review the company’s operations and financial results. The telephone number for the conference call is 800-938-1123.

ICP Solar Technologies, Inc.
Consolidated Statement of Operations
(Unaudited)
Expressed in U.S. Funds
For the three months For the six months
ended July 31, ended July 31,
2009 2008 2009 2008
Net Sales $ 1,365,952 $ 1,946,943 $ 2,812,911 $ 3,838,597
Cost of Sales 1,008,403 1,613,901 2,117,388 2,849,886
Gross Margin 357,549 333,042 695,522 988,711
Expenses
Selling, general and administrative 806,834 1,628,344 1,740,535 3,168,326
Depreciation 20,369 6,946 40,878 13,342
Research and development 14,230 117,025 56,129 155,273
Foreign exchange loss (gain) 101,393 7,759 138,579 13,745
Total Expenses 942,826 1,760,074 1,976,120 3,350,686
Operating Loss (585,277 ) (1,427,032 ) (1,280,598 ) (2,361,975 )
Interest expense (64,461 ) (64,308 ) (142,477 ) (101,055 )
Interest expense on put warrants (5,761,000 ) (560,667 ) (9,902,000 ) (560,667 )
Change in fair value or derivative liability -embedded conversion option 82,441 (138,964 )
Interest income 851 5,614
Forgiveness of loan receivable (88,973 )
Discount on senior secured debentures (731,031 ) (246,914 ) (1,577,949 ) (246,914 )
Accretion of discount on convertible notes (137,573 ) (167,495 )
Discount on loan receivable 166,404
Accretion of discount on loan receivable 26,367 35,639
Financing costs (382,761 ) (382,761 )
Gain on disposal of subsidiary 9 9
Net Loss before Income Taxes $ (7,059,328 ) $ (2,792,028 ) $ (13,041,988 ) $ (3,702,174 )
Deferred Income Taxes 850,000 850,000
Comprehensive Loss $ (7,059,328 ) $ (3,642,028 ) $ (13,041,988 ) $ (4,552,174 )
Basic Weighted Average Number of Shares Outstanding 37,667,640 33,724,100 37,667,640 33,724,100
Basic and Diluted Loss Per Share (0.19 ) (0.11 ) (0.35 ) (0.13 )
ICP Solar Technologies, Inc.
Adjusted EBITDA Reconciliation
(Unaudited)
Expressed in U.S. Funds
For the Three-Month Period
Ended July 31,
For the Six-Month Period
Ended July 31,
2009 2008 2009 2008
Net Earnings (Loss) before Income Taxes ($7,059,328 ) ($2,792,028 ) ($13,041,988 ) ($3,702,174 )
Interest 64,461 64,308 142,477 101,055
Interest expense on put warrant 5,761,000 560,667 9,902,000 560,667
Depreciation 20,369 6,946 40,878 13,342
Amotization of loan discount (166,404 )
Accretion of discount on convertible notes 137,573 167,495
Amortization of discount on convertible debentures 731,031 246,914 1,577,949 246,914
Accretion of discount on loan receivable (26,367 ) (35,639 )
EBITDA (482,467 ) (1,801,987 ) (1,378,684 ) (2,814,744 )
Other non-cash items:
Forgiveness of loan receivable 88,973
Foreign exchange 101,393 7,759 138,579 13,745
Stock based compensation 74,572 518,545 381,892 1,200,678
Change in fair value of derivative liability -embeded conversion option (82,441 ) 138,964
Gain on disposal of subsidiary (9 ) (9 )
Adjusted EBITDA ($388,944 ) ($1,275,692 ) ($719,250 ) ($1,511,357 )
ICP Solar Technologies, Inc.
Consolidated Balance Sheet
(Unaudited)
Expressed in U.S. Funds
July 31, 2009 January 31, 2009
Assets
Current
Cash $ 39,066 $ 193,517
Accounts receivable 661,243 622,981
Inventories 1,004,288 1,492,808
Prepaid expenses 99,315 12,941
1,803,912 2,322,247
Property and Equipment 76,152 88,030
Intangible, net of accumulated amortization of $82,200 (2008-$nil) 91,914 120,914
Investment in Convertible Debenture net of $967,600 provision 1 1
Total Assets $ 1,971,979 $ 2,531,192
Liabilities
Current
Accounts payable and accrued liabilities 2,053,607 1,648,019
Put option liability 134,397 67,555
Derivative liability-embedded conversion option 943,186
Government grants payable 10,565 17,533
Senior Secured Convertible Debentures, less unamortized discount of $ 1,130,985 (2009-$2,708,934) 785,054 171,517
3,926,810 1,904,624
Put Warrant 13,502,000 3,600,000
Shareholders’ Deficiency
Capital Stock 413 351
Additional Paid-In Capital 17,520,297 16,157,548
Accumulated Other Comprehensive Loss (1,005,625 ) (1,005,625 )
Accumulated Deficit (31,971,916 ) (18,125,706 )
Total Shareholders’ Deficiency (15,456,831 ) (2,973,432 )
Total Liabilities & Shareholders’ Deficiency $ 1,971,979 $ 2,531,192

Contact:

ICP Solar Technologies Inc.
Sass Peress, Chief Executive Officer
514-270-5770
or
Investor Relations:
Chris Witty, 646-438-9385
cwitty@darrowir.com
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