CP Reports Second Quarter 2014 Financial Results
AURORA, Ohio, Aug. 7, 2014 /PRNewswire/ — TCP International Holdings Ltd. (NYSE: TCPI), a leading global manufacturer and distributor of energy efficient lighting technologies, today announced financial results for its second quarter ended June 30, 2014.
Net sales for the second quarter were $112.5 million, an 11% increase compared with $101.1 million in the first quarter of 2014 and a 1% increase compared with $111.2 million in the second quarter of 2013. Net income in the second quarter was $2.0 million, or $0.10 per diluted share, compared with $3.9 million, or $0.19 per diluted share, in the first quarter of 2014 and compared with $4.6 million, or $0.22 per diluted share, in the second quarter of 2013.
“Our sales for the second quarter reflected our ongoing success to expand our LED product line in both our commercial and industrial and retail sales channels,” said Ellis Yan, TCP’s Chairman and CEO. “Moving forward, we expect to leverage the investments we have made in our people and infrastructure to drive the continued growth of our LED product line.”
Second Quarter 2014 Summary
Following is a summary of certain key financial measures for the second quarter of 2014:
— Net sales were $112.5 million, an increase of $11.4 million, or 11%,
from the first quarter of 2014 and an increase of $1.3 million, or 1%,
from the second quarter of 2013.
— LED sales were $46.0 million, an increase of $9.7 million, or 27%,
from the first quarter of 2014 and an increase of $18.2 million, or
65%, from the second quarter of 2013, driven by increased sales in
the commercial and industrial, or C&I, channel and with Walmart.
— CFL sales were $59.5 million, roughly flat from the first quarter of
2014 and down $12.4 million, or 17%, from the second quarter of
2013, primarily due to the transition to LEDs in the C&I channel and
lower volume with The Home Depot.
— Gross margin was 22.7%, down from 24.5% in the first quarter of 2014 and
down from 24.3% in the second quarter of 2013 due to the absence of
favorable profit margins on a one-time order in 2013 and an increase in
the provision for excess and obsolete inventory.
— Selling, general and administrative expenses were $20.4 million, an
increase of $3.5 million from the first quarter of 2014 and an increase
of $3.8 million from the second quarter of 2013 due to higher payroll
largely attributable to the expansion of our sales force and marketing
team to serve the C&I channel, increased marketing costs, and
share-based compensation expenses for new awards granted in connection
with the IPO.
— Net income was $2.0 million, a decrease from $3.9 million in the first
quarter of 2014 and a decrease from $4.6 million in the second quarter
of 2013. Diluted earnings per share were $0.10, a decrease from diluted
earnings per share of $0.19 in the first quarter of 2014 and a decrease
from diluted earnings per share of $0.22 in the second quarter of 2013.
— Adjusted EBITDA was $7.7 million, compared to $10.0 million in the first
quarter of 2014 and $12.4 million in the second quarter of 2013.
At June 30, 2014, cash and cash equivalents were $16.1 million, down from $23.0 million at March 31, 2014. On July 1, 2014, TCP completed an initial public offering generating proceeds of $78.6 million, before deducting expenses of the offering estimated at $8.8 million. On a pro forma basis, after giving effect of the offering that will be recorded in the third quarter of 2014, the Company’s cash and cash equivalents were $85.9 million. Combined short-term loans and long-term debt was $144.2 million at June 30, 2014, down from $146.8 million at March 31, 2014. We intend to use the net proceeds from our offering to acquire manufacturing equipment to expand our LED manufacturing capacity, for the repayment of indebtedness outstanding and for general corporate purposes.