Pioneering Technology Reports 2019 Q1 Financial Results
/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
MISSISSAUGA, ON, March 2, 2019 /CNW/ - Pioneering Technology Corp. (TSXV: PTE) ("Pioneering" or the "Company"), a technology company and North America's leader in cooking fire prevention technology and products reports its unaudited financial results for the first quarter ended December 31, 2018. Pioneering's unaudited condensed interim financial statements and MD&A are available on SEDAR (www.sedar.com).
Financial Highlights:
- Revenue in Q1 was down 26% vs. prior year.
- Net loss in Q1 was ($756,241) vs. a net income of $63,699 in Q1 2018.
- Total comprehensive loss per share for the period was ($0.01), down from $0.00 in 2017
- Gross margins were strong at 55.5%.
- Strong balance sheet.
After experiencing 50% year-over-year revenue growth in three consecutive fiscal years (2015, 2016 and 2017), the Company's financial performance declined in fiscal 2018 and the start of fiscal 2019 due to a number of factors, including: longer than normal sales cycles related to the transition from a direct sales model to a distributor model; investments in people, research and marketing; and the impact of activities of former executives of the Company whose employment was terminated in January 2019 (see Pioneering press release dated January 23, 2019).
Pioneering CEO Kevin Callahan said of the results, "While we experienced a 68% improvement in revenue during Q1 2019 versus Q4 2018, we are still working hard to get the business back to where it was prior to 2018 and to continue growing. We are confident that the steps we have taken recently have positioned Pioneering to start restoring shareholder value."
Selected Financial Highlights for the First Quarter ended December 31, 2018 and 2017
Quarter Ended |
Quarter Ended December 31, 2017 |
|
Revenue |
1,273,874 |
1,762,054 |
Total Comprehensive Income (loss) † |
(461,641) |
151,466 |
Total Comprehensive Income (loss) per share † |
(0.01) |
(0.00) |
Adjusted EBITDA # |
(638,845) |
(61,920) |
Total Assets |
10,680,858 |
12,953,631 |
Financial liabilities † |
1,249,013 |
803,546 |
† Includes non-cash items (fair value movement/derivative liability of warrants). See the MD&A for further explanation. |
# Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures" below for further explanation. |
Q1 2019 Business Highlights
Deeper Relationship with Multi-residential Buying Groups: In 2018 the Company announced new partnerships with large buying groups, insurers and leasing organizations in the multi-residential market to provide distributor customers with even greater incentives and ability to purchase. The Company's sales organization will continue to mine these new relationships to drive revenue growth.
Focused Strategic Sales Management Activities: In working with Focus Sales Mgmt. (a professional B2B sales consultancy) to support its distributor network, the Company has simplified its sales organization structure to align the sales team against distributors and territories. This change is enabling the sales team the ability to engage with distributors more frequently to cultivate relationships and identify large sales opportunities with their customer base to drive revenue growth.
Distributor Partnership Activities: As part of its strategy to engage with distributors more frequently the Company continues to participate in HD Supply's "Maintenance Mania" event. This event gives the Company's sales organization direct access to key senior sales personnel at HD Supply across the U.S. who can facilitate product introductions to their key customers and enable trials and demonstrations for the Company's products. The Company has begun participating in annual catalogues and sales conferences at HD Supply and Home Depot Pro that it anticipates will further enable product awareness and end-customer sales opportunities. The Company is also currently negotiating with two new distributors to carry its products.
Current Marketing and Advertising Activities: The Company has invested in B2B advertising and awareness building to drive end-customer awareness for the SmartBurner, SmartRange and Safe-T-sensor products. This advertising investment is targeted against customers in the Company's key B2B channels and is coordinated with the Company's other awareness building and lead generation activities to drive awareness for the cooking fire problem and the Company's product solutions.
Retail After Market Applications: The Company is tactically investing in B2C to build awareness and drive sales. Retail sales at Best Buy USA have shown promise and the Company will invest with Best Buy to build awareness for the SmartBurner product at Best Buy locations in order to increase sales. Once required sales thresholds are met the Company will pursue increasing its points of distribution for the SmartBurner product. The Company is currently pursuing other larger retail opportunities for the aftermarket.
Strong Balance Sheet: As a result of the $6.6 million private placement that it completed in April 2017, the subsequent repayment of all third-party indebtedness and cash generated from ongoing operations in 2016 and 2017, the Company has a very strong balance sheet. As at December 31, 2018 the Company had no debt, approximately $2.3 million in cash and short-term investments and total current assets of over $8.5 million. The Company currently has significant inventory on hand and paid for, most of which was purchased prior to the implementation of U.S. government tariffs. The Company expects that this inventory will allow it to meet current demand and maintain current gross profit margins.
About Pioneering Technology Corp.: Based in Mississauga, Ontario, Pioneering is an "energy smart" technology company and North America's leader in innovative cooking fire prevention technologies and products. Our mission is simple: Protecting people and property from the number one cause of household fire – cooking fires. We do this by engineering and bringing to market energy-smart solutions that make consumer appliances safer, smarter, and more efficient. Our patented cooking-fire prevention products address the multi-billion-dollar problem of cooking fires. According to the National Fire Protection Association, stovetop cooking is the number one cause of household fire and fire injuries in North America. Pioneering's temperature limiting control™ (TLC) technology is now installed in over 300,000 multi-residential housing units across North America without a single cooking fire being reported, delivering peace of mind and a solid return on investment for its customers. Pioneering's proprietary cooking fire prevention solutions include Safe-T-element, SmartBurner, RangeMinder & Safe-T-sensor and are suitable for the majority of the more than 140 million stoves/ranges and over 140 million microwave ovens in use throughout North America. For more information, visit www.pioneeringtech.com.
Forward Looking Statements
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management's current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in Pioneering's target markets, the demand for Pioneering's products, the availability of funding and the efficacy of Pioneering's technology and governmental regulation. These forward-looking statements are made as of the date hereof an, except as required by applicable law, Pioneering does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from Pioneering's expectations and projections.
Non-IFRS Measures
Adjusted EBITDA is a measure not recognized under International Financial Reporting Standards ("IFRS"). However, management of Pioneering believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. Adjusted EBITDA is defined as earnings before interest income, taxes, depreciation and amortization, impairment losses, stock-based compensation, restructuring costs included in general and administration expense, fair value movement – derivative liability and other non-recurring gains or losses including transaction costs related to acquisition. Management believes Adjusted EBITDA is a useful measure that facilitates period-to-period operating comparisons. Adjusted EBITDA does not have any standard meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that Adjusted EBITDA is not an alternative to measures determined in accordance with IFRS and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Pioneering's Adjusted EBITDA should be read in conjunction with the financial statements and management's discussion and analysis of Pioneering posted on SEDAR (www.sedar.com). For a reconciliation of Adjusted EBITDA as presented by Pioneering to net income, please refer to Pioneering's management's discussion and analysis.
This news release contains certain forward-looking statements reflecting the Company's current views or expectations on its performance, business and future events. Such statements are subject to a number of risks, uncertainties and assumptions. Actual results and events may vary significantly.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.
SOURCE Pioneering Technology Corp.
Pioneering Technology Corp., Kevin Callahan, CEO, Direct: 647-945-7515, 1-800-433-6026 ext. 101, Email: [email protected]; For investor relations please contact: Contact Financial Corp., Rob Gamley, Phone: 604-689-7422, Email: [email protected]
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