Compound Annual Revenue Growth Rate of 79% (2013- 2015); Full Year 2015 Adjusted EBITDA of $600K
MISSISSAUGA, ON / November 25, 2015 / Pioneering Technology Corp. ($PTE:CA) ($PTEFF), ("Pioneering"), NorthAmerica's leader in cooking fire prevention technologies and products is pleased to announce preliminary selected unaudited financial results and business highlights for the year ended September 30, 2015. Pioneering's audited financial statements for the year ended September 30, 2015 are scheduled to be filed on or before January 28, 2016. Audited financial statements for the years ended September 30, 2014 and 2013 are available on SEDAR (www.sedar.com). The financial results discussed below are unaudited and preliminary and are subject to change in connection with the completion of Pioneering's annual audit.
Fiscal 2015 Financial Highlights:
Pioneering expects to report that the fourth quarter of fiscal 2015 represented its seventh profitable quarter over the past eight quarters and that it is experiencing meaningful revenue growth (79% CAGR since 2013) on the strength of growing awareness of the significant societal problem that stovetop cooking fires represent and support for the proprietary solutions Pioneering offers to address that problem. Pioneering believes that the new products it introduced in 2015 combined with ongoing business development activities and imminent industry changes will support continued revenue and profitability growth in fiscal 2016 and beyond.
The following chart summarizes preliminary unaudited financial results for the fourth quarter and full year for fiscal 2015 together with comparable results in fiscal 2014 (fourth quarter and full year) and 2013 (full year).
(1) 2014 expenses include stock compensation adjustment in Q4 related to extension of options.
(2) 2013 Expenses & Adjusted EBITDA before R&D impairment cost of $778,069 – As of 2014 the Company began expensing R&D costs.
(3) Adjusted EBITDA is a non-GAAP measure. Please refer to "Non-GAAP Measures" at the end of this press release
- Pioneering achieved preliminary unaudited fiscal 2015 revenue of $4.4M versus audited revenue of $2.9M in 2014 & $1.4M in 2013 - a 79% compound annual growth rate.
- Based on preliminary unaudited results, the fourth quarter of 2015 matched the third quarter of 2015 in generating revenues of approximately $1.2M (Pioneering's highest quarterly total ever) – this is up substantially from revenue in the fourth quarter of 2014 ($254,000) and 2013 ($190,000).
- Gross margins continue to be strong - 64% and 62.5%, respectively for the fourth quarter and full year 2015.
- Net income in fiscal 2015 was approximately $184,000 versus losses in fiscal 2014 of approximately $1.2M and in fiscal 2013 of approximately $1.7M. Adjusted EBITDA in fiscal 2015 was approximately $601,000.
- Expenses for the 2015 fiscal year were approximately $2.2M, lower than expenses of $2.7M in fiscal 2014.
Fiscal 2015 Business Highlights:
- Pioneering successfully commercialized two new products:
- SmartBurner, an easy to install consumer version of the Safe-T-element that is attracting interest from both the retail and business to business channels; and
- RangeMinder, which helps prevent unattended cooking on gas and ceramic stovetops and is designed specifically for the consumer market.
- SmartBurner is available to the general public through Home Hardware stores in Canada (approx. 1,400 stores) and through Home Depot in the US via www.homedepot.com. While Pioneering is pursuing new retail listings for SmartBurner and its other products, it has prioritized new and existing B2B multi- residential housing, institution and facility channel opportunities for the SmartBurner and Safe-T-sensor products as it believes that these channels are presently the most promising areas for increasing revenue and profits.
- RangeMinder is currently only available online. Pioneering plans to begin actively promoting it to consumers once its resources permit.
Customer, Distribution and Market Developments
- Pioneering continued to work on large energy efficiency projects with industry heavyweights Johnson Controls and Siemens in the United States. These organizations like and continue to include the Safe-T- element as a key component of their overall energy efficiency contracts both individually and in conjunction with the Department of Housing and Urban Development. In affordable housing channels Safe-T-element is a proven and preferred solution for energy performance contractors
- Pioneering opened up new channels for its product solutions including private rental property management companies, REITs, hotels/motels, office towers and hospitals/medical facilities. Previous barriers to entry in some of these markets which existed for Safe-T-element (professional installation/cost and maintenance) no longer exist with SmartBurner which is driving channel expansion and revenue growth.
- Pioneering signed vendor and distribution agreements with some of the largest B2B multi-residential, facility and institutional supply distributors in North America:
- STAPLES Advantage, a division of Staples Inc. and one of the largest facility suppliers in North America, listed and began to distribute the SmartBurner and Safe-T-sensor products in the U.S. Over the past several months Pioneering has trained over 200 sales representatives and Pioneering is now beginning to see significant sales activity in new and existing channels.
- HD Supply Canada began selling the SmartBurner product to their B2B customers throughout Canada. Success to date in Canada has resulted in HD Supply U.S. now selling the product to its customers in the United States. HD Supply was previously Home Depot's commercial supply division. It was acquired by a private equity company a number of years ago and continues to be one of the largest maintenance and facility supply companies in North America.
- In addition, large existing wholesale appliance supply partners (ALMO, WL May, The Brick Commercial, Leon's/Appliance Canada and others), who currently sell Safe-T-element to the multi-residential channel either as an aftermarket installation or preinstalled on new ranges will benefit from the addition of the SmartBurner to their overall offering. Pioneering believes this will help drive future growth.
- As a result of these developments Pioneering began making a strategic shift in 2015 away from a primarily direct sales model to a more comprehensive distributor/sales model. With the addition so far, of distribution/sales partners Staples and HD Supply Canada, Pioneering now has hundreds of sales people selling its products into new and existing business to business channels. Pioneering expects this newbusiness model will allow it to (i) drive substantial growth, (ii) avoid adding additional sales force related expenses, and (iii) focus on developing new and improved product solutions for the cooking fire problem and other related business building opportunities.
- A cooking fire prevention study commissioned by Vision 20/20 (funded by the Department of Homeland Security and the Federal Emergency Management Agency) was completed by Eastern Kentucky University's
- Fire & Safety Laboratory. The results of the study identified Pioneering's Safe-T-element and its temperature limiting control technology (TLC) as the only technology tested that prevented stovetop cooking fires. The results of this study helped in part contribute to the impending industry and UL standard changes described below.
- The Association of Home Appliance Manufacturers (AHAM), the Washington DC based trade association representing the vast majority of kitchen range and cook top manufacturers, announced a plan to reduce unattended cooking fires, recognizing that recent technical advances related to electric coil ranges exist that will enable companies to mitigate the potential for unattended cooking fires. Changes to the UL standard for the manufacturing of all electric coiled stoves are expected to be introduced in early 2016. Pioneering's
- Safe-T-element and SmartBurner products with its temperature limiting control sensor technology are the only products available today that prevent stovetop cooking fires and should benefit from this change to the industry standard.
The Company has financed its working capital requirements through a combination of cash flow generated by operations and debt financing. The deadline for repayment of indebtedness owing to McAllister Holdings Ltd. has been extended to March 30,, 2016. As previously disclosed, the Company obtained a revolving accounts receivable financing facility to access up to $550K from a third party lender. Since June 15, 2015 the lender has financed approximately $1.6M in receivables. As at Nov 24, 2015, $118,860 was drawn on this facility. Pioneering is actively investigating alternatives for new debt or equity financing in order to raise funds to repay indebtedness, fund inventory purchases, business development and for general working capital purposes.
About Pioneering Technology Corp: Pioneering, based in Mississauga, Ontario is an "energy smart" product innovation/consumer goods company and North America's leader in cooking fire prevention technologies. Pioneering engineers and brings to market energy-smart solutions for everyday consumer appliances making them safer, smarter, and more efficient. Pioneering's patented cooking-fire prevention technologies/products are engineered to help prevent cooking fires, the number one cause of household fire (a multi-billion dollar problem) in North America. According to the National Fire Protection Association, stovetop cooking is the number one cause of household fire and fire injuries in North America (44% of all household fires - up from 20% in 1980). Pioneering has proprietary cooking fire prevention solutions for the majority of the more than 140 million stoves/ranges and over 140M microwave ovens throughout North America. Pioneering's cooking fire prevention trademarks include Safe-T-element, SmartBurner, RangeMinder & Safe-T-sensor. For more information go to www.pioneeringtech.com.
For more information please contact:
Kevin Callahan, President & CEO of Pioneering Technology, 905-712-2061 ext.222 firstname.lastname@example.org
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 notassume 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.
Adjusted EBITDA is a measure not recognized under Canadian generally accepted accounting principles ("GAAP"). 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, stock based compensation, restructuring costs, impairment charges and other non-recurring gains or losses. 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 GAAP 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 GAAP 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 (http://www.sedar.com).
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.
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