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ThermaCell Reports Significant Improvement in Revenues
and Profitability for 2Q98
MIAMI, May 14 /PRNewswire/ -- ThermaCell Technologies, Inc. (Nasdaq: VCLL - news, VCLLW -
news) reported continued, significant improvements in revenues and profitability for the second fiscal
quarter ended March 31, 1998. Sales increased 239% to $712,347 compared to $210,156 in the year
ago quarter, which helped produce a $112,665 improvement in profitability and a reduction in net loss
to $108,103, or ($0.03) basic per share, compared to a net loss of $220,768, or ($0.14) per share, in
the year ago quarter.
''Performance would have been even better in the second quarter if it wasn't for all the unusually
heavy rains we experienced in Florida in January and February, which impacted the paint industry,''
said John Pidorenko, Chairman, President and CEO. ''As soon as the rain ended, sales really began
to take off. March sales totaled more than $300,000, our best month ever, and sales in April were even
higher. If that rate continues, we'll come close to $1 million in sales in the third quarter, with continued
improvements in profitability as well.''
There were 3.6 million shares outstanding compared to 1.5 million in the year ago quarter due to share
offerings the Company has used to finance its strategy of rolling up acquisitions of Sunbelt paint
manufacturing and distribution companies and developing its innovative microsphere paint insulation
technology. Microspheres are uniform, hollow, glass bubbles that look like fine, white sand. Mixed in
paints, coatings and other building materials, microspheres create a barrier that can be more effective
and less expensive than conventional insulation.
First quarter revenues included major contributions from the Company's ThermaCool line of
microsphere insulation enhanced paints and coatings as well as its Scientific Coatings and Atlas
brands of paints and coatings. Scientific Coatings was acquired with the Company's 1995 acquisition
of C. F. Darling Paint & Chemicals and Atlas was acquired with the Company's 1997 acquisition of
Atlas Chemical Company. The Colorcrest brand, which is produced by ThermaCell's Ladehoff Paint
Company unit, had a minor contribution to the quarter because Ladehoff was acquired in March.
Gross profit as a percentage of sales was 33%, consistent with first quarter trends, due to the change
in the Company's sales mix as compared to the year ago quarter, while actual gross profit increased
127% to $238,200 compared to $104,893 in the year ago quarter. Selling, general and administrative
expenses as a percentage of sales declined to 57% from 140% in the year ago quarter as a result of
higher sales and increased operating leverage. ThermaCell expects margins to expand as higher levels
of sales enable the Company to take full advantage of economies of scale in raw materials purchasing
and operating leverage.
Mr. Pidorenko reported rapid progress integrating the Phoenix-based Ladehoff with ThermaCell.
''We're experiencing strong acceptance in local markets with our Scientific Coatings and Atlas
brands,'' he said. ''We look forward to similarly strong performance later in the year when we
introduce ThermaCool to the Arizona market.'' Mr. Pidorenko also reported progress with plans to
build a microsphere production facility later in the year in Florida to facilitate volume production and
national distribution of ThermaCool. ''Now that Ladehoff's off to a good start, we're scouting
locations and ordering equipment for our microsphere facility,'' he said. ''Once volume production
begins, we'll be able to significantly reduce costs and increase production of ThermaCool.''
As previously reported, tests on ordinary shingles on Florida homes painted with ThermaCool Roof
Coating dramatically reduced temperatures by more than 30%, reducing wear on the roof outside and
air conditioning needs inside. NASCAR Racing Teams report that ThermaCool Racing Products
reduce the extraordinary heat in driver compartments by 50-60%, reducing wear on equipment as well
as drivers. For more information, contact ThermaCell investor relations at 212-527-4808 or visit the
website www.thermacell.com.
THERMACELL TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
3 months ended 6 months ended
March 31, March 31,
1998 1997 1998 1997
Sales $712,347 $210,156 $1,470,631 $403,543
Cost of sales 474,147 105,263 966,856 236,811
Gross profit 238,200 104,893 503,775 166,732
Selling, general
& admin. expenses 408,424 294,315 748,069 729,365
Operating loss (170,224) (189,422) (244,294) (562,633)
Other income (expense), net 55,910 (80,907) 64,912 (127,497)
Loss before income taxes (114,314) (270,329) (179,382) (690,130)
Deferred income
tax benefit 22,863 49,561 35,877 106,636
Net loss ($91,451) ($220,768) ($143,505) ($583,494)
Series B preferred
stock dividends (16,652) -- (16,652) --
Net loss attributable
to common shares ($108,103) ($220,768) ($160,157) ($583,494)
Basic loss per common share ($0.03) ($0.14) ($0.05) ($0.49)
Weighted average number
of shares outstanding 3,620,235 1,533,166 3,378,748 1,201,507
Forward Looking Statements: This news release contains certain ''forward-looking'' statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which provides a new ''safe
harbor'' for these types of statements. To the extent statements in this news release involve, without
limitation, product development and introduction plans, the Company's expectations for growth,
estimates of future revenue, expenses, profit, cash flow, balance sheet items, sell-through or backlog,
forecasts of demand or market trends for the Company's product categories and for the industries in
which the Company operates, or any other guidance on future periods, these statements are
forward-looking statements. The Company assumes no obligation to update forward-looking
statements.
For additional information, please contact, Gary Fishman or Susan Romeo, Investor Relations,
212-527-4808, for ThermaCell Technologies; or Broker Liaison: John Carney of Capital & Media
Partners, 407-839-1987, for ThermaCell
SOURCE: ThermaCell Technologies
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