Spectra Earns $78,000 in Q3
SSA.V Q3 Results Ending September 30th 2015
Price: $0.025
Common Shares: 60,514,837
Insider Holdings: 11,542,143(19% as per SEDI)
Institutional Holdings: 18 million shares(confirmed by Spectra)
Financial Results:
Cash: $120,187
Accounts Receivable: $197,186
Inventories: $87,646
Loan receivable: $25,000
Prepaid expenses: $6,386
Investment in Cotter Pin: $49
Equipment: $25,578
Intangible Assets: $468,600
Accounts Payable: $137,712
Loans Payable(Note9): $350,000 (see MD&A)
Royalty Debenture(Note 10): $664,076 (not due until 2019, see MD&A)
Convertible Pref Shares(Note 11): $937,500 (6% interest waived in 2014/2015)
Q3 Revenue
Sales: $486,953
Cost: $196,396
Gross Profit: $290,557
Net Income: $77,801
9 Month Revenue
Sales: $1,368,236
Net Income: $187,271
Last Seven Quarters (Sales and net income are increasing while costs remain the same)
Q3 September 30, 2015
Revenue: $486,953
Net Income: $77,801
Q2 June 30, 2015
Revenue: $529,252
Net Income: $91,421
Q1 March 31,2015
Revenue: $352,031
Net Income: $18,049
Q4 December 31, 2014
Revenue: 349,020
Net Income: $10,210
Q3 September 30, 2014
Revenue: $394,364
Net Income: $15,788
Q2 June 30, 2014
Revenue: $332,726
Net Income: $13,663
Q1 March 31, 2014
Revenue: $357,447
Net Income: $5,939
MD&A Highlights
Results of Operations
Revenue:
Three months ended September 30, 2015 Revenue for the three months ended September 30, 2015 increased by 23 percent to $486,953 compared to revenue of $394,364 for the three-month period ended September 30, 2014. The quarterly increase in revenue is mostly attributable to increases in sales in of Brake Safe® of $56,925 from the same period in 2014 to $232,904, Termin-8r® of $18,090 from the same 2014 period to $107,520, Hub Alert® of $5,434 from the same period in 2014 to $8,048 and sales of Arrow Logger™ our new product of $695. These increases were offset by decreases in sales of Zafety Lug Lock® which decreased by $26,375 to $78,834 and Brake Inspector® which had sales of $4,357 in 2015, compared to sales in 2014 of $12,516.
Nine months ended September 30, 2015 Revenue for the nine months ended September 30, 2015 increased by 26 percent to $1,368,236 compared to revenue of $1,084,537 for the nine-month period ended September 30, 2014. The increase in revenue is attributable to increases in sales in most product categories; Brake Safe® from $477,847 to $622,719; Termin-8r® from $290,568 to $325,705; Hub Alert® from $17,578 to $28,390; Arrow Logger™ from nil to $2,907 and increases in sundry income from $30,815 to $127,756, less declines in sales of Zafety Lug Lock® from $247,926 to $243,886 and Brake Inspector® from $19,803 to $16,873;
Liquidity and Cash Flow
Nine months ended September 30, 2015
During the nine months ended September 30, 2015, the Company earned $98,153 from operating activities compared to earning $39,717 from operations during the same period in 2014. Non-cash items contributed $105,852 for the period compared to $112,117 for the nine months ended September 30, 2014. The Company had no loan repayments in the nine months ended September 30, 2015, compared to net loan repayments of $30,000 in the nine months ended September 30, 2014. In the nine months ended September 30, 2015, the Company made an investment of $49 in a new private company and made a loan advance of $25,000 to that company. The combined result of these factors was a net increase in cash resources of $73,104 and a cash resources balance at the end of the period of $120,187. During the equivalent period in 2014, the Company showed a net increase in cash resources of $9,717 and a cash resources balance of $29,640 at the end of the period.
OUTLOOK
The Company continues to focus its efforts on expanding the present market for its products while introducing those products into new markets as well as seeking out new products to complement our other offerings.
The Company’s Brake Safe® product is well established in the Canadian market and inroads are now being made into the lucrative American market. With the implementation of its new, aggressive, safety enforcement and monitoring program, CSA (Compliance, Safety, Accountability), the Federal Motor Carrier Safety Administration is bringing the focus onto unsafe Carriers and unsafe Drivers in the US transportation industry. A significant increase in roadside enforcement, citations and fines for all driver and vehicle violations will impact positively on the sales growth of Brake Safe® and Zafety Lug Lock® products. A program is being developed to educate companies of these enforcement changes and the resulting increased intervention by regulatory agencies in order to capitalize on sales opportunities for Brake Safe® and Zafety Lug Lock®.
The Company introduced in the first quarter of 2015 a “buy direct from the manufacturer” program for U.S. fleets and owner operators to increase the awareness of Brake Safe® in the U.S. market. This program is being supported by sustained advertising in select U.S. media and the addition of e-commerce capability on the Company’s website. The Company has entered into a sponsorship arrangement with Kevin Rutherford a radio personality and author of several books for the professional truck driver. Sponsorship is providing widespread exposure to the independent owner/operator trucking segment. Exposure includes prominence on the Let’s Truck website and access to its 30,000 members, frequent blogs featuring the Company’s products as well as interviews with Mr. Rutherford over Sirius XM Satellite radio. The Company will continue to sell Brake Safe® through its existing U.S. distributors.
The Company’s Termin-8R® product continues to receive strong industry acceptance with a corresponding growth in sales to the transportation segment. The second private label arrangement, introduced in 2010 and made for a major supplier to the commercial transport industry, is proving to be a strong performer with 2014 private label sales now being more than 14% ahead of the same period in 2014. The company believes that developing new private label arrangements will be a key to the ongoing growth in the sales of this product.
Zafety Lug Lock® continues to make good inroads into the marketplace with new interest from overseas
The Company’s newly introduced product, Arrow Logger™, has been designed to complement the Brake Safe® product line with enhanced brake adjustment monitoring. The system allows drivers to inspect brake adjustment during roadside operation without the need to apply the service brake, usually a 2 person operation. The Company anticipates a very positive response to the Arrow Logger™ from existing and potential Brake Safe® customers. While initial sales have been slow, these are expected to grow as the market becomes more aware of the product.
At the end of the second quarter of 2015, the Company made an investment in Cotter Pin Solutions Inc. This company has been established to manufacture and sell an innovative new product, the Anti-Seize Cotter Pin. This product solves a major maintenance issue plaguing the industry, the seizing of slack adjuster clevis pins and the resulting time consuming and costly process of their free-up or removal . Seized or binding clevis pins can affect brake performance. The Company has a 49% equity position in Cotter Pin Solutions with the product’s inventor, Jorge Goncalves, retaining 51% equity. These new products are now on trial with various customers and we look forward to sales starting in the last quarter of this year
The Company will continue to form strategic distribution alliances to accelerate its sales outside the Canadian marketplace.
The Company may seek sufficient additional funds to provide working capital, inventory and capital equipment as needs arise, but at the moment, cash flow from operations is sufficient to support current needs. |
