ThermaCell Reports Continued Improvement In 3Q98 Performance;Microsphere Plant Expected to Be Completed in 1Q99
MIAMI, Fla., Aug. 17 /PRNewswire/ -- ThermaCell Technologies, Inc. (Nasdaq: VCLL - news, VCLLW - news) reported continued improvement in performance for the third quarter and nine months ended June 30, 1998.
The Company also announced it has begun to purchase equipment for a prototype microsphere facility in order to increase production of its ThermaCool line of insulation enhanced paints and to generate sales of microspheres to major chemical products distributors.
John Pidorenko, Chairman, CEO and President, said, ''Completion of the plant, which is expected during the first quarter ended December 31, 1998, will enable us to start to generate significantly higher revenues in fiscal 1999.''
For the quarter, sales increased 275% to $789,183 compared to the year ago period, which helped produce a $187,761 improvement in profitability. As a result, net loss dropped to $94,849 or $0.03 per basic common share (after preferred stock dividends) compared to a net loss of $282,610 or $0.10 per share for the prior year period.
For the nine months, sales increased 227% to $2,259,814 compared to the year ago period, which helped produce a $627,750 improvement in profitability. As a result, net loss dropped to $238,354 or $0.08 per basic share compared to a net loss of $866,104 or $0.50 per share.
There were 4.2 million shares outstanding compared to 2.9 million in the year ago quarter due to share offerings the Company has used to finance the consolidation of Sunbelt paint manufacturing and distribution companies and the development of its innovative microsphere paint 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.
Third quarter revenues included major contributions from the Company's Scientific, Atlas and Colorcrest brands as well as its ThermaCool line of microsphere-enhanced paints and coatings.
Scientific Coatings was acquired with the 1995 acquisition of C. F. Darling Paint & Chemicals, Atlas with the 1997 acquisition of Atlas Chemical of Miami, and Colorcrest with the March 1998 acquisition of Ladehoff Paint in Arizona.
Mr. Pidorenko explained that during the quarter, the Company focused on maximizing the efficiency of its three paint manufacturing and distribution facilities.
This effort resulted in transferring some production to Ladehoff, temporarily holding back sales growth, but improving gross profit margin to 37% of sales from 33% in the second quarter.
This effort also resulted in a significant decline in selling, general and administrative costs as a percentage of sales, which, compared to year ago periods, fell to 54% in the quarter compared to 139% and 52% for the nine months compared to 163%.
Looking ahead, Mr. Pidorenko said that, in addition to bringing the microsphere plant on line, the Company expects to:
(1) Continue to increase sales and expand margins as higher levels of sales enable it to take full advantage of economies of scale in purchasing and operating leverage. Mr. Pidorenko said this should result in the fourth quarter of fiscal 1998 being the strongest quarter of the year.
(2) Acquire another paint manufacturing and distribution facility in the Southwest to further its Sunbelt distribution strategy.
(3) Enter new markets for microspheres through its license agreement with Precision Coatings,Inc., a leading company in the application of specialized coatings to plastic film and paper. Applications under consideration include construction insulation film, safety reflective surfaces and transdermal drug delivery systems.
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.
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.
THERMACELL TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(unaudited)
3 months ended 9 months ended
June 30, June 30,
1998 1997 1998 1997
-------- -------- -------- --------
Sales $789,183 $287,468 $2,259,814 $691,011
Cost of sales 497,462 163,265 1,464,318 400,076
-------- -------- -------- --------
Gross profit 291,721 124,203 795,496 290,935
Selling, general
& admin. expenses 430,055 399,799 1,178,124 1,129,144
-------- -------- -------- --------
Operating loss (138,334) (275,576) (382,628) (838,209)
Other income (expense), net 19,773 (77,373) 84,685 (204,870)
-------- -------- -------- --------
Loss before income taxes (118,561) (352,949) (297,943)(1,043,079)
Deferred income tax benefit 23,712 70,339 59,589 176,975
-------- -------- -------- --------
Net loss before dividends ($94,849) ($282,610) ($238,354) ($866,104)
======== ======== ======== ========
Basic loss per common share ($0.03) ($0.10) ($0.08) ($0.50)
======== ======== ======== ========
Weighted average number
of shares outstanding 4,153,620 2,859,551 3,432,484 1,745,345
======== ======== ======== ========
SOURCE: ThermaCell Technologies, Inc.
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