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Capstone Companies, Inc. Reports Second Quarter 2015 Results

DEERFIELD BEACH, Fla., Aug. 14, 2015 (GLOBE NEWSWIRE) -- Capstone Companies, Inc. (OTC:CAPC) ("Capstone" or the "Company"), a designer of innovative LED lighting solutions including power failure lighting, today reported its financial results for the second quarter of 2015.

Stewart Wallach, Capstone's CEO, commented, "Second quarter results were in-line with our expectations, reflecting the strategic brand change from Capstone to Hoover® HOME LED, the lingering effects of the west coast port strike that was resolved earlier this year, and our focus on new product introductions. With those issues now behind us and a strong backlog, revenue will ramp up significantly in the third quarter 2015."

Second Quarter Review

Revenue was $0.3 million for the second quarter, down from the prior year's second quarter primarily due to the previously disclosed transition to the new Hoover® HOME LED branded product lines and the impact of the west coast port labor dispute.

Gross profit was $0.1 million in the second quarter of 2015. Gross profit margin as a percent of sales was 18.4%. Second quarter 2015 gross profit and margin included a cost accrual of approximately $35 thousand for allowances from a previous period, which was the driver of lower gross profit margin when compared with the prior-year period.

Operating expenses totaled $0.7 million, flat with the second quarter of 2014.

For the second quarter, the Company recorded a net loss of $0.7 million compared with a net loss of $0.4 million in 2014.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Friday, August 14, 2015 at 10:30 a.m. ET. During the call, management will review the financial and operating results and discuss the Company's corporate strategy and outlook, followed by a question-and-answer session. The conference call can be accessed by dialing (201) 689-8562. The listen-only audio webcast can be monitored at www.capstonecompaniesinc.com.

A telephonic replay will be available from 1:30 p.m. ET the day of the teleconference until Friday, August 21, 2015. To listen to the replay of the call, dial (858) 384-5517 and enter replay pin number 13614276. Alternatively, the archive of the webcast will be available on the Company's website at www.capstonecompaniesinc.com. A transcript will also be posted to the website, once available.

About Capstone Companies, Inc.

Capstone Companies, Inc. is a public holding company that engages, through its wholly-owned subsidiaries, Capstone Industries, Inc., Capstone Lighting Technologies, LLC, and Capstone International HK, Ltd., in the development, manufacturing, logistics, and distribution of consumer and institutional products, including the Hoover® HOME LED lighting product line, to accounts throughout North America and in international markets. See www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com for information on our current product offerings.

FORWARD-LOOKING STATEMENTS:

This news release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements consist of words like "anticipate," "expect," "project," "continue" and similar words. These statements are based on the Company's and its subsidiaries' current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company's products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors. Prior success in operations does not necessarily mean success in future operations. The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue. The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a "penny-stock Company" and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company's Annual and Quarterly Reports filed with the Securities and Exchange Commission. Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Contents of referenced URL's are not incorporated into this press release.

FINANCIAL TABLES FOLLOW. THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-K FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Revenues, net $ 289,984 $ 1,181,379 $ 1,003,501 $ 5,269,748
Cost of sales (236,725) (828,537) (642,892) (3,610,366)
Gross profit 53,259 352,842 360,609 1,659,382
Gross margin 18.4% 29.9% 35.9% 31.5%
Operating expenses:
Sales and marketing 131,841 73,327 168,512 373,999
Compensation 332,281 374,803 693,390 670,130
Professional fees 49,389 32,244 145,562 106,025
Product development 60,752 84,601 106,409 216,931
Other general and administrative 126,963 144,443 248,319 286,983
Total operating expenses 701,226 709,418 1,362,192 1,654,068
Net operating (loss) income (647,967) (356,576) (1,001,583) 5,314
Other expense:
Interest expense (57,123) (52,445) (94,279) (153,570)
Total other expense (57,123) (52,445) (94,279) (153,570)
Loss before tax provision (705,090) (409,021) (1,095,862) (148,256)
Provision for income tax -- (4,258) -- (4,258)
Net loss $ (705,090) $ (413,279) $(1,095,862) $ (152,514)
Net loss per common share
Basic $0.00 $0.00 $0.00 $0.00
Diluted $0.00 $0.00 $0.00 $0.00
Weighted Average Shares Outstanding
Basic 696,591,051 654,010,532 675,042,840 655,046,444
Diluted 696,591,051 654,010,532 675,042,840 655,046,444
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2015 2014
Assets: (Unaudited)
Current Assets:
Cash $ 807,466 $ 313,856
Accounts receivable - net 186,483 977,597
Advances -- 14,456
Inventory 194,976 128,984
Prepaid expense 1,609,630 358,046
Total Current Assets 2,798,555 1,792,939
Fixed Assets:
Computer equipment and software 15,608 12,272
Machinery and equipment 333,393 299,693
Furniture and fixtures 5,665 5,665
Less: Accumulated depreciation (252,829) (223,589)
Total Fixed Assets 101,837 94,041
Other Non-current Assets:
Deposit 12,193 12,193
Investment (AC Kinetics) 500,000 500,000
Goodwill 1,936,020 1,936,020
Total Other Non-current Assets 2,448,213 2,448,213
Total Assets $ 5,348,605 $ 4,335,193
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable and accrued expenses $ 416,367 $ 644,629
Note payable - Sterling Factors 184,115 286,945
Notes and loans payable to related parties - current maturities 4,318,179 1,936,679
Total Current Liabilities 4,918,661 2,868,253
Commitments and Contingent Liabilities (Note 5)
Stockholders' Equity:
Preferred Stock, Series A, par value $.001 per share, authorized 100,000,000 shares, issued -0- shares -- --
Preferred Stock, Series B-1, par value $.0001 per share, authorized 50,000,000 shares, issued -0- shares -- --
Preferred Stock, Series C, par value $1.00 per share, authorized 1,000 shares, issued -0- shares at June 30, 2015 and 1,000 shares at December 31, 2014 -- 1,000
Common Stock, par value $.0001 per share, authorized 850,000,000 shares, issued 721,989,957 shares at June 30, 2015 and 654,010,532 at December 31, 2014 66,081 65,401
Additional paid-in capital 7,246,244 7,187,058
Accumulated deficit (6,882,381) (5,786,519)
Total Stockholders' Equity 429,944 1,466,940
Total Liabilities and Stockholders' Equity $ 5,348,605 $ 4,335,193

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
June 30,
2015 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,095,862) $ (152,514)
Adjustments necessary to reconcile net loss to net cash used in operating activities:
Stock cancellation -- (28,876)
Depreciation and amortization 29,239 39,910
Compensation expense from stock options 58,866 35,344
Accrued sales allowance (196,977) (36,505)
Decrease in accounts receivable 988,091 6,117,314
(Increase) decrease in inventory (65,990) 18,326
(Increase) decrease in prepaid expenses (1,251,586) 344,118
Decrease (increase) in other assets 14,456 (97,910)
Decrease in accounts payable and accrued expenses (228,262) (1,568,338)
Increase in accrued interest on notes payable 81,500 98,035
Net cash (used in) provided by operating activities (1,666,525) 4,768,904
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (37,036) (23,028)
Net cash used in investing activities (37,036) (23,028)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 1,588,827 6,385,914
Repayments of notes payable (1,691,656) (10,623,058)
Proceeds from notes and loans payable to related parties 2,500,000 950,000
Repayments of notes and loans payable to related parties (200,000) (1,439,600)
Net cash provided by (used in) financing activities 2,197,171 (4,726,744)
Net Increase in Cash and Cash Equivalents 493,610 19,372
Cash and Cash Equivalents at Beginning of Period 313,856 436,592
Cash and Cash Equivalents at End of Period $ 807,466 $ 455,964

CONTACT: For more information, contact Company: Aimee Gaudet Corporate Secretary (954) 252-3440, ext 313 Investor Relations: Garett Gough, Kei Advisors LLC (716) 846-1352 ggough@keiadvisors.com

Source:Capstone Companies, Inc.