News Feed Item

Capstone Companies, Inc. Reports Record Third Quarter 2017 Revenue

Capstone Companies, Inc. (OTC: CAPC) (“Capstone” or the “Company”), a designer of innovative LED lighting solutions including power failure lighting, yesterday reported its financial results for the third quarter 2017.

Stewart Wallach, Capstone’s Chairman and CEO, commented, “As evidenced by our third quarter results, the Companies’ branding and product strategies continue to deliver. Our product placement earlier in the year was strong resulting in five additional products finding retail shelves. We have broken our quarterly revenue record for Q3 and have surpassed our record 2016 revenues by over $2 million. Our product development efforts remain laser focused on continuing to deliver new and innovative products for 2018.”

Third Quarter Financial Summary
($ in thousands, except per share data)


Q3 2017


Q3 2016




% Change

Revenue $ 13,818 $ 11,692 2,126 18.1%
Gross Profit 3,110 2,851 259 9.1%
Gross Margin (%) 22.5% 24.4% - -
Operating Income 1,450 1,604 (154) (9.6%)
Operating Margin (%) 10.5% 13.7% - -
Net Income Before Tax 1,381 1,514 (133) (8.8%)
Net Income Before Tax (%) 10.0% 12.9% - -
Earnings Per Diluted Share $ 0.02 $ 0.03 - -

2017 First Nine Months Financial Summary
($ in thousands, except per share data)


Q3 2017


Q3 2016




% Change

Revenue $ 30,790 $ 22,673 8,117 35.8%
Gross Profit 7,333 5,593 1,740 31.1%
Gross Margin (%) 23.8% 24.7% - -
Operating Income 3,176 2,724 452 16.6%
Operating Margin (%) 10.3% 12.01% - -
Net Income Before Tax 3,063 2,510 553 22.0%
Net Income Before Tax (%) 9.9% 11.1% - -
Earnings Per Diluted Share $ .045 $ .051 - -

Record revenue growth in the third quarter of 2017 resulted from strong demand for the Company’s battery powered accent lighting products and the placement of 5 new lighting products. Products sold under Capstone Lighting®, Hoover® Home LED and Duracell® brands experienced significantly higher revenue levels.

Record gross profit was driven by the record revenue volume. Gross margin as a percent to revenue declined slightly, when compared against the prior year quarter, however that is after the Company invested an additional $677 thousand in market promotional spending to support the launch of the new products.

Selling and marketing expense increased to $928 thousand from $488 thousand in the prior year quarter. During the quarter we expensed $514 thousand of Royalty payments for the branded licenses, resulting from the higher revenue levels.

Net Operating Income for the quarter 2017 and 2016 was $1.450 million and $1.604 million, respectively. With a $390 thousand tax provision for the quarter 2017 Net Income was $991 thousand compared to $1.490 million in 2016.

Record revenue for the 9 months 2017 of $30.8 million was $8.1 million or 35.8% higher than in 2016. Record gross profit for the 9 months 2017 of $7.3 million was $1.7 million or 31.1% higher than in 2016 and that is after investing $1.8 million in product promotional allowances.

Record Operating Income for the 9 months 2017 of $3.2 million was $452 thousand higher than in 2016.

Net Income for the 9 months 2017 was $2.1 million or $331 thousand lower than 2016, however that is after the Company provided for a tax provision of $920 thousand or $883 thousand higher than 2016.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Thursday, November 16, 2017 at 10:30 a.m. Eastern Time. 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. Eastern Time the day of the teleconference until Tuesday, November 23, 2017. To listen to the replay of the call, dial (844) 512-2921 and enter replay pin number 13671616. 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.


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 URLs are not incorporated into this press release.


For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Revenues, net $ 13,817,909 $ 11,692,146 $ 30,789,653 $ 22,672,551
Cost of sales   (10,707,657 )   (8,841,148 )   (23,457,070 )   (17,079,271 )
Gross Profit   3,110,252     2,850,998     7,332,583     5,593,280  
Operating Expenses:
Sales and marketing 928,321 488,057 1,869,596 903,888
Compensation 351,915 325,283 1,065,621 949,753
Professional fees 109,257 111,339 429,440 286,681
Product development 80,991 127,367 219,464 227,552
Other general and administrative   189,780     195,046     572,461     501,458  
Total Operating Expenses   1,660,264     1,247,092     4,156,582     2,869,332  
Net Operating Income   1,449,988     1,603,906     3,176,001     2,723,948  
Other Income (Expense):
Interest Income (12,945 ) 13,664 - 13,664
Interest expense   (56,514 )   (103,363 )   (113,431 )   (227,522 )
Total Other Income (Expense)   (69,459 )   (89,699 )   (113,431 )   (213,858 )
Income Before Tax Provision 1,380,529 1,514,207 3,062,570 2,510,090
Provision for Income Tax   (390,000 )   (24,412 )   (920,000 )   (37,012 )
Net Income $ 990,529   $ 1,489,795   $ 2,142,570   $ 2,473,078  
Net Income per Common Share
Basic $ 0.021   $ 0.031   $ 0.046   $ 0.051  
Diluted $ 0.021   $ 0.031   $ 0.045   $ 0.051  
Weighted Average Common Shares Outstanding
Basic   46,660,456     48,132,664     46,989,940     48,132,664  
Diluted   47,152,574     48,371,158     47,462,664     48,320,017  
The accompanying notes are an integral part of these financial statements.
September 30, December 31,
2017 2016
Current Assets:
Cash $ 3,240,721 $ 1,646,128
Accounts receivable, net 4,660,203 4,449,179
Inventory 142,065 366,330
Prepaid expenses   349,410     330,020  
Total Current Assets   8,392,399     6,791,657  
Property and Equipment:
Computer equipment and software 19,767 19,767
Machinery and equipment 371,323 325,750
Furniture and fixtures 5,665 5,665
Less: Accumulated depreciation   (304,176 )   (250,465 )
Total Property & Equipment   92,579     100,717  
Other Non-current Assets:
Deposit 13,616 12,193
Note receivable - 526,887
Goodwill   1,936,020     1,936,020  
Total Other Non-current Assets   1,949,636     2,475,100  
Total Assets $ 10,434,614   $ 9,367,474  
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities $ 2,122,220 $ 2,678,210
Income tax payable 404,088 1,588
Notes and loans payable to related parties   688,384     1,321,721  
Total Current Liabilities   3,214,692     4,001,519  
Long Term Liabilities:
Deferred tax liabilities   362,000     216,000  
Total Long Term Liabilities   362,000     216,000  
Total Liabilities   3,576,692     4,217,519  
Commitments and Contingencies (Note 6)
Stockholders' Equity:
Preferred Stock, Series A, par value $.001 per share, authorized 6,666,667 shares, issued -0- shares - -
Preferred Stock, Series B-1, par value $.0001 per share, authorized 3,333,333 shares, issued -0- shares - -
Preferred Stock, Series C, par value $1.00 per share, authorized 67 shares, issued -0- shares - -
Common Stock, par value $.0001 per share, authorized 56,666,667 shares, issued 47,046,364 shares and 48,132,664 shares 4,704 4,813
Additional paid-in capital 6,976,678 7,411,172
Accumulated deficit   (123,460 )   (2,266,030 )
Total Stockholders' Equity   6,857,922     5,149,955  
Total Liabilities and Stockholders’ Equity $ 10,434,614   $ 9,367,474  
The accompanying notes are an integral part of these financial statements.
For the Nine Months Ended
September 30,
2017 2016
Net income $ 2,142,570 $ 2,473,078
Adjustments necessary to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 55,725 44,400
Accrued interest on note receivable 26,887 (13,654 )
Stock based compensation expense 66,594 46,581
Provision for deferred income tax 146,000 -
Accrued sales allowance (831,731 ) (94,203 )
(Increase) decrease in accounts receivable 731,532 (6,755,174 )
(Increase) decrease in inventory 224,265 (275,049 )
(Increase) decrease in prepaid expenses (20,813 ) 43,764
Increase (decrease) in accounts payable and accrued liabilities (263,912 ) 958,580
(Decrease) in accrued interest on notes payable   (135,337 )   (168,492 )
Net cash provided by (used in) operating activities   2,141,780     (3,740,169 )
Purchase of property and equipment   (47,587 )   (15,501 )
Net cash (used in) investing activities   (47,587 )   (15,501 )
Proceeds from notes payable 30,559,312 19,393,834
Repayments of notes payable (30,559,312 ) (15,049,345 )
Repurchase of shares from Involve, LLC (250,000 ) -
Warrant issued 7,500 -
Proceeds from notes and loans payable to related parties - 860,000
Repayments of notes and loans payable to related parties   (257,100 )   (1,453,946 )
Net cash provided by (used in) financing activities   (499,600 )   3,750,543  
Net Increase (decrease) in Cash and Cash Equivalents 1,594,593 (5,127 )
Cash and Cash Equivalents at Beginning of Period   1,646,128     364,714  
Cash and Cash Equivalents at End of Period $ 3,240,721   $ 359,587  
Cash paid during the period for:
Interest   221,881   $ 396,014  
Income taxes $ 371,500   $ 31,912  
Non-cash financing and investing activities:
Sale of Investment for Note receivable $ -   $ 500,000  
Shares issued in satisfaction of loan payable to related party $ 240,900   $ -  
The accompanying notes are an integral part of these financial statements.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
The “Digital Era” is forcing us to engage with new methods to build, operate and maintain applications. This transformation also implies an evolution to more and more intelligent applications to better engage with the customers, while creating significant market differentiators. In both cases, the cloud has become a key enabler to embrace this digital revolution. So, moving to the cloud is no longer the question; the new questions are HOW and WHEN. To make this equation even more complex, most ...
As you move to the cloud, your network should be efficient, secure, and easy to manage. An enterprise adopting a hybrid or public cloud needs systems and tools that provide: Agility: ability to deliver applications and services faster, even in complex hybrid environments Easier manageability: enable reliable connectivity with complete oversight as the data center network evolves Greater efficiency: eliminate wasted effort while reducing errors and optimize asset utilization Security: imple...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
Digital transformation is about embracing digital technologies into a company's culture to better connect with its customers, automate processes, create better tools, enter new markets, etc. Such a transformation requires continuous orchestration across teams and an environment based on open collaboration and daily experiments. In his session at 21st Cloud Expo, Alex Casalboni, Technical (Cloud) Evangelist at Cloud Academy, explored and discussed the most urgent unsolved challenges to achieve f...
The dynamic nature of the cloud means that change is a constant when it comes to modern cloud-based infrastructure. Delivering modern applications to end users, therefore, is a constantly shifting challenge. Delivery automation helps IT Ops teams ensure that apps are providing an optimal end user experience over hybrid-cloud and multi-cloud environments, no matter what the current state of the infrastructure is. To employ a delivery automation strategy that reflects your business rules, making r...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...