Capstone Companies, Inc. Reports First Quarter 2018 Revenue of $4.1 Million

  • Gross margin expanded to 25.1%
  • Balance sheet strengthens – strong cash balance
  • 0 Loan balances resulting in no interest expense in the quarter

DEERFIELD BEACH, Fla.--()--Capstone Companies, Inc. (OTC:CAPC) (“Capstone” or the “Company”), a designer, manufacturer and marketer of consumer inspired products that bridge technological innovations with today’s lifestyle, reported its financial results for the first quarter 2018.

Stewart Wallach, Capstone’s CEO, commented, “While our first quarter 2018 reflects a decline in topline revenues, our product lines sustained their shelf position and gross margins improved. Our strategy to stay clear of commodity products has proven effective.”

Gerry McClinton, Capstone’s CFO, added, “During the quarter, three new products were introduced and shipped. With the introduction of these new products, the quarter’s blended gross margin of 25.1% improved from 23.4% in same period 2017.” He further added, “Operating Expenses were $1.2 million the same as in 2017 Product Development expenses increased by $95 thousand over the same quarter 2017.” Net loss was $191 thousand for the quarter as compared to a net income of $251 thousand in the prior year period.

Webcast and Teleconference to Review Results and Outlook

The Company will host a live webcast and conference call on Tuesday, May 15, 2018 at 10:00 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, May 22, 2018. To listen to the replay of the call, dial (858) 384-5517 and enter replay pin number 13679529. 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 and marketing of consumer products to retail channels 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 URLs 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 BALANCE SHEETS
 
      March 31,   December 31,
2018 2017
Assets: (Unaudited)
Current Assets:
Cash $ 3,861,648 $ 3,668,196
Accounts receivable, net 2,698,476 4,367,721
Inventories 62,684 140,634
Prepaid expenses 78,581 239,150
Income tax refundable 113,912 -
Total Current Assets 6,815,301 8,415,701
 
Property and Equipment:
Computer equipment and software 9,895 9,895
Machinery and equipment 318,801 318,801
Furniture and fixtures 5,665 5,665
Less: Accumulated depreciation (276,130) (266,997)
Total Property & Equipment 58,231 67,364
 
Other Non-current Assets:
Deposit 13,616 13,616
Goodwill 1,936,020 1,936,020
Total Other Non-current Assets 1,949,636 1,949,636
Total Assets $ 8,823,168 $ 10,432,701
 
Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts payable and accrued liabilities $ 1,889,837 $ 2,733,516
Income tax payable 11,694 624,782
Total Current Liabilities 1,901,531 3,358,298
 
Long Term Liabilities:
Deferred tax liabilities 260,000 251,000
Total Long Term Liabilities 260,000 251,000
Total Liabilities 2,161,531 3,609,298
 
Commitments and Contingencies (Note 4)
 
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

- -
- -
- -
4,704 4,704
Additional paid-in capital 7,034,428 7,005,553
Accumulated deficit (377,495) (186,854)
Total Stockholders' Equity 6,661,637 6,823,403
Total Liabilities and Stockholders’ Equity $ 8,823,168 $ 10,432,701
 

 

CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
      For the Three Months Ended
March 31,
  2018       2017  
 
Revenues, net $ 4,060,168 $ 6,752,196
Cost of sales   3,040,897     5,172,729  
Gross Profit   1,019,271     1,579,467  
 
Operating Expenses:
Sales and marketing 363,061 376,756
Compensation 375,110 359,802
Professional fees 148,887 204,802
Product development 166,566 72,025
Other general and administrative   174,288     178,619  
Total Operating Expenses   1,227,912     1,192,004  
 
Operating Income (Loss)   (208,641 )   387,463  
 
Other Income (Expense):
Interest income - 12,945
Interest expense   -     (21,730 )
Total Other (Expense)   -     (8,785 )
 
Income (Loss) Before Tax Provision (Benefit) (208,641 ) 378,678
 
Provision (Benefit) for Income Tax   (18,000 )   128,000  
 
Net Income (Loss) $ (190,641 ) $ 250,678  
 
Net Income (Loss) per Common Share
Basic   ($0.004 ) $ 0.005  
Diluted   ($0.004 ) $ 0.005  
 
Weighted Average Shares Outstanding
Basic   47,046,364     47,621,553  
Diluted   47,046,364     47,883,977  
 
 
CAPSTONE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
      For the Three Months Ended
March 31,
  2018       2017  
CASH FLOWS FROM OPERATING ACTIVITIES:
 
Net income (loss) $ (190,641 ) $ 250,678

Adjustments necessary to reconcile net income (loss) to net cash provided by (used

in) operating activities:

Depreciation and amortization 9,133 17,495
Accrued interest on note receivable - (12,945 )
Stock based compensation expense 28,875 20,475
Provision for deferred income tax 9,000 128,000
Increase (decrease) in accrued sales allowance (20,635 ) 206,995
(Increase) decrease in accounts receivable 1,689,880 (1,539,687 )
(Increase) decrease in inventory 77,950 (147,868 )
(Increase) decrease in prepaid expenses 160,569 (214,361 )
Increase (decrease) in accounts payable and accrued liabilities (843,679 ) 1,103,216
(Decrease) in accrued income tax payable (613,088 ) -
(Increase) in accrued income tax refundable (113,912 ) -
(Decrease) in accrued interest on notes payable   -     (18,253 )
Net cash provided by (used in) operating activities   193,452     (206,255 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment   -     (13,433 )
Net cash (used in) investing activities   -     (13,433 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 6,578,358 5,280,373
Repayments of notes payable (6,578,358 ) (5,280,373 )
Repurchase of shares from Involve, LLC - (150,000 )
Repayments of notes and loans payable to related parties   -     (100,000 )
Net cash (used in) financing activities   -     (250,000 )
 
Net Increase (Decrease) in Cash and Cash Equivalents 193,452 (469,688 )
Cash and Cash Equivalents at Beginning of Period   3,668,196     1,646,128  
Cash and Cash Equivalents at End of Period $ 3,861,648   $ 1,176,440  
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ -   $ 39,983  
Income taxes $ 700,000   $ -  
 

Contacts

Capstone Companies, Inc.
Aimee C. Gaudet, 954-252-3440, Ext. 313
Corporate Secretary
aimee@capstonecompaniesinc.com

Contacts

Capstone Companies, Inc.
Aimee C. Gaudet, 954-252-3440, Ext. 313
Corporate Secretary
aimee@capstonecompaniesinc.com