Invisa reports revenue of $98 million and net income to common shareholders of $4.2 million for fiscal year 2014 versus revenue of $26,819 and a net loss of $357,855 reported in 2013 10K
March 31, 2015 | By Business Wire News
SARASOTA, Fla.
Invisa, Inc. (OTCQB: INSA) (“Invisa” or the “Company”) filed its Form 10-K yesterday March 30, 2015 reporting its results for the year ending December 31, 2014.
As previously reported, on November 10, 2014 Invisa acquired all of the ownership interests in Uniroyal Engineered Products, LLC (“Uniroyal”), a U.S. manufacturer of textured coatings, and all of the ordinary common stock of Engineered Products Acquisition Limited (“EPAL”), the holding company for Wardle Storeys (Group) Limited (“Wardle Storeys”), a European manufacturer of textured coatings and polymer films. Details of the acquisitions are set forth in the Current Report on Form 8-K filed by the Company on November 10, 2014 and the Form 8-K/A filed on January 20, 2015. As required by current accounting pronouncements, the transaction was treated as a combination between entities under common control and was accounted for in a manner similar to the pooling-of-interest method. The recognized assets and liabilities were transferred at their carrying amounts at the date of the transaction. The companies were combined retrospectively for prior year comparative information to the extent permitted by applicable accounting rules.
Selected 2014 financial results (after adjustments as explained in discussion of operating results and as shown in the Reconciliation of GAAP to Non-GAAP Financial Measures):
- Revenue in 2014 was $98,323,226 compared to $94,766,651 in 2013
- Adjusted operating Income for the full year 2014 of $5,568,075 compared to $5,805,505 in 2013
- Fully diluted adjusted earnings available to common shareholders of $0.27 per share in 2014; the comparative combined adjusted earnings available to common shareholders for 2013 of $0.24 per share in 2013.
Discussion of operating results:
Revenue:
Prior to its acquisition by Invisa, EPAL had acquired 100% of the common stock of Wardle Storeys on March 4, 2013. Therefore, the comparative combined operating results for 2013 only include the results of Wardle Storeys for the period March 4, 2013 through December 31, 2013 or approximately 10 months which partially explained the increases from year to year.
Total revenue in 2014 increased $3,556,575 or 3.8% to $98,323,226 from $94,766,651, the comparative combined revenue for 2013. Assuming the Wardle Storeys transaction had occurred on January 1, 2013, total consolidated revenues would have shown a decrease of $5.4 million. The decrease was primarily due to the end of a one-year 2013 special automotive program that totaled approximately $6 million and the roll off of some legacy automotive platforms. The decrease in revenue was partially offset by new automotive platform launches and favorable impact of the change in the average Pound Sterling exchange rate for 2014 compared to 2013.
Gross Profit:
Total gross profit in 2014 was $19,318,986 or 19.6% of sales compared with $17,206,607 or 18.2% of sales, the comparative combined gross profit for 2013. Assuming the Wardle Storeys transaction had occurred on January 1, 2013, the consolidated gross profit would have been $18,375,994 or 17.7% of sales, an increase of approximately $943,000 despite lower revenue. The gross profit percentage increased in 2014, primarily due to the rolling off of lower margin automotive platforms, which were replaced with higher margin platforms and the positive results of cost efficiency programs implemented in 2013 and 2014.
Operating Profit:
Total operating profit in 2014 was $4,662,075 or 4.7% of sales compared with $5,681,679 or 6.0% of sales, the comparative combined operating profit for 2013. Assuming the Wardle Storeys transaction had occurred on January 1, 2013, the consolidated operating profit would have been $5,799,126 or 5.7% of sales. The decrease in 2014 operating margin is partially attributable to approximately $414,000 of one-time expenses associated with the closing of the acquisitions. Also Included in general and administrative expenses are approximately $492,000 and $123,826 for 2014 and 2013, respectively, of statutory severance payments as a result of labor reduction programs at our U.K. facility. The severance program was fully expensed in 2014. Adjusting for the one-time expenses and the redundancy payments, the adjusted operating profit in 2014 would have been $5,568,075 or 5.7%.
About Invisa:
Invisa (OTCQB: INSA) is a leading manufacturer of vinyl coated fabrics that are durable, stain resistant, cost-effective alternatives to leather, cloth and other synthetic fabric coverings. Invisa’s revenue in 2014 was derived 63% from the automotive industry and approximately 37% from the recreational, industrial, indoor and outdoor furnishings, hospitality and health care markets.
Forward Looking Statements:
Except for statements of historical fact, certain information contained in this press release constitutes forward-looking statements, including, without limitation, statements containing the words“believe,” “expect,” “anticipate,” “intend,” “expect,” “should,” “planned,” “estimated” and “potential”and words of similar import, as well as all references to the future.These forward-looking statements are based on Invisa’s current expectations. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that a variety of factors could cause the Company´s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company´s forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of the Company´s business include, but are not limited to, the following: uncertainties relating to economic conditions, uncertainties relating to customer plans and commitments,the pricing and availability of equipment, materials and inventories, technological developments,performance issues with suppliers, economic growth, delays in testing of new products, the Company’s ability to successfully integrate acquired operations, the Company’s dependence on key personnel, the Company’s ability to protect its intellectual property rights, the effectiveness of cost-reduction plans, rapid technology changes and the highly competitive environment in which the Company operates. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.
| Invisa, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| As of December 31, 2014 and December 31, 2013 | ||||||||
| December 31, 2014 | December 31, 2013 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 604,234 | $ | 311,029 | ||||
| Accounts receivable, net | 14,607,787 | 15,003,030 | ||||||
| Inventories, net | 17,421,082 | 17,271,621 | ||||||
| Other current assets | 2,130,282 | 1,560,555 | ||||||
| Related party receivable | 74,931 | 42,475 | ||||||
| Total Current Assets | 34,838,316 | 34,188,710 | ||||||
| PROPERTY AND EQUIPMENT | 12,001,128 | 9,911,119 | ||||||
| OTHER ASSETS | ||||||||
| Intangible assets | 3,668,956 | 3,767,896 | ||||||
| Goodwill | 1,079,175 | 1,079,175 | ||||||
| Other long-term assets | 1,295,965 | 571,824 | ||||||
| Total Other Assets | 6,044,096 | 5,418,895 | ||||||
| TOTAL ASSETS | $ | 52,883,540 | $ | 49,518,724 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Checks issued in excess of bank balance | $ | 438,145 | $ | 622,590 | ||||
| Line of credit | 16,396,306 | 15,792,852 | ||||||
| Current maturities of long-term debt | 522,095 | 545,026 | ||||||
| Current maturities of capital lease obligations | 96,071 | 51,016 | ||||||
| Accounts payable | 9,409,062 | 8,981,303 | ||||||
| Accrued expenses | 3,408,143 | 3,217,493 | ||||||
| Related party payable | 20,260 | 20,260 | ||||||
| Current portion of postretirement benefit liability – health and life | 115,039 | 131,714 | ||||||
| Total Current Liabilities | 30,405,121 | 29,362,254 | ||||||
| LONG-TERM LIABILITIES | ||||||||
|
Long-term debt, less current portion |
1,355,297 | 967,113 | ||||||
|
Capital lease obligations, less current portion |
238,836 | – | ||||||
| Related party lease financing obligations | 2,162,393 | 2,014,440 | ||||||
| Long-term debt to related parties | 4,740,728 | 4,572,546 | ||||||
|
Postretirement benefit liability – health and life, less current portion |
2,662,570 | 2,358,896 | ||||||
| Other long-term liabilities | 840,378 | 907,358 | ||||||
| Total Long-Term Liabilities | 12,000,202 | 10,820,353 | ||||||
| Total Liabilities | 42,405,323 | 40,182,607 | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
|
Convertible Preferred Stock: 5,000,000 shares authorized ($100 value): |
||||||||
| Series A, 9,715 shares issued and outstanding | 798,500 | 798,500 | ||||||
| Series B, 2,702 shares issued and outstanding | 270,160 | 270,160 | ||||||
| Series C, 16,124 shares issued and outstanding | 1,600,467 | 1,600,467 | ||||||
|
Preferred unit, Series A UEP Holdings, LLC, 200,000 units issued and outstanding ($100 issue price) |
617,571 | – | ||||||
|
Preferred units, Series B UEP Holdings, LLC, 150,000 units issued and outstanding ($100 issue price) |
463,179 | – | ||||||
|
Preferred stock, Engineered Products Acquisition limited, 50 shares issued and outstanding (£1.00 stated value) |
75 | – | ||||||
|
Common stock, 95,000,000 shares authorized ($.001 par value) 14,351,398 and 13,881,598 shares issued and outstanding as of December 31, 2014 and 2013, respectively |
14,352 | 13,881 | ||||||
| Additional paid in capital | 32,549,585 | 33,651,743 | ||||||
| Accumulated deficit | (26,626,634 | ) | (29,062,898 | ) | ||||
| Accumulated other comprehensive income | 790,962 | 2,064,264 | ||||||
| Total Stockholders’ Equity | 10,478,217 | 9,336,117 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 52,883,540 | $ | 49,518,724 | ||||
| Invisa, Inc. | ||||||||
| Consolidated Statements of Comprehensive Income | ||||||||
| For the Years Ended December 31, 2014 and December 31, 2013 | ||||||||
| December 31, 2014 | December 31, 2013 | |||||||
| NET SALES | $ | 98,323,226 | $ | 94,766,651 | ||||
| COST OF GOODS SOLD | 79,004,240 | 77,560,044 | ||||||
| Gross Profit | 19,318,986 | 17,206,607 | ||||||
| OPERATING EXPENSES: | ||||||||
| Selling | 4,691,974 | 3,706,656 | ||||||
| General and administrative | 8,437,348 | 6,424,005 | ||||||
| Research and development | 1,527,589 | 1,394,267 | ||||||
| OPERATING EXPENSES | 14,656,911 | 11,524,928 | ||||||
| Operating Income | 4,662,075 | 5,681,679 | ||||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest and other debt related expense | (1,552,541 | ) | (1,282,532 | ) | ||||
| Gain on bargain purchase | – | 4,646,046 | ||||||
| Other income | 190,234 | 109,438 | ||||||
| Net Other (Expense) Income | (1,362,307 | ) | 3,472,952 | |||||
| INCOME BEFORE TAX PROVISION | 3,299,768 | 9,154,631 | ||||||
| TAX PROVISION (BENEFIT) | (1,340,682 | ) | 175,491 | |||||
| NET INCOME | 4,640,450 | 8,979,140 | ||||||
| Preferred stock dividend | (403,582 | ) | – | |||||
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS |
4,236,868 | 8,979,140 | ||||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
| Minimum benefit liability adjustment | (888,321 | ) | (183,380 | ) | ||||
| Foreign currency translation adjustment | (425,898 | ) | 516,395 | |||||
| Unrealized gain (loss) on effective hedge: | ||||||||
| Reclassification of amounts to earnings | 42,476 | 64,108 | ||||||
| Unrealized loss for the year | (1,559 | ) | (7,295 | ) | ||||
| COMPREHENSIVE INCOME TO COMMON SHAREHOLDERS |
$ | 2,963,566 | $ | 9,368,968 | ||||
| EARNINGS PER COMMON SHARE: | ||||||||
| Basic | $ | 0.30 | $ | 0.64 | ||||
| Diluted | $ | 0.22 | $ | 0.48 | ||||
| WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||
| Basic | 14,180,963 | 14,012,959 | ||||||
| Diluted | 18,937,796 | 18,769,792 | ||||||
| Invisa, Inc. | ||||
| Consolidated Statements of Cash Flows | ||||
| For the Years Ended December 31, 2014 and December 31, 2013 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | December 31, 2014 | December 31, 2013 | ||
| Net income | $4,640,450 | $8,979,140 | ||
| Adjustments to reconcile net income to net cash flows from operating activities |
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| Depreciation | 1,381,452 | 1,578,807 | ||
| Gain on bargain purchase | – | (4,646,046) | ||
| Deferred tax benefit | (1,253,000) | – | ||
| Distribution of life insurance policy as compensation | 207,227 | – | ||
| Non-cash stock compensation expense | 81,691 | 124,000 | ||
| Contributed officer compensation | 36,000 | 36,000 | ||
| Interest expense added to principal of note payable | 80,317 | 111,090 | ||
| Amortization of intangible assets | 54,583 | 57,418 | ||
| Loss on disposal of property and equipment | 5,209 | 267,730 | ||
| Noncash postemployment health and life benefit | (589,896) | (183,380) | ||
| Amortization of original issue note discount | – | 42,680 | ||
| Changes in assets and liabilities | ||||
| Accounts receivable | (120,768) | 1,146,779 | ||
| Inventories | (575,000) | 666,953 | ||
| Other current assets | (240,332) | (27,113) | ||
| Related party receivable | (32,456) | 132,525 | ||
| Other long-term assets | (178,868) | 22,228 | ||
| Accounts payable | 747,459 | (1,142,813) | ||
| Accrued expenses | (56,858) | (332,261) | ||
| Postretirement benefit liability – health and life | (11,020) | (314,342) | ||
| Other long-term liabilities | 19,268 | (33,950) | ||
| Net Cash Flows from Operating Activities | 4,195,458 | 6,485,445 | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||
| Capital expenditures | (3,255,643) | (1,490,219) | ||
| Purchase of Wardle Storeys less cash acquired | – | (681,340) | ||
| Cash paid for lease deposit | (17,500) | (250,000) | ||
| Net Cash Flows used in Investing Activities | (3,273,143) | (2,421,559) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Checks issued in excess of bank balance | (184,445) | (259,386) | ||
| Net advances (reductions) on line of credit | 1,085,575 | (1,654,199) | ||
| Payments on long-term debt | (187,360) | (459,970) | ||
| Proceeds from issuance of long-term debt | 725,798 | 125,019 | ||
| Payments on capital lease obligations | (100,979) | (91,037) | ||
| Net payments on life insurance policies | – | (423,986) | ||
| Proceeds from related party obligation | – | 919,162 | ||
| Proceeds from issuance of units to members | – | 7,750 | ||
| Purchase of treasury stock | (138,553) | (109,208) | ||
| Distributions to members | (1,800,604) | (1,927,836) | ||
| Net Cash Flows used in Financing Activities | (600,568) | (3,873,691) | ||
| Net Change in Cash and Cash Equivalents | 321,747 | 190,195 | ||
| Cash And Cash Equivalents – Beginning Of Year | 311,029 | 84,489 | ||
| Effects of currency translation on cash and cash equivalents |
(28,542) | 36,345 | ||
| CASH AND CASH EQUIVALENTS – END OF YEAR | $604,234 | $311,029 | ||
| Invisa, Inc. | ||||||||||||||||||||||||||
| Reconciliation of GAAP and Non-GAAP Financial Measures (Unaudited) | ||||||||||||||||||||||||||
| Year Ended December 31, 2014 |
G&A |
Operating |
Gain on |
Tax |
Net Income |
EPS |
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| (In thousands, except for per share data) | ||||||||||||||||||||||||||
| As reported | $ | 8,437 | $ | 4,662 | $ | – | $ | (1,341 | ) | $ | 4,237 | $ | 0.22 | |||||||||||||
| 1 – | Severance payments | (492 | ) | 492 | 98 | 394 | 0.02 | |||||||||||||||||||
| 2 – | Acquisition expenses | (414 | ) | 414 | 414 | 0.03 | ||||||||||||||||||||
| Total items | (906 | ) | 906 | – | 98 | 808 | 0.05 | |||||||||||||||||||
| As adjusted | $ | 7,531 | $ | 5,568 | $ | – | $ | (1,243 | ) | $ | 5,045 | $ | 0.27 | |||||||||||||
| Year Ended December 31, 2013 | G&A |
Operating |
Gain on |
Tax |
Net |
EPS |
||||||||||||||||||||
| (In thousands, except for per share data) | ||||||||||||||||||||||||||
| As reported | $ | 6,424 | $ | 5,682 | $ | (4,646 | ) | $ | 175 | $ | 8,979 | $ | 0.48 | |||||||||||||
| 1 – | Severance payments | (124 | ) | 124 | 25 | 99 | 0.01 | |||||||||||||||||||
| 3 – | Gain on bargain purchase | 4,646 | (4,646 | ) | (0.25 | ) | ||||||||||||||||||||
| Total items | (124 | ) | 124 | 4,646 | 25 | (4,547 | ) | (0.24 | ) | |||||||||||||||||
| As adjusted | $ | 6,300 | $ | 5,806 | $ | – | $ | 200 | $ | 4,432 | $ | 0.24 | ||||||||||||||
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1 – |
Amount represents statutory severance payments as a result of labor reduction program in U.K. facility | ||||||||||||||||||||||||
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2 – |
Amount represents one-time expenses associated with the closing of the acquisitions | ||||||||||||||||||||||||
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3 – |
Amount represents the gain on bargain purchase which resulted from the fair value of the net assets being greater than the purchase price with respect to the Wardle Storeys purchase in 2013 |
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Invisa Corporate Contact:
Elizabeth Henson, 941-870-3950
LHenson@invisa.com
or
InvisaPublic Relations:
TTC Group, Inc.
Vic Allgeier, 646-290-6400
vic@ttcominc.com
