Capstone Companies Inc (CAPC)

[RG]

It was bad compared to the previous qtr and so people are selling.

Watch the manipulation that is being pulled off with PUMA. This can be done with low volumes and thin Bids/Asks. IMO this is one person doing this.

Not so when I read this.

Capstone Companies, inc. Achieves Significant Gross Margin Expansion in Second Quarter 2014
By adminAugust 12, 20140 commentsCompany News
Revenue of $1.2 million increased 15% in the second quarter; Record first-half revenue of $5.3 million exceeded expectations
Second quarter gross margin expanded 1,070 basis points to 29.9%
Record backlog level entering second half of 2014
Partnership with Light Engine Ltd. to accelerate product line expansion efforts, bringing new innovations to market faster
DEERFIELD BEACH, FL, August 12, 2014 – Capstone Companies, Inc. (OTCQB: CAPC) (“Capstone” or the “Company”), a leader in the design and manufacture of specialty power failure lighting solutions and innovator of consumersafety and security products for the Hospitality, Retail and Institutional channels, reported unaudited financial results for the three- and six-month period ended June 30, 2014.

Stewart Wallach, Capstone’s CEO, commented, “The second quarter results came in above our expectations, driving our record top-line results for the first half with $5.3 million in revenue. Our strategic investments, including the enhancements to our distribution model, continuous product development and geographic diversification of our sales base, have driven consistent revenue improvement.”

Increases in Volume and Efficiencies Driving Margin Expansion

Capstone’s financial performance continues to align with the strategic initiatives that have been adopted over the past several years. Revenue of $1.2 million increased $0.2 million, or 15%, from the prior-year period. Gross profit improved 79% to $0.4 million and gross margin as a percent of sales increased measurably to 29.9% from 19.2% in the second quarter of 2013. Operating loss was $0.4 million for the second quarter. Net loss was $0.4 million and improved by $0.1 million from the prior year’s second quarter.

Gerry McClinton, Capstone’s CFO noted, “Our improved distribution strategy and operations, and the associated production efficiencies have driven significant margin improvement. We expect to see greater leverage as we continue to grow our top-line.”

First Half 2014 Review

For the first six months of 2014, revenue more than tripled to a record $5.3 million, an increase of $3.6 million over the prior-year period. Gross profit increased to $1.7 million, or 31.5% of sales, reflecting productivity improvements associated with product development, manufacturing efficiencies, and distribution channel efforts as well as leverage on higher revenue.

Operating income was breakeven for the first half of 2014 compared with an operating loss of $0.7 million in the prior-year period. Net loss of $0.2 million improved significantly from a loss of $0.9 million in the first half of 2013, and included $596 thousand of investments for growth consisting of $240 thousand for the establishment of the Company’s new office in Hong Kong,
$224 thousand in product marketing expenses and $132 thousand in new product development costs.

Mr. Wallach added, “We have been making consistent strides toward our strategic plan and this quarter was no different. In addition to financial results for the first half that exceeded the expectations we provided during our last financial report, we have made another important strategic alliance with Light Engine Ltd. in China, a recognized global leader in the development, engineering and manufacturing of LED technology. This alliance will help Capstone bring new innovative products from concept design to the store shelves much faster.

“During the second half of 2014 we will be introducing the transformational new power failure lighting products that we have developed with AC Kinetics, and expect shipments to commence in early 2015. Additionally, as we enter the 2014 holiday season we are prepared to continue to deliver revenue growth as we have a record level of backlog in place for shipment during the third and fourth quarters.”