Capstone Companies Inc (CAPC)

[msturgeo]

TTI delivered record sales, gross margin and profit for
the first half of 2014. New products, geographic expansion
and a relentless focus on operational efficiency propelled
our continued outstanding performance. We generated
exceptional organic growth in our professional and
DIY power tool businesses. Geographically, both our
North American and European businesses delivered
strong results. In addition, our rest-of-world businesses
continued to flourish delivering double-digit growth.
TTI achieved 10.2% sales growth in the first half despite
challenging weather conditions in North America.
The company’s double digit sales growth is a result of
a series of successful new product launches and highly
effective, targeted geographic expansion.
A highlight of our strong first half result was 100 basis points
improvement with our gross margin increasing from 34.0%
last year to 35.0% this year, by aggressive productivity gains
throughout our supply chain network.

Record financial performance
In the first half of 2014, the Group’s net profit attributable
to shareholders reached US$136 million, a 15.9% increase
over the first half of 2013. Basic earnings per share was
US7.45 cents, 15.9% higher than the same period last year.
Group sales rose by 10.2% over the six month period to
US$2,250 million. The Power Equipment segment
delivered US$1,678 million, which is a 10.5% sales
increase. The Floor Care and Appliance segment grew
9.3% to US$572 million in sales.
Gross margin increased for the sixth consecutive first
half period from 34.0% to 35.0%. The improvement in
gross margin was driven by new product launches and
aggressive productivity gains throughout our supply chain
network. Our strategy of delivering at least one third
of group revenue from new products is a key element
of our success. In addition, we generated increased
productivity and enhanced our operating margins due to
our cost improvement programs across manufacturing
and supply chain.
We continue to invest in strategic SG&A. Our investments are
focused on product development, marketing, and geographic
expansion. These investments continue to deliver outstanding
returns with EBIT margin improving for the fifth consecutive
first half period as a result of our strategic initiatives.