SSA.V - Spectra Inc. Year End Results (Financials + MD&A)
Ending December 31st 2017
Note – Q1 2018 results will be released in the next 2-3 weeks with a more accurate picture of financials. This is due to Michael Faye leaving end of 2017(large expense gone) and Glen Campbell taking debt from DVOF to help reduce payments and extend deadline to 2020(Announced December 2017).
Current Stock Price: $0.03
Common Shares: 60,509,971
Insider Holdings: 6,855,591 or 11.3%
Institutional Holdings: 18,133,000 or 30% - DVOF Debenture Holder
ASSETS
Cash: $54,811
Accounts Receivable: $244,200
Inventories: $175,883
Prepaid Expenses: $4,737
Total Assets: $479,631 (2016 - $417,393)
LIABILITIES
Accounts Payable: $140,207
Royalty Debenture: $629,028
Preferred Shares: $556,430
Total Liabilities: $1,325,665 (2016 - $1,486,237)
Performance
Sales: $1,780,609 (2016 - $1,549,11)
Cost of sales: $762,500
Gross Profit: $1,018,109
Debt Extinguishment: $30,423
G&A Expenses: $825,722
Net Income: $222,810 (2016 - $151,912)
MD&A Highlights From Year End Results
Cash Flow Earned In Operations (Page 4)
2014 - $107,922
2015 - $81,815
2016 - $188,897
2017 - $275,065
Revenue
Twelve months ended December 31, 2017 Revenue for the twelve months ended December 31, 2017 increased by 15 percent to $1,780,609 compared to revenue of $1,549,112 for the twelve months ended December 31, 2017. The increase in revenue is attributable to increased sales of all major product lines.
Net income
Year ended December 31, 2017 The net income for the year ended December 31, 2017 was $222,810 or $0.00 per share basic and fully diluted compared to net income of $151,912 or $0.00 per share basic and fully diluted for the year ended December 31, 2016.
Liquidity and Cash Flow
Twelve months ended December 31, 2017 For the twelve months ended December 31, 2017, the Company earned $275,065 in operating activities compared to earning $188,897 in 2016. Non-cash items during the twelve months contributed $75,812 compared to $100,726 in 2016. $150,000 was repaid on loans payable during the year and $150,000 of preferred shares were repurchased for cancellation. These all resulted in a net decrease in cash resources of $24,935 and a cash resources balance at the end of the period of $54,811. During the equivalent twelvemonth period in 2016 the Company showed a net increase in cash resources of $35,897 and a cash resources balance at the end of the year of $79,746
The Company‘s current cash and cash equivalents are expected to meet the anticipated need for ongoing expenses, working capital and capital expenditures. In the event the Company’s cash and cash equivalents are insufficient, the Company may seek additional financing as required to provide working capital, inventory and capital equipment necessary to implement its business plan.
Management believes that the strong functional and competitive capabilities of its Brake Safe®, Brake Inspector®, Termin-8r® Zafety Lug Lock®, Hub Alert® and Arrow Logger™ product lines will improve the Company’s long-term profitability.
OUTLOOK
The Company continues to focus its efforts on expanding the present market for its products while introducing those products into new markets as well as seeking out new products to compliment our other offerings.
The Company’s Brake Safe® product is well established in the Canadian market and inroads are now being made into the lucrative American market. With the implementation of its new, aggressive, safety enforcement and monitoring program, CSA (Compliance, Safety, Accountability), the Federal Motor Carrier Safety Administration is bringing the focus onto unsafe Carriers and unsafe Drivers in the US transportation industry. A significant increase in roadside enforcement, citations and fines for all driver and vehicle violations will impact positively on the sales growth of Brake Safe® products. A program has been developed to educate companies of these enforcement changes and the resulting increased intervention by regulatory agencies in order to capitalize on sales opportunities for Brake Safe®.
The Company’s Termin-8R® product continues to receive strong industry acceptance with a corresponding growth in sales to the transportation segment. The second private label arrangement, introduced in 2010 and made for a major supplier to the commercial transport industry, is proving to be a strong performer with 2017 private label sales, by dollar amount, now being 80% of total Termin-8R® product sales and 27% more than that of the previous year. The company believes that developing new private label arrangements will be a key to the ongoing growth in the sales of this product.
The Company will continue to form strategic distribution alliances to accelerate its sales outside the Canadian marketplace.
The Company may seek sufficient additional funds to provide working capital, inventory and capital equipment as needs arise, but at the moment, cash flow from operations is sufficient to support current needs.
