Revolution Lighting Technologies Reports Exponential Revenue Growth in 2013

Revolution Lighting Technologies, Inc. (Revolution Lighting), a provider of advanced LED lighting solutions, announced financial results for the fourth quarter and full year ended December 31, 2013.

  • Reported 2013 Revenues of US$26.1 Million for FY 2013, an Increase of 480 percent.

  • Gross Margin at 38 percent for 2013 .

  • 2014 Pro Forma Revenue to be in the $110 Million Range with Organic Revenue Growth of Over 40 percent.

  • 2014 Adjusted EBITDA to be in the 12-15 percent range.

"We built a solid foundation and executed on our business strategy in 2013," said Robert LaPenta, Chairman and Chief Executive Officer, Revolution Lighting Technologies. "We increased revenues, significantly improved our gross margin and made several strategic acquisitions to broaden our product portfolio, expand our distribution network, and strengthen our engineering and management teams."

LaPenta continued: "We are extremely excited about our recently announced acquisition of Value Lighting Inc., which will allow us to penetrate new markets, including the multifamily residential housing sector where demand for our products continues to grow. As we look forward, Revolution Lighting is well-positioned for the rapid growth of the LED industry that we believe lies ahead."

Quarter Ended December 31, 2013

For the quarter ended December 31, 2013, total revenue was approximately US$ 7.1 million, as compared to US$ 1.0 million in the same period of 2012, an increase of approximately 610 percent. Gross profit for the quarter was approximately US$ 2.3 million, as compared to US$ 0.15 million during the same period in 2012. Gross margin was 33 percent as compared to 15 percent for the same period in 2012.

Revenue and gross margin includes the impact of strong organic growth of the businesses we acquired in 2012 and 2013. On a pro forma basis, giving effect to the acquisitions of Seesmart, Relume and Tri-State businesses, as if they had occurred on January 1, 2012, consolidated revenues for the quarter increased by 47 percent to US$ 7.6 million. The results reflect the shift in focus away from the lower ticket and lower margin consumer retail market to the rapidly growing commercial, industrial and municipal (municipal, university, schools and healthcare) segments, which we believe offer higher margin opportunities.

The Company reported an operating loss of US$ 3.3 million in the fourth quarter of 2013 as compared to US$ 1.4 million in the same period of 2012. Operating results for the fourth quarter of 2013 were negatively impacted by one-time and non-cash charges of US$ 0.9 million, including expenses related to acquisitions, the amortization of intangible assets resulting from the acquisitions and stock-based compensation. Negative Adjusted EBITDA (as defined below) for the fourth quarter of 2013 was approximately US$ 2.4 million excluding the aforementioned charges.

The Company reported a net loss for the fourth quarter of 2013 of approximately US$ 3.3 million as compared to a net loss of US$ 1.4 million for the same period in 2012. The net loss for the fourth quarter of 2013 includes the aforementioned one-time and non-cash charges.

Basic and diluted loss per share attributable to common stockholders were US$ 0.05 and US$ 0.04, respectively, for the quarters ended December 31, 2013 and 2012. Weighted basic and diluted shares outstanding were 80.9 million for the quarter ended December 31, 2013 and 38.6 million for the quarter ended December 31, 2012. The per share amounts reflect accrual of dividends on preferred stock and the accretion to redemption value of the Series E and F preferred stock.

Fourth Quarter Business Highlights

  • October 7th: Announced acquisition of portfolio of LED products from CMG Energy Solutions to broaden product portfolio and strengthen distribution network.

  • November 18th: Announced acquisition of Tri-State LED, a leading distributor of Revolution Lighting's Seesmart LED lighting solutions with a significant client base across the Tri-State area that includes municipalities, major school systems, hospitals, convention centers and real estate developers

  • December 10th: Announced that SL Green Realty Corp., New York City's largest commercial property owner, selected Revolution Lighting's  See smart brand LED tube lamps for the second phase retrofit at ten SL Green properties, saving US$ 300,000 annually.

  • December 16th: Announced selection by the U.S. Navy's Military Sealift Command to supply Lewis and Clark class T-AKE dry cargo/ammunition ships with 17,000 Seesmart two and 4  foot (1.21 meters) LED tube lamps

The Company's business pipeline is stronger than ever with Revolution Lighting being selected for several strategic opportunities in recent months, including the following:

  • Down selected on LED lighting retrofit projects for several large nationwide franchise operators with over 6,000 outlets commencing in 2014 with a potential of over US$ 100 million.

  • Designated the preferred provider of LED products for New Jersey and select New York State public school systems with the potential of over US$ 30 million.

  • Selected to participate in a large multi-use project in a major U.S. city, including hotels, apartments and retail outlets with a potential of US$ 20 million.

During the fourth quarter, the Company completed and initiated a number of key projects, including:

  • Completed LED retrofit projects for the Empire Casino in Yonkers, New York and the MGM Casino in Detroit, Michigan.

  • Completed the project with U.S. Navy's Military Sealift Command to supply Lewis and Clark dry cargo/ammunition ships with 17,000 Seesmart two and  four foot (1.41 meter) LED tube lamp; the Company expects follow-on orders throughout 2014.

  • Commenced delivery of products for the retrofit of the Connecticut  Convention Center, located in Hartford, Connecticut; this 540,000 square foot building is the largest energy reduction project in the state.

Full Year Ended December 31, 2013

For the year ended December 31, 2013, the Company reported revenues of approximately US$ 26.1 million, as compared to US$ 4.5 million in the same period of 2012, an increase of approximately 480 percent. Gross profit for the full year ended December 31, 2013 was approximately US$ 10.0 million, as compared to negative US$ 0.2 million during the same period in 2012. Gross margin was 38 percent, as compared to negative 5 percent for the same period in 2012.

Revenue and gross margins include the impact of strong organic growth of the businesses we acquired in 2013 and 2012. On a pro forma basis, giving effect to the acquisitions of the Seesmart, Relume and Tri-State businesses as they had occurred on January 1, 2012, consolidated revenues increased by 59 percent to US$ 35.0 million over the corresponding period in 2012. The 2012 gross margin includes charges from the liquidation of surplus and discontinued inventory related to the retail consumer markets. The results reflect the shift in focus away from the lower ticket and lower margin consumer retail market to the commercial, industrial and municipal (municipal, university, schools and healthcare) segments.

The Company reported an operating loss of US$ 10.5 million in the full year ended December 31, 2013, as compared to US$ 9.4 million in the same period of 2012. Operating results for the full year were negatively impacted by one-time and non-cash charges of US$ 7.5 million, including expenses related to acquisitions, severance and facility transition costs related to the closing of the former Nexxus Lighting corporate office in North Carolina, the amortization of intangible assets related to acquisitions and stock-based compensation. Negative Adjusted EBITDA (as defined below) for the full year was approximately US$ 2.9 million excluding the aforementioned one-time and non-cash charges.

The Company reported a net loss for the full year ended December 31, 2013 of approximately US$ 16.8 million as compared to a net loss of US$ 8.6 million for the same period in 2012. The net loss includes the aforementioned charges and additional one-time non-cash charge of US$ 7.0 million related to the change in fair value of the embedded liability related to the Company's Series E, a gain of US$ 0.7 million on a bargain purchase of a business which the Company does not expect to reoccur going forward, as well as interest costs of US$ 0.1 million.

Basic and diluted loss per share attributable to common stockholders were US$ 0.26 and US$ 0.63, respectively, for the years ended December 31, 2013 and 2012. Weighted basic and diluted shares outstanding were 77.3 million for the year ended December 31, 2013 and 22.1 million for the year ended December 31, 2012. The per share amounts reflect the accretion to the redemption value of the Series E and Series F Preferred Stock of US$ 3.7 million and the accrual of dividends on preferred stock.

Liquidity Position

The Company's liquidity position remains adequate with a cash balance of US$ 1.8 million as of December 31, 2013.

During the fourth quarter of 2013 the Company entered in accounts receivable financing facilities pursuant to which it can borrow up to an aggregate of US$ 1.5 million, subsequently increased to US$ 2.0 million.

Subsequent to December 31, 2013 the Company borrowed US$ 3.5 million under a financing arrangement with an affiliate of its controlling stockholder.

"We continued to strengthen our financial position with the growth of our sales pipeline and we are pleased to have achieved strong margins," said Charles Schafer, Chief Financial Officer, Revolution Lighting Technologies. "We have adequate resources and are continuing to invest in the growth of Revolution Lighting."

2014 Revenue & Adjusted EBITDA Outlook

Revolution Lighting started 2014 with a robust pipeline of close to US$ 200 million in actionable opportunities over the next 12 to 18 months. With the benefit of the Value Lighting acquisition announced on March 10, 2014, the Company expects pro forma combined revenue in 2014 to be in the US$ 110 million range with organic revenue growth of over 40 percent, and Adjusted EBITDA in the 12-15 percent range.

Business Highlights for Full Year 2013

  • January 23rd: Appointed Robert LaPenta as Chief Executive Officer and Charles J. Schafer as President and Chief Financial Officer.

  • January 24th: Announced receipt of a US$ 5 million order for Seesmart LED  lighting products with a total potential value of US$ 10 million.

  • February 21st: Announced the receipt of an additional US$ 5 million investment from an affiliate of Aston Capital LLC, in the form of       convertible preferred stock to fund customer orders and future growth.

  • March 11th: Announced the completion of a US$ 5 million common stock investment from an unaffiliated investor.

  • March 25th: Introduced the most energy efficient 15-watt tube lamp on the market today, producing a measured efficacy of 112 lumens per watt and more than 1,700 lumens of light.

  •  July 3rd: Announced retrofits for Gasolineras Don Justo, subdivision of  the largest gas station chain in Mexico.

  • July 11th: Announced partnership agreement with GB Energie LED to drive LED adoption across multiple markets.

  • July 15th: Aston Capital, a limited partnership private equity firm, announced that it will create LightCap I Fund to finance LED lighting       purchases and installations for Revolution Lighting Technologies customers.

  • August 12th: Announced acquisition of Relume Technologies to increase LED product portfolio for outdoor lighting applications and smart grid control systems; acquisition closed on Aug. 22nd, 2013.

  • September 26th: President and CFO Charlie Schafer presented at  Craig-Hallum's 4th Annual Alpha Select Conference.

  • October 7th: Announced acquisition of portfolio of LED products from CMG Energy Solutions to broaden product portfolio and strengthen distribution network.

  • November 18th: Announced acquisition of Tri-State LED, a leading distributor of Revolution Lighting's Seesmart LED lighting solutions with a significant client base across the Tri-State area that includes municipalities, major school systems, hospitals, convention centers and       real estate developers.

  • December 10th: Announced that SL Green Realty Corp., New York City's largest commercial property owner, selected Revolution Lighting's Seesmart brand LED tube lamps for the second phase retrofit at 10 SL Green properties, saving US$300,000 annually.

  • December 16th: Announced selection by the U.S. Navy's Military Sealift Command to supply Lewis and Clark class T-AKE dry cargo/ammunition ships with 17,000 Seesmart two and four foot LED tube lamps.

 

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