Significantly improved revenue of $2.2 million & net income of $324,733 for the quarter.
Mississauga, ON (March 2, 2020) – Pioneering Technology Corp. (TSXV: PTE) (“Pioneering” or the “Company”), a technology company and North America’s leader in cooking fire prevention technology and products reports its unaudited financial results for the first quarter ended December 31, 2019. Pioneering’s unaudited condensed interim financial statements and MD&A are available on SEDAR (www.sedar.com).
• Revenue was $2,201,185 up 73% versus the same period year ago of $1,273,874.
• Expenses in Q1 2020 were down 44% to $813,382 versus $1,463,453 in Q1 2019.
• Net Income for the quarter was $324,733 versus a loss of $(756,241) in Q1 2019.
• Adjusted EBITDA was $413,801 an improvement of 164% from Adjusted EBITDA of ($646,179) a year ago.
• Gross margins remained strong at 53%.
• The Company’s balance sheet improved during the period and remains strong.
After experiencing profitability and 50% year-over-year revenue growth in three consecutive fiscal years (2015, 2016 and 2017), the Company’s financial performance declined in fiscal 2018 and 2019 due to a number of factors, including: longer than normal sales cycles related to its transition from a direct sales model to a distributor model; investments in people, research and marketing; and the impact of activities by former executives/contractors of the Company whose employment was terminated in January 2019.
The Company believes that it has addressed many of these challenges and is now in a position to generate improved financial performance. The Company reduced expenses in the first quarter of 2020 that did not directly drive sales revenue or impact new product development. During the quarter, cash flow improved as revenue recovered on the strength of increased awareness and sales via the Company’s distribution network, investments in sales and marketing and reductions in operating expenses.
Selected Financial Highlights for the First Quarter ended December 31, 2019 and 2018
|Quarter Ended Dec. 31, 2019||Quarter Ended Dec. 31, 2018|
|Net Income (Loss)||324,733||(756,241)|
|EPS Basic (Loss)||0.01||(0.01)|
(1) Adjusted EBITDA is a non-IFRS measure. Please refer to “Non-IFRS Measures” at the end of this press release.
Pioneering CEO Kevin Callahan said of the results, “We are very pleased with the progress we are making including the almost 200% improvement in revenue versus Q4 2019. The Company will continue working hard to get the business back to where it was prior to 2018 and growing. We are confident that the steps we have taken over the past year have positioned Pioneering to begin restoring shareholder value.”
Q1 2020 Business Highlights
Strong Balance Sheet: As at December 31, 2019, the Company has no debt, approximately $2.2 million in cash and total current assets of approximately $7.1 million. The Company currently has significant fully paid inventory on hand. The Company expects that this inventory will allow it to meet current demand.
New Vice President of Sales: During the quarter the Company hired a new Vice President of Sales, Tim Mulroney. Tim brings with him an impressive track record in sales and sales leadership. He has more than 18 years of team leadership experience, including 12 years leading direct sales for North America. Most recently, Tim spent seven years at Siamons International, makers of the Concrobium brand of non-toxic specialty mold cleaners, as their Senior Vice President, Global Sales. Like Pioneering, Siamons generates a significant amount of sales in the U.S., operates in a niche space, and focuses on the B2B market leveraging relationships with key distributors and broker partners. In seven years at Siamons, Tim was responsible for significant increases in sales. Prior to that, Tim spent more than 20 years with S.C. Johnson, a cleaning and household products company, where he held progressively more senior account management, sales management and customer marketing roles, culminating with the role of Vice President of Sales, leading a team of 65 sale professionals that generated hundreds of millions of dollars of sales. Tim has a Bachelor of Science from Queen’s University in Kingston and is a graduate of the Marketing Management Program at the University of Western Ontario in London.
HD Supply Partnership Activities: As part of its strategy to aggressively invest for growth with HD Supply USA, the Company is gaining direct access to key senior sales personnel at HD Supply across the U.S. who can facilitate product introductions to their key customers and enable trials and demonstrations of the Company’s products. The Company has also begun participating in annual catalogues and sales conferences at HD Supply. The Company will also begin to participate in the HDS sales outreach program which will allow the Company to disseminate key cooking fire information and key product information to the HDS sales organization to drive awareness and sales with end customers.
Current Marketing and Advertising Activities: The Company continues to invest in B2B advertising and awareness building to drive end-customer awareness for the SmartBurner, SmartRange and Safe-T-sensor products. The Company expects this investment to increase B2B sales leads. This advertising investment targets customers in the Company’s key B2B channels and is coordinated with the Company’s other awareness building and lead generation activities.
About Pioneering Technology Corp: Pioneering, based in Mississauga, Ontario is an “energy smart” technology company and North America’s leader in innovative cooking fire prevention technologies and products. Our mission is simple: To help save lives and property from the number one cause of household fire – cooking fires. We do this by engineering and bringing to market energy-smart solutions that make consumer appliances safer, smarter, and more efficient. Our patented cooking-fire prevention products address the multi-billion-dollar problem of cooking fires. According to the National Fire Protection Association, stovetop cooking is the number one cause of household fire and fire injuries in North America. Pioneering’s temperature limiting control (TLC) technology is now installed in over 300,000 multi-residential housing units across North America without a single cooking fire being reported, delivering peace of mind and a solid return on investment for its customers. Pioneering’s proprietary cooking fire prevention solutions include Safe-T-element, SmartBurner, RangeMinder & Safe-T-sensor and are suitable for the majority of the more than 140 million stoves/ranges and over 140 million microwave ovens in use throughout North America. For more info, go to www.pioneeringtech.com.
For investor relations please contact:
VP Marketing & Communications Phone: 647-945-7521
Forward Looking Statements
The statements made in this press release include forward-looking statements that involve a number of risks and uncertainties. These statements relate to future events or future performance and reflect management’s current expectations and assumptions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, such as the economy, generally, competition in Pioneering’s target markets, the demand for Pioneering’s products, the availability of funding and the efficacy of Pioneering’s technology and governmental regulation. These forward- looking statements are made as of the date hereof an, except as required by applicable law, Pioneering does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from Pioneering’s expectations and projections.
Adjusted EBITDA is a measure not recognized under International Financial Reporting Standards (“IFRS”). However, management of Pioneering believes that most shareholders, creditors, other stakeholders and investment analysts prefer to have these measures included as reported measures of operating performance, a proxy for cash flow, and to facilitate valuation analysis. Adjusted EBITDA is defined as earnings before interest income, taxes, depreciation and amortization, impairment losses, stock-based compensation, restructuring costs included in general and administration expense, fair value movement – derivative liability and other non-recurring gains or losses including transaction costs related to acquisition. Management believes Adjusted EBITDA is a useful measure that facilitates period-to-period operating comparisons. Adjusted EBITDA does not have any standard meanings prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Readers are cautioned that Adjusted EBITDA is not an alternative to measures determined in accordance with IFRS and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Pioneering’s Adjusted EBITDA should be read in conjunction with the financial statements and management’s discussion and analysis of Pioneering posted on SEDAR (www.sedar.com). For a reconciliation of Adjusted EBITDA as presented by Pioneering to net income, please refer to Pioneering’s management’s discussion and analysis.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release. (Not for dissemination in the United States of America)