Mississauga, ON - March 4, 2013 - Pioneering Technology Corp. ("Pioneering" or the "Company") (TSX Venture: PTE), an "Energy Smart" product innovation/consumer goods company and North America's leader in cooking fire prevention technologies, reports its financial results for the three months ended December 31, 2012. The Company's unaudited financial statements for the three months ended December 31 2012, together with its Management's Discussion and Analysis of these results, are available for review under the Company's profile at www.sedar.com.
Total revenue for the quarter ended December 31, 2012 of $242,000 was down from $432,000 in the same period in 2011. While revenue in Q1 has been traditionally slow, revenue during this period was further impacted by the prospect of the looming sequestration in the U.S. resulting in previously approved projects being delayed and not closing during the quarter as anticipated. For the quarter ended December 31, 2012, the Company's reported comprehensive net loss was approximately ($275,000) or ($.015) per share after the capitalization of development costs of $93,000, compared to a loss of approximately ($210,000) or ($.011) per share for the same quarter in the prior year. Gross margin for the quarter was 65% as a result of a large percentage of sales for the quarter being direct to customers. Adjusted EBITDA for the three months ended Dec 31, 2012 was approximately ($256,000) compared to $(177,000) in the three months ended Dec 31, 2011. Overall, expenses were down for the quarter. Total expenses were approximately $416,000 compared to expenses of approximately $482,000 in the same quarter year ago. The decrease is based on the capitalization of development costs and a commitment to cutting overall administrative costs by approximately 10% in fiscal 2013 to meet budget projections.
The Company's strategic decision to invest in sales resources and new product development to accelerate growth by leveraging the Company's success and its established leadership position in the area of cooking fire safety is continuing to create large and growing opportunities that will drive incremental revenue and growth in the future.
The sales pipeline for the Safe-T-element(R) is strong and continues to grow as awareness for the product is driven by successful installations and continued sales penetration of key multi-residential channels. During the period, the Company continued to aggressively pursue private sector property management companies and energy service companies who readily comprehend the positive return on investment that the Company's products can deliver.
Tax Incentives for Inclusion of Safe-T-element in Six US States to Date
The Company was successful in increasing the STE's inclusion as a "Qualified Allocation Plan" ("QAP") product in the U.S. (now included in Pennsylvania, Connecticut, South Carolina, Georgia, Alabama, Virginia and growing). Property developers in these states receive tax credits for including the STE product in properties as they are built and/or redeveloped. The potential revenue opportunity for the STE in the U.S. state QAP market is significant. The Company also continued to expand its reach into the private sector of the U.S. military channel during the period.
Jurisdictional Ordinance/Requirements for the Safe-T-element
The Company announced that Union City, Georgia was the first municipality in the State of Georgia and the most recent city in North America to pass an ordinance (law) requiring "high end heat limiting technology" for electric coiled cooking devices (ranges, cook tops and hot plates). The ordinance states that all electric coil cooking devices purchased for the purpose of replacement in existing buildings and for installation in any new buildings (includes all apartment buildings, nursing homes, tax supported housing and facilities used for residential board and care occupancy) must include "high end heat limiting technology" as standard equipment. Pioneering is currently the only Company that has "high end heat limiting technology" and has patents and patents pending. Other jurisdictions are currently reviewing the implementation of similar city ordinances.
Universities and Colleges continue to invest to protect students
During the quarter the Company continued to have success selling its technologies to academic institutions looking for fire safety and relief from nuisance alarms. As an example Fanshawe College in London Ontario equipped all of their stoves and microwaves on campus with both the Safe-T-element(R) and Safe-T-sensor(TM).
Ontario Power Authority provides Energy Rebate for Installation of Safe-T-element(R)
On February 5th, 2013 The Company announced that Hasting County's installation of 806 new ranges equipped with the STE cooking system was recognized by the Ontario Power Authority's saveONenergy program. With the help of its local utility company Veridian Connections Inc., the Hastings County Housing Programs Branch was the first affordable housing provider in the province to receive an energy savings rebate for the installation of new ranges equipped with the Safe-T-element's fire prevention and energy saving technology. The installation of Safe-T-element(R) on 806 new ranges projected an annual savings of 115,137 kWh. This has provided the precedence necessary for other public housing authorities to benefit from the same and is another important milestone in this product's positioning as a true and meaningful energy saving technology.
The Company began preliminary discussions with retailers in Q1 2013 for two new products it is planning to introduce later this year. Feedback has been very positive and the Company continues to refine its go-to-market strategy for both products to ensure maximum awareness of the significant consumer problems these products help to solve, product positioning relative to future competition, product configuration and pricing strategy.
On January 23, 2013 the Company closed a non-brokered private placement primarily to insiders of the Company for gross proceeds of $750,000. The proceeds are being used by the Company for working capital and to fund the development and launch of new products. The private placement consisted of 7,500,000 units of the Company, at a price of $0.10 per Unit. Each Unit consisted of one common share of the Company and one- half of one Common Share purchase warrant. Each whole warrant may be exercised for one additional Common Share at a price of $0.15 per Common Share for a period of two years.
About Pioneering Technology Corp: Pioneering, based in Mississauga, Ontario is an "Energy Smart" product innovation/consumer goods company and North America's leader in cooking fire prevention technology. Pioneering engineers and brings to market energy smart solutions for consumer products making them safer, smarter and/or more efficient. Pioneering's patented and patent pending Safe-T-element(R) cooking system is engineered to help prevent stove top cooking fires, the number one cause of fire in North America, and to reduce the amount of electricity required to cook. Available on new ranges or as a retrofit, the STE technology is installed on over 80,000 ranges in multi-residential housing (low income, seniors, college/university and military) throughout the world. Pioneering trademarks include Safe-T-element(R), Safe-T-Sensor(TM), Powergrill(TM), Battery Eliminator(R), Powerpak(TM) and the Hydro-free Furnace Fan(TM). For more information visit: www.pioneeringtech.com.
For further information contact: Kevin Callahan, President & CEO at (905) 712-2061 ext. 222.
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 the Corporation's target markets, the demand for the Corporation's products, the availability of funding, the efficacy of the Corporation's technology and governmental regulation. These forward-looking statements are made as of the date hereof an, except as required by applicable law, the Corporation does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from the Corporation's expectations and projections.
Adjusted EBITDA is a measure not recognized under Canadian generally accepted accounting principles ("GAAP"). 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; stock based compensation, restructuring costs, impairment charges, and other non-recurring gains or losses. 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 GAAP 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 GAAP and should not, on its own, be construed as indicators of performance, cash flow or profitability. References to the Corporation's Adjusted EBITDA should be read in conjunction with the financial statements and management's discussion and analysis of the Corporation posted on SEDAR (www.sedar.com).
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)
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