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Color Kinetics Reports Record Revenues for First Quarter 2005
28 April 2005
Color Kinetics Incorporated (Nasdaq: CLRK - News), a pioneer of intelligent solid-state lighting systems and technologies, today announced its results of operations for the first quarter of 2005. Revenues for the quarter were a record $11.5 million, an increase of 40% from the $8.2 million reported in the first quarter of 2004. Net income for the first quarter increased to $672,000 from the $330,000 reported in the first quarter of 2004. On a per share basis, earnings for the first quarter were $0.03 per diluted share, compared to $0.02 per diluted share for the first quarter of 2004 on a non-GAAP basis. On a per share GAAP basis, earnings for the first quarter were $0.03 per diluted share, compared to $0.06 per diluted share for the corresponding period in 2004. Non-GAAP earnings per share for the first quarter of 2004 is calculated as if 12.9 million shares from our initial public offering and related conversion of outstanding redeemable preferred stock in June 2004 had been outstanding for the entire first quarter of 2004. Please see table at the bottom of the condensed consolidated statements of income for a reconciliation of the non-GAAP and GAAP diluted earnings per share.
"We are pleased to start the year with another quarter of excellent results, reflecting a broad customer base in diverse and growing markets, as well as the accelerating adoption of intelligent solid-state lighting worldwide," said George Mueller, Chairman and CEO. "This achievement reflects Color Kinetics' ability to deliver strong operational results both domestically and internationally, fueled by continued market, technology, and intellectual property leadership."
"Our first quarter results were driven by strong revenues from both our Lighting Systems and OEM & Licensing business units, including a record performance in International Sales and notable gains in overall gross margins," said Bill Sims, President and COO. "We believe our first quarter performance demonstrates the returns of our strategic investments across engineering, product development, and sales and channel expansion, as well as our timely execution on key initiatives. We expect this momentum to carry well into 2005 and beyond."
Highlights from the first quarter include:
* Record international revenues, with demonstrable traction in Asia
Pacific and the highest revenues to date from Europe.
* Favorable market response to the IntelliWhite(TM) series, Color
Kinetics' first-of-its-kind line of intelligent white solid-state
lighting solutions.
* Major OEM product line expansion with eight new offerings delivered,
facilitating cross-industry adoption of intelligent solid-state
lighting.
* Four OEM and licensing agreements signed, reflecting a diverse range of
new and existing markets for Color Kinetics' technology.
* The issuance of the company's third patent relating to intelligent
solid-state pool and spa lights, broadening the company's protection in
those markets.
* Continued industry recognition with four awards for product excellence.
For the second quarter of 2005, the company currently targets revenues in the range of $12.4 million to $12.9 million with earnings of $0.03 to $0.05 per diluted share.
Color Kinetics will host a conference call to review its first quarter results after the close of market today. The conference call may be accessed by dial-in number or via the Internet as follows:
Wednesday, April 27 at 5:00 pm ET
Domestic dial-in number: 800-638-5439
International dial-in number: 617-614-3945
Passcode: 22391492
Webcast: http://phx.corporate-ir.net/phoenix.zhtml?c=178448&p=irol-irhome
A dial-in replay of the conference call will be available from 7:00 pm ET today through May 4 at 888-286-8010 (domestic), 617-801-6888 (international), passcode: 82726574. The webcast will be archived and available for one year via the Investor Relations section of Color Kinetics' website.
About Color Kinetics
Color Kinetics Incorporated (Nasdaq: CLRK - News) is a pioneer in the design, marketing and licensing of intelligent solid-state lighting systems and technologies. The company's award-winning line of products applies the practical and aesthetic benefits of LEDs to transcend the limits of traditional light sources for use in high-performance lighting and OEM and licensing applications. Its products and technologies leverage a patented layer of digital intelligence, called Chromacore®, to generate and control millions of colors and dynamic lighting effects. Color Kinetics holds 38 patents and has over 130 patent applications pending that apply to many aspects of solid-state lighting technology. Founded in 1997, the company is headquartered in Boston, MA with offices in the UK, China, and a joint venture in Japan. More information can be found at http://www.colorkinetics.com.
Chromacore, Color Kinetics, and the Color Kinetics logo are registered trademarks and IntelliWhite is a trademark of Color Kinetics Incorporated. All other trademarks mentioned are the property of their respective owners.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Color Kinetics Incorporated's business that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these statements involve risks and uncertainties, are only predictions and may differ materially from actual future events and results. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Registration Statement on Form S-1, File Number 333-114386, and in its Annual Report on Form 10-K for the Twelve Months Ended December 31, 2004, each as filed with the Securities and Exchange Commission.
Color Kinetics Incorporated
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Ended March 31,
2005 2004
REVENUES:
Lighting systems (1) $9,639 $ 6,758
OEM and licensing 1,877 1,459
Total revenues 11,516 8,217
COST OF REVENUES:
Lighting systems 4,643 3,366
OEM and licensing 901 682
Total cost of revenues 5,544 4,048
GROSS PROFIT 5,972 4,169
OPERATING EXPENSES:
Selling and marketing 2,420 1,828
Research and development 1,032 800
General and administrative (2) 2,227 1,375
Total operating expenses 5,679 4,003
INCOME FROM OPERATIONS 293 166
INTEREST INCOME 339 31
EQUITY IN EARNINGS OF JOINT VENTURE 40 133
NET INCOME $672 $330
EARNINGS PER SHARE:
Basic $0.04 $0.12
Diluted $0.03 $0.06
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 17,959 2,804
Diluted 19,531 5,191
NON-GAAP DILUTED EARNINGS PER SHARE (3):
Diluted Earnings Per Share: $0.02
Weighted Average Shares Outstanding: 18,092
Three Months Ended March 31,
2005 2004
(1) Includes revenues from a related party of $1,265 $880
(2) Includes stock-based compensation of $8 $61
(3) RECONCILIATION OF NON-GAAP AND GAAP
WEIGHTED AVERAGE SHARES OUTSTANDING FOR
DILUTED EARNINGS PER SHARE PURPOSES FOR
THE THREE MONTHS ENDED MARCH 31, 2004 (a):
Weighted average shares outstanding for
diluted purposes - Non-GAAP 18,092
Issuance of common stock in connection with
initial public offering (4,000)
Conversion of redeemable convertible preferred
stock into common stock (8,901)
Weighted average shares outstanding for
diluted purposes - GAAP 5,191
(a) Non-GAAP diluted earnings per share for the three months ended March
31, 2004 is stated on a pro forma basis and is calculated based on
GAAP net income for the period and Non-GAAP weighted average shares
outstanding determined as if shares of common stock issued in
connection with our initial public offering ("IPO") in June 2004,
together with the conversion of redeemable convertible preferred stock
to common stock also issued in connection with our IPO, were
outstanding for the entire three months ended March 31, 2004.
Color Kinetics Incorporated
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
March 31, December 31,
2005 2004
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and equivalents (4) $20,121 $26,198
Investments (4) 32,770 29,022
Restricted cash 331 604
Accounts receivable, net of allowance for
doubtful accounts of approximately
$461 and $429 in 2005 and 2004, respectively 5,882 5,346
Accounts receivable from related parties 116 31
Inventory 6,971 4,730
Prepaid expenses and other current assets 1,593 1,572
Total current assets 67,784 67,503
PROPERTY AND EQUIPMENT-net 1,189 1,147
INVESTMENT IN JOINT VENTURE 620 557
RESTRICTED CASH-Long-term portion 1,000 1,000
TOTAL ASSETS $70,593 $70,207
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,946 $1,681
Accounts payable to related party 41 48
Accrued expenses 1,354 1,458
Accrued compensation 903 1,731
Accrued restructuring 400 405
Accrued warranty 731 860
Deferred revenue 441 379
Total current liabilities 5,816 6,562
ACCRUED RESTRUCTURING 532 628
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value 18 18
Additional paid-in capital 97,654 97,059
Accumulated other comprehensive loss (161) (122)
Accumulated deficit (33,266) (33,938)
Total stockholders' equity 64,245 63,017
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $70,593 $70,207
(4) The balances of cash and equivalents and investments at December 31,
2004 have been reclassified from amounts previously reported in our
Form 10-K for the year ended December 31, 2004. A total of $3.0
million was reduced from cash and equivalents and added to
investments at December 31, 2004 to conform to recent SEC guidance
concerning certain types of investments.
Color Kinetics Incorporated
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Three Months Ended March 31,
2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $672 $330
Adjustments to reconcile net income to cash
from operating activities:
Depreciation and amortization 228 182
Loss on disposal of property and equipment 3 -
Stock-based compensation 8 61
Equity in earnings of joint venture (40) (133)
Changes in assets and liabilities:
Accounts receivable (621) (463)
Inventory (2,241) 371
Prepaid expenses and other current assets (21) (653)
Restricted cash 273 145
Accounts payable 258 110
Accrued expenses (1,061) (262)
Deferred revenue 62 190
Accrued restructuring (101) (114)
Cash flows from operating activities (2,581) (236)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments (3,810) -
Purchase of property and equipment (273) (143)
Cash flows from investing activities (4,083) (143)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of stock options 434 -
Proceeds from issuance of redeemable
convertible preferred stock - net of
issuance costs - 13,003
Proceeds from issuance of common stock 153 -
Cash flows from financing activities 587 13,003
EFFECT OF EXCHANGE RATE CHANGES ON CASH - -
INCREASE (DECREASE) IN CASH AND EQUIVALENTS (6,077) 12,624
CASH AND EQUIVALENTS-Beginning of period 26,198 5,686
CASH AND EQUIVALENTS-End of period $20,121 $18,310
--------------------------------------------------------------------------------
Source: Color Kinetics Incorporated
Source: PR Newswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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