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Nexxus Lighting reports second quarter 2009 results |
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FOR IMMEDIATE RELEASE August 14, 2009 ######
CHARLOTTE, NC, August 14, 2009 – Nexxus Lighting, Inc. (NASDAQ Capital Market: NEXS) today reported results for its second quarter ending June 30, 2009.
Revenue Revenue for the three months ended June 30, 2009 was approximately $2,605,000 as compared to approximately $3,844,000 for the three months ended June 30, 2008. The sales results reflect the acquisition of Lumificient Corporation (Lumificient) on April 30, 2008. Excluding revenue attributable to Lumificient, revenue decreased 45% to approximately $1,767,000. “The global recession continued to have a major impact on the commercial and residential new construction markets that we serve,” stated Mike Bauer, President and CEO of Nexxus Lighting, Inc. “As a result, we experienced much softer demand for our legacy products throughout the quarter.” “However, we are very encouraged by the growing demand for our new Array™ Lighting line of replacement LED light bulbs,” added Mr. Bauer. “We have seen orders for this exciting new technology increase every month since we introduced the brand in the first quarter, with over $565,000 in new purchase orders placed in June and July. With the recent introduction of our much anticipated narrow beam optics, our confidence in the Array™ Lighting strategy remains strong, despite the economy, and we continue investing in related technology and products.” Revenue from sales of commercial lighting products decreased by $829,000, or 34%, from approximately $2,458,000 in the second quarter of 2008 to approximately $1,629,000 in the second quarter of 2009. Excluding revenue attributable to Lumificient, the Company’s commercial product sales decreased $1,009,000, or 56%, in the second quarter of 2009 as compared to the same period in 2008, driven primarily by significant decreases in commercial construction activity across the US. Sales of the Company’s newly introduced Array™ LED lamps were approximately $197,000 in the second quarter of 2009.
Gross profit for the quarter ended June 30, 2009 was approximately $650,000, or 25% of revenue, as compared to approximately $1,226,000, or 32% of revenue, for the comparable period of 2008. Direct gross margin for the second quarter of 2009, which is revenue less material cost, decreased slightly to approximately 51% as compared to 53% in the same period of 2008. The decrease in direct gross margin was due primarily to a shift in sales to lower margin products and the Company’s decision to increase third party manufacturing where production costs are incorporated into the purchased product. Production costs decreased approximately $139,000 on significantly lower sales volume. Excluding the impact of Lumificient, the Company reduced production costs by approximately $257,000 to more closely match sales activity.
Selling, general and administrative (SG&A) expenses were approximately $2,048,000 for the quarter ended June 30, 2009 as compared to approximately $2,420,000 for the same period in 2008, a decrease of approximately $372,000, or 15%. SG&A expenses decreased primarily due to the consolidation of the operations of our Advanced Lighting Systems subsidiary (ALS) into our SV Lighting Division, resulting in the elimination of SG&A costs totaling $232,000 incurred in the second quarter of 2008. In addition, SG&A expenses decreased due to a reduction in marketing costs of $106,000 and a reduction in commission expense of $88,000. Offsetting these decreases was the addition of a full quarter of SG&A from Lumificient in the second quarter of 2009. Research and development costs were approximately $130,000 during the three months ended June 30, 2009 as compared to approximately $170,000 during the same period in 2008. This decrease of approximately $40,000, or 23%, was primarily due to lower employee costs in the second quarter of 2009 as compared to the same period of 2008. “In response to decreased order volumes, we continue to focus on a series of operational and financial initiatives aimed at cutting production costs, reducing operating expenses and realigning inventory investment toward our new Array™ Lighting line of LED replacement lamps,” noted Gary Langford, Chief Financial Officer of Nexxus Lighting. “We intend to maintain these priorities during the third and fourth quarters.”
Revenue Total revenue for the six months ended June 30, 2009 was approximately $5,642,000 as compared to approximately $6,863,000 for the six months ended June 30, 2008, a decrease of approximately $1,221,000. Revenue benefitted from the April 30, 2008 acquisition of Lumificient, which serves the commercial and signage lighting markets. Excluding revenue attributable to Lumificient from our consolidated results, revenue decreased to approximately $3,727,000 in the first six months of 2009 compared to approximately $6,205,000 in the same period of 2008. Revenue from sales of commercial lighting products decreased by $696,000, or 16%, from approximately $4,344,000 in the first six months of 2008 to approximately $3,648,000 in the first six months of 2009. Excluding revenue attributable to Lumificient, our commercial product sales decreased $1,953,000, or 53%, in the first half of 2009 as compared to the same period in 2008, driven primarily by significant decreases in commercial construction activity across the US. Sales of the Company’s newly introduced Array™ LED lamps were approximately $290,000 in the six months ended June 30, 2009. Revenue from sales of pool and spa lighting products was approximately $1,993,000 in the first half of 2009, as compared to $2,519,000 for the same period of 2008. Revenue decreased $526,000, or 21%, reflecting the continued significant year over year reductions in the pool and OEM spa markets tied to the steep drop in demand for luxury items related to the US recession.
Gross profit for the six months ended June 30, 2009 was approximately $1,705,000, or 30% of revenue, as compared to approximately $2,021,000, or 29% of revenue, for the comparable period of 2008. Direct gross margin for the first half of 2009, which is revenue less material cost, decreased to approximately 52% as compared to 54% in the same period of 2008, due primarily to a significant drop in sales of higher margin commercial products. Production costs decreased approximately $434,000 on lower sales volume.
Selling, general and administrative expenses were approximately $4,400,000 for the six months ended June 30, 2009 as compared to approximately $4,335,000 for the same period in 2008, an increase of approximately $65,000, or 2%. Excluding operating expenses attributable to Lumificient, which was acquired on April 30, 2008, the Company reduced operating expenses by $407,000, including $344,000 of savings from consolidating the operations of ALS into Nexxus’ operations in March 2009. Research and development costs were approximately $238,000 during the six months ended June 30, 2009 as compared to approximately $294,000 during the same period in 2008. This decrease of approximately $56,000, or 19%, was primarily due to lower employee and project costs in the first half of 2009 as compared to the same period of 2008.
Net loss for the six months ended June 30, 2009 and 2008 was approximately $2,959,000 and $2,577,000, respectively. After including the effects of the dividends related to the preferred stock and warrants issued in November 2008, net loss attributable to common stockholders was approximately $3,566,000 and $2,577,000 for the six months ended June 30, 2009 and 2008, respectively. Basic and diluted loss per common share attributable to common stockholders was $0.43 and $0.34 for the six months ended June 30, 2009 and 2008, respectively.
About Nexxus Lighting, Inc. (www.nexxuslighting.com)
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Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Reference is made to Nexxus Lighting’s filings under the Securities Exchange Act for factors that could cause actual results to differ materially. Nexxus Lighting undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.
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