Pioneering Technology Corp. Reports 2013 Financial Results
Pioneering Technology Corp. Reports 2013 Financial Results
Not for dissemination in the United States of America
Mississauga, Ontario CANADA, January 31, 2014 /FSC/ - Pioneering Technology Corp. (PTE - TSX Venture), ("Pioneering" or the "Company an "Energy Smart" product innovation/consumer goods company and North America's leader in cooking fire prevention technologies, reports its financial results for the twelve months ended September 30, 2013. The Company's audited financial statements together with its Management Discussion and Analysis are available for review at www.sedar.com.
In 2013, the Company successfully met three of its four 2013 stated strategic business objectives:
1.) Successfully enhanced its position with its end user markets and distributors.
2.) Successfully made energy savings an essential part of the overall Safe-T-element product story.
3.) Successfully targeted and continued to enlist opinion leaders/key influencers to support its solutions.
4.) And while the Company did not meet its target of accelerating growth beyond its existing product portfolio (from a revenue standpoint), it did successfully complete the development and commercialization of 2 new products to ensure that this objective will be achieved in 2014 and beyond.
Revenue in 2013 was down versus previous year (see below FY 2013 Financial Results). The decline in part can be attributed to the Company's strategic focus on accelerating the development and commercialization of relevant new products that will fulfill current unmet needs in the private residence market and will deliver incremental value to distributors and end users. Management believes that the investments made in new product development during the past year have set the foundation and positioned the Company for exponential growth. The launch of the Company's new product offerings will be announced shortly with marketing support that will have a significant impact in creating awareness for these new product solutions and drive incremental sales.
FY 2013 Financial Results
Revenue for the twelve months ended September 30, 2013 was $1.383 million, down 42% as compared to the previous year ($2.391 million). The decline in revenue is in part attributed to the Company's strategic focus on category development (distributors and influencers) and its internal focus on the completion of its two new products. Gross profit for the period was $797,000 compared to $1.486 million in FY 2012 (a decrease of 46.3%). Gross profit margin was 58% in 2013, down from 62% in FY 2012 due to a shift in the sales mix and selling more products through the distributor network versus selling direct.
Total expenses for the twelve month period ended September 30, 2013 were $1.608 million (after capitalization of development expenses) as compared to total expenses of $2.145 million for the same period in 2012 (after capitalization of development expenses). Expenses were down in all key functional areas as the Company focused on reducing costs to support the investment made in the development of its two new products. For the 12 month period versus year ago costs in the following categories decreased by approximately the following amounts: administration down $152,000; sales and marketing down $110,000; share-based payments down $198,000; warranty/warehousing costs were down $27,000; and the loss on foreign exchange improved by approximately $51,000. Development costs capitalized were approximately $445,287 in 2013 and $340,960 in 2012 as the Company focused its efforts on bringing to market two new products. Management expects this investment to provide opportunities for incremental revenue and growth.
Loss and Comprehensive Loss for the FY 2013 was ($1,652,583) or ($0.07) per share after the impairment charge of $778,069 compared to a loss of ($729,584) or ($0.039) per share in FY 2012 when no impairment charge was incurred.
Pioneering secures regulatory approval for the first of its new product launches
The Company received an ETL/Intertek listing and FCC approval, both of which are required for this new product to be made available to the general public in Q2 2014.
International Association of Fire Chiefs Approve Plan to reduce cooking fires and related injuries
The Action Plan highlighted that, "Home fires and losses dominate the North American fire problem. Electric ranges are by far the leading cause of home cooking appliance fires. The focus of the plan is on promoting temperature limiting control." Pioneering's patented Safe-T-element cooking system is the only technology available today that delivers temperature limiting control ("TLC") on electric coiled stovetops.
Temperature Limiting Control Technology (TLC) legally mandated in another U.S. city
Union City, GA was the latest municipality and the first in the State of Georgia to pass an ordinance (law) requiring "temperature limiting control" (TLC) technology for electric coiled cooking devices.
Homeland Security/FEMA continue to provide grants for the purchase and installation of the STE
The latest example is Rhode Island's Providence Housing Authority (PHA) awarded a federal fire safety grant for the purchase and installation of Pioneering's Safe-T-element. The STE is now installed in all six of the PHA's elderly/disabled high-rise buildings and stovetop related fire damages have been eliminated.
Pioneering Teams with Siemens
Pioneering and Siemens partnered with the Metropolitan Development and Housing Agency in Nashville, Tennessee to deliver fire safety and a 25-35% reduction in energy consumption. The STE has become a key component for Energy Performance contract projects with companies like Siemens in the U.S.
Ontario Power Authority (OPA) provides Energy Rebates for Safe-T-element (STE)
OPA is now offering non-profit housing providers up to a 50% rebate for the purchase/installation of the STE.
Pioneering recognized as one of PROFIT magazine's Fastest growing Canadian Companies
This was the third consecutive year that the Company has been recognized by PROFIT.
Private Placement completed
On January 28, 2013, the Company completed a non-brokered private placement through the issuance of 7,500,000 units at $0.10 per unit, for gross proceeds of $750,000. Each unit comprised one common share and one half of one common share purchase warrant exercisable at $0.15 per share for a period of two years. Proceeds were for working capital for development/commercialization of the Company's two new products.
On January 24th, 2014 (subject to TSXV approval) the Company agreed to a $500,000 short term loan from a significant shareholder, McAllister Holdings Ltd. The loan carries no interest and is to be paid back by May 17, 2014. In connection with this loan, the Company agrees to issue 2,000,000 warrants at an exercise price of $0.15, exercisable for one year. The proceeds are to be used to help support increasing sales of the STE and to help get the Company's two new products to market as quickly as possible.
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 technologies. Pioneering engineers and brings to market energy smart solutions for consumer products making them safer, smarter and/or more efficient. Pioneering's patented cooking technologies/products are engineered to help prevent cooking fires, the number one cause of household fire (a multi-billion dollar problem) in North America and around the world. The Company's proprietary, family of fire prevention technologies/products are designed to prevent cooking fires and false alarms on most cooking appliances (electric and gas stovetops and microwave ovens). The Company's flagship product, the Safe-T-element cooking system has been installed on over 100,000 ranges in multi-residential housing (low income, seniors, college/university and military housing) throughout the world. Pioneering trademarks include Safe-T-element, RangeMinder, Safe-T-burner, Safe-T-Sensor, Powergrill, Battery Eliminator, Powerpak and the Hydro-free Furnace Fan. 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.
The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy and accuracy of this release.
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