OPTION REPORTS FULL YEAR 2015 RESULTS
FOCUS ON SMART LIGHTING, CONNECTED CAR, ENGINEERING SERVICES AND CLOUDGATE SOLUTIONS
CEO FRANK DESCHUYTERE LEAVES OPTION
Leuven, Belgium – March 10, 2016 – Option N.V. (EURONEXT Brussels: OPTI; OTC: OPNVY) today announced its results for the full fiscal year 2015 ended December 31, 2015. The financial information reported in this release is presented in Euros and has been prepared in accordance with the recognition and measurement criteria of IFRS as adopted by the European Union. The accounting policies and methods of computation followed in the attached financial statements are the same as those followed in the most recent annual financial statements.
FINANCIAL HIGHLIGHTS OF THE FULL FISCAL YEAR 2015
For a detailed report on the consolidated Income Statement and Balance Sheet, we refer to the financial report below.
The highlights of the consolidated results include the following (in thousands EUR):
|
Reported |
Normalized |
|
|
Full year revenues: |
4 698 |
4 698 |
|
Gross profit: |
1 328 |
2 165 |
|
Operating expenses: |
(13 082) |
(11 673) |
|
EBIT: |
(11 754) |
(9 508) |
|
EBITDA: |
(7 927) |
(6 840) |
|
Result before taxes: |
(14 066) |
(11 820) |
|
Net result: |
(14 084) |
(11 838) |
Total revenues for 2015 were EUR 4.7 million compared with EUR 5.2 million realized in 2014. CloudGate revenues increased with EUR 1 million and revenues from embedded modules and devices decreased with EUR -1.7 million.
Gross margin for the year 2015 was 28.3 % on total revenues compared with a gross margin of 43.6 % in 2014. Excluding the write-off on inventories of EUR 837 thousand, the normalized gross margin would have reached 46.1 % in 2015
During 2015, the operating expenditure decreased with EUR 385 Thousand from EUR 13.5 million in 2014 to EUR 13.1 million in 2015
Normalized impact 2015 (in thousands EUR):
|
Operating expenses |
(13 082) |
|
Impairment on fiancial assets |
746 |
|
Impairment on intangible assets |
413 |
|
Correction withholding taxes personnel |
250 |
|
Normalized operating expenses 2015 |
(11 673) |
|
Normalized operating expenses 2014 |
(13 467) |
This decrease in normalized operating costs of EUR 1.8 million results from further cost control.
In 2015 EBIT amounted to EUR -11.8 million compared to EUR -11 million in 2014.
The financial result decreased from EUR -1.8 million in 2014 to EUR -2.3 million in 2015, mainly as a result of interests due on the convertible bonds which were issued at the beginning of the second quarter of 2015 and in November 2015 as also the bridge funding raised in the first half of 2015.
The 2015 cash burn was compensated by a bridge funding of 2.7 million EUR during the first half of 2015, a convertible bond of 6.0 million EUR in November 2015 and further leveraging the company’s working capital.
The cash position increased from EUR 1.6 million at the end of 2014 to EUR 4.1 million at the end of 2015.
The net result for the full year 2015 amounted to EUR -14.1 million or EUR -0.15 per basic and diluted share. This compares to a net result of EUR -12.9 million or EUR -0.15 per basic and diluted share during 2014.
During 2015, 2,116,782 new shares we created as the result of the conversion of convertible bonds.
BUSINESS UPDATE
Whereas CloudGate remains a building block of projects and solutions, the full year results indicate that the expected pick-up of CloudGate sales did not materialize. The current sales process involving multiple partners before the solution reaches the end-customer, remains complicated, slow and with steeper learning curves than anticipated. Although the CloudGate platform is unique and appreciated by our partners, the Company has not been able to monetize the platform in a sustainable way fast enough.
To address this situation, the Company – since the second half of 2015 and through 2016 – additionally embarked on the go-to-market strategy of commercializing end-to-end solutions.
- Connected Car Solutions: through the strategic partnership with Danlaw Inc., the Company, has a complete Connected Car Solution targeted towards insurance companies and fleet managers;
- Smart Lighting Solutions: through the acquisition of InnoLumis, the Company has a complete Smart Lighting Solution, generating a vivid interest from numerous cities and municipalities.
At its core, Option is an engineering company. Its expertise in Radio Frequency (RF) design and development is recognized worldwide. The Company continues to actively commercialize its expertise in these areas. The contract for designing and developing an On Board Diagnostics Datalogger (OBD) for Danlaw or the work for Asea Brown Boveri (ABB) and Jabil Circuit are examples of the Company’s expertise in engineering services.
The Company continues to support its channel partners and end-customers on the CloudGate platform by selecting end-to-end applications developed by our partners for further commercialization by Option.
The Board of Directors has decided to terminate the mandate of the CEO, Frank Deschuytere, with immediate effect. The Board has decided to entrust its Executive Chairman, Mr Jan Callewaert, with the daily management of the Company.
Jan Callewaert, Option’s Executive Chairman:
“With CloudGate as a platform for IoT solutions, we have become a partner in the pioneering market of ‘Internet of Things’. CloudGate technology is perceived as an essential building block adding connectivity and smart applications to the Internet of Things. Over the last two years we obtained valuable feedback from our target markets. Consequently, we carefully selected the business segments of smart lighting and connected cars. To fully exploit this potential, the Company acquired Dutch Lemnis Public Lighting & Innolumis Public Lighting and entered into a corporate partnership through an important investment from Danlaw Inc USA, global provider of telematics and connected vehicle solutions. The Company is turning the page and will be working on its future in a novel way. The Company created, and will manage the following business entities separately: Engineering Services, Smart Lighting Solutions, Connected Car Solutions and CloudGate Solutions. To that end every entity will have to focus on cost alignments for its activities to become at least break-even. We are looking into organizing the CloudGate business entity in such a way that it is ready for future partnering while we see appetite for investments in Smart City applications, in particular connected building and public lighting.”
CORPORATE
Following the continued review by the statutory auditor of the Company of the cash position of the Company and its continuity, the Option Board of Directors has further deliberated in this respect and informed the market accordingly in its press releases of April 21, 2015 and July 3, 2015.
In addition to the announced 2.7M EUR bridge financing provided by its existing bond- and other stakeholders in March of 2015, the Company secured an additional convertible bond loan of 6 mio EUR in November of 2015. Under the terms of the agreement Danlaw Inc. invests up to € 10 million in Option by means of a private placement in two phases. Initially via a Convertible Bond loan of € 6 million at an accrued interest of 5% yearly as agreed by the Board on November 6, 2015 within the context of the authorized capital. The Convertible Bond loan has a term of 5 years and will expire on November 5, 2020 and can be converted in maximum 32.894.736 shares of Option at a conversion price of € 0.228 per share, interest included, taxes excluded. The conversion price is set at 30 days average stock price before issue in accordance with Article 598 of the Code of Companies.
In addition to the Bond loan, Danlaw has the possibility to invest an amount of € 4 million through warrants which were issued by an Extraordinary Shareholders’ Meeting of January 26, 2016.
On 26 June 2015 the Extraordinary Shareholder’s Meeting of the Company decided to renew the authorized capital of the Company for a total amount of four million seven hundred thirty eight thousand nine hundred sixty four euro and fifty cent (EUR 4,738,964.50), both by means of contribution in cash or in kind, within the limits imposed by the Belgian Code of Companies as well as by conversion of reserves and issue premiums, with or without the issue of new shares, with or without voting right, or trough the issue of convertible bonds, subordinated or not, or through the issue of warrants or of bonds to which warrants or other movables are linked, or of other securities, such as shares in the framework of a Stock Option Plan. Furthermore the Extraordinary Shareholder’s Meeting of the Company decided to grant the board of directors special authority, in the event of a public take over bid for securities issued by the Company during a period of three (3) years, running from the Extraordinary Shareholders’ Meeting which will resolve on this authorization, to proceed with capital increases under the conditions foreseen by the Belgian Code of Companies and has authorized the board of directors, in the interest of the company, within the limits and in accordance with the conditions imposed by the Belgian Code of Companies, to limit or suspend the preferential rights of the shareholders, when a capital increase occurs within the limits of the authorized capital. This limitation or suspension may likewise occur for the benefit of one or more specified persons.
EVENTS AFTER THE BALANCE SHEET DATE
Going concern
Given the continued cash drain in 2016, the Board is looking for further project fundings as well as financial funding in the short term.
Other events after balance sheet date
On January 21, 2016 Option announced the acquisition of the shares of the Dutch LED lighting companies Lemnis Lighting BV Public and Innolumis Public Lighting BV and merges the two companies into a single commercial organization under the name Innolumis Public Lighting.
On January 26, 2016, the Extraordinary Shareholder’s Meeting of the Company decided to renew the authorized capital of the Company for a total amount of four million eight hundred forty four thousand eight hundred two euro and seventy cent (EUR 4,844,802.70), both by means of contribution in cash or in kind, within the limits imposed by the Belgian Code of Companies as well as by conversion of reserves and issue premiums, with or without the issue of new shares, with or without voting right, or trough the issue of convertible bonds, subordinated or not, or through the issue of warrants or of bonds to which warrants or other movables are linked, or of other securities, such as shares in the framework of a Stock Option Plan. Furthermore, to grant the board of directors special authority, in the event of a public take over bid for securities issued by the Company during a period of three (3) years, running from the Extraordinary Shareholders’ Meeting which has resolved on this authorization, to proceed with capital increases under the conditions foreseen by the Belgian Code of Companies. To authorize the board of directors, in the interest of the company, within the limits and in accordance with the conditions imposed by the Belgian Code of Companies, to limit or suspend the preferential rights of the shareholders, when a capital increase occurs within the limits of the authorized capital. This limitation or suspension may likewise occur for the benefit of one or more specified persons.
Furthermore, the Extraordinary Shareholder’s Meeting of the Company decided to grant 17,391,304 warrants to Danlaw Inc. for a total amount of 4 mio EUR, if exercised, this would increase the capital of the company with eight hundred sixty-nine thousand five hundred sixty five euro and twenty cent (EUR 869,565.20).
For the entire press release, including tables, click on the link below.
OPTION REPORTS FULL YEAR 2015 RESULTS