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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Vycon | LSE:VYCO | London | Ordinary Share | COM SHS USD0.0001 (REGS) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 1.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:0517D Vycon Inc 31 August 2007 31 August 2007 Vycon, Inc Interim results for the six months ended 30 June 2007 Vycon Inc ("Vycon" or the "Company"), the designer and manufacturer of high-speed flywheel based energy storage systems, today announces its results for the six months ended 30 June 2007. These are Vycon's first results since its admission to trading on AIM in March 2007. Financial highlights * Total revenue of U$252,260 (2006: US$8,006) driven by sales of UPS and crane units. * Net loss of US$ (3,160,441) (2006: US$(3,857,113)) due to lower expenses. * Strong balance sheet with cash of US$14.4 million. Operational highlights * New customer wins with Hutchison Port Holdings (China), Incheon Container Terminal Co. Ltd. (Korea), Long Beach Container Terminal (US) and Children's Hospital (US). * Established a strategic alliance with MGE UPS Systems to provide advanced, green tech, VDC flywheel based energy systems as an alternative to battery back up systems. * Entered into a Memorandum of Understanding with Fantuzzi Group, a leading crane manufacturer, to market and supply REGEN flywheel systems for both new cranes as well as retrofit applications. * Completed California Air Resources Board (CARB) emissions testing and submitted its application to CARB for a formal verification certificate. * Strengthened the management team with the appointment of Mr. Pana Shenoy to Vice President of Engineering. * Strengthened the Board of Directors with the appointment of Mr. David Potter as a Non-Executive Director who has extensive experience with UK listed companies. * Relocated the Company's headquarters to a new 35,000 square foot manufacturing facility to support growth in production and the development and testing of larger flywheel products. * Since the period end, approved by the Port of Los Angeles to receive funding under the Air Quality Mitigation Incentive Program for flywheel systems to be installed at three different port operation sites in Los Angeles. John Uttley, Chairman, commented: "At this stage in a company's development, Vycon's business model remains robust despite encountering frustrating delays, which are not uncommon, in the marketing of its major products. Significant progress has been made in the development of our products and in the expansion of our distribution and marketing channels. We remain confident that this solid platform will deliver both growth and value as these initiatives begin to take effect and as sales of our products gain further momentum." Enquires: Vycon Inc Tony Aoun 001 714 308 0388 Dennis Whittler 001 714 386 3800 Smith & Williamson Nick Reeve +44 (0) 117 933 3344 Corporate Finance Limited Martyn Fraser Cardew Group Rupert Pittman +44 (0) 20 7930 0777 Shan Shan Willenbrock Emma Consett Chief Executive Officer's Statement: We continue to make significant progress towards achieving our strategic objectives in our target markets, by strengthening infrastructure and developing new flywheel products. While sales of $252,260 for the six month period ended 30 June 2007 increased from the previous six months, they did not materialise at the rate previously anticipated. Sales were impacted by two primary factors; the delay of orders from our crane customers and a merger between MGE, Vycon's channel partner, and another large UPS competitor. Despite this however, in the first half of 2007, flywheel products were shipped to high-potential, targeted customers, including some of the largest port operators in the world, for testing purposes. An agreement with one of the worlds leading crane manufacturers, to supply flywheel systems for both new cranes as well as retrofit applications, was also entered into. We remain positive in terms of market opportunities and believe that there is significant future potential and demand for our products. In addition, Vycon completed an AIM listing in March 2007, which is providing the financial resources required to pursue our strategic objectives. Operational Review Crane Customer Testing During the six months ended 30 June 2007, three REGEN 120 flywheel systems were shipped to high-potential customers in the US, China and Korea for validation testing. Two additional REGEN units are undergoing long-term testing at port operation sites in the US. Based on positive preliminary results, testing for some of the REGEN units has been expanded to evaluate the use of the REGEN units with smaller generator sets, which are expected to produce even greater fuel savings and emissions reductions. While these tests are taking longer than anticipated, positive results are expected to help establish Vycon's REGEN unit in the crane market and to deliver future sales opportunities. Additionally, experience gained through integration with major brand name diesel engines and crane control systems, during the testing process, from such manufacturers as ABB, Fuji and Siemens, have improved Vycon's flywheel efficiency, further enhancing our future sales opportunities. Environment In June 2007, the completion of rigorous testing by the University of California, Riverside (CE-CERT), on behalf of the California Air Resources Board (CARB) was announced. CE-CERT verified the emissions reducing aspect of the REGEN system and, based upon the results, an application was submitted to CARB for a formal verification certificate. The award of the CARB verification certificate will be a major step forward in California and worldwide as CARB is an internationally recognised authority in emissions controls. This award will represent another validation of REGEN technology and its ability to reduce emissions and provide improved fuel economy. Since the period end, notification has been received from the Port of Los Angeles ("POLA") that funds will be provided for the purchase of flywheel systems under the Air Quality Mitigation Incentive Program. POLA has committed to spending in excess of $20 million over a five year period on quality mitigation projects that will reduce emissions associated with port operations in nearby communities, and for research and development of specific technologies that will reduce emissions. We expect to install our flywheel systems at three different port operation sites in Los Angeles, the funding of which will be provided under the program. Sales Channels During the first half of 2007, negotiations were entered into with Fantuzzi Reggiane Group ("Fantuzzi"), a leading crane manufacturer that delivers container handling equipment to port authorities around the world. Since the period end, Fantuzzi and Vycon have completed an agreement (Memorandum of Understanding). Fantuzzi is now the first authorised VYCON representative to offer the REGEN system on new Rubber-Tired Gantry (RTG) cranes. Additionally, Fantuzzi will promote the REGEN system as a retrofit technology with all existing Fantuzzi crane customers. Fantuzzi, with its subsidiary company, Noell Crane Systems (China) Ltd, has a production capacity of approximately 120 new RTG cranes each year and there are currently over 1,100 units in operation around the world. UPS In January 2007, a strategic alliance was entered into with MGE UPS Systems, Inc., a market leader in the UPS industry, to provide VDC flywheel based energy storage systems. These systems were to be integrated with MGE's Comet and Galaxy PW models. However, a subsequent merger of MGE with another large, battery-based UPS competitor, and the integration of the merged companies, resulted in the disruption of our efforts to sign up and train manufacturers' representatives and distributors in the UPS sales channel. The disruption resulted in the delay of orders for our UPS products and consequently, substantially lower than anticipated sales were experienced in the six months ended 30 June 2007. Subsequently, we have refocused our UPS sales efforts on continuing to train remaining, and signing on new, manufacturers' representatives and distributors. Testing has also begun with another major brand UPS manufacturer with strong sales distribution capabilities in Europe and MEA. In addition, we are planning to strengthen our direct sales force working through existing sales channels improving the selling process and also developing new channels and applications for the Company's products. Financial Review Total revenue for the six months ended 30 June 2007 was $252,260 compared to total revenue for a similar period ended 30 June 2006 of $8,006. This increase was driven by UPS and crane unit sales. During the period ended 30 June 2006, the Company was primarily engaged in product development activities. Gross profit (loss) for the six months ended 30 June 2007 was $(757,938) compared to a gross profit for a similar period ended 30 June 2006 of $846. This loss was primarily due to the low volume of sales relative to the Company's fixed manufacturing infrastructure costs and the classification of indirect and fixed manufacturing costs as costs of goods sold. Also, beginning in 2007, the Company transitioned from a development stage into the production stage and such costs incurred to support the assembly and test of developmental and beta units were classified as operating expenses for the period ended 30 June 2006. The overall gross loss for the six months ended 30 June 2007 was comprised of a gross profit of $44,332 from sales less direct product costs and a loss of $ (802,270) attributable to indirect and fixed manufacturing infrastructure costs that were in excess of net realisable value due to the low sales volume. Operating expenses for the six months ended 30 June 2007 were $2,276,051 compared to operating expenses for a similar period ended 30 June 2006 of $3,332,255. These lower operating expenses resulted from a reclassification of costs associated with the assembly and testing of developmental and beta units from operating expenses to cost of sales as discussed above, and a reduction in legal expenses. Also, during the period under review, higher engineering expenses, relating to the Company's large flywheel development project, were offset by the capitalisation of about $444,669 in development costs under IAS 38 (Intangible Assets). The loss for the period attributable to equity shareholders for the six months ended 30 June 2007 was $(3,160,441) compared to a loss for a similar period ended 30 June 2006 of $(3,857,113). This reduction in loss was due to lower legal expenses and lower interest expenses related to the Company's outstanding preferred stock. All the Company's outstanding preferred stock was converted to common stock effective at the time of the Company's AIM listing in March 2007. The loss per share for the six months ended 30 June 2007 was $(0.14) compared to a loss for a similar period ended 30 June 2006 of $(0.77). The reduction in the loss per share was due to a lower net loss and also due to a greater number of total shares outstanding. Shares issued in conjunction with a Series B Preferred offering in 2006 and shares issued in conjunction with the Company's AIM listing in 2007, resulted in this greater number of total shares outstanding. Cash and cash equivalents as of 30 June 2007 were $14,402,952 compared to cash and cash equivalents as of 30 June 2006 of $1,185,839. This increase in cash was primarily due to the receipt of proceeds from the AIM listing in March 2007 and proceeds from the Series B Preferred Stock offering closed in September 2006. Facilities Relocation In May 2007, a five year lease was signed and Vycon headquarters relocated to a 35,000 square foot manufacturing facility in Yorba Linda, California. The new manufacturing facility provides sufficient space to support the expected growth in production and the development and testing of larger flywheel products. Key Appointments In March 2007, Mr. Pana Shenoy was appointed as Vice President of Engineering. Mr. Shenoy is responsible for the end product development role for the engineering team and complements the core flywheel expertise of the Company's Chief Technical Officer, Mr. Pat McMullen. Mr. Shenoy has over 20 years experience in the power industry and a solid track record in successful product launches; he joins Vycon from Liebert Corporation, a division of Emerson, where he was Manager of Power Technology. In May 2007, Mr. David Potter joined the Vycon Board as a Non-Executive Director. Mr. Potter has extensive experience within UK listed companies, having held a number of senior board positions. His appointment further strengthens our Board following Vycon's admission to AIM in early 2007. Outlook I would like to thank Vycon shareholders for their continued support and commitment. Currently we are engaged in a number of new initiatives including a marketing agreement with a leading crane manufacturer, helping to expand our market reach, and a development project for larger products, which are expected to have a positive impact on the Company. These initiatives, combined with the recent move to our new facility, which has substantially increased manufacturing capacity, means we remain confident in our ability to negotiate attractive sales and distribution agreements. Tony Aoun President and Chief Executive Officer Operating Statements For the 12 For the six months ended months ended 30 June 31 December ----------------------------------------------- 2007 (unaudited) 2006 2006 US $ US $ US $ ----------------------------------------------- Revenue 252,260 8,006 193,006 Cost of sales 1,010,198 7,160 (177,159) ----------------------------------------------- Gross profit (757,938) 846 15,847 Operating expenses 2,276,051 3,332,255 6,316,023 ----------------------------------------------- Operating loss (3,033,989) (3,331,409) (6,300,176) Other gains and losses (12,040) 9,289 4,616 Finance costs (113,612) (534,193) (1,212,094) ----------------------------------------------- Loss before tax (3,159,641) (3,856,313) (7,507,654) Tax 800 800 800 ----------------------------------------------- Loss for the period attributable to equity shareholders (3,160,441) (3,857,113) (7,508,454) =============================================== Loss per share: Basic and diluted (0.14) (0.77) (1.47) =============================================== Balance Sheets As of As of 30 June 31 December ----------------------------------------------- 2007 (unaudited) 2006 2006 US $ US $ US $ ----------------------------------------------- Assets Non-current assets Property, plant and equipment 775,877 335,728 280,103 Capitalized development costs 444,669 - - ----------------------------------------------- 1,220,546 335,728 280,103 Current assets Inventories 1,764,025 886,523 1,253,020 Trade receivables 197,871 - 196,200 Deferred offering costs and other prepaid expenses 145,941 762,644 966,671 Cash and cash equivalents 14,402,952 1,185,839 1,589,354 ----------------------------------------------- 16,510,789 2,835,006 4,005,245 ----------------------------------------------- Total assets 17,731,335 3,170,734 4,285,348 =============================================== Liabilities Current liabilities Trade and other payables 1,600,740 1,293,083 1,343,324 Obligations under finance leases 52,439 36,458 38,762 ----------------------------------------------- 1,653,179 1,329,541 1,382,086 ----------------------------------------------- Non-current liabilities Obligations under finance leases 68,734 51,477 31,504 Series A convertible 8% preferred stock - 11,624,310 12,095,612 Series B convertible 8% preferred stock - 3,063,301 7,146,369 ----------------------------------------------- 68,734 14,739,088 19,273,485 ----------------------------------------------- Total liabilities 1,721,913 16,068,629 20,655,571 ----------------------------------------------- Equity Share capital 3,025 503 533 Share premium 36,271,279 554,702 733,685 Retained deficit (20,264,882) (13,453,100) (17,104,441) ----------------------------------------------- Total equity deficit 16,009,422 (12,897,895) (16,370,223) ----------------------------------------------- Total equity and liabilities 17,731,335 3,170,734 4,285,348 =============================================== Statements of Cash Flow For the 12 For the six months ended months ended 30 June 31 December ----------------------------------------------- 2007 (unaudited) 2006 2006 US $ US $ US $ ----------------------------------------------- Cash out flow from operating activities (2,870,858) (2,909,410) (7,024,553) Investing activities Proceeds on disposal of property and equipment - 24,164 24,164 Purchase of property and equipment (509,282) (36,956) (80,290) ----------------------------------------------- Net cash used in investing activities (509,282) (12,792) (56,126) ----------------------------------------------- Financing activities Capital lease payments (20,370) (16,057) (33,726) Proceeds from the issue of series B convertible 8% preferred stock - 2,476,311 6,905,972 Proceeds from the issue of Common Shares 16,214,108 - 150,000 ----------------------------------------------- Net cash from financing activities 16,193,738 2,460,254 7,022,246 ----------------------------------------------- Net (decrease)/increase in cash and cash equivalents 12,813,598 (461,948) (58,433) Cash and cash equivalents at beginning of period 1,589,354 1,647,787 1,647,787 ----------------------------------------------- Cash and cash equivalents at end of period 14,402,952 1,185,839 1,589,354 =============================================== Notes 1. General The condensed financial statements have been prepared in accordance with International Accounting Standards. The accounting polices adopted are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 31 December 2006. This financial information has been presented in United States dollars, the currency of the primary economic environment in which the Company operates. The interim results for the six months ended 30 June 2006 and the year-end results for the year ended 31 December 2006 are audited and the interim results for the six months ended 30 June 2007 are unaudited. 2. Loss per share The calculation of basic and diluted loss per share is based on the following data: For the 12 For the six months ended months ended 30 June 31 December ----------------------------------------------- 2007 (unaudited) 2006 2006 US $ US $ US $ ----------------------------------------------- Loss for the period attributable to equity stockholders (3,160,441) (3,857,113) (7,508,454) =============================================== Number Number Number ----------------------------------------------- Weighted average number of common shares in issue 21,940,661 5,031,295 5,117,000 =============================================== US $ US $ US $ ----------------------------------------------- Basic and diluted loss per share (.14) (.77) (1.47) =============================================== Basic loss per share is calculated by dividing the loss for the year attributable to equity shareholders by the weighted average number of shares in issue during the year. Diluted loss per share is calculated by dividing the loss for the year attributable to equity shareholders by the weighted average number of shares in issue plus the number of shares which could be issued on conversion of dilutive instruments. Diluted loss per share is the same as basic loss per share as the dilutive instruments have been excluded due to their anti-dilutive effect. 3. Net cash flow from operating activities For the 12 For the six months ended months ended 30 June 31 December ----------------------------------------------- 2007 (unaudited) 2006 2006 US $ US $ US $ ----------------------------------------------- Loss before tax (3,159,641) (3,856,313) (7,507,654) Depreciation and amortization 102,782 94,960 194,150 Stock compensation 86,082 9,950 38,963 Net gain on disposal of fixed assets 12,041 (9,289) (4,416) Interest converted to series A and B 8% preferred stock 333,477 544,102 1,255,804 ----------------------------------------------- Operating loss before changes in working capital (2,625,259) (3,216,590) (6,023,153) Decrease/(increase) in trade/ other receivables (1,671) (78,020) (135,848) Decrease/(increase) in deferred offering costs and other prepaid expenses 820,730 - (942,399) Inventory (511,005) (205,745) (572,242) Increase in capitalized development costs (444,669) - - Trade and other accrued payables (108,184) 591,745 649,889 Tax paid (800) (800) (800) ----------------------------------------------- Cash outflow from operating activities (2,870,858) (2,909,410) (7,024,553) =============================================== 4. Share Capital During the period under review the Company issued 10,307,292 common shares pursuant to its admission to trading on AIM. At the time of listing outstanding shares were comprised of 5,331,295 shares of common stock, 9,606,769 shares of Series A preferred stock and 4,999,989 shares of Series B preferred stock, which were converted to 19,938,053 shares of the new common stock. At 30 June 2007 the Company's issued share capital comprised 30,245,345 common shares with a par value of US$0.0001 each. 5. Dividends In line with the policy set out at the time of admission to AIM, no dividend has been proposed at this time. This information is provided by RNS The company news service from the London Stock Exchange END IR ILFITTVIIVID
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