WELLAND, ONTARIO--(Marketwire -05/30/12)- CRS Electronics Inc. ("CRS" or the "Company"), (LED.V), a developer and manufacturer of LED lighting, today reported its financial results for the three month period ended March 31, 2012.
Net sales for the three month period increased 143% to $1.3 million compared to $540,700 for the same period in 2011. Net loss for the quarter was $1.1 million or $0.03 per share versus a net loss for the comparative period in 2011 of $516,700 or $0.02 per share.
The increase in revenues is attributed primarily to the entry of the Company into the retail market with shipments of retail product commencing in January, 2012. Retail revenues recognized in the first quarter amounted to approximately $889,000.
The loss in the quarter resulted primarily from production issues related to the manufacture of the retail product as well as significant increases in selling and marketing and administrative expenses. The production issues related to problems with suppliers and tooling associated with the retail product as well as increased fixed factory overhead including amortization ahead of sufficient sales volume. Sales and marketing expenses increased as a consequence of the addition of the retail sales and marketing team and the launch of the retail product. The increase in general and administrative costs relates primarily to stock based compensation expense. The loss was partially offset by a reduction in the warrant liability a result of the decline in the market price of the Company's shares.
Subsequent to the quarter end, CRS entered into a binding agreement with CLJ Holding Inc. ('CLJ') to purchase 30,400,548 common shares of the Company at a price of $0.2921 per common share for total proceeds to the Company of $8.9 million. The transaction closed into escrow on May 24, 2012 and the Company has received $1.5 million of the proceeds by way of a non-refundable deposit. The Company will receive the balance of the proceeds upon final approval by the TSX Venture Exchange of the Investor and the nominees proposed by the Investor to serve as Directors and Officers of the Company. It is also the intention of the parties to enter into a commercial and trade credit agreement involving the manufacture and financing of product purchases.
The unaudited financial statements and related MD&A can be found on SEDAR at www.sedar.com.
CRS Electronics Inc., a Lighting Facts partner, is a leader in the emerging, rapidly-growing market of high efficiency light-emitting-diode ("LED"), or, solid state lighting ("SSL"). The principal activities of CRS include the development, manufacture and sale, primarily in North America, of indoor lighting such as LED replacement lamps, exterior LED warning lights on school buses, child safety systems for school buses and contract manufacturing of LED circuit boards. CRS plans to be a major supplier of LED lighting solutions for a variety of applications to be developed by CRS on its own and in conjunction with its customers. CRS recently signed a license agreement with Eveready Battery Company Inc., a subsidiary of Energizer Holdings Inc., for CRS to manufacture a range of LED lighting products under the brand name Energizer®. The CRS LED product line includes the MR16, GU10, PAR 20, PAR 30, PAR 38 and A19. Future products developed by CRS may also be considered by Energizer. © 2011 Energizer. Energizer, Energizer bunny design and related graphics are trademarks of Eveready Battery Company, Inc. and are used by CRS Electronics Inc. All other brand names are trademarks of their respective owners. Neither CRS Electronics Inc. nor Eveready Battery Company, Inc. is affiliated with the respective owners of their trademarks.
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws which can be identified by terminology such as "may", "will", "could", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "projects", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited in any manner, those disclosed in any other CRS filings, and include availability of sufficient working capital for development and operations, availability of a qualified work force, availability of manufacturing equipment and the ultimate ability execute its business plan on economically favourable terms. While we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in other CRS filings at www.sedar.com and other unforeseen events or circumstances. Other than as required by law, CRS does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new information or future events.
Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.