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Lightscape Technologies Reports Quarterly Results HONG KONG--(MARKET WIRE)--Aug 18, 2008 -- Lightscape Technologies Inc. (OTC BB:LTSC.OB - News), an
operator of outdoor LED billboards and provider of LED solutions,
reported
financial results on August 14 for the fiscal first quarter
ending June 30,
2008.
Total net revenue for the three months ended June 30, 2008 was $1.56 million, a 91% increase from the total net revenue of $0.81 million for the three months ended June 30, 2007. Operating expenses, consisting of selling and marketing expenses and general and administrative expenses, for the three months ended June 30, 2008 were $1.13 million, compared with $0.87 million for the three months ended June 30, 2007. Net loss for the three months ended June 30, 2008 was $0.99 million, or $0.02 per fully diluted share, compared to a net loss of $1.32 million, or $0.04 per fully diluted share, for the three months ended June 30, 2007. Bondy Tan, President and CEO of Lightscape, said, "During the first quarter, we continued to focus on opportunities in our core LED outdoor advertising and LED solutions businesses, which resulted in increased revenue compared to a year ago. We see excellent opportunities for growth in these businesses and we will continue to build and expand the company's outdoor LED advertising network through partnerships with major property owners and developers and by forming strategic relationships with advertising agencies." Business Highlights Developments during the first quarter included:
-- The appointment of Ogilvy & Mather (Hong Kong) Private Limited ("-
Ogilvy") to serve as brand communications, sales and marketing consultant
for Lightscape's "Out Of Home LED Media" (OOH) line of business, which
includes the Company's outdoor LED advertising joint venture with Xintong
Media, a New World Group company. Under the agreement, Ogilvy will provide
market research, strategic planning, brand and image analysis, brand-
building and a dynamic sales strategy.
-- The continued development of Lightscape's outdoor LED network in
China. The company remains on track to complete 10 installations in China
by the end of 2008.
-- Strengthening the senior management team by naming Richard Lam as
Financial Controller and Dr. Chingshan Li as Vice President, Operations.Results of Operations Total net revenue for the three months ended June 30, 2008 was $1,558,707 representing a 91% increase from the total net revenue of $814,896 for the three months ended June 30, 2007. The increase in net revenues is primarily attributable to the increase in sales and contract revenue from LED solutions and the increase in sales of lighting source products. Specifically, sales and contract revenue related to the Company's LED solutions business increased to $652,949 for the three months ended June 30, 2008 from $nil during the three months ended June 30, 2007. The increase in revenues was due primarily to the completion of several new LED solutions contracts during the three months ended June 30, 2008. Sales from the Company's lighting source products business were $894,806 for the three months ended June 30, 2008 compared to $804,579 for the three months ended June 30, 2007, representing an increase of 11%. The increase in revenues was due primarily to the effect of the change of local senior executives and internal restructuring during the three months ended June 30, 2008. The purpose of the changes and restructuring was to reduce manufacturing costs and foster the sales and marketing network in China. Total cost of revenues for the three months ended June 30, 2008 was $1,126,968 which represents an increase of 79% as compared with the total cost of revenues of $628,090 for the three months ended June 30, 2007. The increase in the total cost of revenues during the three months ended June 30, 2008 was directly associated with the corresponding increase in sales revenues. Operating expenses for the three months ended June 30, 2008 were $1,132,101, which represents a 31% increase in operating expenses of $867,176 for the three months ended June 30, 2007. Selling and marketing expenses as well as general and administrative expenses constitute the components of the Company's operating expenses. Selling and marketing expenses for the three months ended June 30, 2008 decreased approximately 19% to $163,975 from $195,307 for the three months ended June 30, 2007. The decrease was mainly due to decreased advertising expenses and staff costs. General and administrative expenses increased by 23% during the three months ended June 30, 2008 to $936,794 from $758,800 for the three months ended June 30, 2007. The increase was mainly due to increased staff and business development costs for the three months ended June 30, 2008 to provide the foundation to support the Company's anticipated overall business growth, particularly its LED outdoor advertising and LED solutions businesses. As of June 30, 2008, the Company had a net working capital surplus of $10,858,780 compared with a surplus of $11,490,237 as of March 31, 2008, representing a decrease in working capital of $631,457. The cash and cash equivalents of the Company increased to $4,438,936 as at June 30, 2008 as compared to $3,976,565 as of March 31, 2008. As of June 30, 2008, the Company had not obtained any credit facilities. Lightscape incurred capital expenditures of $2,814 during the three months ended June 30, 2008 and $90,174 for the three months ended June 30, 2007. The decrease in capital expenditures for the three months ended June 30, 2008 as compared to June 30, 2007 was mainly attributable to decreased purchases of equipment. Additional information regarding Lightscape's financial performance as of June 30, 2008 and a comparison to the period ended June 30, 2007 can be found in the financial tables below and in the Company's Quarterly Report on Form 10-Q, which has been filed with the Securities and Exchange Commission. About Lightscape Technologies Lightscape Technologies Inc. (OTC BB:LTSC.OB - News) is one of the leading digital media and LED solutions companies in Asia. Through a joint venture agreement, Lightscape is building an outdoor LED media network in China focused on LED billboards in prime locations. The Company also designs, markets, sells and installs large-scale LED video screens and LED systems, operates outdoor LED advertising billboards, and provides LED screen rentals. Lightscape is headquartered in Hong Kong, and the Company has offices in Singapore, China and Macau. For additional information, please visit www.lightscapetech.com.hk. Cautionary Disclaimer -- Forward-Looking Statements This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Such forward-looking statements include, among others, the estimation, expectation and/or claim, as applicable, that: Lightscape will continue to build and expand the Company's outdoor LED advertising network through partnerships with major property owners and developers and by forming strategic relationships with advertising agencies; Lightscape expects to complete the installation of 10 outdoor LED screens in China by the end of 2008; and Lightscape anticipates overall business growth, particularly within the Company's LED outdoor advertising and LED solutions businesses. Actual results could differ from those projected in any forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, delays in the supply of LED modules, LED video screens and other hardware; risks of downturns in economic conditions generally and in Hong Kong and China specifically; competition with larger companies with greater resources and more experience in providing LED outdoor advertising services and LED solutions; the availability of timely financing; and the company's ability to manage growth. These forward-looking statements are made as of the date of this news release and the company assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although the company believes that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations, or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in the company's periodic reports filed from time-to-time with the Securities and Exchange Commission and available at www.sec.gov.
LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Expressed in US dollars
Three Months
Ended June 30,
2008 2007
---------- ----------
$ $
---------- ----------
Revenues:
Sale of LED solutions 347,888 -
Sale of lighting source products 894,806 804,579
Contract revenue from LED solutions contracts 305,061 -
Commission and service income 10,952 10,317
---------- ----------
Total net revenues 1,558,707 814,896
---------- ----------
Cost of revenues:
Cost of sales of LED solutions (261,110) (7,996)
Cost of sales of lighting source products (619,144) (559,683)
Contract costs of LED solutions contracts (246,525) (60,411)
Costs of commission and service (189) -
---------- ----------
Total cost of revenues (1,126,968) (628,090)
---------- ----------
Gross profit 431,739 186,806
Bad debts (85,640) -
Amortization (205,653) (187,226)
Depreciation (42,495) (61,846)
Selling and marketing expenses (163,975) (195,307)
General and administrative expenses (936,794) (758,800)
---------- ----------
Loss from operations (1,002,818) (1,016,373)
Interest expense (300) (356,053)
Interest income 326 24,300
Other income 1,441 14,918
---------- ----------
Loss from continuing operations before income tax
and minority interests (1,001,351) (1,333,208)
Income taxes - -
---------- ----------
Net loss from continuing operations before minority
interests (1,001,351) (1,333,208)
Minority interests 21,436 35,068
---------- ----------
Net loss from continuing operations (979,915) (1,298,140)
---------- ----------
---------- ----------
Discontinued operations
Net loss from discontinued operations, net of
income taxes (13,946) (21,832)
---------- ----------
---------- ----------
Net loss attributable to common shareholders (993,861) (1,319,972)
========== ==========
Loss per share
- Basic and diluted
Continuing operations (0.02) (0.04)
Discontinued operations (0.00) (0.00)
---------- ----------
Total (0.02) (0.04)
========== ==========
Weighted average number of common shares
outstanding
- Basic and diluted 55,876,410 37,451,410
========== ==========
LIGHTSCAPE TECHNOLOGIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Expressed in US dollars
June 30, March 31,
2008 2008
(Unaudited)
----------- -----------
$ $
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents 4,438,936 3,976,565
Accounts receivable, net of allowance for
doubtful accounts of $854,533 on June 30, 2008
and $817,790 on March 31, 2008 3,426,471 4,438,207
Costs and estimated earnings in excess of
billings on uncompleted contracts 664,260 639,035
Prepaid expenses and other current assets 1,685,960 1,742,031
Inventories 4,016,038 3,903,798
Current assets of discontinued operations 663,401 699,847
----------- -----------
Total current assets 14,895,066 15,399,483
----------- -----------
Intangible assets, net 1,512,957 1,700,114
Goodwill 4,476,574 4,476,574
Plant and equipment, net 4,629,393 4,650,398
Net investment in sales-type leases of
discontinued operation 103,695 126,521
----------- -----------
10,722,619 10,953,607
----------- -----------
TOTAL ASSETS 25,617,685 26,353,090
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables 2,015,133 2,413,203
Amount due to a director 488,432 -
Accrued expenses and other current liabilities 796,979 763,797
Obligations under capital leases - current
portion 1,774 1,774
Income tax payable 388,985 366,281
Current liabilities of discontinued operations 344,983 364,191
----------- -----------
Total current liabilities 4,036,286 3,909,246
----------- -----------
Non-current liabilities:
Obligations under capital leases - non-current
portion 5,026 5,469
----------- -----------
Total non-current liabilities 5,026 5,469
----------- -----------
Total liabilities 4,041,312 3,914,715
----------- -----------
Minority interest 1,400,267 1,421,702
----------- -----------
COMMITMENTS (see Note 16)
Shareholders' equity:
Preferred stock, par value of $0.001 each;
100,000,000 shares authorized, none issued or
outstanding
Common stock
Authorized:
800,000,000 common shares, par value $0.001 per
share
Issued and outstanding:
55,876,410 common shares at June 30, 2008 and at
March 31, 2008 55,876 55,876
Additional paid-in capital 34,140,708 34,140,708
Common stock warrants (see Note 19) 344,673 344,673
Statutory surplus reserves 28,944 28,944
Accumulated other comprehensive income 1,235,736 1,082,442
Accumulated deficit (15,629,831) (14,635,970)
----------- -----------
Total shareholders' equity 20,176,106 21,016,673
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 25,617,685 26,353,090
=========== ===========Contact: Contacts:
Aaron Ratner
(917) 519-3852
aaron@lightscapetech.com.hk
Source: Lightscape Technologies
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