ProPhotonix back in black as forex boosts margins

LED lighting and laser designer ProPhotonix posted it first ever profit in more than a decade thanks to the effect of the same currency fluctuations which had led to revenues declining.

The US-headquartered company, which has its manufacturing operations base in Cork, Ireland and research facilities near Stansted airport in the UK, reported revenue down 12% to $14.4m in calendar 2015 from $16.4m, which would have been down 9% to $15.8m without the currency effect.

With the euro and sterling both weakening against the dollar in 2015, exchange rate oscillations contributed more than a third of the improvement in operating costs tightening to $5.2m from $6.2m.

With a gross profit margin of 41.4%, earnings before interest, tax, depreciation and amortisation doubled to $1.2m, leading to a profit before tax of $0.3m compared to the $1.3m net loss the year before.

Income per share came out at $0.003, versus a loss per share of $0.016 in 2014.

President and chief executive Tim Losik said the economic and foreign currency exchange rate headwinds from the start of 2015 did not abate during the year, which made the financial success "all the more meaningful".

He pointed out that the comppanny has now achieved five consecutive half-yearly periods of positive EBITDA and three consecutive half-yearly periods of positive operating income.

Term debt declined $750,000 to $1.5m by the year end, the lowest outstanding balance in more than a decade.

"In addition, the ProPhotonix team has been diligently pursuing new customers and new product and market initiatives, which helps set the stage for 2016."

Further on the outlook, Losik said production orders had been received from all three customers who signed three year supply agreements during 2015.

"Recent booking trends, the macroeconomic environment and foreign exchange rate impacts cause us to be cautious for the first half of 2016, but we remain very positive about our business pipeline and confident in our ability to achieve continued positive momentum toward our profitability objectives."

Shares in ProPhotonix were up 35% to 2.2p on Tuesday, their highest level since mid-May.