TCP International Holdings Ltd (NYSE:TCPI), a leading global manufacturer and distributor of energy efficient lighting technologies, today announced financial results for its first quarter ended March 31, 2015.

Net sales for the first quarter of 2015 were $98.8 million, a 35% decrease compared with $153.1 million in the fourth quarter of 2014 and a 2% decrease compared with $101.1 million in the first quarter of 2014.  Net loss in the first quarter of 2015 was $1.2 million, or $0.04 per diluted share, compared to net income of $2.1 million, or $0.07 per diluted share, in the fourth quarter of 2014 and net income of $3.9 million, or $0.19 per diluted share, in the first quarter of 2014. Adjusted earnings per share were $0.00 for the first quarter of 2015, compared to $0.13 in the fourth quarter of 2014.

“While revenues were tempered by our decision to perform a safety review of all products shipped in March, we were pleased that our cost reduction roadmap resulted in strong margins for the quarter, demonstrating TCP’s position as a market leader in energy-efficient lighting,” said Ellis Yan, TCP’s Chairman and CEO.

First Quarter 2015 Summary

Following is a summary of certain key financial measures for the first quarter of 2015:

  • Net sales were$98.8 million, a decrease of$54.3 million, or 35%, from the fourth quarter of 2014 and a decrease of$2.3 million, or 2%, from the first quarter of 2014.
    • LED sales were $40.6 million, a decrease of $14.3 million, or 26%, from the fourth quarter of 2014, largely due to reduced sales from seasonal buying practices among all sales channels, as well as lower volume in 2015 attributable to voluntary shipping delays associated with our product validation review. Our LED sales increased $4.3 million, or 12%, compared with the first quarter of 2014, driven by higher sales with Walmart and higher sales in our C&I channel.
    • CFL sales were $52.6 million, a decrease of $37.9 million, or 42% from the fourth quarter of 2014, primarily due to significantly lower sales with The Home Depot, and a decrease of $6.9 million, or 12%, from the first quarter of 2014, mainly due to lower sales in our C&I channel and with Walmart.
  • Gross margin was 24.5%, an increase from 17.7% in the fourth quarter of 2014, and level with the first quarter of 2014. The increase from the fourth quarter of 2014 mainly is due to favorable product and channel mix from a higher proportion of LED and C&I sales, as well as the non-recurrence of a write-down of Connected by TCPTM inventory, which adversely impacted gross margin in fourth quarter of 2014.
  • Selling, general and administrative expenses were $21.0 million, flat with the fourth quarter of 2014, but an increase of $4.0 million from the first quarter of 2014. The increase from the first quarter of 2014 is primarily due to share-based compensation expense associated with restricted share units granted in connection with our IPO and an increase in professional fees largely related to our previously disclosed litigation.
  • Our effective income tax rate of 229.2% primarily was due to a $1.3 million shortfall charged to income tax expense from the issuance of common shares underlying RSUs with a fair value at issuance that was less than the fair value at grant date.
  • Net loss was $1.2 million, compared with net income of $2.1 million in the fourth quarter of 2014 and net income of $3.9 million in the first quarter of 2014. Diluted net loss per share was $0.04, compared with diluted net income per share of $0.07 in the fourth quarter of 2014 and diluted net income per share of $0.19 in the first quarter of 2014.

At March 31, 2015, cash and cash equivalents were $58.0 million, up from $31.4 million at December 31, 2014, primarily resulting from the collections of account receivables from record 2014 fourth quarter sales.  Combined short-term loans and long-term debt was $90.3 million atMarch 31, 2015, up from $80.0 million at December 31, 2014 largely due to additional borrowings used to finance our anticipated working capital needs. (Original Source)

Shares of TCP International closed today at $3.76, up $0.07 or 1.9%. TCPI has a 1-year high of $11.40 and a 1-year low of $2.22. The stock’s 50-day moving average is $2.89 and its 200-day moving average is $5.11.

On the ratings front, TCP International has been the subject of a number of recent research reports. In a report issued on April 17, Piper Jaffray analyst Mike Ritzenthaler reiterated a Hold rating on TCPI, with a price target of $6, which implies an upside of 63.9% from current levels. Separately, on the same day, Cowen’s Jeff Osborne assigned a Hold rating to the stock and has a price target of $4.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mike Ritzenthaler and Jeff Osborne have a total average return of 4.2% and 3.1% respectively. Ritzenthaler has a success rate of 65.2% and is ranked #1615 out of 3590 analysts, while Osborne has a success rate of 54.8% and is ranked #1612.

TCP International Holdings Ltd is a producer and provider of energy efficient light bulbs to the structures of light bulb market. It designs, develops, manufacture and deliver quality energy efficient lamps, fixtures & among others.