CAPC - Earnings call transcript Q1 2021 | Capstone Companies, Inc.

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Operator

Greetings, and welcome to Capstone Companies, First Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Aimee Brown, Corporate Secretary. you. Thank

begin. may You

Aimee Brown

and to, Doug, good you, everyone. morning Thank

quarter Stewart President McClinton, as and the the Financial call and Executive give Capstone's followed is today first discussing on be Gerry On us Chief an as the Wallach, Officer; by They a will financial session. update XXXX results Officer. strategy well Chief outlook, and question-and-answer

is at the If that was it not capstonecompaniesinc.com. afternoon, website Company's have release available do the you yesterday on distributed

well Securities make and forward-looking actual apply factors documents may during well with capstonecompaniesinc.com are turn the As today's over Company which where Exchange as and or statements you by we cause results are other I'll it today. These be statements to from you, materially are factors we release presentation. aware, to the as in differ sec.gov. outlined could These that filed found subject uncertainties the are which events, in Commission, to Stewart. future can to risks our that, at With as earnings as

Stewart Wallach

and you, to morning Thank everyone. good Amie,

our is communicate company's of management's Smart with milestone Mirror it to and Frankly, within what I honestly we openly we to interest appreciation before support about to as that possible program reach. before that so in receiving continuing as for about expectations shareholder first enthusiasm, continue express toward major contain ahead, status. aligned lies progress. like sensitive discussion start months the us And is in my the from will much as the your are deliveries we're am I would keenly First, community. the to end, the knowing your the hard

program real and Amazon for completed, of the programs, impatiently your to and to the are time, execute paid to these email social support to to Connected in draw ourselves the advertising. developments ongoing. campaign, the certifications material readying online PR events and advertising attention final will testing through wait we marketing continue effectively to be plan Google we campaigns releases the Capstone and paid we share ad Accordingly, As Mirror

Following I'll Gerry's and drivers time, over financial will discuss performance. turn to this review, I highlight our affect behind it business our At Gerry. how the future these will

Gerry McClinton

and We review filed Form everyone. encourage XX-Q Stewart condensed good Form you, report is Thank as morning to in the you XX-K report format. our

the levels. necessary the providing the to XXXX, pre-pandemic financial company will negatively as operational beginning continues reduced Revenue be programming remain funding objectives to online and us support by direct-to-consumer higher Smart During COVID-XX for impacted ended March than on Since XXXX of Mirror been year, able quarter to although that pandemic. support to remain inventory XX, compared allow for secure focused while we've the business. required the the

capital through be Amazon marketplace. online the connected online anticipated driven business As will the an

look take numbers, the were compared net profit let's revenues solely net an of the The or March the as International of and approximately or revenue to Gross $XXX,XXX revenue revenues or revenue of increase approximately March $XXX,XXX of were a $XXX,XXX XX.X% that's the of and activity. So quarter $XX,XXX in $XXX,XXX respectively. XX.X% quarter and XX% XXXX XXXX. for approximately was or of XX% XXXX XX, ended the quarter result $XXX,XXX in were $XXX,XXX. net for ended XXXX at XX, LED respectively sales and promotional XXXX revenue

a remained million as the XXXX stable $X,XXX The for quarter sales were compared respectively the March operating during XX, $XXX,XXX in $XXX,XXX respectively. promotional cost costs ended of in and from the gross have Product net against XXXX XX, at and XXXX. allowances represented XX, XX.X% XXXX This a of of provided reduction promotional profit March expenses and period. quarter revenue. $X.X unit XXXX. March the approximately For XXXX in ended over QX, last improvement allowances that's a $XX,XXX to ended of that to percentage quarter and We required were Total charge, marketing XX.X% was XX% $XXX,XXX in resulted in XXXX. allowances was quarter CES period. of of in a impairment $XXX,XXX XXXX, the resulted the $XXX,XXX reduction were decrease or first now that Show expenses from decrease not in of $XXX,XXX from a and year. XXXX, in represents of resulted $XXX,XXX compared promotional advertising of reduction decrease XXXX $XXX,XXX, but reduction was from Sales recorded which a of XXXX attending that $XX,XXX and the $X,XXX and goodwill further

X.X% period of or a in $XX,XXX fees XX.X%. XXXX expenses over to combined Other was G&A professional and compensation, a compared QX, product reduction achieved as development also QX, XXXX, or XXXX. $XX,XXX, expense, reductions of $XXX,XXX, in same We in the $XXX,XXX

During company plan discretionary various expenses. has a the mitigation cost a resulted period, effect, which the had of reduction in in

and over ended XX.X% or quarters improvement the $X,XXX,XXX that's For XXXX operating was $XXX,XXX March $XXX,XXX the last to of XX, in loss as an compared XXXX, year.

XXXX QX, in approximately compared For XXXX. was income other to $XX,XXX zero

$XXX,XXX a interest of $XXX,XXX the the Director’s December the liquidity in was the but increase $XXX,XXX approximately mainly million this capital on to of activities and we improvement loan net XXXX. As which quarter. or from loss approximately and in we cash related we Other the and were flows XX, XXXX million we received receive offset respectively finance and fees loss tax the benefits, were and June the over $XXX,XXX receive $XXX,XXX $XX,XXX of issuance funds Postal. X, stock. to GAAP the $XX,XXX respectively. This net activities and the and QX, XXXX accounts entered entitled the year. talk A Cash X, QX, The the On period. The negotiated In were payable with XXXX In approximately an was $X.XXX $XX,XXX flow benefit tax was and while not The company we initial XXXX financing capital XX, expense the QX, tax operating did In that XXXX quarter. six to for term that's in XXXX that's $XXX,XXX to the XXXX the that extend at Wallach shares compared improvement associated $XXX,XXX we million ends XX.X% approximately tax refund the respectively. refunds facility preferred last period Cash cash $XXX,XXX period resulted year. and QX, that used XXXX. income zero of about XXXX. over from working $XXX,XXX accrued a the IRS $X.X liabilities use in Director’s of in were at as flows in ending repurchase ended XX, additional received expenses We'll from option Cash XXXX, from loss March a was XXXX zero and XXXX. to January March bit investing quarter approximately months Jeffrey zero $XX,XXX before for start a XXXX in with resources. during hand $XXX,XXX $X.X decrease the company benefit. company activities loss compared loan tax Stewart and December any did in loan started against of agreement QX, XXXX, January XXXX XXXX net XX, $XXX,XXX these initial in XX, consecutive has XXXX to and for

was extend the company company available whereby facility securities report, with aggregate in purchase purchase As available separate agreement working placement five equity On XXXX, agreement, funds us. X,XXX,XXX capital. be does The under product funding remains purchase shares investors a into X, that will plans from placement the the equity to the as have of for used company of $XXX,XXX. private April is line balance marketing, the five inventory four consisted aggregate And and price to $X,XXX,XXX The used of this for not the of and date individual. of mostly of stock placed the proceeds Mirror at an Smart to this advertising, its the now company's for equity new private placement in the one privately entered start-up common $X,XXX,XXX. private that

liabilities, summary XXXX. accounts I'll payable the no assets on and the you. company company. accrued my quarter outstanding March call of for has debt zero Stewart, XX, of XXXX, incumbencies turn other concludes As to the and back financial This first than the the

Stewart Wallach

Thank Gerry. you,

the overview the will start Smart as segment been Home helps companies Smart the as ourselves. we this has participating such created the today discussion space is Home of frame the that early with potential Let's Acknowledging an be companies for in.

spaces and logical bulbs, successes smart are that light While the by space growing systems, to computing and from is home to opened sorry Mirror the simplest we to approximately are living and XXst into consumer resulting the companies now and the home a the expected are to content volumes the life. devices. updating from the updating an traditional success to analysis, segment an known, products. in capabilities annual have remain within introduction penetration the speaks grow. is rates It modern possibly as The today's projecting In with impact $XXX devices short, day hit Household - five platforms technology the seamlessly segment XXXX. XX% the advance. has important of traditional far of basic XXXX. like Smart and to within. In a to Home and The their these essential commonly of doorbells, operating through to The interest Essentially, to I'm of validating a in to reaching living continued acceptance name Mirrors Home XXXX want security numerous XX% century growth as is item Smart Home of continues and XXXX less Ring, people addition companies considered device the technology obvious. have Smart billion and volume similarly imagine to the that in market Smart logic most a is Mirror acceptance growth occurred in SimpliSafe, is the are door not few. years will smart Nest connected hard

space. of the So Further computer what and encouraging broadband I companies aspects the of the a affordable continue asked the physical will all potential into change all Smart continue heavily of above, of to cloud of the speed invest across and program, lives. living to platforms processors, of increasing all technology points, about consider contribute picture. Capstone integration to the services, which data rapid daily the paints the our Mirror often I'm sensors, to very Advancements revenue above

And about let's I are When the often. room. your hear this Mirrors? we concerns. the So getting in now talk I completely understand elephant

before As before I and certifications close resolute the final the The two steps have the shared to with We are production submitted. required the last you webcast product testing shipping remain been has which in and discussions. Connected initiate shipments The to Capstone directed meaningful being by be the real Amazon QX, Amazon be introductions. be will That expedited online warehouse the will will air. kickoff of July. support to said, shipments initial the

full For line. and translates both full of inventories fulfill Connected this crossing we - weeks tilt. having underway, running and orders, meaningful goal discussion, only the all from orders Amazon to marketing at short, are online the production campaigns In purpose stateside away to Capstone

While of getting is this first product focus all. us released the

Let's programs the approach produced forget North in Pacific in the we American volume and experience large disciplined not the managing have marketplace. for Rim

Your activities. of proven management again. high our we to combined arena, time With everything all operational team years costs, daily of this at on itself time be This ourselves the a philosophy and excellence do. in plus is leader have governs we output us core prides XXX experience low in

the products Our affordably attention new the driver fundamentals be past Capstone differentiator as only Capstone’s in behind of not story. will to is innovative Creating success business next companies. the

we my at here that project. two corner well around entire product We just I In and level. at strategies not value are monitor only note, are also the funded, been career. I have our years strictly the exciting maximize I but and closing responsible tell ready disciplined endured The most for business to execute performance overwhelming a plus past you have challenging launch we on times. that have in program to personal never been a every more ensure effectively, well But can

be to the business Capstone and for you thank Connected campaign support. will Surfaces’ of ongoing Our like continuous experiences. I’d truly my your

will question-and-answer our We session. now to move

Operator

a Kuras, Thank Please you Instructions] comes first proceed [Operator Our of David with your from Investor. question the Private question. line

Unidentified Analyst

a different last biggest And question you the is up? would there no you industry numerous for conference to something you sales brainer mentioned of any - that big X pertaining question. from industries to industry team mentioned that resorts know time? the that and types to on ones was the Thank me my interest major any you're that, the part plans be hit Is gained go updates that I that my that call. and have corporations future there taking like my to of last you getting hospitality interest a like was hotel sounds April in out

Stewart Wallach

Wallach thanks strategy, Absolutely, could to is in accomplished be but even for hospitality certain course, things David, clearly Stewart that. there's market identified of anticipate question. our your we before have that growth

And commonplace we deal as potential headquarters, be the so would what there in doing. far relatively accessing exactly for that's to us it's and

relative So if which to flagship like the doing They we developments, programs for have procurement et we in a were future design to to headquarter be Marriott have talk offices. place researched we'd at interior do cetera.

at emphasize that, the ourselves I end want familiarizing the strategy. not be marketing with front that, but our to will are We of fact that

what of identify business right hospitality the requirements will market in that's mainstream identify We the set want The we have - a entertain. for distributing of residential to to different than and market first certainly use. additional product we're exploit front capacities the us have

those We been in that cases, and in the the people be the so software are are of technical hurdles, None some but into of already see clearly They rooms. that their will back they been Mirror advised way those down they road. hotel haven't want by these they identified of have integration have the aren't. their to don't

I And developers’ did lot received we was area property second inquiry. by of The luxury luxury the market have condominiums, mention, way, a i.e. there development.

from negotiating factory. Thai that's been a We've discussions you luxury that open In we've been away now and contacted, miles are just - with fact, with I right our can to asked tower. company them a tell on we condominium

in We worked pursued. to of So opportunity clearly, will front things these all But be have we hard to us. this major get a point.

exhaust then from our So, we'll in will position go retail leverage, market, the we the there. and

Operator

proceed Companies]. Our of Please Capstone the [Mike comes next your with line from question Curry question. with

Unidentified Analyst

appreciates how on to milestones, like I'd more mentioned because different openness is we little please? could dates whatnot. your how the for away can’t difficult a how much know that and First, you specifics you let understand today add shareholder these - it the weeks exact give understand being community But of to difficult and you pandemic for us,

Stewart Wallach

how Mike you Sure, today? are

Unidentified Analyst

thanks. Good

Stewart Wallach

So on At eight and a of we I is scenario weeks here a best as room. to case scenario point, earlier the elephant of to in weeks. to planning five go, case based this referred out six the nine our worst

in is QX our this product which have June keeping which initial Now QX, date, goal of with course to first was XX. shipments out within is

QX always early in of course launch July the national is Our in which been has plan.

in We have But pass And controlling day, team government's instances the false exact ad difficulties to like our few And in know ups very that this have aggressive we management had to the we've plague hesitant Bangkok unexpectedly hearing we dates. us is things starts. usually a there just few at the nauseam. their particularly to pandemic to We've and had everybody's These now of end the pandemic, more downs. some look week. continues can't completely a why had I some had a but relative it. get locked over down because been of even hotels. in factory. that's They provide The where

change. after frankly corner. So in the to best should I've with this will time mentioned to that eight expectations in point six this also, case, think we'll worst weeks agree we and of that’s any right from weeks I the case around two forward webcast the and five be nine the real in Mike quite updating all I'm they the at comfortable years,

on to the the full we're and day, cetera ready of et programming, end ahead pull steam next our marketing, weeks. trigger we're the to in six the at five all going So

Operator

question Instructions] Cohen], line Investor. comes [Operator Our a next Please from Private question. proceed a of [Baron your with

Unidentified Analyst

over expect can Crew, insight quick have the I'm you and many Stewart, do units how us to morning, give preorders actually you to many sell a year? Good on you next books the how

Stewart Wallach

why bringing That the that the competing will projections a emerging that referred success fourth simply type Quite sure by SimpliSafe, is the out to that always and to around billion why the points can't guess fact I they like technology in. et last space Amazon. same It's year, we've of started, competing the to This its space we be they difficult. to doorbell. referenced tell will the the by be end year the expect I companies anticipate what new at It's day, But were bought over cetera. couldn't vary $X a relative ship Ring, market That potential. of course are over that you Ring I'm in of that program, I category. is the data obviously year. possibly and will for

being size the over enormity that homes of when start that fact there's However, and look have that the at you America take subscriptions. million case, consider the the market, the to in a XXX broadband just

math, So at X%. X.X crazy numbers. about We're do the talking of

Unidentified Analyst

understand. I

Stewart Wallach

going So challenge, I of start think the this balance we And as year take our to soon is capacity. to as my on, biggest monster anxious booking. I'm that be biggest concern,

longer. Connected first do part Those that was your a cancel those which people did converted were thought concept and right to of What question was site we initially, relative that had to Capstone we we contacted we the orders. orders on reservation. did, them exist preorders home the one asked we Barry the of I to Now preorders, site, things to any was the doesn't thing of

it's guaranteed. reservation, not a it's because However,

reservations. my And Mirror. Mirror, though, tell people that asked supporting every day the am the orders people I cancel me get every ring new we my are that our have please calling credit can I saying card that. day, getting to phones from when So don't What is plus I you the

interest. any lost haven't certainly we So

that seems their little they're gone. it be it fact, on be been numbers hesitant that to I'm they'll variable, we we've are mere as quiet first in you because to fact In this, airplanes inventories to enthusiasm. say said, a put guaranteed. not give Suffice I sold, they're the But raising those the

they'll that's they Amazon's will we they over this for this as some Capstone would and manufacturing, are help we conclude as as as placed July. we initial will Mirrors hit I your development first that X,XXX customers you and be hit, be benefit as tell shipments Soon in you possibly also actually customers. well soon in well to warehouse and in numbers Amazon the have placing orders, out and moving Connected have for orders the

Unidentified Analyst

Great.

Stewart Wallach

I'll So give of idea, that that little avoid questions, that basis to to questions, what these hope things pretty whatever you as you stated on some that'll come I this. back quoted put I haven’t these right. And question. you a we have answers understand me a regular all reason color at said but hate I and for

Unidentified Analyst

to sell out big again, One question, box this warehouses the you reaching product? will last be to

Stewart Wallach

our strong boxes. All been and a you right, investor big as you've a know, here question so obviously we're so interesting longtime career very you've followed

Unidentified Analyst

Yes.

Stewart Wallach

boxes this us said to going big when category. new have to have already about The a we discussion are, reached and out

Here is of the have interesting part thing variance. it's strategy. the launch products clubs They about never big their box retailers, business new warehouse particularly don't not

called were they've your and long the to We So me what market a for see time. create course very we they know said they already know of website. see doing waiting you're us and

retail be I level. have to be And to same we But want positions know at cannibalize at product time, I compromise I've will to going substantial two, honestly, price them sustainable that providing the One, the going you you're tell think they to our don't going to have very for distribute. significant we're to that on we're margin. or us. had a a follow So don't

open big level problem is I door always meetings highest don't at companies. the us the So on those of box. any getting have the to

pop-in performance expense will margin frankly, to forced need We online. I that don't a to our of to make make. at are think smart we're going we'll decision. this be be going I going be very that have don't this. to we volume to the And or quite gauge a We're want decision think about if

to do. to going be option an think I this that will is choose

Unidentified Analyst

the taking…. Thank place That's greatest Well. for you to be.

Stewart Wallach

Yes you, I think. Thank Barry.

Operator

in There for call hand are questions back the no remarks. management further I'd closing to the queue. like to

Stewart Wallach

it's to works a we passes the in looking relative you how we're is Well, was so got route I exciting. I know just standing next by until financial to riveting forward up the ticking. not the trip minutes was in pretty just product We've possibilities, performance much promotional And but certainly States. things are and testing, certification the tell here. many This to brief is today But month. long can't away. our and session. a the ideas been first it's is And opportunities, very management

happen I than more that. your seeing interest financing us. year. myself the Dr. bear I we in no So But Postal shareholder. than know, as tell as you and I continue sensitive with hope We're the sensitive sooner to you can am, early understand largest later. to this in And you

not have any We sold stock.

over We two. And the very we are or about wait product very, launch to next excited month this. of the course the can't

So, we'll you informed. keep

I do the if mentioned, et to webcasts. really there's cetera. update development we're also channels, Then in having And going substantial marketing's updates. contemplate we'll time anything real to relative As

And for again, So thank your all support. tuned. stay you

Operator

today's Thank teleconference. this participation. Ladies and conclude you your for does gentlemen,

at day. your time disconnect may lines You a this and wonderful have

Capstone Companies (CAPC) 18 May 212021 Q1 Earnings call transcript