SANTA FE, N.M., Aug. 14, 2017 (GLOBE NEWSWIRE) -- Sigma Labs, Inc. (NASDAQ:SGLB) (“Sigma Labs” or the “Company”), a provider of quality assurance software under the PrintRite3D® brand, today announced financial results for the three and six months ended June 30, 2017 and provided an overview of recent developments.
Second Quarter 2017 Business Highlights and Recent Developments
- August 2017 – Sigma Labs announced that its cloud-based PrintRite3D® INSPECT® software Version 2.0 was installed at Woodward Inc. (NASDAQ:WWD) Aircraft Turbine Systems group at its Zeeland, MI location. The Company's PrintRite3D® software is part of Woodward's additive manufacturing strategies to ensure that Woodward's aerospace and industrial customers receive quality product.
- August 2017 – Sigma Labs announced signing Jeta Enterprises as a new manufacturer’s representative for sales of Sigma Labs contract printing and additive manufacturing (AM) services in the Pacific Northwest region of the U.S, including Oregon and Washington states. Jeta’s strong customer base in Aerospace and Medical Devices coupled with its expertise in custom-engineered components positions it to serve a growing base of demand for advanced component manufacturing.
- July 2017 – Sigma Labs announced that Mark Cola was appointed as Sigma Labs’ Chief Technology Officer on July 24, 2017, responsible for building and implementing the Sigma Labs technological strategy and guiding key technical advancements towards digitalization in the context of the Industrial Internet of Things (IIoT). Mr. Cola formerly served as President and CEO of Sigma Labs and his new title is President and Chief Technology Officer. Mr. Cola will seek to expand and grow the Company through next-generation products and key customer development in a broad range of industries.
- July 2017 - John Rice, who has served as Chairman of the Board of the Company since his appointment in April 2017, replaced Mr. Cola as CEO. As Chairman and interim CEO, Mr. Rice will oversee Sigma Labs' implementation of internal and external growth, with an emphasis on internal focus technology, sales, and efficiency, and externally, reaching into the marketplace to expand the Company’s digital technical bandwidth with respect to the Company's In-Process Quality Assurance™ (“IPQA®”) technology and AM. Mr. Rice brings substantial operating and investment experience to these tasks, including with respect to operations of startup and emerging companies, corporate finance, and mergers and acquisitions.
- July 2017 – Sigma Labs announced the June 30, 2016 publication of its U.S. Patent Application No. US 2016/0185048; Multi-Sensor Quality Inference and Control for Additive Manufacturing Processes. This patent application is related to real-time quality analysis during AM processes and the characterization of material properties using acoustic signals emitted during AM which can be used in addition to optical signals to simplify the qualification of printed parts.
- July 2017 – Sigma Labs announced that it signed a Technology Development Agreement (TDA) with OXYS Corporation, a technology company in Cambridge, MA working in the Industrie 4.0 space. The first project to be executed under the TDA will be a new architecture platform for the Company's PrintRite3D® INSPECT.
- June 2017 – Sigma Labs announced that its PrintRite3D® INSPECT® software Version 2.0 was installed at Honeywell Aerospace in Honeywell's Advanced Manufacturing Engineering Center in Phoenix, AZ, in connection with Sigma Labs' ongoing participation in the Honeywell lead, DARPA Phase III.
- June 2017 – Sigma Labs announced that the Company entered into agreements with two additional, non-exclusive sales agents in the Asia Pacific region, driven by strong customer interest in the region for PrintRite3D®. One such agent, Enervision Inc., will target the high growth expectations in the South Korean AM market, driven by the Korean government's announcement in April 2017 of a $37 million investment to accelerate the development of 3D printing across the country. Sigma Labs' other new sales agent, Beijing Yida Sifang Technology Co., Ltd, a leading metal AM reseller with multiple offices in China, will assist Sigma Labs with its expansion into the China AM market.
“We are implementing our strategic double down on both Sigma Labs' technology and also on our ongoing efforts to grow Sigma Labs into a robust digital 3D ecosystem by seeking to identify compatible businesses to potentially acquire that will be synergistic with Sigma Labs' technology and business, although there are currently no agreements with respect to the acquisition by the Company of any third party, and there is no assurance than any acquisition will be consummated. In July and early August 2017, we changed our management lineup to add more capacity to implement our strategy. We believe that we have excellent technology and are supported by an excellent team of technologists. We also believe that we have accomplished a hard-won understanding of a rapidly changing market place, and that our early adopter and OEM strategies are gaining traction. We know that we need to perform better operationally, and are reconstituting senior management and the Board to focus on three very defined targets: (1) product development, sales, and support; (2) business operations; and (3) expansion through the exploration of various business opportunities," said John Rice, interim CEO.
Second Quarter Ended June 30, 2017 Financial Results
Revenue for the three months ended June 30, 2017, was $290,553, as compared to revenue of $93,824 during the same period in 2016. The increase in revenue was primarily due to new contracts in 2017, including Honeywell DARPA Phase III, Aerojet Rocketdyne, and Solar Turbines, Pratt and Whitney, and Woodward which accounted for the majority of the $196,729 increase in revenues when comparing Q2 2017 to Q2 2016. In addition, the Q2 2016 revenues were lower due to the completion of the GEA America Makes Program in Q1 2016, providing no revenues from that contract in Q2 2016.
General and Administrative expenses for the three months ended June 30, 2017, were $594,193, as compared to $480,697 for the same period in 2016. The $113,496 increase was primarily due to increases in legal fees and the increase in interest and finance costs on the $1,000,000 promissory note originated in October 2016. Payroll expenses for the three months ended June 30, 2017, were $300,661, as compared to $252,895 for the same period in 2016. The $47,766 increase was due to an increase in employees in Q2 2017 versus Q2 2016. Expenses relating to stock-based compensation for the three months ended June 30, 2017, were $166,773, as compared to $59,362 for the same period in 2016. The $107,411 increase was due to more stock and stock options being used to pay for services as a mechanism to preserve cash. Research and Development expenses for the three months ended June 30, 2017, were $118,853, as compared to $11,907 for the same period in 2016. The $106,946 increase was the result of continued improvement and development of the Company's software and technology.
Net loss for the three months ended June 30, 2017 increased $246,895 and totaled $988,741, as compared to $741,846 for the same period in 2016. The increase is primarily due to the $375,619 increase in expenses noted above, partially offset by the $116,221 increase in gross profits, which is primarily due to the $196,729 increase in revenues in Q2 2017 compared to Q2 2016.
Revenue for the six months ended June 30, 2017, was $440,756, as compared to $452,279 recognized during the same period in 2016. The $11,523 decrease in revenue was primarily due to the completion of the GEA America Makes Program in 2016, providing three months of revenue in 2016 but no revenue in 2017. However, new business in Q2 2017 from customers like Honeywell DARPA Phase III, Aerojet Rocketdyne and Solar Turbines made up for the majority of the reduction that resulted from the completion of the GEA America Makes Program. The Company financed its operations during the six months ended June 30, 2017 and 2016 primarily from PrintRite3D® system sales, DARPA Phase III, Aerojet Rocketdyne and Solar Turbines programs, engineering consulting services provided to third parties, and through sales of the Company's common stock and debt securities.
General and Administrative expenses for the six months ended June 30, 2017, were $1,237,988, as compared to $876,185 for the same period in 2016. The costs of the February 2017 public offering that generated net proceeds of approximately $5.25 million, legal fees, and the interest and finance costs related to the Company's $1,000,000 note, are the primary reasons for the $361,803 increase in G&A expenses. Payroll expenses for the six months ended June 30, 2017, were $677,282, as compared to $468,484 for the same period in 2016. Employee additions are the main reason for the $208,798 payroll expense increase. Expenses relating to stock-based compensation for the six months ended June 30, 2017, were $306,405, as compared to $130,913 for the same period in 2016. The $175,492 increase is the result of using stock and stock options to pay for services in order to preserve cash. Research and Development expenses for the six months ended June 30, 2017, were $167,615, as compared to $50,978 for the same period in 2016. The $116,637 increase is the result of increased efforts to continue to develop and improve the Company's software and technology.