Electronic Cigarettes Intl Group Ltd (OTCMKTS:ECIG) reported financial results for the first quarter ended March 31, 2015. The revenue in the quarter was $11.1 million, up from $4.1 million recorded in 1Q2014. The net loss came at $67.5 million against a net loss of $86.4 million from the same period in 2014. The loss in 2015 can be attributed to non-cash expenses in the value of certain warrants and notes.
The performance
Electronic Cigarettes reported that Adjusted EBITDA came negative at $2.2 million after including non-cash charges amounting to $15.5 million compared with adjusted EBITDA negative $5.1 million in the same period a year ago. At the end of 1Q2015, the cash and cash equivalents stood at $1 million. Following the end of 1Q, the company informed a term loan deal offering $41 million from strategic business associates and long-term investors.
The expert comments
Phil Anderson, the CFO of Electronic Cigarettes said that 1Q revenue was negatively affected by insufficient working capital to support operating units and offer product inventory to meet demand. However, the recently disclosed $41 million capital injection improved the capital structure and strengthened the balance sheet by removing toxic convertible debt.
The impact
The company now has positive working capital and since the closing of deal the company has reported considerable progress in restructuring supplier and vendor relationships to minimize accounts receivable and other operating costs. Anderson added that they believe Electronic Cigarettes is well-positioned to invest for growth, and develop business alliances relationships to support company’s global brands. The CEO Dan O’Neill said that the company is pleased to strengthen its association with the Mansour Group, which solidifies financial position and creates opportunities for expansion in Northern Africa and the Middle East.
In last trading session, the stock price of Electronic Cigarettes Intl Group Ltd (OTCMKTS:ECIG) declined more than 9% to close the trading session at $0.263. The decline came at a share volume of 912,807 compared to average share volume of 1.35 million.
