Q2 Lumenpulse Product Revenues Increased 89% and Adjusted EBITDA Reached $1.4 million

• Revenues of $25.6 million for Q2 2015; up 68% over last year, including Lumenpulse Product revenues up 89%
• Solid Q2 Adjusted Gross Profit margin on Lumenpulse Products of 46% compared to 44% in Q2 Fiscal 2014
• Q2 Adjusted EBITDA of $1.4 million compared to $0.2 million in Q2 Fiscal 2014
• Q2 Adjusted Net Income of $0.6 million compared to an Adjusted Net Loss of $0.9 million in Q2 Fiscal 2014
• Q2 positive cash flow from operations of $1.3 million

Lumenpulse, a leading manufacturer of high performance, specification-grade LED lighting solutions, released today its financial results for the second quarter and six-month period ended October 31, 2014.

"For the second quarter, we reported solid financial results and have mitigated all the risks related to the manufacturing and supply chain issues encountered during the first quarter. Through various measures implemented in recent months, we have solidified our manufacturing capabilities to meet future demand for our growing portfolio of products.

Lumenpulse Product revenues grew by 89% over last year with international revenues reaching a record level and representing 35% of our total revenues for the second quarter. Our revenues of $25.6 million for the second quarter bring us at a run rate of over $100 million on an annualized basis. Finally, our Adjusted EBITDA of $1.4 million was the highest level reached in the Company's short history and clearly a step towards our profitability goals.

We are very pleased with the integration process of AlphaLED and its second quarter revenue contribution of $6.5 million, exceeding anticipated annualized revenues of between $21 and $24 million. The next key milestone will be the launch of AlphaLED products in North America late in the third quarter with deliveries starting in the fourth quarter of Fiscal 2015.

The solid consolidated revenue growth achieved in the first half of 2015 is a clear indication of our ability to execute our strategy on a global scale and continue to deliver above-industry growth," said François-Xavier Souvay, President and CEO.

"This quarter, the Company generated positive operating cash flow of $1.3 million and was free cash flow neutral. Additionally, the Company reached profitability for the first time in its history with a Net Income of $0.4 million (Adjusted Net Income of $0.6 million). These achievements are positive indicators that we are heading in the right direction," said Robert Comeau, Executive Vice President and CFO.

"Our objectives remain to continue growing Lumenpulse's business at a growth rate exceeding the growth rate in the general lighting market for LED products and, over time, converging towards market growth, and to reach Adjusted Gross Profit margin approaching 50% and Adjusted EBITDA margin of approximately 18% to 20% within the next five years," concluded Mr. Souvay.

Financial Highlights

(Unaudited, in millions of Canadian dollars, except per share amounts)

Revenues

For its second quarter of Fiscal 2015 ended October 31 2014, Lumenpulse revenues increased by $10.3 million, or 68%, to $25.6 million compared with $15.3 million for the corresponding period last year. This increase is primarily due to the increase of the Lumenpulse Products segment which achieved significant year-over-year growth of 89% with revenues of $21.9 million from $11.6 million for the same period last year. For the six- month period, Lumenpulse recorded revenues of $44.2 million, representing an increase of 58% compared to revenues of $28.0 million for the same period last year.

For both periods, the increase in revenues was mainly attributable to the solid growth from our Lumenpulse Products segment which was fueled by the acquisition of AlphaLED, the introduction of new products, and by further penetration of the North America and international network of agents and VARs.

International revenues were an important and increasingly large contributor to the second quarter and six-month period representing 35% and 31% of total revenues, respectively.

Adjusted Gross Profit margin

For the second quarter and the six-month period ended October 31, 2014, the consolidated Adjusted Gross Profit margin increased to 44% from 42% and to 43% from 41%, respectively. For both periods, the increases were primarily related to the larger proportion of revenues derived from higher margin Lumenpulse Products and also from continued margin improvements in this product segment.

For the quarter and the six-month period ended October 31, 2014, the Adjusted Gross Profit margin on Lumenpulse Products increased to 46% from 44% and to 45% from 43%, respectively. The progress in Lumenpulse Products margin reflects the impact of manufacturing efficiency improvements and higher capacity utilization. This upward trend supports our mid-term objective of reaching Lumenpulse Products Adjusted Gross Profit margin in the range of 50%.

For the second quarter, when excluding AlphaLED, the Lumenpulse Products Adjusted Gross Profit margin rose to 48% from 44% last year. Adjusted Gross Profit margin for AlphaLED reached 41% from 29% in the first quarter reflecting the benefits of cost reduction initiatives, among other things.

Adjusted EBITDA

For the second quarter, Adjusted EBITDA increased to $1.4 million from $0.2 million for the same period last year. For the six-month period, Adjusted EBITDA increased to $0.4 million from a negative $0.5 million for the same period last year. For both periods, the increases in Adjusted EBITDA are mainly attributable to increased revenues, higher gross margins partially offset by the higher level of operating expenses to support growth and the requirements of a public company.

Adjusted Net Income (Net Loss)

For the second quarter, Adjusted Net Income increased to $0.6 million from a $0.9 million loss for the same period last year. The improvement is mainly attributable to higher Adjusted EBITDA, as described above. For the six-month period, Adjusted Net Loss decreased to $0.8 million from a $2.8 million loss for the same period last year. The Adjusted Net Loss decrease was primarily due to improved Adjusted EBITDA and also to a favorable variance in net financing costs.

Cash Flow

For the second quarter, the Company generated $1.3 million of cash flow from operations compared to a use of cash of $1.0 million for the same period last year. For the six-month period, cash flow from operations used was $4.0 million compared to $4.3 million for the same period last year.