SAN DIEGO, May 7, 2015 /PRNewswire/ -- InfoSonics
Corporation (NASDAQ: IFON), the provider of verykool® wireless
handset solutions and tablets, today announced results for its
first quarter ended March 31, 2015.
"We are pleased to report strong results in our first quarter of
2015 in terms of net sales, average selling price per unit ("ASP")
and net income," said Joseph Ram, president and CEO of
InfoSonics. "First quarter net sales increased 25% over the
same quarter last year and net income amounted to $532,000. We achieved a strong balance
between our Latin American carrier business and that of our big box
retail, independent distribution and on-line customers,
collectively referred to as the "open market." During the
quarter, 54% of sales came from the open market and 46% from
carrier customers. In addition, a higher mix of smartphone
sales in the quarter elevated our ASP by 55% over the prior year
quarter. Our goal for the remainder of 2015 is to capitalize
on the momentum we have built over the last two quarters to
increase our sales and ASP while keeping operating expenses in
check."
InfoSonics reported net sales for the 2015 first quarter of
$14.5 million, which represented a
$2.9 million, or 25%, increase
from $11.6 million for the first
quarter of 2014. The Company reported significant sales
growth to big box retailers in Mexico, expanded sales to distribution
customers serving Central and South American independent and big
box retailers and a higher level of sales to U.S. customers.
These gains were partially offset by lower sales to Latin American
carrier customers, as well as the discontinuation of private label
sales to customers in Europe. Unit shipments during the
quarter declined by 19% compared to the prior year, but the average
selling price per unit rose 55% as the percentage of smartphones
sold increased from 13% to 42%.
Gross profit in the first quarter of 2015 was $2.6 million, a 23% increase compared to
$2.1 million for the comparable
period in 2014. The gross profit margin as a percent of sales
in the 2015 first quarter declined to 17.6% compared to 17.8% for
the comparable period in 2014, due principally to the liquidation
of certain older model inventories at reduced margins.
Operating expenses in the first quarter of 2015 were
$1.9 million, a decrease of
$116,000, or 6%, compared to
$2.0 million in the 2014 first
quarter. This reflects a $111,000, or 6%, increase in SG&A expenses
and an elimination of R&D expenses which amounted to
$227,000 in the prior year
quarter. The higher SG&A expenses include increased wages
and insurance costs, partially offset by a decrease in professional
fees. Total operating expenses as a percent of sales in the
first quarter declined from 17.3% in the 2014 first quarter to
13.1% in the 2015 first fourth quarter.
Net income for the first quarter of 2015 was $532,000, $0.04 per
share, compared to net income of $55,000, $0.00 per
share, in the first quarter of 2014. Income taxes remain
nominal because of the Company's operating loss
carryforwards.
At March 31, 2015, the Company had
$2.8 million in cash, $16.4 million of net working capital and
$2.7 million of outstanding bank
debt.
About InfoSonics Corporation
InfoSonics is a San Diego-based
manufacturer and provider of wireless handsets, tablets and related
products to carriers, distributors and consumers in the United States and Latin America under the verykool® brand.
The company is committed to delivering quality products with
innovative designs that appeal to consumers and offer exceptional
value. Additional information can be found on our corporate
website at www.infosonics.com and www.verykool.net.
Past performance in any period may not be indicative of future
results in the next period or the same period in a subsequent
year. We also experience seasonal revenue fluctuations that
can be significant from one quarter to another. Except for
the factual statements made herein, the information contained in
this news release consists of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks, uncertainties and assumptions that are
difficult to predict. Words and expressions reflecting
optimism, satisfaction or disappointment with current prospects, as
well as words such as "believes," "hopes," "intends," "estimates,"
"expects," "projects," "plans," "anticipates" and variations
thereof, or the use of future tense, identify forward-looking
statements, but their absence does not mean that a statement is not
forward-looking. Such forward-looking statements are not guarantees
of performance and our actual results could differ materially from
those contained in such statements. Factors that could cause or
contribute to such differences include, without limitation:
(1) intense competition internationally, including competition
from alternative business models, such as manufacturer-to-carrier
sales, which may lead to reduced prices, lower sales, lower gross
margins, extended payment terms with customers, increased capital
investment and interest costs, bad debt risks and product supply
shortages; (2) our ability to source new
verykool® handsets, including LTE models, at a
sufficient pace and successfully introduce them into target
markets; (3) extended general economic downturn in world
markets; (4) inability to secure adequate supply of
competitive products on a timely basis and on commercially
reasonable terms; (5) the ability of the Company to maintain and
improve its gross margins despite intense competition;
(6) foreign exchange rate fluctuations, devaluation of a
foreign currency, adverse governmental controls or actions,
political or economic instability, or disruption of a foreign
market, including, without limitation, the imposition, creation,
increase or modification of tariffs, taxes, duties, levies and
other charges and other related risks of our international
operations which could significantly increase selling prices of our
products to our customers and end-users; (7) the ability to
attract new sources of profitable business from expansion of
products or services or risks associated with entry into new
markets, including geographies, products and services; (8) an
interruption or failure of our information systems or subversion of
access or other system controls may result in a significant loss of
business, assets, or competitive information; (9) significant
changes in supplier terms and relationships or shortages in product
supply; (10) loss of business from one or more significant
customers; (11) customer and geographical accounts receivable
concentration risk and other related risks; (12) rapid product
improvement and technological change resulting in inventory
obsolescence; (13) uncertain political and economic conditions
internationally, including terrorist or military actions;
(14) the loss of a key executive officer or other key
employees and the integration of new employees; (15) changes
in consumer demand for multimedia wireless handset products and
features; (16) our failure to adequately adapt to industry
changes and to manage potential growth and/or contractions;
(17) seasonal buying patterns; (18) the resolution of any
litigation for or against the Company, including claims for
infringement of intellectual property; (19) the ability of the
Company to have access to adequate capital to fund its operations,
including the availability of vendor credit and availability under
the Company's bank line of credit; and (20) the ability of the
Company to generate taxable income in future
periods. Reference is also made to other factors detailed from
time to time in our periodic reports filed with the Securities and
Exchange Commission. These forward-looking statements speak only as
of the date of this release and we undertake no obligation to
publicly update any forward-looking statements to reflect new
information, events or circumstances after the date of this
release.
InfoSonics
Corporation
|
Consolidated
Statements of Operations
|
(Amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
|
|
2015
|
|
2014
|
Net
sales
|
$
14,517
|
|
$
11,624
|
Cost of
sales
|
11,963
|
|
9,551
|
Gross
profit
|
2,554
|
|
2,073
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
1,896
|
|
1,785
|
|
Research and
development
|
-
|
|
227
|
|
|
1,896
|
|
2,012
|
Operating
income
|
658
|
|
61
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Other expense,
net
|
-
|
|
(3)
|
|
Interest
|
(123)
|
|
-
|
Income before
provision for income taxes
|
535
|
|
58
|
Provision for
income taxes
|
(3)
|
|
(3)
|
Net
income
|
$
532
|
|
$
55
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
Basic
|
$
0.04
|
|
$
0.00
|
|
Diluted
|
$
0.04
|
|
$
0.00
|
|
|
|
|
|
Weighted-average number of common shares
outstanding:
|
|
|
|
|
Basic
|
14,362
|
|
14,218
|
|
Diluted
|
14,755
|
|
14,810
|
InfoSonics
Corporation
|
Consolidated
Balance Sheets
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
|
(audited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
2,848
|
|
$
1,464
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $95 and $95,
respectively
|
14,492
|
|
15,644
|
|
Other accounts
receivable
|
85
|
|
70
|
|
Inventory
|
7,907
|
|
5,880
|
|
Prepaid
assets
|
1,960
|
|
2,778
|
|
Total current
assets
|
27,292
|
|
25,836
|
Property and
equipment, net
|
118
|
|
137
|
Other
assets
|
56
|
|
31
|
|
Total
assets
|
$
27,466
|
|
$
26,004
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
5,407
|
|
$
4,371
|
|
Accrued
expenses
|
2,752
|
|
2,804
|
|
Line of credit
borrowings
|
2,725
|
|
2,725
|
|
Total current
liabilities
|
10,884
|
|
9,900
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.001 par value, 10,000 shares authorized (no shares issued and
outstanding)
|
-
|
|
-
|
|
Common stock, $0.001
par value, 40,000 shares authorized, 14,380 and 14,358 shares
issued and outstanding as of
March 31, 2015 and December 31, 2014, respectively
|
|
|
|
|
14
|
|
14
|
|
Additional paid-in
capital
|
32,681
|
|
32,614
|
|
Accumulated other
comprehensive loss
|
(847)
|
|
(726)
|
|
Accumulated
deficit
|
(15,266)
|
|
(15,798)
|
|
Total stockholders'
equity
|
16,582
|
|
16,104
|
|
Total liabilities and
stockholders' equity
|
$
27,466
|
|
$
26,004
|
InfoSonics
Corporation
|
Consolidated
Statements of Cash Flows
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
2015
|
|
2014
|
Cash flows
from operating activities:
|
|
|
|
|
Net income
|
$
532
|
|
$
55
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
Depreciation
|
22
|
|
48
|
|
|
Loss on
disposal of fixed assets
|
-
|
|
1
|
|
|
Provision for
obsolete inventory
|
(67)
|
|
43
|
|
|
Stock-based
compensation expense
|
51
|
|
21
|
|
|
(Increase)
decrease in:
|
|
|
|
|
|
|
Trade accounts
receivable
|
1,152
|
|
(1,699)
|
|
|
|
Other accounts
receivable
|
(15)
|
|
80
|
|
|
|
Inventory
|
(1,960)
|
|
(567)
|
|
|
|
Prepaids
|
818
|
|
305
|
|
|
|
Other
assets
|
(25)
|
|
138
|
|
|
(Increase)
decrease in:
|
|
|
|
|
|
|
Accounts
payable
|
1,036
|
|
365
|
|
|
|
Accrued
expenses
|
(52)
|
|
(122)
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
1,492
|
|
(1,332)
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
Purchase of
property and equipment
|
(3)
|
|
(14)
|
|
|
Net cash used
in investing activities
|
(3)
|
|
(14)
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
Borrowings on
line of credit
|
3,091
|
|
-
|
|
Repayments on
line of credit
|
(3,091)
|
|
-
|
|
Cash received
from exercise of stock options
|
16
|
|
135
|
|
|
Net cash
provided by financing activities
|
16
|
|
135
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
(121)
|
|
(13)
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
1,384
|
|
(1,224)
|
|
Cash and
cash equivalents, beginning of period
|
1,464
|
|
2,369
|
|
Cash and
cash equivalents, end of period
|
$
2,848
|
|
$
1,145
|
|
|
|
|
|
|
|
|
|
Cash paid
for interest
|
$
115
|
|
$
-
|
|
Cash paid
for taxes
|
$
-
|
|
$
-
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/infosonics-reports-first-quarter-2015-results-300079332.html
SOURCE InfoSonics Corporation