SAN DIEGO, May 13, 2014 /PRNewswire/ -- InfoSonics
Corporation (NASDAQ: IFON), the provider of verykool® wireless
handset solutions and tablets, today announced results for its
first quarter ended March 31,
2014.
"We are pleased to report a third consecutive quarter of
profitability," said Joseph Ram,
president and CEO of InfoSonics. "Sales in the first quarter
grew 49% over the same quarter last year, gross profit grew 50% and
operating expenses declined by 6%. Unit shipments during the
quarter rose 51% compared to the prior year. Most
importantly, we reported a large swing in profitability by turning
a $709,000 loss in the first quarter
of 2013 into a $55,000 profit in the
first quarter of 2014. Also significant, in late March we
secured a $2 million bank line of credit that will provide
future liquidity, together with the arrangement of $4 million of credit insurance that will enable
our manufacturing vendors to extend credit to us that was not
previously available."
InfoSonics reported net sales for the 2014 first quarter of
$11.6 million, which represented a
$3.8 million, or 49%, increase
from $7.8 million for the first
quarter of 2013. The Company reported sales growth in a
number of geographical areas, primarily in South America and increased private label
sales to customers in Europe. These increases were partially
offset by a decline in sales to customers in Central America.
Gross profit in the first quarter of 2014 was $2.1 million, a 50% increase over
$1.4 million in the 2013 first
quarter. The gross profit margin as a percent of sales in the
first quarter of 2014 rose to 17.8% compared to 17.7% in the 2013
first quarter.
Operating expenses in the first quarter of 2014 were
$2.0 million, a decrease of
$129,000, or 6%, compared to
$2.1 million in the 2013 first
quarter. This reflects a $42,000, or 2%, increase in SG&A expenses and
a $171,000, or 43%, decrease in
R&D expenses. These changes reflect increased legal fees
during the quarter and substantially reduced R&D expenses
incident to the Company's restructurings during 2013 of its
China-based development team.
Net income for the first quarter of 2014 was $55,000, a significant improvement over the net
loss of $709,000 in the first quarter
of 2013.
At March 31, 2014, the Company had
$1.1 million in cash, $16.3 million of net working capital and no
outstanding indebtedness.
About InfoSonics Corporation
InfoSonics is a San Diego-based
designer, manufacturer and provider of wireless handsets and
related products to OEMs, carriers, distributors and consumers in
the United States, Latin America, Europe, Africa and Asia Pacific. The company is
committed to delivering quality products with innovative industrial
designs that appeal to consumers and offer exceptional value.
InfoSonics sells and supports its own line of products under the
verykool® and other private label brands. Additional
information can be found on our corporate website at
www.infosonics.com and www.verykool.net.
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
develop new verykool® handsets and successfully
introduce them into new emerging 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, disruptions in
production at contract manufacturers 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,
|
|
|
2014
|
|
2013
|
Net
sales
|
$
11,624
|
|
$
7,821
|
Cost of
sales
|
9,551
|
|
6,439
|
Gross
profit
|
2,073
|
|
1,382
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
1,785
|
|
1,743
|
|
Research and
development
|
227
|
|
398
|
|
|
2,012
|
|
2,141
|
Operating
income (loss)
|
61
|
|
(759)
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
Other income
(expense), net
|
(3)
|
|
51
|
|
Interest
|
-
|
|
6
|
Income (loss)
before provision for income taxes
|
58
|
|
(702)
|
Provision for
income taxes
|
(3)
|
|
(7)
|
Net income
(loss)
|
$
55
|
|
$
(709)
|
|
|
|
|
|
Net income
(loss) per share:
|
|
|
|
|
Basic
|
$
0.00
|
|
$
(0.05)
|
|
Diluted
|
$
0.00
|
|
$
(0.05)
|
|
|
|
|
|
Weighted-average number of common shares
outstanding:
|
|
|
|
|
Basic
|
14,218
|
|
14,184
|
|
Diluted
|
14,810
|
|
14,184
|
|
|
|
InfoSonics
Corporation
Consolidated
Balance Sheets
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
|
(unaudited)
|
|
(audited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,145
|
|
$
2,369
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $373 and
$373, respectively
|
13,555
|
|
11,856
|
|
Other accounts
receivable
|
83
|
|
163
|
|
Inventory
|
2,991
|
|
2,467
|
|
Prepaid
assets
|
3,130
|
|
3,435
|
|
Total current
assets
|
20,904
|
|
20,290
|
Property and
equipment, net
|
165
|
|
200
|
Other
assets
|
41
|
|
179
|
|
Total
assets
|
$
21,110
|
|
$
20,669
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
1,526
|
|
$
1,161
|
|
Accrued
expenses
|
3,058
|
|
3,180
|
|
Total current
liabilities
|
4,584
|
|
4,341
|
|
|
|
|
|
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, 14,356 and 14,184
shares issued and outstanding as of March 31, 2014 and December 31,
2013, respectively
|
14
|
|
14
|
|
|
Additional
paid-in capital
|
32,547
|
|
32,391
|
|
Accumulated
other comprehensive loss
|
(31)
|
|
(18)
|
|
Accumulated
deficit
|
(16,004)
|
|
(16,059)
|
|
Total stockholders'
equity
|
16,526
|
|
16,328
|
|
Total liabilities and
stockholders' equity
|
$
21,110
|
|
$
20,669
|
|
|
|
|
|
InfoSonics
Corporation
|
Consolidated
Statements of Cash Flows
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2014
|
|
2013
|
Cash flows
from operating activities:
|
|
|
|
|
Net income
(loss)
|
$
55
|
|
$
(709)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation
|
48
|
|
56
|
|
|
Loss on
disposal of fixed assets
|
1
|
|
12
|
|
|
Provision for
bad debts
|
-
|
|
23
|
|
|
Provision for
obsolete inventory
|
43
|
|
4
|
|
|
Stock-based
compensation expense
|
21
|
|
57
|
|
|
(Increase)
decrease in:
|
|
|
|
|
|
|
Trade accounts
receivable
|
(1,699)
|
|
243
|
|
|
|
Other accounts
receivable
|
80
|
|
(174)
|
|
|
|
Inventory
|
(567)
|
|
177
|
|
|
|
Prepaids
|
305
|
|
(819)
|
|
|
|
Other
assets
|
138
|
|
25
|
|
|
(Increase)
decrease in:
|
|
|
|
|
|
|
Accounts
payable
|
365
|
|
(376)
|
|
|
|
Accrued
expenses
|
(122)
|
|
(94)
|
|
|
|
|
Net cash used
in operating activities
|
(1,332)
|
|
(1,575)
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
Purchase of
property and equipment
|
(14)
|
|
(10)
|
|
Decrease in
restricted cash
|
-
|
|
1,003
|
|
|
Net cash
provided by (used in) investing activities
|
(14)
|
|
993
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
Cash received
from exercise of stock options
|
135
|
|
-
|
|
|
Net cash
provided by financing activities
|
135
|
|
-
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
(13)
|
|
33
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
(1,224)
|
|
(549)
|
|
Cash and
cash equivalents, beginning of period
|
2,369
|
|
5,230
|
|
Cash and
cash equivalents, end of period
|
$
1,145
|
|
$
4,681
|
|
|
|
|
|
|
|
|
|
Cash paid
for interest
|
$
-
|
|
$
-
|
|
Cash paid
for taxes
|
-
|
|
-
|
|
|
|
|
|
|
|
|
SOURCE InfoSonics Corporation