InfoSonics Reports First Quarter 2014 Results

SAN DIEGO, May 13, 2014 – 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.

Contact:

Vernon A. LoForti
Chief Financial Officer
vern.loforti@infosonics.com
858-373-1675

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InfoSonics Unveils its Most Feature-Rich Smartphone: the verykool® s505 ‘Spark’ with Next-Gen Safety Capabilities

SAN DIEGO, May 21, 2014 – InfoSonics Corporation (NASDAQ: IFON) today announced the launch of its new verykool® s505 smartphone, the most dynamic mobile handset the company has offered to date.

The s505, nicknamed the “Spark,” has an ultra high-end design. It is powered by a 1.3 GHz quad core processor and is equipped with the Android 4.2 (Jelly Bean) operating system. The phone will be upgradable to Android 4.4 (KitKat) in the near future via a partnership with Red Bend Software, the market leader in mobile software management.

The Spark sports a 5-inch HD IPS-LCD, on-cell touch screen with full lamination, an 8mm ultra slim profile and is being offered at a suggested retail price of $199. In addition to providing a comprehensive set of features, the Spark is the first smartphone to come preloaded with the Personal Safety Services application from MobileTREC, which allows texting to 911 and immediate deployment of emergency help across multiple contacts when personal safety is at risk.

“We understand that the future of the industry is dependent upon our ability to offer robust applications that provide tools and resources that are important for our work and daily lives,” said Joseph Ram, InfoSonics president and chief executive officer. “We are on the forefront of this trend as exemplified by partnering with MobileTREC to bring their patented safety platform to verykool users. We believe our goal to provide the best value to our customers is met by the Spark, which combines smart functionality with an elegant design and one of the most advanced safety features available–all at a very affordable price.”

MobileTREC provides a family of next-generation mobile safety technology and services.  According to MobileTREC, their system is the only true platform that allows users to text to 911, offering a quick emergency response method in case of danger. In addition to one-touch response, there’s a single help button to push in case of a crisis. Other features include a family locator with GPS tracking capabilities, mobile intelligence indicating danger and safe zones before you enter and personalized safety network alerts for friends and family. Customers who purchase the s505 Spark can enjoy a free 30-day trial of MobileTREC’s safety platform to experience firsthand the many features of these important Personal Safety Services.

InfoSonics noted the following additional details of the s505:

  • 3G HSPA+ 21 Mbps DL, 5.6 Mbps UL;  3G (850/1900/2100 and 850/1700/2100); 2G (850/1900)
  • Connectivity includes Wi-Fi, Wi-Fi hotspot, modem tethering, Bluetooth, GPS, A-GPS and USB port
  • 1280×720 HD IPS-LCD on-cell touch screen with full lamination
  • SMS and MMS messaging plus push e-mail, IM and SNS
  • Built-in FM radio, multimedia player and recorder, 1080 HD video recording
  • 2,000 mAh Li-Ion battery
  • Speakerphone, proximity/light/gravity sensors and 3.5mm audio jack
  • Stereo headset, travel adapter and charger included

The verykool® s505 is available now in two versions: a single SIM version for operator customers and a dual SIM (unlocked) version for the open market. Suggested retail price: $199 (U.S.). To learn more about the device, visit our verykool® website at http://www.verykool.net/Products/s505

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) customer acceptance of the new s505 handset; (2) our ability to continue to differentiate our products, including the s505, from the competition; (3) significant changes in supplier terms and relationships or shortages in component or product supply; (4) extended general economic downturn in world markets; (5) inability to secure adequate supply of competitive products on a timely basis and on commercially reasonable terms; (6) inability 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; and (7) rapid product improvement and technological changes leading to changes in consumer demand for multimedia wireless handset products and features. In addition, statements regarding the MobileTREC system are attributable to MobileTREC, are the responsibility of MobileTREC, and have not been independently verified by InfoSonics. 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.

Note:  All trademarks and copyrights other than InfoSonics and verykool are property of their respective owners.

Media Contact:

Cynthia Guiang
CG Communications
cynthia@cgcommunications.com
858-793-2471

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