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INFOSONICS REPORTS THIRD QUARTER 2009 FINANCIAL RESULTS |
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Third Consecutive Profitable Quarter SAN DIEGO, CA, November 12, 2009 – InfoSonics Corporation (NASDAQ: IFON), one of the premier providers and distributors of wireless handsets and accessories serving Latin America, today announced results for the third quarter ended September 30, 2009. “We are pleased to report our third consecutive quarter of profitability,” said Joseph Ram, President and Chief Executive Officer of InfoSonics Corporation. “Despite the ongoing difficult global business environment, we are very encouraged by the year-over-year increases of 23% in net sales, 10% in handsets sold and 49% in gross profit. We continued to see sales growth in both South and Central America as we remained focused on our OEM distribution business as well as on our proprietary line of verykool® handsets.” “We believe our continued profitability and overall strengthening of our balance sheet will allow us to continue to navigate the current economic downturn. At the same time we will work to expand our verykool® business with more feature-rich models and more units sold as it becomes a more significant contributor to our overall business.” Third Quarter Results Approximately 725,000 units were shipped in the third quarter of 2009, compared to approximately 656,000 units in the third quarter of 2008. Average selling price per unit increased 11% year-over-year primarily due to growing demand and sales of more feature filled and higher priced units. Gross profit for the third quarter of 2009 increased 49% to $4.3 million or 6.6% of net sales, as compared to $2.9 million, or 5.5% of net sales for the third quarter of 2008. Operating income from continuing operations (before interest and taxes), for the quarter was $311,000 or $0.02 per diluted share, compared to a loss of $310,000 or $0.02 per share for the third quarter of 2008. Our discontinued operations incurred a net loss of $47,000 during the quarter ended September 30, 2009, as compared to a net loss of $81,000 for the third quarter of 2008. Net income for the third quarter of 2009 was $185,000 or $0.01 per diluted share, compared to net income of $101,000 or $0.01 per diluted share in the third quarter of 2008. InfoSonics ended the third quarter of 2009 with quick assets (cash and accounts receivable) of $69.4 million and working capital (current assets minus current liabilities) of $25.9 million. At the end of the third quarter of 2009, InfoSonics had drawn down $30 million of its $45 million credit facility with Wells Fargo. Nine-Month Results Gross profit for the first nine months of 2009 increased 21% to $11.8 million or 6.9% of total sales, as compared to $9.7 million, or 5.4% of total net sales for the same period of 2008. Operating expenses for the first nine months of 2009 were $10.5 million, an increase of 3% as compared to operating expenses of $10.1 million in the same period of 2008. Operating income from continuing operations (before interest and taxes), for the first nine months of 2009 was $1.3 million or $0.09 per diluted share, compared to a loss of $412,000 or $0.03 per share for the same period of 2008. Net income from continuing operations for the first nine months of 2009 was approximately $1.1 million or $0.07 per diluted share, compared to a net loss from continuing operations of $306,000, or $0.02 per share for the same period a year ago. Our discontinued operations in the U.S. and Mexico incurred a net loss $406,000 for the first nine months of 2009, compared to a net loss of $2.2 million in the same period of 2008. Net income for the first nine months of 2009 was $663,000 or $0.05 per diluted share, compared to a net loss of $2.5 million or $0.17 per share in the same period of last year. About InfoSonics Corporation InfoSonics is one of the premier providers and distributors of wireless handsets and accessories serving Latin America. For the wireless telecommunications industry, InfoSonics provides flexible and cost effective solutions, including product assembly, purchasing, marketing, selling, warehousing, order assembly, programming, packing, shipping, and delivery. InfoSonics supports manufacturers in moving their products to agents, resellers, distributors, independent dealers, retailers and wireless network operators in Latin America. For additional information, please visit www.infosonics.com or www.verykool.net About verykool Cautionary Statement for the Purpose of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 The matters in this press release that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about future revenues, sales levels, operating income and margins, wireless handset sales, stock-based compensation expense, gain/loss in value of derivatives, cost synergies, operating efficiencies, profitability, market share, and rates of return, are based on current management expectations that involve certain risks and uncertainties. These risks and uncertainties, in whole or in part, could cause such expectations to fail to be achieved and have a material adverse effect on InfoSonics’ business, financial condition and results of operations, and 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) dependency on Latin American sales a majority of which are from Argentina; (3) extended general economic downturn; (4) inability to secure adequate supply of competitive products on a timely basis and on commercially reasonable terms; (5) 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, such as the pending tax change in Argentina on certain electronics (including cellular phones) which could significantly increase selling prices to our customers and end-users; (6) 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; (7) 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; (8) significant changes in supplier terms and relationships; (9) termination of a supply or services agreement with a major supplier or product supply shortages; (10) continued consolidation in the wireless handset carrier market; (11) loss of business from one or more significant customers; (12) customer and geographical accounts receivable concentration risk and other related risks; (13) rapid product improvement and technological change resulting in inventory obsolescence; (14) terrorist or military actions; (15) the loss of a key executive officer or other key employees; (16) changes in consumer demand for multimedia wireless handset products and features; (17) our failure to adequately adapt to industry changes and to manage potential growth and/or contractions; (18) seasonal buying patterns; (19) uncertain political and economic conditions internationally; (20) the resolution of any litigation for or against the Company; (21) the ability of the Company to successfully introduce and sell its verykool® products and the related inventory risk of such products; and (22) the ability of the Company to generate taxable income in future periods in order to utilize and realize any quarterly tax benefits recorded. Our actual results and condition could differ materially from those anticipated in our forward-looking statements. InfoSonics has instituted in the past and continues to institute changes to its strategies, operations and processes to address these risk factors and to mitigate their impact on InfoSonics’ results of operations and financial condition. However, no assurances can be given that InfoSonics will be successful in these efforts. For a further discussion of significant factors to consider in connection with forward-looking statements concerning InfoSonics, reference is made to Item 1A Risk Factors of InfoSonics’ Annual Report on Form 10-K for the year ended December 31, 2008 and Quarterly Reports on Form 10-Q for the periods ended March 31, 2009 and June 30, 2009; other risks or uncertainties may be detailed from time to time in InfoSonics’ future SEC filings. InfoSonics does not intend to update any forward-looking statements.
Contacts: Jeffrey A. Klausner Todd Kehrli |
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