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INFOSONICS 2004 ANNUAL REVENUE INCREASES 21%;
INCOME FROM CONTINUING OPERATIONS UP 61%
SAN DIEGO, CA, March 10, 2005 - InfoSonics Corporation (AMEX: IFO) , one of the largest distributors of wireless handsets in the United States and Latin America, today announced results for the year ended December 31, 2004. The year included the completion of the Company's Initial Public Offering (IPO), and listing on the American Stock Exchange, in June, and year-end increases in revenues, units sold and income from continuing operations, in addition to a focus on growing its core distribution business.
Income from continuing operations for the year ended December 31, 2004 increased 61% to $929,000, or $0.19 per fully diluted share, compared with $577,000, or $0.15 per fully diluted share, for the year ended December 31, 2003. Discontinued operations showed a loss of $891,000, or $0.18 per diluted share, for the year ended December 31, 2004 compared with income of $562,000, or $0.14 per diluted share, for the year ended December 31, 2003. Net income for the year ended December 31, 2004 was $38,000, or $0.01 per fully diluted share, compared with net income for the year ended December 31, 2003 of $1,139,000, or $0.29 per fully diluted share.
Units shipped for the year and average selling price both increased 10%. Net sales for the year ended December 31, 2004 were $73.4 million compared with $60.9 million for the year ended December 31, 2003, an increase of 21% from the prior year.
Joseph Ram, InfoSonics Chief Executive Officer commented, We are pleased with our results from continuing operations for the year, with increases of 21% in net sales and 61% in income from continuing operations over the prior year. Significant events of the year included the completion of our IPO, enhancement and expansion of our Samsung relationship, contracting with VK Mobile for exclusive distribution of its products in the Americas , and the discontinuing of our mall-based retail business. These events, combined with others, have created a financial and operational foundation on which we intend to build, and will enable us to focus resources on our core business; while allowing us to examine other opportunities that utilize our industry knowledge and distribution infrastructure. During the year we developed and augmented relationships with new key customers in the United States and Latin America that we believe will have a positive impact on our top-line growth. Our recent acquisition in Argentina and the development of additional carrier relationships should enable us to increase our penetration in the Americas.
Summary financial information
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For the Year ended December 31 |
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2004 |
2003 |
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|
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Net Sales |
$73,406,390 |
$60,885,347 |
Gross Profit |
$5,543,051 |
$4,801,485 |
Income from Continuing Operations |
$928,936 |
$576,832 |
Income (Loss) from Discontinued Operations |
($890,840) |
$562,181 |
Net Income |
$38,096 |
$1,139,013 |
Diluted Earnings (loss) per share: |
|
|
Continuing Operations |
$0.19 |
$0.15 |
Discontinued Operations |
($0.18) |
$0.14 |
Net Income |
$0.01 |
$0.29 |
InfoSonics Corporation will host a conference call today at 11 a.m. eastern time to discuss the Company's financial results and achievements and will answer participants' questions. Representing InfoSonics will be Joseph Ram, Chief Executive Officer, and Jeffrey Klausner, Chief Financial Officer. Those who wish to participate in the conference call may telephone 800-299-9630, or 617-786-2904 for international callers, and enter passcode 73138537 approximately 15 minutes before the call. A digital replay will be available by telephone for two weeks and may be accessed by dialing 888-286-8010 from the U.S. , or 617-801-6888 for international callers, and entering passcode 96017586. There is also a web simulcast which is available at www.infosonics.com in the Investor Relations section.
About InfoSonics Corporation
InfoSonics is one of the largest distributors of wireless handsets and accessories in the United States and Latin America . For the wireless telecommunications industry, InfoSonics provides flexible and cost effective solutions, including purchasing, marketing, selling, warehousing, order assembly, programming, packing, shipping, and delivery. InfoSonics supports the manufacturers in moving their products to agents, resellers, distributors, independent dealers, retailers and wireless network operators in the U.S. and Latin America . For additional information, please visit http://www.infosonics.com .
The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Some of these uncertainties and risks include, but are not limited to, the demand for our products, our ability to obtain our products from our suppliers, our ability to maintain commercially feasible margins given significant competition, and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof. InfoSonics undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Readers should carefully review the risks described in other documents that InfoSonics files from time to time with the Securities and Exchange Commission (SEC), including the final prospectus filed June 18, 2004, in connection with the Company's initial public offering.
InfoSonics Corporation and subsidiaries
Consolidated Balance Sheets
ASSETS |
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December 31, |
December 31, |
|
|
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2004 |
2003 |
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Current assets |
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Cash and cash equivalents |
$ 5,183,876 |
$ 2,570 |
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Trade accounts receivable, net of allowance for |
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|
|
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doubtful accounts of $250,000 and $359,990 |
7,596,104 |
8,633,284 |
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Inventory, net of reserves of $141,086 |
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and $76,820 |
4,640,756 |
1,575,999 |
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Prepaid expenses |
456,306 |
188,513 |
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Net assets of discontinued operations |
181,010 |
1,559,207 |
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Deferred tax assets |
285,000 |
515,650 |
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|
|
|
|
|
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Total current assets |
18,343,052 |
12,475,223 |
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|
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Property and equipment , net |
237,853 |
37,312 |
Deferred offering costs |
- |
162,913 |
Other assets |
138,851 |
22,767 |
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Total assets |
$ 18,719,756 |
$ 12,698,215 |
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InfoSonics Corporation and Subsidiaries
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS' EQUITY |
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December 31, |
December 31, |
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2004 |
2003 |
Current liabilities |
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Line of credit |
$ 2,564,115 |
$ 5,236,432 |
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Book Overdraft |
- |
867,555 |
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Accounts payable |
2,576,034 |
2,211,563 |
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Accrued expenses |
447,067 |
144,278 |
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Income taxes payable |
- |
821,982 |
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Current portion of notes payable - related party |
- |
30,000 |
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Net liabilities of discontinued operations |
693,542 |
988,905 |
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Total current liabilities |
6,280,758 |
10,300,715 |
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Total liabilities |
6,280,758 |
10,300,715 |
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Shareholders' equity |
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Preferred stock, $0.001 par value 10,000,000 shares |
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authorized 0 and 0 shares issued and outstanding |
- |
- |
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Common stock, $0.001 par value 40,000,000 shares |
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authorized 5,212,000 and 3,200,000 |
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shares issued and outstanding |
5,212 |
3,200 |
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Additional paid-in capital |
10,529,652 |
528,263 |
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Retained earnings |
1,904,134 |
1,866,037 |
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|
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| |
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Total shareholders' equity |
12,438,998 |
2,397,500 |
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Total liabilities and shareholders' equity |
$ 18,719,756 |
$ 12,698,215 |
InfoSonics Corporation and Subsidiaries
Consolidated Statements of Income
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For the Years Ended |
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December 31 |
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2004 |
2003 |
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|
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Net sales |
$73,406,390 |
$60,885,347 |
Cost of sales |
67,863,339 |
56,083,862 |
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Gross profit |
5,543,051 |
4,801,485 |
Operating expenses |
4,210,198 |
3,563,187 |
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Income from continuing operations |
1,332,853 |
1,238,298 |
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Other income (expense) |
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Interest income (expense) |
(95,941) |
(140,453) |
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Income from continuing operations before provision for income taxes |
1,236,912 |
1,097,845 |
Provision for income taxes |
307,976 |
521,013 |
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Income from continuing operations |
928,936 |
576,832 |
Income (loss) from discontinued operations |
(890,840) |
562,181 |
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Net income |
$ 38,096 |
$ 1,139,013 |
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Basic earnings (loss) per share |
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From continuing operations |
$0.22 |
$0.18 |
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From discontinued operations |
($0.21) |
$0.18 |
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Net Income |
$0.01 |
$0.36 |
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Diluted earnings (loss) per share |
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From continuing operations |
$0.19 |
$0.15 |
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From discontinued operations |
($0.18) |
$0.14 |
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Net Income |
$0.01 |
$0.29 |
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Basic weighted-average number of shares |
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outstanding |
4,290,546 |
3,200,000 |
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Diluted weighted-average number of shares |
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outstanding |
4.987,792 |
3,908,098 |
InfoSonics Corporation and Subsidiaries
Consolidated Statements of Cash Flows
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For the Years Ended |
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December 31 |
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2004 |
2003 |
Cash flows from operating activities |
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|
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Net income from continuing operations |
$ 928,936 |
$ 576,832 |
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Adjustments to reconcile net income from operations to net |
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cash provided by (used in) operating activities |
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Depreciation and amortization |
28,390 |
10,688 |
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Loss on disposal of fixed assets |
2,017 |
1,088 |
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Provision for bad debt |
(109,990) |
325,979 |
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Provision for obsolete inventory |
62,606 |
48,509 |
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(Increase) decrease in |
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|
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Trade accounts receivable |
1,147,170 |
(6,425,335) |
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Inventory |
(3,127,363) |
(344,759) |
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Prepaid expenses |
(267,793) |
(73,736) |
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Other assets |
(116,084) |
(1,274) |
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Increase (decrease) in |
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Accounts payable |
364,471 |
629,597 |
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Accrued expenses |
302,789 |
165,428 |
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Income tax liabilities |
(821,982) |
632,362 |
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Deferred tax assets |
230,650 |
- |
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Cash provided by (used in) continuing operations |
(1,376,183) |
(4,454,621) |
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Cash provided by (used in) discontinued operations |
191,994 |
(653,356) |
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Net cash provided by (used in) operating activities |
(1,184,189) |
(5,107,977) |
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Cash flows from investing activities |
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Purchase of property and equipment |
$ (230,920) |
$ (13,469) |
Net cash provided by (used in) investing activities |
$ (230,920) |
$ (13,469) |
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Cash flows from financing activities |
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Bank overdraft |
(867,555) |
867,555 |
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Borrowings from line of credit |
48,404,847 |
27,187,014 |
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Payments on line of credit |
(51,077,191) |
(23,950,582) |
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Payments on subordinated notes payable related parties |
(30,000) |
(57,509) |
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Cash paid for deferred offering costs |
- |
(162,913) |
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Offering costs |
(1,887,686) |
- |
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Cash received for stock |
12,054,000 |
- |
Net cash provided by (used in) financing activities |
6,596,415 |
3,883,565 |
Net increase (decrease) in cash and cash equivalents |
5,181,306 |
(1,237,881) |
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Cash and cash equivalents, beginning of period |
2,570 |
1,240,451 |
Cash and cash equivalents, end of period |
$ 5,183,876 |
$ 2,570 |
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