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INFOSONICS REPORTS RECORD FIRST QUARTER RESULTS
SAN DIEGO, CA, May 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 quarter ended March 31, 2005. During the quarter, the Company achieved record revenues of $24 million, and also advanced its expansion into Latin America with new subsidiaries serving carriers and retailers in Argentina, Guatemala and El Salvador.
Revenues for the quarter ended March 31, 2005 were $24.0 million, which is a 28% increase compared with $18.7 million reported for the quarter ended March 31, 2004. For the quarter ended March 31, 2005, units shipped and average selling price increased year-over-year by 16% and 9% respectively.
Net income for the quarter ended March 31, 2005 increased 61% to $315,000, or $0.05 per fully diluted share, compared with $196,000, or $0.06 per fully diluted share, for the quarter ended March 31, 2004. Fully diluted shares increased to 5.9 million at March 31, 2005 from 3.9 million at March 31, 2004 due to the Company's initial public offering in June 2004. Income from continuing operations before provision for income tax for the quarter ended March 31, 2005 increased 55% to $539,000 compared with $347,000 for the quarter ended March 31, 2004.
In the first quarter we experienced strong growth in net income and reported the highest quarterly revenue in our company's history, commented Joseph Ram, InfoSonics President and Chief Executive Officer. Our year-over-year revenue growth of 28% and bottom line performance is a direct result of focusing on our core distribution business including increases of sales in Latin America and expansion of relationships with carrier customers.
During the quarter, we believe we continued to improve the long-term growth prospects of our company through acquisitions and new product agreements. In January, we expanded our growing list of carrier customers in Latin America by successfully completing an acquisition of the company that has distribution rights for Samsung cellular phones and accessories in Argentina. In addition, we signed agreements with Novatel Wireless and VK Mobile that will provide new products to our carrier customers in the future.
Mr. Ram concluded, We are pleased with our accomplishments during the first quarter and believe that we are in a position to deliver superior value to our customers and continue to implement and execute on our strategic objectives.
Summary financial information
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For the Quarter ended March 31 |
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2005 |
2004 |
Increase |
Net Sales |
$ 24,024,217 |
$ 18,743,319 |
28% |
Gross Profit |
$ 2,131,260 |
$ 1,414,677 |
51% |
Income from Continuing Operations before tax provision |
$ 539,525 |
$ 347,247 |
55% |
Income from Continuing Operations |
$ 320,915 |
$ 229,489 |
40% |
Income (Loss) from Discontinued Operations |
($ 6,077) |
($ 33,554) |
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Net Income |
$ 314,838 |
$ 195,935 |
61% |
Diluted Earnings (loss) per share: |
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|
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Continuing Operations |
$ 0.05 |
$ 0.06 |
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Discontinued Operations |
($ 0.00) |
($ 0.01) |
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Net Income |
$ 0.05 |
$ 0.05 |
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InfoSonics Corporation will host a conference call today at 12 noon eastern time to discuss the Company's financial results and achievements and will answer participants' questions. Representing InfoSonics will be Joseph Ram, President and Chief Executive Officer, and Jeffrey Klausner, Chief Financial Officer. Those who wish to participate in the conference call may telephone 866-761-0748, or 617-614-2706 for international callers, and enter passcode 33753275 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 28215080. There is also a web simulcast which is available at www.infosonics.com in the Investor Relations section.
About InfoSonics
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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March 31, |
December 31, |
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2005 |
2004 |
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(unaudited) |
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Current assets |
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Cash and cash equivalents |
$ 3,543,213 |
$ 5,183,876 |
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Trade accounts receivable, net of allowance for |
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doubtful accounts of $361,650 and $250,000 |
12,572,410 |
7,596,104 |
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Inventory, net of reserves of $119,756 |
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and $141,086 |
3,764,319 |
4,640,756 |
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Prepaid merchandise |
2,500,000 |
71,850 |
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Prepaid expenses |
216,235 |
384,456 |
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Net assets of discontinued operations |
176,947 |
181,010 |
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Deferred tax assets |
343,000 |
285,000 |
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Total current assets |
23,116,124 |
18,343,052 |
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Property and equipment , net |
267,234 |
237,853 |
Deferred tax asset - noncurrent |
(2,000) |
67,000 |
Other assets |
86,266 |
71,851 |
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Total assets |
$ 23,467,624 |
$ 18,719,756 |
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InfoSonics Corporation and Subsidiaries
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS' EQUITY |
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March 31, |
December 31, |
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2005 |
2004 |
Current liabilities |
(unaudited) |
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Line of credit |
$ 7,500,000 |
$ 2,564,115 |
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Accounts payable |
2,049,887 |
2,576,034 |
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Accrued expenses |
384,830 |
447,054 |
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Income taxes payable |
108,514 |
- |
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Net liabilities of discontinued operations |
670,555 |
693,542 |
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Total current liabilities |
10,713,786 |
6,280,745 |
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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 5,212,000 |
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shares issued and outstanding |
5,212 |
5,212 |
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Additional paid-in capital |
10,529,652 |
10,529,652 |
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Retained earnings |
2,218,974 |
1,904,147 |
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Total shareholders' equity |
12,753,838 |
12,439,011 |
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Total liabilities and shareholders' equity |
$ 23,467,624 |
$ 18,719,756 |
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InfoSonics Corporation and Subsidiaries
Consolidated Statements of Income
(unaudited)
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For the Quarter Ended |
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March 31 |
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2005 |
2004 |
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Net sales |
$ 24,024,217 |
$ 18,743,319 |
Cost of sales |
21,892,957 |
17,328,642 |
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Gross profit |
2,131,260 |
1,414,677 |
Operating expenses |
1,566,914 |
1,020,981 |
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Income from continuing operations |
564,346 |
393,696 |
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Other income (expense) |
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Interest income (expense) |
(24,821) |
(46,449) |
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Income from continuing operations before provision for income taxes |
539,525 |
347,247 |
Provision for income taxes |
218,610 |
117,758 |
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Income from continuing operations |
320,915 |
229,489 |
Income (loss) from discontinued operations |
(6,077) |
(33,554) |
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Net income |
$ 314,838 |
$ 195,935 |
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Basic earnings (loss) per share |
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From continuing operations |
$0.06 |
$0.07 |
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From discontinued operations |
($0.00) |
($0.01) |
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Net Income |
$0.06 |
$0.06 |
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Diluted earnings (loss) per share |
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From continuing operations |
$0.05 |
$0.06 |
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From discontinued operations |
($0.00) |
($0.01) |
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Net Income |
$0.05 |
$0.05 |
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Basic weighted-average number of shares |
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Outstanding |
5,212,000 |
3,200,000 |
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Diluted weighted-average number of shares |
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Outstanding |
5,856,686 |
3,908,098 |
InfoSonics Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
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For the Three Months ended |
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March 31, |
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2005 |
2004 |
Cash flows from operating activities |
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Net income from continuing operations |
$ 320,915 |
$ 229,489 |
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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 |
13,690 |
(19,581) |
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Provision for bad debt |
111,650 |
75,246 |
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Provision for obsolete inventory |
(21,330) |
6,407 |
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(Increase) decrease in |
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Trade accounts receivable |
(5,087,956) |
(225,617) |
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Inventory |
897,767 |
293,681 |
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Prepaid Merchandise |
(2,428,150) |
97,587 |
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Prepaid expenses |
168,221 |
(55,322) |
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Other assets |
(14,415) |
(33,299) |
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Increase (decrease) in |
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Accounts payable |
(526,147) |
1,234,623 |
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Accrued expenses |
(62,224) |
134,841 |
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Income tax liabilities |
108,514 |
(182,978) |
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Deferred tax assets |
11,000 |
- |
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Cash provided by (used in) continuing operations |
(6,508,465) |
1,555,077 |
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Cash provided by (used in) discontinued operations |
(25,001) |
286,575 |
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Net cash provided by (used in) operating activities |
(6,533,466) |
1,841,652 |
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Cash flows from investing activities |
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Purchase of property and equipment |
(43,071) |
(47,495) |
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Net cash provided by (used in) investing activities |
(43,071) |
(47,495) |
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Cash flows from financing activities |
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Bank overdraft |
- |
(867,555) |
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Borrowings from line of credit |
18,422,466 |
4,903,062 |
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Payments on line of credit |
(13,486,592) |
(5,734,535) |
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Cash paid for deferred offering costs |
- |
(137,931) |
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Cash received for stock |
- |
54,000 |
Net cash provided by (used in) financing activities |
4,935,874 |
(1,782,959) |
Net increase (decrease) in cash and cash equivalents |
(1,640,663) |
11,198 |
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Cash and cash equivalents, beginning of period |
5,183,876 |
2,570 |
Cash and cash equivalents, end of period |
$ 3,543,213 |
$ 13,768 |
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