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INFOSONICS SECOND QUARTER REVENUE INCREASES 84% TO $32.5 MILLION WHILE NET INCOME IMPROVES BY 78%
SAN DIEGO, CA, August 11, 2005 - InfoSonics Corporation (AMEX: IFO) , one of the largest distributors of wireless handsets in the United States and Latin America, today announced second quarter and six month results for the period ended June 30, 2005. During the quarter, the Company achieved record revenue, operating income and earnings. The company also continued to invest in the future of the business by expanding its operational facilities and value added services.
Revenues for the quarter ended June 30, 2005 were $32.5 million, which is an 84% increase compared with $17.7 million reported for the quarter ended June 30, 2004 . For the second quarter of 2005, units shipped increased by 131% year-over-year offsetting a 19% decline in average selling price.
Net income for the quarter ended June 30, 2005 increased 78% to $408,000, or $0.07 per fully diluted share, compared with $230,000, or $0.05 per fully diluted share, for the comparable period in 2004. Average fully diluted shares increased to 5.8 million at June 30, 2005 from 4.2 million at June 30, 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 June 30, 2005 increased 26% to $615,000 compared with $487,000 for the quarter ended June 30, 2004 .
Revenues for the six months ended June 30, 2005 were $56.6 million, which is a 55% increase compared with $36.4 million reported for the comparable period in 2004. For the first six months of 2005, units shipped increased 66% offsetting a 6% decline in average selling price.
Net income for the six months ended June 30, 2005 increased 70% to $723,000, or $0.12 per fully diluted share, compared with $426,000, or $0.10 per fully diluted share, for the comparable period in 2004. Average fully diluted shares increased to 5.8 million at June 30, 2005 from 4.1 million at June 30, 2004 due to the Company's initial public offering in June 2004. Income from continuing operations before provision for income tax for the six-month ended June 30, 2005 increased 38% to $1.2 million compared with $834,000 for the six months ended June 30, 2004 .
" Our second quarter achievements were marked by record revenue and a strong increase in year-over-year profitability," stated Joseph Ram , InfoSonics Chief Executive Officer. "Due to our value added services, we have increased our market share in mobile communications by expanding our relationships with existing partners and adding new relationships. We added more U.S. customers in the RSA channel and we also began new relationships with several Latin American carriers."
Gross profit for the quarter ended June 30, 2005 was $2.7 million or 8.2% of revenues, a dollar increase of 72%, compared to $1.5 million and 8.7% gross profit margin for the quarter ended June 30, 2004. For the first six months of 2005, the Company's gross margin improved to 8.5% compared to 8.1% in the comparable period last year. The quarterly fluctuations in gross profit margin are due to several factors including but not limited to increased sales volume from time to time with large key accounts in both the United States and Latin America .
Operating expenses in the second quarter of 2005 were $2.0 million or 6.1% of sales, as compared with $1.0 million, or 5.8% of sales for the second quarter of 2004. This increase as a percent of revenue is primarily due to increased personnel to support the higher sales levels, and larger office and warehouse facilities as the company positions itself for future growth.
"We have made strides in our revenue and earnings growth during the past six months. While achieving these results, we continue to invest for the long-term growth of our company." Mr. Ram added. "We believe our results are due to our business strategy of developing long-term or "sticky" relationships with our manufacturing and carrier partners based on our leading value added services. As an example, our recent announcement of approval of the VK530 by a number of carriers both domestically and in Latin America is the result of investments in sales, logistics, engineering, product management and marketing in order to handle this type of business that requires additional expertise on our part. We believe that this additional expertise will allow us to offer better solutions to both our current customers and vendor partners."
Summary financial information
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For the Quarter ended June 30 |
|
|
2005 |
2004 |
Increase |
Net Sales |
$ 32,527,630 |
$ 17,660,301 |
84% |
Gross Profit |
$ 2,656,583 |
$ 1,543,416 |
72% |
Income from Continuing Operations before income tax provisions |
$ 614,649 |
$ 486,946 |
26% |
Net Income |
$ 407,937 |
$ 229,615 |
78% |
|
|
|
|
Diluted Earnings per share: |
|
|
|
From continuing operations |
$0.07 |
$0.09 |
|
Net Income |
$0.07 |
$0.05 |
|
Fully Diluted Shares |
5,827,793 |
4,217,217 |
|
|
For the Six Months ended June 30 |
|
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2005 |
2004 |
Increase |
Net Sales |
$ 56,551,847 |
$ 36,423,227 |
55% |
Gross Profit |
$ 4,787,843 |
$ 2,958,093 |
62% |
Income from Continuing Operations before income tax provisions |
$ 1,154,175 |
$ 834,193 |
38% |
Net Income |
$ 722,776 |
$ 425,550 |
70% |
|
|
|
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Diluted Earnings per share: |
|
|
|
From continuing operations |
$0.13 |
$0.14 |
|
Net Income |
$0.12 |
$0.10 |
|
Fully Diluted Shares |
5,843,153 |
4,069,339 |
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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 800-561-2731, or 617-614-3528 for international callers, and enter passcode 18175287 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 98137208. There will also be a simultaneous webcast 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. In addition, references to past operating results should not be considered to be indicative of future performance. 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 our Forms 10-K and 10-Q.
InfoSonics Corporation and Subsidiaries
Consolidated Balance Sheets
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June 30
2005 |
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December 31
2004 |
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(unaudited) |
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ASSETS |
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|
|
|
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Current assets |
|
|
|
|
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Cash and cash equivalents ............................................................................ |
|
$ |
712,899 |
|
$ |
5,183,876 |
|
Trade accounts receivable, net of allowance for doubtful accounts of $542,566 (unaudited) and $250,000 ............................................................................................ |
|
19,583,436 |
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7,596,104 |
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Inventory, net of reserves of $132,269 (unaudited) and $141,086 ..................... |
|
4,512,405 |
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4,640,756 |
|
Prepaid inventory ......................................................................................... |
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- |
|
71,850 |
|
Prepaid expenses ......................................................................................... |
|
250,076 |
|
384,456 |
|
Net assets of discontinued operations ............................................................. |
|
176,784 |
|
181,010 |
|
Deferred tax assets - current ......................................................................... |
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381,000 |
|
285,000 |
|
|
|
|
|
|
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Total current assets ...................................................................................... |
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25,616,600 |
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18,343,052 |
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|
|
|
|
|
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Property and equipment, net ......................................................................... |
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321,762 |
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237,853 |
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Deferred tax assets - noncurrent ................................................................... |
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- |
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67,000 |
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Other assets ................................................................................................ |
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86,266 |
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71,851 |
|
|
|
|
|
|
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Total assets ............................................................................................... |
|
$ |
26,024,628 |
|
$ |
18,719,756 |
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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|
|
|
|
|
|
|
|
|
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Current liabilities |
|
|
|
|
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Line of credit ................................................................................................ |
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$ |
6,277,634 |
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$ |
2,564,115 |
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Accounts payable ......................................................................................... |
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4,649,919 |
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2,576,034 |
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Accrued expenses ........................................................................................ |
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1,168,381 |
|
447,054 |
|
Income taxes payable ................................................................................... |
|
90,485 |
|
- |
|
Net liabilities of discontinued operations .......................................................... |
|
676,434 |
|
693,542 |
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|
|
|
|
|
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Total current liabilities ................................................................................... |
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12,862,853 |
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6,280,745 |
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|
|
|
|
|
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Stockholders' equity |
|
|
|
|
|
Preferred stock, $0.001 par value 10,000,000 shares authorized 0 and 0 shares issued and outstanding ........................................................................................ |
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- |
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- |
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Common stock, $0.001 par value 40,000,000 shares authorized 5,212,000 shares issued and outstanding ........................................................................................ |
|
5,212 |
|
5,212 |
|
Additional paid-in capital ............................................................................... |
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10,529,652 |
|
10,529,652 |
|
Retained earnings ......................................................................................... |
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2,626,911 |
|
1,904,147 |
|
|
|
|
|
|
|
Total stockholders' equity .............................................................................. |
|
13,161,775 |
|
12,439,011 |
|
|
|
|
|
|
|
Total liabilities and stockholders' equity ................................................. |
|
$ |
26,024,628 |
|
$ |
18,719,756 |
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InfoSonics Corporation and Subsidiaries
Consolidated Statements of Income
(unaudited)
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For the Three Months
Ended June 30, |
|
For the Six Months
Ended June 30, |
|
2005 |
|
2004 |
|
2005 |
|
2004 |
|
|
|
|
|
|
|
|
|
|
Net sales ............................................................................... |
$ 32,527,630 |
|
$ 17,660,301 |
|
$ 56,551,847 |
|
$ 36,423,227 |
|
Cost of sales .......................................................................... |
29,871,047 |
|
16,116,885 |
|
51,764,004 |
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33,465,134 |
|
|
|
|
|
|
|
|
|
|
Gross profit ........................................................................... |
2,656,583 |
|
1,543,416 |
|
4,787,843 |
|
2,958,093 |
|
Operating expenses .............................................................. |
1,980,779 |
|
1,016,808 |
|
3,547,693 |
|
2,037,789 |
|
|
|
|
|
|
|
|
|
|
Operating income from continuing operations .................... |
675,804 |
|
526,608 |
|
1,240,150 |
|
920,304 |
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Interest income (expense) .................................................. |
(61,155) |
|
(39,662) |
|
(85,975) |
|
(86,111) |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before provision for income taxes ..................................................................... |
614,649 |
|
486,946 |
|
1,154,175 |
|
834,193 |
|
Provision for income taxes ................................................... |
195,705 |
|
118,176 |
|
414,315 |
|
235,934 |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations ..................................... |
418,944 |
|
368,770 |
|
739,860 |
|
598.259 |
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Loss from discontinued operations ...................................... |
(11,007) |
|
(139,155) |
|
(17,084) |
|
(172,709) |
|
|
|
|
|
|
|
|
|
|
Net income ............................................................................ |
$ 407,937 |
|
$ 229,615 |
|
$ 722,776 |
|
$ 425,550 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
|
|
|
|
|
|
|
From continuing operations ................................................. |
$ 0.08 |
|
$ 0.11 |
|
$ 0.14 |
|
$ 0.18 |
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From discontinued operations .............................................. |
$ (0.00) |
|
$ (0.04) |
|
$ ($0.00) |
|
$ ( 0.05) |
|
Net Income ....................................................................... |
$ 0.08 |
|
$ 0.07 |
|
$ 0.14 |
|
$ 0.13 |
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
From continuing operations ............................................... $ |
$ 0.07 |
|
$ 0.09 |
|
$ 0.13 |
|
$ 0.14 |
|
From discontinued operations .............................................. |
$ (0.00) |
|
$ (0.04) |
|
$ (0.01) |
|
$ (0.04) |
|
Net Income ....................................................................... |
$ 0.07 |
|
$ 0.05 |
|
$ 0.12 |
|
$ 0.10 |
|
|
|
|
|
|
|
|
|
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Basic weighted-average number of common shares outstanding ........................................................................ |
5,212,000 |
|
3,500,889 |
|
5,212,000 |
|
3,353,011 |
|
|
|
|
|
|
|
|
|
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Diluted weighted-average number of common shares outstanding ........................................................................ |
5,827,793 |
|
4,217,217 |
|
5,843,153 |
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4,069,339 |
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Contacts:
Jeffrey A. Klausner
Chief Financial Officer
ir@InfoSonics.com
858-373-1600
John Mills or Allyson Pooley
Integrated Corporate Relations
jmills@icrinc.com or apooley@icrinc.com
310-954-1100
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