SAN DIEGO, March 4, 2015 /PRNewswire/ -- InfoSonics
Corporation (NASDAQ: IFON), the provider of
verykool® wireless handset solutions and tablets,
today announced results for its fourth quarter and year ended
December 31, 2014.
"We are very pleased to report strong results in our fourth
quarter in terms of both revenue and earnings," said
Joseph Ram, president and CEO of InfoSonics. "Our
efforts to diversify our customer base into the retail segment are
finally paying off. Fourth quarter revenues increased 51%
over the same quarter last year and resulted in 27% sales growth
for the year as a whole. Strong bottom line profitability in
the fourth quarter also drove profitability for the full 2014
year. We sold a higher mix of smartphones in the fourth
quarter and our average selling price per unit was up 57% over the
prior year quarter. We feel positive looking ahead to 2015 as
we have significantly refreshed our product portfolio and plan to
continue to do so at a more rapid pace than in the past. We
have been working to improve the design, technology, specifications
and pricing of our new phones to make them even more competitive in
both the carrier and retail spaces. In addition, we are
responding to customer demand for larger screen devices and, for
the U.S. market, have introduced our first LTE model with more
models to be launched soon."
InfoSonics reported net sales for the 2014 fourth quarter of
$17.9 million, which represented a
$6.1 million, or 51%, increase
from $11.9 million for the fourth
quarter of 2013. The Company reported significant sales
growth to customers in Mexico,
Peru and the U.S. Unit
shipments during the quarter declined by 4% compared to the prior
year, but the average selling price per unit rose 57%. Net
sales for the year ended December 31,
2014 were $48.1 million, which
represented a $10.2 million, or 27%,
increase over $37.9 million for the
2013 year.
Gross profit in the fourth quarter of 2014 was $3.0 million, a 48% increase compared to
$2.0 million for the comparable
period in 2013. The gross profit margin as a percent of sales
in the fourth quarter of 2014 declined to 16.5% compared to 16.9%
for the comparable period in 2013. The margin reduction
resulted from costs in the quarter associated with the conclusion
of projects for internally designed products and related
terminations with contract manufacturers, as well as a higher level
of inventory reserves. Gross profit for the year ended
December 31, 2014 was $8.3 million, which represented a $1.3 million, or 19%, increase from
$6.9 million for the 2013
year.
Operating expenses in the fourth quarter of 2014 were
$2.1 million, an increase of
$284,000, or 15%, compared to
$1.9 million in the 2013 fourth
quarter. This reflects a $422,000, or 26%, increase in SG&A expenses
and a $138,000, or 64%, decrease in
R&D expenses. The higher SG&A expenses include
increased personnel, marketing and insurance costs, while the
decrease in R&D expenses reflects the wind-down of the
Company's China-based development
team. Total operating expenses as a percent of sales in the
fourth quarter declined from 15.6% in the 2013 fourth quarter to
11.9% in the 2014 fourth quarter. For the year ended
December 31, 2014, total operating
expenses were $8.0 million,
which represented a $120,000, or 1%,
decrease from $8.1 million for
the 2013 year. As a percent of sales, operating expenses
declined from 21.3% in 2013 to 16.6% in 2014.
Net income for the fourth quarter of 2014 was $730,000, $0.05 per
share, compared to net income of $125,000, $0.01 per
share, in the fourth quarter of 2013. Net income for the year
ended December 31, 2014 was
$261,000, $0.02 per share, compared to a net loss of
$597,000, $0.04 per share, in the 2013 year.
At December 31, 2014, the Company
had $1.5 million in cash,
$15.9 million of net working
capital and $2.7 million of
outstanding bank debt.
About InfoSonics Corporation
InfoSonics is a San Diego-based
manufacturer and provider of wireless handsets, tablets and related
products to carriers, distributors and consumers in the United States and Latin America under the verykool® brand.
The company is committed to delivering quality products with
innovative designs that appeal to consumers and offer exceptional
value. Additional information can be found on our corporate
website at www.infosonics.com and www.verykool.net.
Past performance in any period may not be indicative of future
results in the next period or the same period in a subsequent
year. We also experience seasonal revenue fluctuations that
can be significant from one quarter to another. 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, including LTE models, at a
sufficient pace and successfully introduce them into target
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.
InfoSonics
Corporation
|
Consolidated
Statements of Operations
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
(Audited)
|
|
|
|
|
|
Net
sales
|
$ 17,937
|
|
$ 11,865
|
|
$ 48,144
|
|
$ 37,895
|
Cost of
sales
|
14,981
|
|
9,863
|
|
39,891
|
|
30,953
|
Gross
profit
|
2,956
|
|
2,002
|
|
8,253
|
|
6,942
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
2,059
|
|
1,637
|
|
7,379
|
|
6,751
|
|
Research and
development
|
79
|
|
217
|
|
588
|
|
1,336
|
|
|
2,138
|
|
1,854
|
|
7,967
|
|
8,087
|
Operating
income (loss)
|
818
|
|
148
|
|
286
|
|
(1,145)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
(2)
|
|
(2)
|
|
115
|
|
582
|
|
Interest,
net
|
(75)
|
|
2
|
|
(126)
|
|
17
|
Income (loss)
before provision for income taxes
|
741
|
|
148
|
|
275
|
|
(546)
|
Provision for
income taxes
|
(11)
|
|
(23)
|
|
(14)
|
|
(51)
|
Net income
(loss)
|
$ 730
|
|
$ 125
|
|
$ 261
|
|
$ (597)
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
$ 0.05
|
|
$ 0.01
|
|
$ 0.02
|
|
$ (0.04)
|
|
Diluted
|
$ 0.05
|
|
$ 0.01
|
|
$ 0.02
|
|
$ (0.04)
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
14,358
|
|
14,184
|
|
14,323
|
|
14,184
|
|
Diluted
|
14,685
|
|
14,294
|
|
14,789
|
|
14,184
|
InfoSonics
Corporation
|
Consolidated
Balance Sheets
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,464
|
|
$
2,369
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $95 and
$373, respectively
|
15,644
|
|
11,856
|
|
Other accounts
receivable
|
70
|
|
163
|
|
Inventory
|
5,880
|
|
2,467
|
|
Prepaid
assets
|
2,778
|
|
3,435
|
|
Total current
assets
|
25,836
|
|
20,290
|
Property and
equipment, net
|
137
|
|
200
|
Other
assets
|
31
|
|
179
|
|
Total
assets
|
$
26,004
|
|
$
20,669
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
4,371
|
|
$
1,161
|
|
Accrued
expenses
|
2,804
|
|
3,180
|
|
Line of credit
borrowings
|
2,725
|
|
-
|
|
Total current
liabilities
|
9,900
|
|
4,341
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred
stock, $0.001 par value, 10,000 shares authorized (no shares issued
and outstanding)
|
-
|
|
-
|
|
Common stock,
$0.001 par value, 40,000 shares authorized, 14,358 and 14,184
shares issued and outstanding
as of December 31, 2014 and 2013, respectively
|
14
|
|
|
|
|
14
|
|
Additional
paid-in capital
|
32,614
|
|
32,391
|
|
Accumulated
other comprehensive loss
|
(726)
|
|
(18)
|
|
Accumulated
deficit
|
(15,798)
|
|
(16,059)
|
|
Total stockholders'
equity
|
16,104
|
|
16,328
|
|
Total liabilities and
stockholders' equity
|
$
26,004
|
|
$
20,669
|
InfoSonics
Corporation
|
Consolidated
Statements of Cash Flows
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Twelve Months Ended
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
2014
|
|
2013
|
Cash flows
from operating activities:
|
|
|
|
|
Net income
(loss)
|
$ 261
|
|
$ (597)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation
|
146
|
|
263
|
|
|
Loss on
disposal of fixed assets
|
33
|
|
49
|
|
|
Provision for
(recovery of) bad debts
|
(65)
|
|
34
|
|
|
Provision for
obsolete inventory
|
255
|
|
(194)
|
|
|
Stock-based
compensation expense
|
86
|
|
109
|
|
|
(Increase)
decrease in:
|
|
|
|
|
|
|
Trade accounts
receivable
|
(3,723)
|
|
(1,643)
|
|
|
|
Other accounts
receivable
|
93
|
|
(68)
|
|
|
|
Inventory
|
(3,668)
|
|
1,156
|
|
|
|
Prepaids
|
657
|
|
(1,914)
|
|
|
|
Other
assets
|
148
|
|
50
|
|
|
Increase
(decrease) in:
|
|
|
|
|
|
|
Accounts
payable
|
3,210
|
|
(353)
|
|
|
|
Accrued
expenses
|
(376)
|
|
(606)
|
|
|
|
|
Net cash used
in operating activities
|
(2,943)
|
|
(3,714)
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
Purchase of
property and equipment
|
(116)
|
|
(145)
|
|
Decrease in
restricted cash
|
-
|
|
1,003
|
|
|
Net cash
provided by (used in) investing activities
|
(116)
|
|
858
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
Borrowings on
line of credit
|
4,380
|
|
-
|
|
Repayments on
line of credit
|
(1,655)
|
|
-
|
|
Cash received
from exercise of stock options
|
137
|
|
-
|
|
|
Net cash
provided by financing activities
|
2,862
|
|
-
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
(708)
|
|
(5)
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
(905)
|
|
(2,861)
|
|
Cash and
cash equivalents, beginning of period
|
2,369
|
|
5,230
|
|
Cash and
cash equivalents, end of period
|
$ 1,464
|
|
$ 2,369
|
|
|
|
|
|
|
|
|
|
Cash paid
for interest
|
$ 77
|
|
$
-
|
|
Cash paid
for taxes
|
$ 50
|
|
-
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/infosonics-reports-fourth-quarter-and-full-year-2014-results-300045037.html
SOURCE InfoSonics Corporation