SAN DIEGO, March 9, 2017 /PRNewswire/ -- InfoSonics
Corporation (NASDAQ: IFON), the provider of verykool®
wireless handset solutions and tablets, today announced results for
its fourth quarter ended December 31, 2016.
"We are pleased to report a positive quarter," said
Joseph Ram, President and CEO of InfoSonics. We were
successful in our efforts this quarter to manage industry-wide
component cost increases and increase prices in certain of our
markets. In addition, we reduced our quarterly operating
expenses to the lowest point in twelve years. As a result,
our gross profit margin rose to 15.9% and we had a small profit at
the bottom line. Our challenge in 2017 is to find new sources
of profitable revenue on a consistent basis as part of our focus on
higher margin channels. In addition, we are finalizing the
development of our software platform, suite of services and
cloud-based solutions that we plan to launch in the second quarter
of 2017."
We had net sales for the 2016 fourth quarter of $8.6 million, which represented a $1.6 million, or 15%, decrease from
$10.2 million for the fourth quarter
of 2015. The decrease reflects our exit from the U.S. market,
as well as a lower level of sales to certain carrier customers and
to U.S. based distributors selling to Latin America. These
declines were partially offset by increased sales to big box
retailers. For the year ended December
31, 2016, our net sales were $39.1
million, which represented an $8.7 million, or 18%, decrease from
$47.8 million for the year ended
December 31, 2015.
Gross profit in the 2016 fourth quarter was $1,374,000, a 9% increase compared to
$1,256,000 for the fourth quarter of
2015. Our gross profit margin as a percent of sales in the
2016 fourth quarter increased to 15.9% compared to 12.3% for the
2015 fourth quarter. The margin improvement reflects a higher
mix of sales to non-carrier open market customers, as well as
increased selling prices to compensate for higher product costs
resulting from supply constraints. For the year ended
December 31, 2016, gross profit was $4.6 million, a 38% decrease from
$7.4 million in the prior year.
Operating expenses in the fourth quarter of 2016 were
$1,338,000, a 38% decrease compared
to $2,154,000 in the 2015 fourth
quarter. The decrease reflects expense reduction actions we
took over the course of 2016, as well as the resolution of all
outstanding patent litigation. The largest decreases were in
wages and benefits, marketing and legal fees. For the year
ended December 31, 2016, operating
expenses were $6.9 million, a 17%
reduction from $8.3 million in the
prior year.
After a $96,000 tax benefit from
the closure of two inactive foreign subsidiaries, we reported net
income of $48,000 for the fourth
quarter of 2016 compared to a net loss of $959,000, $0.07 per
share, in the fourth quarter of 2015. For the year ended
December 31, 2016, the net loss was
$2,835,000, $0.20 per share, compared to a net loss of
$1,243,000, $0.09 per share, in 2015.
At December 31, 2016, we had
$2.2 million in cash, $10.1 million of net working capital and no
outstanding funded debt.
About InfoSonics Corporation
InfoSonics is a San Diego-based
manufacturer and provider of wireless handsets, tablets and related
products to carriers, distributors and retailers in 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) the ability of the Company to restore and maintain
profitability; (2) our ability to have access to adequate
capital to fund operations, including the availability of vendor
credit and availability under the Company's bank line of credit;
(3) 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; (4) our ability to secure adequate supply of
competitive products on a timely basis and on commercially
reasonable terms; (5) our ability to successfully introduce new
products into target markets, increase sales and improve our gross
margins despite intense competition; (6) foreign exchange rate
fluctuations, devaluation of a foreign currency, adverse
governmental controls or actions including a possible protective
import tariff on Chinese products or weakening of U.S. trade
relations with Mexico, 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 and decrease profitability; (7) the
ability to attract new sources of profitable business from
expansion of products or services including iOT devices,
applications and cloud-based solutions, 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 or shortages in product supply, including, but not
limited to, those caused by recent and continuing industry
consolidation of component suppliers; (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 customer buying patterns; and (18) the
impact of any litigation for or against the Company, including
claims for infringement of intellectual property. 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 and Subsidiaries
|
|
Consolidated
Statements of Operations and Comprehensive Loss
|
(Amounts in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
December
31,
|
|
|
For the Twelve
Months Ended
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
Net
sales
|
|
$
|
8,615
|
|
|
$
|
10,192
|
|
|
$
|
39,140
|
|
|
$
|
47,833
|
|
Cost of
sales
|
|
|
7,241
|
|
|
|
8,936
|
|
|
|
34,547
|
|
|
|
40,414
|
|
Gross
profit
|
|
|
1,374
|
|
|
|
1,256
|
|
|
|
4,593
|
|
|
|
7,419
|
|
Selling, general
and administrative expenses
|
|
|
1,338
|
|
|
|
2,154
|
|
|
|
6,943
|
|
|
|
8,339
|
|
Operating income
(loss)
|
|
|
36
|
|
|
|
(898)
|
|
|
|
(2,350)
|
|
|
|
(920)
|
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
(13)
|
|
|
|
—
|
|
|
|
(334)
|
|
|
|
—
|
|
Interest expense,
net
|
|
|
(71)
|
|
|
|
(61)
|
|
|
|
(244)
|
|
|
|
(320)
|
|
Loss before
benefit (provision) for income taxes
|
|
|
(48)
|
|
|
|
(959)
|
|
|
|
(2,928)
|
|
|
|
(1,240)
|
|
Benefit
(provision) for income taxes
|
|
|
96
|
|
|
|
—
|
|
|
|
93
|
|
|
|
(3)
|
|
Net income
(loss)
|
|
$
|
48
|
|
|
$
|
(959)
|
|
|
$
|
(2,835)
|
|
|
$
|
(1,243)
|
|
Net income (loss)
per share (basic and diluted)
|
|
$
|
0.00
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.20)
|
|
|
$
|
(0.09)
|
|
Basic and diluted
weighted-average number of common shares outstanding
|
|
|
14,389
|
|
|
|
14,389
|
|
|
|
14,389
|
|
|
|
14,380
|
|
Comprehensive
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
48
|
|
|
$
|
(959)
|
|
|
$
|
(2,835)
|
|
|
$
|
(1,243)
|
|
Foreign currency
translation adjustments
|
|
|
(252)
|
|
|
|
(32)
|
|
|
|
(1,103)
|
|
|
|
(866)
|
|
Comprehensive
loss
|
|
$
|
(204)
|
|
|
$
|
(991)
|
|
|
$
|
(3,938)
|
|
|
$
|
(2,109)
|
|
InfoSonics
Corporation
|
|
Consolidated
Balance Sheets
|
(Amounts in
thousands, except per share data)
|
(Audited)
|
|
|
|
|
|
|
|
|
|
December
31,
2016
|
|
|
December
31,
2015
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,200
|
|
|
$
|
2,647
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $113 and
$95, respectively
|
|
|
7,507
|
|
|
|
9,291
|
|
Other accounts
receivable
|
|
|
62
|
|
|
|
96
|
|
Inventory
|
|
|
4,071
|
|
|
|
6,637
|
|
Prepaid
assets
|
|
|
1,670
|
|
|
|
2,025
|
|
Total current
assets
|
|
|
15,510
|
|
|
|
20,696
|
|
Property and
equipment, net
|
|
|
132
|
|
|
|
156
|
|
Other
assets
|
|
|
384
|
|
|
|
129
|
|
Total
assets
|
|
$
|
16,026
|
|
|
$
|
20,981
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
3,839
|
|
|
$
|
4,398
|
|
Accrued
expenses
|
|
|
1,597
|
|
|
|
2,343
|
|
Total current
liabilities
|
|
|
5,436
|
|
|
|
6,741
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
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; 14,389 and 14,389 shares
issued and outstanding as of December 31, 2016 and 2015,
respectively
|
|
|
14
|
|
|
|
14
|
|
Additional paid-in
capital
|
|
|
33,147
|
|
|
|
32,859
|
|
Accumulated other
comprehensive loss
|
|
|
(2,695)
|
|
|
|
(1,592)
|
|
Accumulated
deficit
|
|
|
(19,876)
|
|
|
|
(17,041)
|
|
Total stockholders'
equity
|
|
|
10,590
|
|
|
|
14,240
|
|
Total liabilities and
stockholders' equity
|
|
$
|
16,026
|
|
|
$
|
20,981
|
|
InfoSonics
Corporation
|
|
Consolidated
Statements of Cash Flows
|
(Amounts in
thousands)
|
(Audited)
|
|
|
|
|
|
|
For the Year
Ended
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,835)
|
|
|
$
|
(1,243)
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
86
|
|
|
|
92
|
|
Provision for obsolete
inventory
|
|
|
(192)
|
|
|
|
(63)
|
|
Provision for bad
debts
|
|
|
18
|
|
|
|
—
|
|
Stock-based
compensation
|
|
|
288
|
|
|
|
218
|
|
(Increase) decrease
in:
|
|
|
|
|
|
|
|
|
Trade accounts
receivable
|
|
|
1,766
|
|
|
|
6,353
|
|
Other accounts
receivable
|
|
|
34
|
|
|
|
(26)
|
|
Inventory
|
|
|
2,758
|
|
|
|
(694)
|
|
Prepaid
assets
|
|
|
355
|
|
|
|
753
|
|
Other
assets
|
|
|
(255)
|
|
|
|
(98)
|
|
Increase (decrease)
in:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
(559)
|
|
|
|
27
|
|
Accrued
expenses
|
|
|
(746)
|
|
|
|
(461)
|
|
Net cash provided by
(used in) operating activities
|
|
|
718
|
|
|
|
4,858
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
|
(62)
|
|
|
|
(111)
|
|
Net cash used in
investing activities
|
|
|
(62)
|
|
|
|
(111)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Borrowings on line of
credit
|
|
|
1,848
|
|
|
|
4,460
|
|
Repayments on line of
credit
|
|
|
(1,848)
|
|
|
|
(7,185)
|
|
Cash received from
exercise of stock options
|
|
|
—
|
|
|
|
27
|
|
Net cash provided by
(used in) financing activities
|
|
|
-
|
|
|
|
(2,698)
|
|
Effect of exchange
rate changes on cash
|
|
|
(1,103)
|
|
|
|
(866)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
(447)
|
|
|
|
1,183
|
|
Cash and cash
equivalents, beginning of period
|
|
|
2,647
|
|
|
|
1,464
|
|
Cash and cash
equivalents, end of period
|
|
$
|
2,200
|
|
|
$
|
2,647
|
|
Cash paid for
interest
|
|
$
|
229
|
|
|
$
|
350
|
|
Cash paid for
income taxes
|
|
$
|
—
|
|
|
$
|
—
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/infosonics-reports-fourth-quarter-2016-results-300420940.html
SOURCE InfoSonics Corporation