Infosonics Reports Fourth Quarter 2016 Results

The following excerpt is from the company's SEC filing.

SAN DIEGO, March 9, 2017 – 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

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

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 guaran

tees 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 profi

tability; (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 alter

native 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 sho

rtages; (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 despi

te 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 operati

ons 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, app

lications 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 s

ignificant 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 comp

onent 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 obs

olescence; (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.

Contact:

Vernon A. LoForti

Chief Financial Officer

vern.loforti@infosonics.com

858-373-1675

InfoSonics Corporation and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

(Amounts in thousands, except per share data)

For the Three Months Ended

For the Twelve Months Ended

(Unaudited)

(Audited)

Net sales

10,192

39,140

47,833

Cost of sales

34,547

40,414

Selling, general and administrative expenses

Operating income (loss)

(2,350

Other expense:

Interest expense, net

Loss before benefit (provision) for income taxes

(2,928

(1,240

Benefit (provision) for income taxes

Net income (loss)

(2,835

(1,243

Net income (loss) per share (basic and diluted)

Basic and diluted weighted-average number of

   common shares outstanding

14,389

14,380

Comprehensive loss:

Foreign currency translation adjustments

(1,103

(3,938

(2,109

Consolidated Balance Sheets

ASSETS

Current assets:

Cash and cash equivalents

Trade accounts receivable, net of allowance for doubtful accounts of $113 and $95,

   respectively

Other accounts receivable

Inventory

Prepaid assets

Total current assets

15,510

20,696

Property and equipment, net

Other assets

Total assets

16,026

20,981

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

Accrued expenses

Total current liabilities

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

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

Consolidated Statements of Cash Flows

(Amounts in thousands)

For the Year Ended

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation

Provision for obsolete inventory

Provision for bad debts

Stock-based compensation

(Increase) decrease in:

Increase (decrease) in:

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Borrowings on line of credit

Repayments on line of credit

(1,848

(7,185

Cash received from exercise of stock options

Net cash provided by (used in) financing activities

(2,698

Effect of exchange rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Cash paid for interest

Cash paid for income taxes

The above information was disclosed in a filing to the SEC. To see the filing, click here.

To receive a free e-mail notification whenever InfoSonics Corp makes a similar move, sign up!

Other recent filings from the company include the following:

InfoSonics Corp's CEO was just granted 424,348 ownership of the company. - Sept. 17, 2018
InfoSonics Corp's Chief Operating Officer just picked up 31,869 shares - Sept. 17, 2018
InfoSonics Corp's Chief Sales & Mktg Officer was just granted 361,018 ownership of the company. - Sept. 17, 2018
Termination of a Material Definitive - Sept. 17, 2018
Delavaco Holdings Inc. just provided an update on share ownership of InfoSonics Corp - Sept. 11, 2018

Auto Refresh

Feedback