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Infosonics Reports Third Quarter 2015 Results

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

SAN DIEGO, November 5, 2015 InfoSonics Corporation (NASDAQ: IFON), the provider of

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wireless handset solutions and tablets, today announced results for its third quarter ended September 30, 2015.

We are encouraged by the significant improvement we achieved this quarter compared to the prior year, said Joseph Ram, president and CEO of InfoSonics. We reported a 50% increase in sales and a 67% increase in gross profit. Our strategy to focus on the retail channel rather than large carrier customers is gaining significant traction. Sales to retailers and distributors comprised 69% o f our 2015 third quarter sales. That represents a dramatic shift from only 19% in the first quarter of 2014. The result is that we are now selling a greater percentage of smartphones and our average unit selling price in the 2015 third quarter rose by 33% to $39.34 compared to $29.64 in the 2014 third quarter. I am also encouraged that we were able to achieve these results despite the extremely weak currency environment that exists throughout the Latin American markets we serve. Our goal now is to offer a wider portfolio of products with higher average selling prices, and accelerate revenue growth by generating additional business with existing distributors and retailers, as well as adding new customers who can help us fill market gaps and profitably leverage our existing infrastructure.

We had net sales for the 2015 third quarter of $12.2 million, which represented a $4.0 million, or 50%, increase from $8.1 million for the third quarter of 2014. We experienced significant growth in sales to a number of big box retailers and distribution customers across Latin America and the U.S. These gains were partially offset by lower sales to Latin American carrier customers. Unit shipments during the quarter increased by 12% compared to the comparable period in 2014, and, as noted above, the average selling price per unit rose 33%, reflecting the demand for higher end smartphones in the retail channel compared to the operator channel. For the nine months ended September 30, 2015, our net sales were $37.6 million, which represented a $7.4 million, or 25%, increase over $30.2 million for the comparable nine month period of 2014.

Gross profit in the third quarter of 2015 was $2.0 million, a 67% increase compared to $1.2 million for the comparable period in 2014. Our gross profit margin as a percent of sales in the 2015 third quarter improved to 16.4% compared to 14.7% for the comparable period in 2014. For the nine months ended September 30, 2015, gross profit was $6.2 million, which represented an $866,000 increase from $5.3 million for the comparable period in 2014.

Operating expenses in the third quarter of 2015 were $2.1 million, an increase of $161,000, or 8%, compared to $1.9 million in the 2014 third quarter. This reflects a $286,000, or 16%, increase in SG&A expenses and an elimination of R&D expenses, which amounted to $125,000 in the comparable period of 2014. The higher SG&A expenses include increased marketing, wages and professional fees. For the nine months ended September 30, 2015, operating expenses were $6.2 million, a 6% increase over $5.8 million in the comparable period of 2014.

The net loss for the third quarter of 2015 was $138,000, $0.01 per share, compared to a net loss of $633,000, $0.04 per share, in the third quarter of 2014. For the nine...


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