InfoSonics, the San Diego headquartered parent for a network of subsidiaries organized around the design, manufacturing, and commercial sale of the company’s verykool® brand wireless handsets and related products/solutions to global end markets (primarily Latin America, Europe, Africa, and also Asian markets at this time), reported Q1 FY12 financials today, marking yet another quarter of profitability for the company, driven by a fourth consecutive quarter of record sales dominated by the verykool® brand business segment.
Q1 FY12 (ended March 31):
• Net Sales up 30% from the same quarter in the prior year to $12.4M
• Gross Profit up a whopping 178% to $2.3M
• Operating Expenses up 16% to $2.1M, 11% of which is attributable to increased ancillary expense associated with increased sales volume
• R&D expenses up 40% (expanded development/design capacity for more models to better address demand)
• Net Income of $105k ($0.01/share) compared to a net loss of $894k (loss of $0.06/share) in Q1 FY11
• Zero outstanding debt
It seems the array of beautiful designs achieved in the verykool® brand have really started to hit a sweet spot in the end markets (currently some 20 countries total), as consumers flock to the mobile handsets, with Latin America and the Caribbean being salient foci. High value in the product, elegant, feature-rich design, and the kind of market presence that can only come from such a diverse, experienced multi-national company, has resulted in a powerful product mix that makes the in-house R&D efforts by IFON appear masterfully executed.
President and CEO of IFON, Joseph Ram, beamed to shareholders over the success of the verykool® brand and reassured investors that the company was investing heavily in R&D in order to maintain the rapidly accruing traction established with consumers in major target markets for the brand. Ram underscored the tripling of sales of the brand in Q1 this year and emphasized that within that metric sales in Latin American had doubled. Ram also indicated that the company had seen significant incremental growth of private label OEM sales throughput in the Asian, African, and European markets.
Ram noted that the growth of the verykool® brand had offset the declining low-margin distribution business nicely, resulting in a superior product mix, with the brand shouldering more of the performance load after only a minority showing in Q1 FY11. Yes, the brand certainly has grown by leaps and bounds since 2011 and gross profit margin in Q1 this year reflects that perfectly, more than doubling from the prior year to 18.3% (up 10.3%).
Ram also delineated several other positive economic health factors from the company’s Q1 bottom line, like the sequential quarterly increase in the amount of cash on hand (up 23%), and sequential drop in the number of days outstanding on receivables (down 15%); solid indicators that personnel and infrastructural investments are also paying off with better overall product throughput. The company had $15.3M in cash (including restricted/cash equiv.) and $18.9M for net working capital at the close of Q1 FY12, really solid footing for IFON as the handset game heats up and the company starts to hit a product consumption stride. Latin America looks to be really growth-friendly for the portfolio and management will be eager to update markets on progress as the year advances.
For more information on InfoSonics Corp., or to get a closer look at the verykool® brand, please visit: www.InfoSonics.com and www.verykool.net
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