Product category:
Manufacturing orders, contracts, financial reports
News Release from: Hemisphere GPS
Edited by the Manufacturingtalk Editorial
Team on 30 April 2004
Wireless and GPS firm earns US$726,000
in Q1
CSI Wireless, reports a consecutive quarterly increase in revenues of over 50% and a net profit increase of US$1.3 million compared to the fourth quarter of 2003.
CSI Wireless, a designer and manufacturer of advanced wireless and GPS products, today released financial results for the 2004 first quarter The Company reported a consecutive quarterly increase in revenues of over 50% and a net profit increase of US$1.3 million compared to the fourth quarter of 2003
This article was originally published on Manufacturingtalk on 9 Jun 2005 at 8.00am (UK)
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Net earnings for the quarter reached US$726,000, or US$0.03 per share.
The Company currently expects continued top and bottom-line improvements on a consecutive quarterly basis throughout 2004.
For the first quarter ended March 31, 2004, the Company reported revenues of US$15.1 million.
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On a consecutive quarterly basis, this represents a 52% increase from revenues of US$9.9 million in the fourth quarter of 2003.
Revenue growth exceeded 50% in the Company's GPS and the Wireless Units.
On a year-over-year basis, revenues decreased from US$24.1 million in the first quarter of 2003.
However, the first quarter of 2003 was unusually strong due to the initial ramp-up of sales of the Company's Motorola-branded fixed wireless telephone in Mexico.
This ramp-up resulted in temporary inventory build-up in the Mexican distribution channel in late 2003 but has since been drawn down and increasing orders are being received.
As the fixed wireless telephone market tends to demonstrate lumpy purchasing patterns, year-over-year quarterly comparisons may not be indicative of the Company's overall year-over-year trend and the positive direction of annualized growth in revenues and earnings.
"We are experiencing a continuous increase in volume demand for our fixed wireless telephone," stated Stephen Verhoeff, CSI's president and CEO.
"Volumes shipped during the first quarter exceeded fourth-quarter volumes by 45%.
Based on orders in hand, an additional increase of over 75% is expected for the second quarter.
We also expect increased profitability on this product line.
Development of our new GSM fixed wireless phone is progressing well, and we are slated to begin shipping in the second half of the year, adding potential for significant upside to our financial performance." Gross margins of 37% in the first quarter increased significantly from margins of 21% in the first quarter of 2003.
"In spite of the decline in revenues from Q1 of 2003, gross margins of US$5.6 million in the first quarter were a record level for the Company," stated erhoeff.
"The Company's strong focus on profitability and product cost reduction has resulted in improved gross margins in all of the Company's product lines compared to the first quarter of 2003." Operating expenses of US$4.6 million in the first quarter of 2004 increased from US$4 million in the fourth quarter of 2003, due to the implementation of the new accounting standard for stock-based compensation and due to the research and development costs associated with the Company's GSM-based fixed wireless telephone.
Year-over-year operating expenses were up 4% from US$4.4 million in the first quarter of 2003 primarily as a result of the implementation of the new accounting standard relating to stock-based compensation.
Net income increased to US$726,000, or $0.03 per share, compared to net income of US$104 thousand, or US$0.01 per share in the first quarter of 2003.
Net income improved by more than US$1.3 million over the 2003 fourth quarter net loss of $589 thousand.
"Our first quarter shows a building trend on our top and bottom lines that we expect will continue throughout 2004," Verhoeff said.
"We've begun 2004 with growing demand, and opportunities in all of our business segments that have us very excited about the year." Operational Highlights - CSI's GPS Business Unit received record orders for the first quarter, indicating a strong year for the GPS business.
The GPS unit's margins were 54% in the first quarter as a result of strong sales of high- margin ground guidance products and product cost reductions.
- The Company announced that inventory issues in the fixed wireless telephone distribution channel had been resolved, resulting in new purchase orders and improving volumes for the Company's fixed wireless product.
- On March 3, 2004, the Company closed a common share offering of 5 million shares for gross proceeds of US$16.25 million.
- CSI Wireless' customer, Directed Electronics, received an Innovations Award at the Consumer Electronics Show (CES) in Las Vegas for its Clifford GPS Tracking System.
The system's core tracking and communication technology is based on CSI Wireless' Asset-Link product platform.
Liquidity and Capital Resources The financing completed during the first quarter has resulted in a significant strengthening of the Company's historically weak balance sheet.
Proceeds have been used to retire the Company's long-term debt and to pay down the line of credit.
CSI Wireless held cash of US$12.5 million at the end of the first quarter.
"This financing represents a major milestone for CSI Wireless," stated Verhoeff.
"It has enabled us to pay out our long-term debt and strengthen our balance sheet, reducing shareholder risk, improving our profile with suppliers and customers, and creating the financial strength to support our aggressive growth plans moving forward.".
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