InfoSonics Reports Second Quarter 2013 Results

                InfoSonics Reports Second Quarter 2013 Results

PR Newswire

SAN DIEGO, Aug. 14, 2013

SAN DIEGO, Aug. 14, 2013 /PRNewswire/ -- InfoSonics Corporation (NASDAQ:
IFON), the provider of verykool® wireless handset solutions, today announced
results for its second quarter ended June 30, 2013.

"We are pleased with a number of achievements this quarter," said Joseph Ram,
president and CEO of InfoSonics. "Our results reflect the shipment of 432,000
handsets, the third consecutive quarter of record unit shipments. We were
also pleased with our gross profit margin that topped 20%. Operating expenses
included one-time costs related to the second quarter restructuring of our
development team, which we estimate will result in annual savings of
approximately $500,000. Other operating metrics for the quarter were also
encouraging as we generated $1.8 million of positive cash flow, reduced our
days-sales-outstanding in accounts receivable and increased our inventory
turns. We continue to search for ways to expand our business in both existing
and new geographic markets."

InfoSonics reported net sales for the second quarter of 2013 of $8.3 million,
which represented a $231,000, or 3%, increase from $8.1 million for the second
quarter of 2012. We enjoyed a 64% increase in net sales to carrier customers
in Central America and an 8% increase in South America. In addition, sales to
U.S. distributors were greatly improved over the prior year quarter when we
first re-entered the U.S. market. Partially offsetting these improvements was
a $1.0 million decline in private label sales, as well as a decrease in sales
to non-carrier Latin American distributors.

Gross profit margin as a percent of sales in the second quarter of 2013 was
20.7% compared to 25.3% in the 2012 second quarter. The higher gross margin
in the prior year was principally the result of disproportionately higher
margins on private label sales to customers in EMEA and APAC which were
nominal in the current quarter.

Operating expenses in the second quarter of 2013 of $2.3 million declined 3%
compared to $2.4 million in the 2012 second quarter. The current quarter
included approximately $192,000 in nonrecurring costs related to the June
consolidation of our R&D team in Shenzhen, China and the associated reduction
of our Beijing workforce. We also had higher expenses related to legal fees,
product certification, personnel and other administrative costs. The
increases were offset by reductions in other areas, primarily a $235,000
reduction in bad debt expense as the 2012 second quarter included a large
reserve against the receivable of a former distribution customer.

Other income in the second quarter of 2013 included $527,000 related to the
legal defeasance of a previously recorded supplier obligation that had been
included in accrued expenses on our balance sheet.

The net loss for the second quarter of 2013 was $47,000, or $0.00 per share,
compared to a net loss of $265,000, or $0.02 per share, in the second quarter
of 2012.

At June 30, 2013, the Company had $15.7 million in working capital, including
$6.4 million in cash, and no outstanding indebtedness. Cash and restricted
cash balances grew by $1.8million compared to the March 31, 2013 balances
primarily as a result of reductions in accounts receivable and inventories.

About InfoSonics Corporation
InfoSonics is a San Diego-based designer, manufacturer and provider of
wireless handsets and related products to OEMs, carriers, distributors and
consumers in the United States, Latin America, Europe, Africa and Asia
Pacific. The company is committed to delivering quality products with
innovative industrial designs that appeal to consumers and offer exceptional
value. InfoSonics sells and supports its own line of products under the
verykool® and other private label brands. Additional information can be found
on our corporate website at www.infosonics.com and www.verykool.net.

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)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; (2)the ability of our China R&D
group to develop new verykool^® handsets and successfully deliver them on a
timely basis; (3)the ability of the Company to have access to adequate
capital to fund its operations; (4)extended general economic downturn in
world markets; (5)inability to secure adequate supply of competitive products
on a timely basis and on commercially reasonable terms; (6)foreign exchange
rate fluctuations, devaluation of a foreign currency, adverse governmental
controls or actions, 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; (7)the ability to attract new sources of profitable business from
expansion of products or services or risks associated with entry into new
markets, including geographies, products and services; (8)cancellation of
customer orders or delays in requested delivery dates; (9) 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; (10)significant changes in supplier terms and relationships,
shortages in critical components or delays in product supply or manufacturing
lead times that could impact our ability to fulfill customer orders; (11)loss
of business from one or more significant customers; (12)customer and
geographical accounts receivable concentration risk and other related risks;
(13)rapid product improvement and technological change resulting in inventory
obsolescence; (14)uncertain political and economic conditions
internationally, including terrorist or military actions; (15)the loss of a
key executive officer or other key employees and the integration of new
employees; (16)changes in consumer demand for multimedia wireless handset
products and features; (17)our failure to adequately adapt to industry
changes and to manage potential growth and/or contractions; (18)seasonal
buying patterns; (19)the resolution of any litigation for or against the
Company; and (20)the ability of the Company to generate taxable income in
future periods.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
Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
                                Three months ended    Six months ended
                                June 30,              June 30,
                                2013        2012        2013        2012
Net sales                      $  8,342   $  8,111   $  16,163  $  20,469
Cost of sales                  6,612       6,056       13,051      16,158
Gross profit                   1,730       2,055       3,112       4,311
Operating expenses:
      Selling, general and     1,799       1,874       3,542       3,458
      administrative
      Research and development 500         496         898         996
                                2,299       2,370       4,440       4,454
Operating loss                 (569)       (315)       (1,328)     (143)
Other income (expense):
      Other income (expense)   535         -           586         (65)
      Interest, net            5           50          11          50
Loss before provision for      (29)        (265)       (731)       (158)
income taxes
Provision for income taxes     (18)        -           (25)        (2)
Net loss                       $         $  (265)  $        $   
                                (47)                   (756)       (160)
Net loss per share (basic and  $  (0.00)  $  (0.02)  $         $  
diluted)                                                (0.05)      (0.01)
Weighted-average number of
common shares outstanding
      Basic and diluted        14,184      14,184      14,184      14,184



InfoSonics Corporation
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
                                        June 30,             December 31,
                                        2013                   2012
                                        (unaudited)          (audited)
ASSETS
Current assets:
 Cash and cash equivalents             $       6,435   $       
                                                               5,230
 Restricted cash                       -                      1,003
 Trade accounts receivable, net of
 allowance for doubtful accounts of     7,587                  10,247
 $373 and $339, respectively
 Other accounts receivable             90                     95
 Inventory                             2,456                  3,429
 Prepaid assets                        2,768                  1,521
  Total current assets             19,336                 21,525
Property and equipment, net            235                    367
Other assets                           177                    229
  Total assets                     $      19,748     $     
                                                               22,121
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 Accounts payable                      $         881  $       
                                                               1,514
 Accrued expenses                      2,712                  3,786
  Total current liabilities        3,593                  5,300
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, 14,184
 shares issued andoutstanding as of    14                     14
 June 30, 2013 and December 31, 2012
 Additional paid-in capital            32,374                 32,282
 Accumulated other comprehensive loss  (15)                   (13)
 Accumulated deficit                   (16,218)               (15,462)
  Total stockholders' equity       16,155                 16,821
  Total liabilities and            $      19,748     $     
 stockholders' equity                                          22,121



InfoSonics Corporation
Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
                                                For the Six Months Ended
                                                June 30,
                                                2013           2012
Cash flows from operating activities:
 Net loss                                      $  (756)      $   (160)
 Adjustments to reconcile net loss to net cash
 provided by (used in)
  operating activities:
     Depreciation                              143            131
     Loss on disposal of fixed assets          47             57
     Provision for bad debts                   34             225
     Provision for obsolete inventory          (104)          25
     Stock-based compensation expense          92             117
     (Increase) decrease in:
         Trade accounts receivable             2,626          1,502
         Other accounts receivable             5              (23)
         Inventory                             1,077          (1,720)
         Prepaids                              (1,247)        217
         Other assets                          52             (246)
     Decrease in:
         Accounts payable                      (633)          (191)
         Accrued expenses                      (1,074)        (755)
             Net cash provided by (used in)    262            (821)
             operating activities
Cash flows from investing activities:
 Purchase of property and equipment            (58)           (144)
 (Increase) decrease in restricted cash        1,003          (1)
  Net cash used in investing          945            (145)
 activities
Effect of exchange rate changes on cash        (2)            43
Net increase (decrease) in cash and cash       1,205          (923)
equivalents
 Cash and cash equivalents, beginning of       5,230          11,422
 period
 Cash and cash equivalents, end of period      $ 6,435       $ 10,499
 Cash paid for interest                        $      -  $       -
 Cash paid for taxes                           -              -

SOURCE InfoSonics Corporation

Website: http://www.infosonics.com
Contact: Vernon A. LoForti, Chief Financial Officer,
vern.loforti@infosonics.com, 858-373-1675
 
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