COPPELL, Texas, May 15, 2017 /PRNewswire/ -- Costar Technologies, Inc. (the "Company") (OTC Markets Group: CSTI), announced its financial results for the quarter ending March 31, 2017 that have been reviewed by the independent accounting firm RSM US LLP.
Summary Results for the Quarter Ended March 31, 2017
- GAAP net loss of $159, or ($0.11) per share based on 1,493 weighted average diluted shares outstanding. This compares to GAAP net income of $304, or $0.20 per share based on 1,534 weighted average diluted shares outstanding for the quarter ended March 31, 2016.
- Consolidated revenue decreased $559 or 6% from the prior year due to an 8% decrease in revenue generated by the CohuHD operating segment and a 4% decrease in the Costar Video Systems operating segment.
- The Company incurred $214, or $0.14 per share in amortization expense relating to Innotech intangible assets and $68 or in $0.05 per share in transaction related expenses due to the acquisition of Innotech during the quarter ending March 31, 2017.
James Pritchett, President and Chief Executive Officer of the Company, stated, "The first quarter results are the combination of an industry wide soft first quarter in retail in tandem with a seasonally slow first quarter. One of the Company's largest customers has not been able to maintain their rollout schedule due to a lack of qualified installers, while our new large retail accounts have scheduled their large installations for the second half of this year."
Mr. Pritchett went on to say, "The Company continues to reposition itself to focus on the growing grocery, financial, and entertainment segments of the retail market, resulting in reduced customer concentration. Recent strategic investments are generating positive results, such as CohuHD's new, internally developed Command Core operating software, which was released in the second quarter and has received encouraging early market feedback. CohuHD is in the final development phase of a new dual headed thermal and visual camera expected to launch in Q4 of 2017. This product will be a real differentiator in the critical infrastructure and border security markets expanding our market opportunities. In addition, the Company is expanding its sales force to capitalize on market opportunities and is investing in infrastructure to better support sales activities."
"We believe that Costar is poised to deliver significant cash flow and profitability in 2017, as long as we continue to execute on our strategy," said Mr. Pritchett.
Financial Results, First Quarter of 2017 Compared to First Quarter of 2016
Revenue for the first quarter of 2017 totaled $9,571, as compared to revenue of $10,130 for the first quarter of the prior year, a decrease of approximately 6%. CohuHD had an unusually strong first quarter of 2016 due to the passage of the long overdue transportation funding bill in late 2015 and a large border security project.
Gross profit for the first quarter of 2017 totaled $3,714. This compares to gross profit of $3,864 for the first quarter of 2016, a decrease of 4%. The decrease in gross profit is largely attributable to the decrease in revenue.
Operating expenses for the first quarter of 2017 totaled $3,841. This compares to operating expenses of $3,326 for the first quarter of 2016, an increase of 15%. The majority of the increase is due to expenses incurred in connection with the acquisition of Innotech Security, Inc. ("Innotech") and the inclusion of Innotech's operating expenses in the first quarter of 2017.
Other expense was $120 for the first quarter of 2017 compared to other expense of $38 for the first quarter of 2016.
Tax expense of ($88) was recognized during the first quarter of 2017 compared to $196 during the first quarter of 2016. For more information regarding the Company's tax analysis, please see Note 9 of the Company's financial statements for the year ended December 31, 2016.
Net loss for the first quarter of 2017 was approximately ($159), or ($0.11) fully diluted earnings per share. This compares to net income for the first quarter of 2016 of $304, or $0.20 fully diluted earnings per share.
The Company's outside independent auditors completed their analysis of the Company's financial condition. The Independent Auditor's Review Report, including financial statements and applicable footnote disclosures, is available on our website at www.costartechnologies.com.
About Costar Technologies, Inc.
Costar Technologies, Inc. develops, designs and distributes a range of security solution products including surveillance cameras, lenses, digital video recorders and high-speed domes. The Company also develops, designs and distributes industrial vision products to observe repetitive production and assembly lines, thereby increasing efficiency by detecting faults in the production process. Headquartered in Coppell, Texas, the Company's shares currently trade on the OTC Markets Group under the ticker symbol "CSTI". Costar was ranked 41 in a&s magazine's Security 50 for 2016. Security 50 is an annual ranking of the world's largest security manufacturers in the areas of video surveillance, access control and intruder alarms and is based on financial performance.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. You can identify forward-looking statements by words such as "believe," "may," "estimate," "continue," "anticipate," "intend," "plan," "expect," "predict," "potential," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of the risks and uncertainties.
You should not place undue reliance on any forward-looking statements. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable laws.
Chief Financial Officer
Costar Technologies, Inc.
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SOURCE Costar Technologies, Inc.