Costar Technologies, Inc. Announces Preliminary Financial Results for the Fourth Quarter and Year Ended December 31, 2014
(In thousands except per share amounts)
COPPELL, Texas, March 31, 2015 /PRNewswire/ -- Costar Technologies, Inc. (the "Company") (OTC Markets Group: CSTI), announced preliminary year-end 2014 financial results in advance of the full release of their audited financials, which are expected in mid to late April.
Highlights for the Year Ended December 31, 2014
- The Company acquired the CohuHD division from Cohu, Inc. for approximately $10,000.
- Earnings increased by 43% to $2,725, or $1.77 per share, based on the Company's 1,543 weighted average fully diluted shares outstanding. The $818 increase, or $0.52 per share, compared to earnings of $1,907, or $1.25 per fully diluted share in FY 2013.
- Revenue increased 36% to $36,051, from $26,476 in FY 2013.
- Positive cash flow of approximately $5,500 from operating activities allowed the Company to pay down bank debt by $2,486 in the last six months, to $3,219.
James Pritchett, President and Chief Executive Officer of the Company, stated, "We are pleased with the strong contribution that CohuHD made to the Company in 2014. After aligning sales strategies this past year, we continue to be encouraged by the many opportunities this combination presents. We look to maintain the momentum of 2014 by expanding our footprint with our existing customer base through our increasingly broad product line. We believe this is the best way to continue to create value for our shareholders."
Financial Results, Fourth Quarter of 2014 as Compared to Fourth Quarter of 2013
Revenue for the fourth quarter of 2014 totaled $10,492, as compared to revenue of $4,331 for the fourth quarter of the prior year, an increase of approximately 142%. The Company's new subsidiary, CohuHD, generated approximately $5,284 in revenue during the period. Excluding CohuHD, the 20% revenue increase was due to increased demand for the Company's network product.
Gross profit for the fourth quarter of 2014 totaled $3,993. This compares to gross profit of $923 for the fourth quarter of 2013, an increase of 333%. The majority of the increase was due to the acquisition of CohuHD, but increased sales of the Company's higher margin network product was also a strong contributor.
Selling, general and administrative expenses for the fourth quarter of 2014 totaled $3,588. This compares to selling, general and administrative expenses of $1,163 for the fourth quarter of 2013, an increase of 209%. The majority of the increase was due to CohuHD. The Company also fully accrued for its vacation liability in accordance with FASB ASC 43, Accounting for Compensated Absences, which added $104 to SG&A.
Net income for the fourth quarter of 2014 was approximately $254, or $0.16 fully diluted earnings per share. This compares to net (loss) for the fourth quarter of 2013 of $(177), or $(0.12) fully diluted earnings per share. CohuHD contributed approximately $438 toward the Company's profits in the 2014 quarter.
Financial Results, Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Revenue for the year ended December 31, 2014 totaled $36,051, an increase of 36% as compared to revenue of $26,476 for the same period last year. CohuHD accounted for $11,256 of the increase.
Gross profit for the year ended December 31, 2014 totaled $13,562. This compares to gross profit of $7,467 for the year ended December 31, 2013. The majority of the increase in gross profit was due to the acquisition of CohuHD and the industry transition to network product.
Selling, general and administrative expenses for the year ended December 31, 2014 totaled $10,524. This compares to selling, general and administrative expenses of $5,598 for the year ended December 31, 2013, an increase of 88%. The majority of the increase was due to CohuHD and the related acquisition costs of $397.
Net income for the year ended December 31, 2014 was approximately $2,725, or $1.77 fully diluted earnings per share, as compared to net income of $1,907, or $1.25 fully diluted earnings per share for the year ended December 31, 2013. CohuHD contributed approximately $1,458 to the increase.
The Company expects to release its audited financials in mid to late April. The transfer of tax work papers from the Company's prior accountant took longer than anticipated, which delayed the finalization of the tax work required to complete the audit. While management believes material changes to the results are unlikely, the results are preliminary and subject to change.
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".
Cautionary Statement Regarding Forward Looking Statements
This document contains forward-looking statements that involve risks and uncertainties, as well as assumptions, that if they never materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements generally are identified by the words "expects," "anticipates," "believes," "intends," "estimates," "should," "would," "strategy," "plan" and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. The risks, uncertainties and assumptions include developments in the marketplace for our products, competition, related products and services and general economic conditions, as well as other risks and uncertainties. Accordingly, we cannot give assurance that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company.
COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(AMOUNTS SHOWN IN THOUSANDS) |
||||||||
December 31, 2014 |
December 31, 2013 |
|||||||
(Unaudited) |
(Reviewed) |
|||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash |
$ |
$ |
1,637 |
|||||
Accounts receivable, less allowance for doubtful accounts |
||||||||
of $75 in 2014 and 2013 |
7,086 |
2,136 |
||||||
Inventories, net of reserve for obsolescence |
||||||||
of $379 in 2014 and 2013 |
7,629 |
7,180 |
||||||
Promissory note - current |
86 |
|||||||
Prepaid expenses |
307 |
207 |
||||||
Total current assets |
15,022 |
11,246 |
||||||
Non-current assets |
||||||||
Property and equipment, net |
397 |
69 |
||||||
Deferred financing costs, net |
97 |
|||||||
Trade names, net |
2,464 |
925 |
||||||
Distribution agreement, net |
844 |
918 |
||||||
Customer relationships, net |
799 |
80 |
||||||
Covenant not to compete |
18 |
14 |
||||||
Goodwill |
2,063 |
|||||||
Total assets |
$ |
21,704 |
$ |
13,252 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ |
3,499 |
$ |
2,448 |
||||
Accrued expenses and other |
1,913 |
832 |
||||||
Line of credit |
519 |
|||||||
Short-term debt |
600 |
|||||||
Contingent purchase price |
128 |
|||||||
Total current liabilities |
6,659 |
3,280 |
||||||
Long-Term liabilities |
||||||||
Deferred tax liability |
87 |
|||||||
Long-term debt |
2,100 |
|||||||
Total long-term liabilities |
2,187 |
|||||||
Total liabilities |
8,846 |
3,280 |
||||||
Stockholders' Equity |
||||||||
Preferred stock |
||||||||
Common stock |
3 |
3 |
||||||
Additional paid in capital |
156,073 |
155,912 |
||||||
Accumulated deficit |
(138,697) |
(141,422) |
||||||
Less common stock held in treasury |
(4,521) |
(4,521) |
||||||
Total stockholders' equity |
12,858 |
9,972 |
||||||
Total liabilities and stockholders' equity |
$ |
21,704 |
$ |
13,252 |
||||
COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES |
||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS) |
||||||||||||||
Three Months Ended December 31, |
Years Ended December 31, |
|||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Reviewed) |
|||||||||||
Net revenues |
$ |
10,492 |
$ |
4,331 |
$ |
36,051 |
$ |
26,476 |
||||||
Cost of revenues |
6,499 |
3,408 |
22,489 |
19,009 |
||||||||||
Gross profit |
3,993 |
923 |
13,562 |
7,467 |
||||||||||
Selling, general and administrative expenses |
2,835 |
1,108 |
8,472 |
5,374 |
||||||||||
Engineering and development expense |
753 |
55 |
1,655 |
224 |
||||||||||
Transaction and related expense |
397 |
|||||||||||||
3,588 |
1,163 |
10,524 |
5,598 |
|||||||||||
Income (loss) from operations |
405 |
(240) |
3,038 |
1,869 |
||||||||||
Other income (expenses) |
||||||||||||||
Interest expense |
(39) |
(1) |
(93) |
(52) |
||||||||||
Other income and expense, net |
(29) |
65 |
(26) |
105 |
||||||||||
Total other income (expenses), net |
(68) |
64 |
(119) |
53 |
||||||||||
Income (loss) before taxes |
337 |
(176) |
2,919 |
1,922 |
||||||||||
Current income tax provision |
75 |
1 |
107 |
15 |
||||||||||
Deferred income tax provision |
8 |
87 |
||||||||||||
Net income (loss) |
$ |
254 |
$ |
(177) |
$ |
2,725 |
$ |
1,907 |
||||||
Net income (loss) per share: |
||||||||||||||
Basic |
$ |
0.17 |
$ |
(0.12) |
$ |
1.86 |
$ |
1.31 |
||||||
Diluted |
$ |
0.16 |
$ |
(0.12) |
$ |
1.77 |
$ |
1.25 |
||||||
Weighted average shares outstanding |
||||||||||||||
Basic |
1,464 |
1,457 |
1,462 |
1,453 |
||||||||||
Diluted |
1,545 |
1,534 |
1,543 |
1,530 |
||||||||||
SOURCE Costar Technologies, Inc.
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