Costar Technologies, Inc. Announces Financial Results for the First Quarter Ended March 31, 2015

(In thousands except per share amounts)

May 18, 2015, 20:52 ET from Costar Technologies, Inc.

COPPELL, Texas, May 18, 2015 /PRNewswire/ -- Costar Technologies, Inc. (the "Company") (OTC Markets Group: CSTI), announced its unaudited financial results for the quarter ended March 31, 2015 that has been reviewed by the independent accounting firm McGladrey LLP.

Highlights for the Quarter Ended March 31, 2015

  • GAAP net income of $29, or $0.02 per share based on 1,550 weighted average diluted shares outstanding. This compares to GAAP net income of $1,072, or $0.70 per share based on 1,532 weighted average diluted shares outstanding for the quarter ended March 31, 2014.
  • The Company posted positive net income for the quarter in spite of the anticipated decline of $4,200 in revenue from its largest customer, which included $3,300 due to the "catch-up" order in 2014 and $900 due to the implementation of tighter inventory management.
  • Revenue outside of the company's largest customer and CohuHD, grew at a rate of 22% versus the first quarter of 2014.

James Pritchett, President and Chief Executive Officer of the Company, stated, "We are pleased with the performance of our team and their ability to deliver a profitable quarter despite many obstacles. The first quarter is a historically soft quarter for both Costar and CohuHD, in addition, our largest customer reduced inventory and there was significant inclement weather in the Northeast." Mr. Pritchett added, "The CohuHD integration is progressing as planned as CohuHD finalizes its launch of the new RISE product line. We believe the Company is aligned to take advantage of specific vertical market opportunities in 2015 as we stay focused on our commitment to increase shareholder value through long term revenue and profitability growth."

Financial Results, First Quarter of 2015

The financial results for the first quarter of fiscal 2015 include the results of operations for CohuHD for the full quarter. In comparison, financial results for the first quarter of fiscal 2014 do not include CohuHD.

Revenue for the first quarter of 2015 totaled $8,099, as compared to revenue of $8,307 for the first quarter of the prior year, a decrease of approximately 3%. The Company's new subsidiary, CohuHD, generated approximately $3,353 in revenue during the period. 

Gross profit for the first quarter of 2015 totaled $3,219. This compares to gross profit of $2,739 for the first quarter of 2014, an increase of 18%. 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.

Operating expenses for the first quarter of 2015 totaled $3,129. This compares to operating expenses of $1,655 for the first quarter of 2014, an increase of 89%. The majority of the increase was due to CohuHD.

Net income for the first quarter of 2015 was approximately $29, or $0.02 fully diluted earnings per share. This compares to net income for the first quarter of 2014 of $1,072, or $0.70 fully diluted earnings per share.  CohuHD accounted for approximately $(46) of Company's net income in the 2015 quarter.

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".

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)




March 31, 2015


December 31, 2014



(Reviewed)


(Audited)








ASSETS








Current assets








   Cash 


$

620


$


   Accounts receivable, less allowance for doubtful accounts of $70 and $75 in 2015 and 2014, respectively


5,070



7,086

   Inventories, net of reserve for obsolescence of $379 in 2015 and 2014


7,714



7,629

   Prepaid expenses




345



307

   Deferred tax asset - current



392



408


Total current assets



14,141



15,430









Non-current assets








   Property and equipment, net



407



397

   Deferred financing costs, net



82



97

   Deferred tax asset, non-current



7,280



7,280

   Trade names, net




2,405



2,464

   Distribution agreement, net



826



844

   Customer relationships, net



774



799

   Covenant not to compete, net



17



18

   Goodwill




2,063



2,063










Total assets


$

27,995


$

29,392










LIABILITIES AND STOCKHOLDERS' EQUITY























Current liabilities








   Accounts payable



$

2,385


$

3,499

   Accrued expenses and other



1,234



1,899

   Line of credit




1,134



519

   Short-term debt




600



600

   Contingent purchase price






128


Total current liabilities



5,353



6,645









Long-Term liabilities








   Long-term debt




1,950



2,100


Total long-term liabilities



1,950



2,100










Total liabilities



7,303



8,745

















Stockholders' Equity








   Preferred stock








   Common stock




3



3

   Additional paid in capital



156,089



156,073

   Accumulated deficit




(130,879)



(130,908)

  Less common stock held in treasury, at cost



(4,521)



(4,521)


Total stockholders' equity



20,692



20,647











Total liabilities and stockholders' equity

$

27,995


$

29,392

 

COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME

(AMOUNTS SHOWN IN THOUSANDS, EXCEPT NET INCOME PER SHARE)


















For the Three Months Ended March 31,






2015


2014






(Reviewed)


(Compiled)











Net revenues




$

8,099


$

8,307

Cost of revenues





4,880



5,568











Gross profit





3,219



2,739











Selling, general and administrative expenses




2,368



1,560

Engineering and development expense




761



56

Transaction and related expense






39







3,129



1,655











Income from operations




90



1,084











Other income (expenses)









Interest expense





(44)



(1)


Other income and expense, net



1



2

Total other income (expenses), net



(43)



1











Income before taxes





47



1,085

Income tax provision





18



13











Net income




$

29


$

1,072





















Net income per share:









Basic




$

0.02


$

0.74






















Diluted




$

0.02


$

0.70





















Weighted average shares outstanding








Basic





1,466



1,458






















Diluted





1,550



1,532

 

SOURCE Costar Technologies, Inc.



RELATED LINKS

http://www.costartechnologies.com