HAUP - Hauppauge Digital, Inc. (NASDAQ:HAUP - News), a leading developer and manufacturer of digital video TV and data broadcast receiver products for personal computers, today reported financial results for the three month and nine month period ending June 30, 2002.
THIRD QUARTER RESULTS
Net sales for the quarter were $10.1 million, compared to $9.4 million for the prior year's third quarter, an increase of 8%. The sales growth was attributable to Domestic and European sales, as both regions experienced sales growth over last year's third quarter.
Gross margins of 26.4% for the quarter increased 7.9% over last year's third quarter. The gross margin increase was due to favorable product mix, lower material costs and reduced labor costs. Selling, General and Administrative expenses decreased by approximately $196,000, the result of a cost reduction program initiated during fiscal 2001. Spending for research and development increased 14%, reflecting the Company's commitment to product development and enhancement.
Net income for the quarter was $26,126, compared to loss of $804,974 for the prior year's third quarter excluding insurance proceeds of $1 million received pursuant to a key man life insurance policy. Including insurance proceeds, net income for the previous year's third quarter was $195,026.
NINE MONTH RESULTS
Net sales for the nine months ended June 30, 2002 were $32.9 million compared to $41.8 million for the same period in fiscal 2001, a decrease of 21%.
Gross margins of 25.6% increased 4.2% compared to the same period last year. The gross margin increase was due to favorable product mix, lower material costs and reduced labor costs. Selling, General and Administrative expenses decreased by approximately $1,199,000, the result of a cost reduction program initiated during fiscal 2001. Spending for research and development increased 3% over last year, reflecting the Company's commitment to product development and enhancement.
Net income for the nine month period was $527,062, compared to a profit of $459,222 for the prior year's nine month period excluding insurance proceeds of $1 million received pursuant to a key man life insurance policy. Including insurance proceeds, net income for the previous year's nine month period was $1,459,522.
SHARE REPURCHASE
The Company continued to repurchase shares on the open market during the quarter. The Company has, as of June 30, 2002, repurchased approximately 504,000 shares pursuant to its 1996 stock repurchase plan.
DISCUSSION OF RESULTS
Ken Plotkin, Hauppauge's Chief Executive Officer, stated, "In this quarter we saw the first year-over-year increase in quarterly sales since March of 2000, though it's difficult to say that this sales increase indicates a trend. We believe that our Research and Development program, our only expense area to increase this quarter, will lead the company, through new product introductions, out of the economic difficulties pervasive throughout the personal computer industry.
"In this quarter, the company introduced the newest member of our Personal Video Recorder family, called the WinTV-PVR-250. This model is designed to enable the recording of television shows on a personal computer, and will allow users to turn their home video tapes into DVD or CD-ROMs for playback on their home DVD players. The WinTV-PVR-250 has quickly become our best selling Personal Video Recorder in the United States.
"I'm also happy to report that as of May 1 of this year, Dean Cirielli became our new Company President and Chief Operating Officer. Dean has had extensive experience in managing large R&D projects, and we have already seen that he has contributed his experience to Hauppauge in a positive way."
SEC CERTIFICATIONS
Both Chief Executive Officer Ken Plotkin and Chief Financial Officer Gerald Tucciarone intend to furnish to the U.S. Securities and Exchange Commission (SEC) the certification required by Section 906 of the Sarbanes-Oxley Act of 2002. This certification will accompany the Company's Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2002.
ABOUT HAUPPAUGE DIGITAL
Hauppauge Digital, Inc. is a leading developer and manufacturer of digital TV and data broadcast receiver products for personal computers. Through its Hauppauge Computer Works, Inc. and Hauppauge Digital Europe subsidiaries, the Company designs and develops digital video boards for TV-in-a-window, digital video editing and video conferencing. The Company is headquartered in Hauppauge, New York, with administrative offices in New York, Singapore, Ireland and Luxembourg and sales offices in Germany, London, Paris, The Netherlands, Sweden, Italy, Spain, Singapore and California. The Company's Internet web site can be found at hauppauge.com.
Certain statements in this Release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, those described in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's Annual Report in Form 10-K for the fiscal year ended September 30, 2000.
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months ended
June 30,
2002 2001
---- ----
Net Sales $10,113,135 $ 9,382,610
Cost of Sales 7,444,435 7,649,976
----------- -----------
Gross Profit 2,668,700 1,732,634
Selling, General and
Administrative expenses 2,189,484 2,385,838
Research & Development Expenses 404,829 353,804
Litigation settlement - 212,500
----------- -----------
Income (loss) from operations 74,387 (1,219,508)
Other income (expense):
Interest income 6,457 8,265
Interest expense - (6,826)
Foreign currency (15,718) 7,200
Non operational USD to Euro currency
re-measurement (28,003) 109,895
Insurance proceeds - 1,000,000
----------- -----------
Other income (expense) (37,264) 1,118,534
----------- -----------
Income (loss) before taxes on income 37,123 (100,974)
Income tax expense (benefit) 10,997 (296,000)
----------- -----------
Net income $ 26,126 $ 195,026
=========== ===========
Per share results:
Basic $0.00 $0.02
Diluted $0.00 $0.02
Weighted average shares-basic 8,886,755 8,920,504
Weighted average shares-diluted 9,042,571 9,164,496
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Nine Months ended
June 30,
2002 2001
---- ----
Net Sales $32,924,368 $41,773,593
Cost of Sales 24,512,946 32,866,647
----------- -----------
Gross Margins 8,411,422 8,906,946
Selling, General and Administrative
expenses 6,650,857 7,849,728
Research & Development Expenses 1,128,266 1,094,832
Litigation settlement - 212,500
----------- -----------
Income (loss) from operations 632,299 (250,114)
Other income (expense):
Interest income 28,085 26,811
Interest expense - (26,546)
Foreign currency 2,318 (112,824)
Non operational USD to Euro currency
re-measurement (82,143) 109,895
Insurance proceeds - 1,000,000
----------- -----------
Other income (expense) (51,740) 997,336
----------- -----------
Income before taxes on income 580,559 747,222
Income tax expense (benefit) 53,497 (508,300)
----------- -----------
Income before cumulative effect of a
change in accounting principle 527,062 1,255,522
Cumulative effect of a change in
accounting principle, net of taxes - 204,000
----------- -----------
Net income $ 527,062 $ 1,459,522
=========== ===========
Per share results-basic:
Income before cumulative effect of a
change in accounting principle $0.06 $0.14
Cumulative effect of a change in
accounting principle - $0.02
----------- -----------
Net income per share-basic $0.06 $0.16
=========== ===========
Per share results-diluted:
Income before cumulative effect of a
change in accounting principle $0.06 $0.14
Cumulative effect of a change in
accounting principle - $0.02
----------- -----------
Net income per share-diluted $0.06 $0.16
=========== ===========
Weighted average shares-basic 8,888,926 8,903,812
Weighted average shares-diluted 9,057,402 9,271,495
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Contact:
Hauppauge Digital Inc., Hauppauge
Gerald Tucciarone, 516/434-1600 ext. 306 |
