Hauppauge Digital Reports Fiscal 2006 Fourth Quarter and Year End Results.Sales increase of 24% leads to record fiscal year sales of $97.7 million. Net income increases by 74% for fiscal 2006. HAUPPAUGE, N.Y. -- Hauppauge Digital, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : HAUP HAUP High-Accuracy Universal Polarimeter ), a leading developer of digital video TV and data broadcast receiver products for personal computers, today reported financial results for the fourth fiscal quarter and year ended September 30, 2006. FOURTH QUARTER RESULTS Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $22.2 million for the fourth quarter compared to $15.4 million for the previous year's fourth quarter, an increase of approximately 44%. Growth in North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. , European and Asian sales contributed to the sales increase. In the fourth fiscal quarter of 2006, the Company recorded net income of $50,920 which included charges for year-end incentives and stock compensation. The Company adopted the provisions of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R Share Based Payments on October 1, 2005, and for the fiscal fourth quarter of 2006 we recorded $81,516 in stock compensation expense. There was no stock compensation expense recorded in the fiscal fourth quarter of 2005. This compares with a net loss of $864,371 for the fourth fiscal quarter of 2005. Net income per share for the fourth quarter was $0.01 on a basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis compared to a net loss per share of $0.09 on a basic and diluted basis for the prior year fourth fiscal quarter. The fourth quarter gross profit percentage of 21.66% remained relatively consistent when compared to the gross profit percentage of 21.71% for the previous year's fourth fiscal quarter. Selling, General and Administrative expenses increased by $276,423 for the fourth quarter of fiscal 2006 compared to 2005. Higher compensation expenses, year end incentives plus stock compensation expenses were the primary reasons for the increase. FISCAL YEAR RESULTS Net sales were $97.7 million for fiscal 2006 compared to $78.5 million for the previous year, an increase of approximately 24%. Growth in North American, European and Asian sales contributed to the sales increase. Gross profit percentage was 20.32% compared with a gross profit of 22.76% for the previous year. A higher mix of lower gross profit products coupled with an increase in transportation costs were the items driving the gross profit percent decrease. For the fiscal 2006 year, the Company recorded net income of $2,409,612, compared with net income of $1,386,753 for the fiscal year ended September 30, 2005. The Company adopted the provisions of SFAS No. 123R Share Based Payments on October 1, 2005, and for fiscal 2006 recorded $356,286 in stock compensation expense. There was no stock compensation expense recorded in the previous fiscal year. Net income per share was $0.25 and $0.24 on a basic and diluted basis compared to net income per share of $0.15 and $0.14 on a basic and diluted basis for the fiscal year ended September 30, 2005. Selling, General and Administrative expenses increased by $212,572 for fiscal 2006 compared to fiscal 2005. Decreases in sales and marketing expenses offset by higher compensation expenses and year end incentives plus stock compensation expenses were the primary reasons for the increase. DISCUSSION OF RESULTS Ken Plotkin, Hauppauge's Chief Executive Officer, stated "We believe that our sales increase for the year was due primarily to the growing acceptance of TV as part of the PC multimedia experience, a market we serve with our WinTV-PVR, WinTV-NOVA and WinTV-HVR products. Helping the sales increase in the quarter was growth in sales of our digital TV tuner An electronic part of a radio or TV that locks on to a selected carrier frequency (station, channel) and filters out the audio and video signals for amplification and display. receivers for PCs and notebooks plus sales growth of TV receivers for Media Center PCs. In addition, we saw a turnaround in European sales when compared to the previous year's fourth quarter. During the quarter, we started shipping the WinTV-HVR-950 "stick", our hybrid dual format TV tuner for North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. plus the new quad format WinTV-HVR-4000 designed for the European market. The WinTV-HVR-950 stick is a pocket sized, external TV receiver which allows for the viewing of ATSC (Advanced Television Systems Committee) An international digital television (DTV) standard adopted by the U.S., Canada, South Korea, Taiwan and Argentina. high definition TV plus NTSC (National TV Standards Committee) The committee that developed the television standards for the U.S, which are also used in Canada, Japan, South Korea and several Central and South American countries. Both the committee and the standard are called "NTSC. cable TV on your PC or laptop Same as laptop computer. laptop - portable computer . The WinTV-HVR-4000 is Hauppauge's first product with high-definition satellite TV reception. For the fiscal year, strong sales of our TV receivers for Media Center PCs plus sales of newly introduced digital TV receivers contributed to a 24% annual sales growth. By keeping corporate expenses under control while we increased our R&D budget, we were able to see a 74% increase in net income and also introduced a record number of new products." ABOUT HAUPPAUGE DIGITAL Hauppauge Digital, Inc. is a leading developer of analog and digital TV receiver products for the personal computer market. Through its Hauppauge Computer Works, Inc. and Hauppauge Digital Europe subsidiaries, the Company designs and develops analog and digital TV receivers that allow PC users to watch television on their PC screen in a resizable window and enable the recording of TV shows to a hard disk, digital video editing See nonlinear video editing and video editor. , video conferencing See videoconferencing. (communications) video conferencing - A discussion between two or more groups of people who are in different places but can see and hear each other using electronic communications. , receiving of digital TV transmissions, and the display of digital media stored on a computer to a TV set via a home network. The Company is headquartered in Hauppauge, New York Hauppauge (pronounced /hɔpɔg/) is a hamlet in the Town of Islip and the Town of Smithtown in Suffolk County, New York, United States. , with administrative offices in Luxembourg, Ireland and Singapore and sales offices in Germany, London, Paris, The Netherlands, Sweden, Italy, Spain, Singapore, Taiwan and California. The Company's Internet web site can be found at http://www.hauppauge.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this press release may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences (including, but not limited to, those set forth in our public reports filed with the Securities and Exchange Commission including, but not limited to, our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended September 30, 2005, our Form 10-Q Form 10-Q See 10-Q. for the quarters ended December 31, 2005, March 31, 2006, and June 30, 2006, and our Form 10-K for the year ended September 30, 2006 to be filed with the Securities and Exchange Commission) many of which are beyond our control, that may influence the accuracy of the statements and the projections upon which the statements are based. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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