Hauppauge Digital Reports Fiscal 2007 First Quarter Results.Sales Increase of 19% Leads to Record First Quarter Sales of $29.9 Million Net Income Increase of Approximately 116% Drives Record First Quarter Earnings 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 first fiscal quarter ended December 31, 2006. FIRST 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 $29.9 million for the first quarter compared to $25.0 million for the previous year's first quarter, an increase of approximately 19%. Sales increases in 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. and Europe were the primary drivers for the sales increase. Selling, general and administrative expenses increased by $421,153 for the first fiscal quarter of fiscal 2007 compared to 2006. Increases in sales related marketing expenses such as commissions and advertising due to higher sales plus higher compensation expenses were the primary reasons for the increase. The Company recorded net income of $2,202,735 for the first quarter of fiscal 2007 compared to net income of $1,020,472 for the first quarter of fiscal 2006, an increase of approximately 116%. Basic net income per share for the first fiscal quarter of 2007 was $0.23 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. net income per share was $0.22, compared to basic net income per share of $0.11 and diluted net income per share of $0.10 for the first fiscal quarter of 2006. DISCUSSION OF RESULTS Ken Plotkin, Hauppauge's Chief Executive Officer, stated "We are pleased with the record sales in this quarter, which is typically our seasonally best quarter of the year. The increase in sales was primarily driven by new products introduced during fiscal 2006, such as our WinTV-HVR-900 hybrid analog/digital TV receiver, the WinTV-NOVA-T digital "stick" and our quad format WinTV-HVR-4000 designed for the European market, plus our new WinTV-HVR-950 ATSC/NTSC "stick" and the WinTV-HVR-1600 dual format ATSC/NTSC TV receiver for North America. A larger proportion of higher margin products such as the WinTV-HVR-900 and WinTV-HVR-4000 contributed to the profitability increase in the quarter. The Company believes that the gradual acceptance of upgrades to Microsoft's new Vista operating system operating system (OS) Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. may impact our sales growth for the next few quarters. In addition, we expect that the next few quarters will see lower gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. as our newer products, which contributed to our profitability increase in this quarter, become more main stream." 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 Sarl 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, 2006, and our Form 10-Q Form 10-Q See 10-Q. for the quarter ended December 31, 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] |
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