Add
HAUP to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| HAUP > SEC Filings for HAUP > Form 10-Q on 14-Aug-2009 | All Recent SEC Filings |
14-Aug-2009
Quarterly Report
THREE MONTH PERIOD ENDED JUNE 30 2009 COMPARED TO THREE MONTH PERIOD ENDED JUNE
30, 2008
Results of operations for the three months ended June 30, 2009 compared to June
30, 2008 are as follows:
Three Three
Months Months
Ended Ended Variance Percentage of sales
6/30/09 6//30/08 $ 2009 2008 Variance
Net sales $ 13,067,124 $ 19,415,731 $ (6,348,607 ) 100.00 % 100.00 % -
Cost of sales 9,845,438 15,568,094 (5,722,656 ) 75.35 % 80.18 % -4.83 %
Gross profit 3,221,686 3,847,637 (625,951 ) 24.65 % 19.82 % 4.83 %
Gross profit % 24.65 % 19.82 % 4.83 %
Selling, general and
administrative expenses:
Sales and marketing 2,753,296 2,776,622 (23,326 ) 21.07 % 14.30 % 6.77 %
Technical support 127,922 131,393 (3,471 ) 0.98 % 0.68 % 0.30 %
General and administrative 796,503 994,339 (197,836 ) 6.11 % 5.12 % 0.99 %
Amortization of intangible assets 188,709 - 188,709 1.45 % 0.00 % 1.45 %
Stock compensation 88,106 95,241 (7,135 ) 0.68 % 0.49 % 0.19 %
Total selling, general and
administrative expenses 3,954,536 3,997,595 (43,059 ) 30.29 % 20.59 % 9.70 %
Research and development expenses 1,074,268 922,752 151,516 8.22 % 4.75 % 3.47 %
Research & development stock
compensation 48,643 43,938 4,705 0.36 % 0.24 % 0.12 %
Total expenses 5,077,447 4,964,285 113,162 38.87 % 25.58 % 13.29 %
Net operating loss (1,855,761 ) (1,116,648 ) (739,113 ) -14.22 % -5.76 % -8.46 %
Other income (expense) :
Interest income 1,707 11,816 (10,109 ) 0.01 % 0.06 % -0.05 %
Interest (expense) (20,832 ) - (20,832 ) -0.16 % 0.00 % -0.16 %
Foreign currency 25,532 15,823 9,709 0.19 % 0.08 % 0.11 %
Total other income (expense) 6,407 27,639 (21,232 ) 0.04 % 0.14 % -0.10 %
Loss before taxes (1,849,354 ) (1,089,009 ) (760,345 ) -14.18 % -5.62 % -8.56 %
Taxes provision 38,028 28,554 9,474 0.29 % 0.15 % 0.14 %
Net loss $ (1,887,382 ) $ (1,117,563 ) $ (769,819 ) -14.47 % -5.77 % -8.70 %
|
Net sales for the three months ended June 30, 2009 decreased $6,348,607 compared to the three months ended June 30, 2008 as shown in the table below.
Increase Increase
(decrease) (decrease) Percentage of sales by
Three Months Three Months Dollar dollar Geographic region
ended 6/30/09 ended 6/30/08 Variance variance % 2009 2008
The Americas $ 6,834,846 $ 8,112,299 $ (1,277,453 ) -16 % 53 % 42 %
Europe 5,821,748 10,561,243 (4,739,495 ) -45 % 44 % 54 %
Asia 410,530 742,189 (331,659 ) -45 % 3 % 4 %
Total $ 13,067,124 $ 19,415,731 $ (6,348,607 ) -33 % 100 % 100 %
|
Net sales to customers in The Americas were 53% and 42% of net sales for the three months ended June 30, 2009 and 2008, respectively. Net sales to customers in Europe were 44% and 54% of net sales for the three months ended June 30, 2009 and 2008, respectively. Net sales to customers in Asia were 3% and 4% of net sales for the three months ended June 30, 2009 and 2008, respectively. We experienced a decrease in unit sales of about 36% while the change in sales mix increased the average sales price by about 4%.
Factors driving the decline in sales for the third quarter of fiscal 2009 were the effects of a weakened economy which curtailed consumer spending, the liquidation of Circuit City, the weakening of the Euro compared to the U.S. dollar and the shift in emphasis by PC manufacturers to lower cost PCs which do not include TV tuners. Somewhat offsetting the declines caused by the factors listed above was the addition of sales from the PCTV product line that we acquired from Avid Technology, Inc.
Gross profit
Gross profit decreased $625,951 for the three months ended June 30, 2009 compared to the three months ended June 30, 2008.
The decrease in the gross profit is detailed below:
Increase (decrease)
Lower sales $ (1,848,381 )
Decrease in the Euro exchange rate (812,003 )
Lower production and production related expenses 425,363
Higher gross profit due favorable sales mix 1,609,070
Total decrease in gross profit $ (625,951 )
|
Gross profit percentage for the three months ended June 30, 2009 was 24.65 % compared to 19.52% for the three months ended June 30, 2008, resulting in a gross profit increase of 4.83%.
The increase in gross profit percentage is detailed below:
Increase (decrease)
Higher gross profit due favorable sales mix 11.94 %
Decrease in the Euro exchange rate (5.85 )%
Production and production related expenses (1.26 )%
Net increase in gross profit percentage 4.83 %
|
Selling, general and administrative expenses
The chart below illustrates the components of Selling, general and administrative expense.
Three months ended June 30,
Dollar Costs Percentage of Sales
2009 2008 Decrease 2009 2008 Increase
Sales and
marketing-HCW $ 2,637,961 $ 2,776,622 $ (138,661 ) 20.19 % 14.30 % 5.89 %
Sales and
marketing-PCTV 115,335 - 115,335 0.88 % 0.00 % 0.88 %
Technical support 127,922 131,393 (3,471 ) 0.98 % 0.68 % 0.30 %
General and
administrative-HCW 770,359 994,339 (223,980 ) 5.90 % 5.12 % 0.78 %
General and
administrative-PCTV 26,144 - 26,144 0.21 % 0.00 % 0.21 %
Amortization of
intangible assets 188,709 - 188,709 1.45 % 0.00 % 1.45 %
Stock compensation 88,106 95,241 (7,135 ) 0.68 % 0.49 % 0.19 %
Total $ 3,954,536 $ 3,997,595 $ (43,059 ) 30.29 % 20.59 % 9.70 %
|
Selling, general and administrative expenses decreased $ 43,059 from the prior year's fiscal third quarter. Sales and marketing expense for HCW decreased $138,661, primarily driven by the decrease in the Euro exchange rate compared to the U.S. dollar which resulted in an expense reduction of $257,410, lower compensation expense of $21,221 due personnel reductions and lower travel and industry show expenses $42,459 due to the budgeted expense reductions. Offsetting these decreases was an increase of $ 115,335 in sales and marketing expense for PCTV due to personnel expenses related to PCTV employees hired in connection with the acquisition of the PCTV business from Avid Technology, Inc. and increased sales office expenses for HCW of $34,238 related to higher personnel costs.
The decrease in general and administrative expense for HCW of $223,980 was primarily due lower professional fees, primarily for legal and consulting fees of $121,644, a decrease in compensation expense of $31,231 due to staff reductions, a reduction of $36,689 in insurance expense due to lower negotiated premiums, lower communications expenses of $6,643 and lower insurance expense of $36,689 due lower premiums. These decreases were somewhat offset by $26,144 in general and administration expenses related to the PCTV operation. There also was $188,709 in amortization of intangible assets charged to operations for the third quarter of fiscal 2009 related to the acquisition of the PCTV business.
Research and development expenses
Research and development expenses increased $156,221. Higher compensation expense of $426,441 for personnel expenses related to PCTV employees hired in connection with the acquisition of the PCTV business from Avid Technology, Inc., offset by $ 183,183 in lower compensation expense due to staff reductions and $107,240 less in project development expenses due to a lower volume of programs in progress for fiscal 2009.
Tax provision
Our tax provision for the three months ended June 30, 2009 and 2008 is as follows:
Three months ended June 30,
2009 2008
Tax expense on international operations $ 28,028 $ 28,554
State taxes 10,000 -
Tax provision $ 38,028 $ 28,554
|
We recorded a net loss of $1,887,382, for the three months ended June 30, 2009, which resulted in basic and diluted net loss per share of $0.19 on weighted average basic and diluted shares of 10,048,771 compared to a net loss of $1,117,563 for the three months ended June 30, 2008, which resulted in basic and diluted net loss per share of $0.11 on weighted average basic and diluted shares of 10,018,771.
Options to purchase 1,522,394 and 1,767,744 shares of common stock, at prices for both periods ranging from $1.05 to $8.75, were outstanding for the three months ended June 30, 2009 and 2008, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.
NINE MONTH PERIOD ENDED JUNE 30, 2009 COMPARED TO NINE MONTH PERIOD ENDED JUNE
30, 2008
Results of operations for the nine months ended June 30, 2009 compared to June
30, 2008 are as follows:
Nine Nine
Months Months
Ended Ended Variance Percentage of sales
6/30/09 6/30/08 $ 2009 2008 Variance
Net sales $ 43,089,233 $ 73,975,884 $ (30,886,651 ) 100.00 % 100.00 % -
Cost of sales 34,305,007 58,647,765 (24,342,758 ) 79.61 % 79.28 % 0.33 %
Gross profit 8,784,226 15,328,119 (6,543,893 ) 20.39 % 20.72 % -0.33 %
Gross profit % 20.39 % 20.72 % -0.33 %
Selling, general and
administrative expenses:
Sales and marketing 7,956,761 8,699,273 (742,512 ) 18.47 % 11.76 % 6.71 %
Technical support 398,906 434,160 (35,254 ) 0.93 % 0.59 % 0.34 %
General and administrative 2,663,055 3,081,296 (418,241 ) 6.18 % 4.17 % 2.01 %
Amortization of intangible assets 377,418 - 377,418 0.88 % 0.00 % 0.88 %
Stock compensation 258,963 285,723 (26,760 ) 0.60 % 0.39 % 0.21 %
Total selling, general and
administrative expenses 11,655,103 12,500,452 (845,349 ) 27.06 % 16.91 % 10.15 %
Research and development expenses 3,093,428 2,727,572 365,856 7.18 % 3.69 % 3.49 %
Research & development stock
compensation 142,973 131,814 11,159 0.33 % 0.18 % 0.15 %
Total expenses 14,891,504 15,359,838 (468,334 ) 34.57 % 20.78 % 13.79 %
Net operating loss (6,107,278 ) (31,719 ) (6,075,559 ) -14.18 % -0.06 % -14.12 %
Other income (expense) :
Interest income 11,332 28,633 (17,301 ) 0.03 % 0.04 % -0.01 %
Interest expense (49,478 ) - (49,478 ) -0.11 % 0.00 % -0.11 %
Foreign currency 669,209 (16,130 ) 685,339 1.55 % -0.02 % 1.57 %
Total other income (expense) 631,063 12,503 618,560 1.47 % 0.02 % 1.45 %
Loss before taxes (5,476,215 ) (19,216 ) (5,456,999 ) -12.71 % -0.04 % -12.67 %
Tax provision 115,550 160,437 (44,887 ) 0.27 % -0.04 % -9.66 %
Net loss $ (5,591,765 ) $ (179,653 ) $ (5,412,112 ) -12.98 % 0.00 % -12.98 %
|
Net sales for the nine months ended June 30, 2009 decreased $30,886,651 compared to the nine months ended June 30, 2008 as shown in the table below.
Increase Increase
(decrease) (decrease) Percentage of sales by
Nine Months Nine Months Dollar Dollar Geographic region
ended 6/30/09 ended 6/30/08 Variance variance % 2009 2008
The Americas 21,341,299 35,497,270 (14,155,971 ) -40 % 50 % 48 %
Europe 20,363,226 36,560,030 (16,196,804 ) -44 % 47 % 49 %
Asia 1,384,708 1,918,584 (533,876 ) -28 % 3 % 3 %
Total $ 43,089,233 $ 73,975,884 $ (30,886,651 ) -42 % 100 % 100 %
|
Net sales to customers in The Americas were 50% and 48% of net sales for the nine months ended June 30, 2009 and 2008, respectively. Net sales to customers in Europe were 47% and 49% of net sales for the nine months ended June 30, 2009 and 2008, respectively. Net sales to customers in Asia were 3% of net sales for the nine months ended June 30, 2009 and 2008, respectively. We experienced a decrease in unit sales of about 43% while the change in sales mix increased the average sales price by about 3%.
Factors driving the decline in sales for the nine months ended June 30, 2009 were the effects of a weakened economy which curtailed consumer spending, the liquidation of Circuit City, the weakening of the Euro and the shift in emphasis by the PC manufacturers to lower cost PCs which do not include TV tuners. Somewhat offsetting the declines caused by the factors listed above was the addition of sales from the PCTV product line that we acquired from Avid Technology, Inc.
Gross profit
Gross profit decreased $6,543,893 for the nine months ended June 30, 2009 compared to the nine months ended June 30, 2008.
The decrease in the gross profit is detailed below:
Increase (decrease)
Lower sales $ (9,093,029 )
Decrease in the Euro exchange rate (2,475,837 )
Lower production and production related expenses 1,870,234
Higher gross profit due favorable sales mix 3,154,739
Total decrease in gross profit $ (6,543,893 )
|
Gross profit percentage for the nine months ended June 30, 2009 was 20.39 % compared to 20.72% for the nine months ended June 30, 2008, resulting in a gross profit decrease of 0.33%.
The decrease in the gross profit percentage is detailed below:
Increase (decrease)
Lower gross profit due favorable sales mix 7.01 %
Decrease in the Euro exchange rate (5.43 )%
Production and production related expenses (1.91 )%
Net decrease in gross profit percentage (0.33 )%
|
Selling, general and administrative expenses
The chart below illustrates the components of Selling, general and administrative expense.
Nine months ended June 30,
Dollar Costs Percentage of Sales
2009 2008 Decrease 2009 2008 Increase
Sales and marketing-HCW $ 7,753,381 $ 8,699,273 $ (945,892 ) 17.99 % 11.76 % 6.23 %
Sales and marketing-PCTV 203,380 - 203,380 0.48 % 0.00 % 0.48 %
Technical support 398,906 434,160 (35,254 ) 0.93 % 0.59 % 0.34 %
General and
administrative-HCW 2,521,048 3,081,296 (560,248 ) 5.85 % 4.17 % 1.68 %
General and
administrative-PCTV 142,007 - 142,007 0.33 % 0.00 % 0.33 %
Amortization of
intangible assets 377,418 - 377,418 0.88 % 0.00 % 0.88 %
Stock compensation 258,963 285,723 (26,760 ) 0.60 % 0.39 % 0.21 %
Total $ 11,655,103 $ 12,500,452 $ (845,349 ) 27.06 % 16.91 % 10.15 %
|
Selling, general and administrative expenses decreased $845,349 compared to the same period in the prior fiscal year. Sales and marketing expense for HCW decreased $945,892, primarily driven by the decrease in the Euro exchange rate compared to the U.S. dollar which resulted in an expense reduction of $676,489, lower compensation expense of $61,273 due personnel reductions, lower travel and industry show expenses $85,757 due to the budgeted expense reductions , lower commissions, marketing development and advertising expense of $293,738 due to lower sales. Offsetting these decreases were higher HCW European sales office expense of $112,433 due to higher personnel costs and $203,380 in sales and marketing expenes for PCTV due to personnel expenses related to PCTV employees hired in connection with the acquisition of the PCTV business from Avid Technology, Inc.
The decrease in general and administrative expense for HCW of $560,248 was primarily due lower professional fees, primarily for legal and consulting fees of $260,705, a decrease in bad debt expense of $120,000 related to the February 2008 liquidation of CompUSA, a decrease in compensation expense of $81,633 due to staff reductions, a reduction of $77,617 in insurance expense due to lower premiums and lower communication expenses of $16,796. These decreases were offset $142,007 in PCTV general and administrative expenses, mainly due to $140,000 paid to Avid Technology, Inc. pursuant to a transitional services agreement. There also was $377,418 in amortization of intangible assets charged to operations related to the acquisition of the PCTV business.
Research and development expenses
Research and development expenses increased $377,015. The primary drivers of the increase were higher compensation expense of $846,191 for personnel expenses related to PCTV employees hired in connection with the acquisition of the PCTV business from Avid Technology, Inc., offset by $239,955 in lower compensation expense due to staff reductions, $241,255 less in project development expenses due to a lower volume of programs in progress during fiscal 2009 and $39,559 less in travel expense due budget restrictions.
Tax provision
Our tax provision for the nine months ended June 30, 2009 and 2008 is as follows:
Nine months ended June 30,
2009 2008
Tax expense on international operations $ 85,550 143,437
State taxes 30,000 17,000
Tax provision $ 115,550 $ 160,437
|
We recorded a net loss of $5,591,765, for the nine months ended June 30, 2009, which resulted in basic and diluted net loss per share of $0.56 on weighted average basic and diluted shares of 10,042,546 compared to a net loss of $179,653 for the nine months ended June 30, 2008, which resulted in basic and diluted net loss per share of $0.02 on weighted average basic and diluted shares of 9,951,552. .
Options to purchase 1,522,394 and 1,767,744 shares of common stock at prices for both periods ranging from $1.05 to $8.75, respectively, were outstanding for the nine months ended June 30, 2009 and 2008, respectively, but were not included in the computation of diluted earnings per share because they were anti-dilutive.
Seasonality
As our sales are primarily to the consumer market, we have experienced certain seasonal revenue trends. Our peak sales quarter due to holiday season sales of computer equipment is our first fiscal quarter (October to December), followed by our second fiscal quarter (January to March). In addition, our international sales, mostly in the European market, were 52%, 44% and 54% of sales for the years ended September 30, 2008, 2007 and 2006, respectively. Part of our third and fourth quarters (April through June and July to September) can be potentially impacted by the reduction of activity experienced in Europe during the summer holiday period.
To offset the above cycles, we target a wide range of customer types in order to moderate the seasonal nature of our retail sales.
Liquidity and capital resources
Our cash, working capital and stockholders' equity position as of June 30, 2009 and September 30, 2008 is set forth below:
June 30, 2009 September 30, 2008
Cash $ 9,033,115 $ 14,191,721
Working Capital 7,105,609 17,229,410
Stockholders' Equity 13,804,245 18,988,536
|
We had cash and cash equivalents as of June 30, 2009 of $9,033,115, a decrease of $5,158,606 from September 30, 2008.
The decrease in cash was due to :
Sources of cash: Decrease in inventory $ 2,301,900 Increase in accounts payable and accrued expenses 2,119,894 Proceeds from employee stock purchases 24,133 Less cash used for: Net loss adjusted for non cash items (4,611,617 ) PCTV acquisition-net of note payable (2,490,500 ) Payment on note payable (1,249,998 ) Increase in accounts receivables (1,186,810 ) Capital equipment purchases (28,319 ) Increase in prepaid expenses and other current assets (18,694 ) Effect of exchange rates on cash (18,595 ) Net cash decrease $ (5,158,606 ) |
Net cash of $1,395,327 used in operating activities was due to the net loss adjusted for non cash items of $4,611,617, an increase in accounts receivable of $1,186,810 plus an increase in prepaid expenses and other current assets of $18,694, offset by a decrease in inventory of $2,301,900 and an increase in accounts payable and accrued expenses of $2,119,894. The increase in accounts receivable was due to sales shipped during June 2009 making up 40% of the sales for the quarter. The decrease in inventory was due to lower sales which resulted in a lower investment in inventory
Cash of $2,518,819 was used in investing activities. Of this amount, $2,490,500 was used for the acquisition of the PCTV business and $28,319 was used to purchase fixed assets. The $2,490,500 used for the PCTV acquisition consisted of $2,238,000 paid against the $5,000,000 purchase price and $252,300 disbursed in payment of direct expenses of the acquisition. We also entered into a Note Payable with Avid Technology, Inc. of $2,500,000, of which $1,249,998 in payments have been made against the note . Cash of $24,133 was provided from purchases of stock pursuant to our employee stock purchase plan.
Our cash requirements for the next twelve months will include, among other things, the cash required to pay off the note to Avid Technology, Inc related to the purchase the PCTV product line and the cash needed to fund the acquisition's working capital needs. With the proper execution of our business and operational integration plan, we believe that our cash and cash equivalents as of March 31, 2009 and our internally generated cash flow will provide us with sufficient . . .
|
|