($ in thousands except per share amounts)
COPPELL, Texas, Aug. 15, 2017 /PRNewswire/ -- Costar Technologies, Inc. (the "Company") (OTC Markets Group: CSTI), announced its financial results for the quarter ending June 30, 2017 that have been reviewed by the independent accounting firm RSM US LLP.
Summary Results for the Quarter Ended June 30, 2017
- GAAP net income of $112, or $0.07 per share based on 1,567 weighted average diluted shares outstanding. This compares to GAAP net income of $135, or $0.09 per share based on 1,541 weighted average diluted shares outstanding for the quarter ended June 30, 2016.
- The Company incurred $471, or $0.31 per share in amortization and fair value adjustment expenses. Innotech's amortization expense was $214, or $0.14 per share, and CohuHD's was $81, or $0.05 per share, while a fair value adjustment to the contingent consideration relating to the Innotech acquisition was $184, or $0.12 per share.
- Consolidated revenue increased approximately $1,200, or 13%, from the prior year due to a $1,100 contribution from the Company's recently acquired subsidiary, Innotech.
James Pritchett, President and Chief Executive Officer of the Company, stated, "Despite the first six months being uncharacteristically slow, the Company had a solid second quarter generating over $10M in revenue. Costar Video Systems has large retail projects scheduled for the third and fourth quarter combined with CohuHD's strengthening backlog and anticipated launch of its new thermal product position the Company for a strong finish to the year."
Mr. Pritchett went on to say, "CohuHD's dual headed thermal and visual camera, slated to launch in the fourth quarter, continues to generate attention within the marketplace, winning the 2017 GSN Airport, Seaport, Border Security Award for Best Long Range/High Resolution Camera and contributing to the strongest CohuHD backlog in history."
Financial Results, Second Quarter of 2017 Compared to Second Quarter of 2016
Revenue for the second quarter of 2017 totaled $10,282, as compared to revenue of $9,082 for the second quarter of the prior year, an increase of approximately 13%. The majority of the increase, $1,100, was due to the acquisition of Innotech.
Gross profit for the second quarter of 2017 totaled $4,379. This compares to gross profit of $3,431 for the second quarter of 2016, an increase of 28%. The increase in gross profit is largely attributable to the increase in revenue.
Operating expenses for the second quarter of 2017 totaled $4,064. This compares to operating expenses of $3,172 for the second quarter of 2016, an increase of 28%. The majority of the increase is due to the inclusion of Innotech operating expenses in the second quarter of 2017 and the fair value change in the contingent consideration relating to the Innotech acquisition.
Other expense was $124 for the second quarter of 2017 compared to $30 for the second quarter of 2016. The increase is primarily due to an increase in interest expense.
Net income for the second quarter of 2017 was approximately $112, or $0.07 fully diluted earnings per share. This compares to net income for the second quarter of 2016 of $135, or $0.09 fully diluted earnings per share.
Financial Results, Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016
Revenue for the six months ended June 30, 2017 totaled $19,853, an increase of 3% compared to revenue of $19,212 for the same period in 2016. Innotech accounted for approximately $2,000 of the increase.
Gross profit for the six months ended June 30, 2017 totaled $8,093. This compared to gross profit of $7,295 for the six months ended June 30, 2016. The 11% increase in gross profit was due to Company-wide revenue growth.
Operating expenses for the six months ended June 30, 2017 totaled $7,905. This compares to operating expenses of $6,498 for the six months ended June 30, 2016, an increase of 22%. Expenses incurred in relation to the Innotech acquisition accounted for $68 of the increase, the fair value change in contingent consideration accounted for $184 of the increase, amortization of intangibles accounted for $427. The remaining increase was due to the inclusion of Innotech's operating expenses for the six months ended June 30, 2017.
Other expenses, net increased by approximately $176 during the six months ended June 30, 2017 as compared to the six months ended June 30, 2016. The increase is primarily due to an increase in interest expense.
The income tax benefit for the six months ended June 30, 2017 was ($9) compared to income tax expense of $290 for the six months ended June 30, 2016.
Net loss for the six months ended June 30, 2017 was approximately ($47), or ($0.03) fully diluted earnings per share, compared to net income of $439 or $0.28 fully diluted earnings per share for the six months ended June 30, 2016.
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". Costar was ranked 41 in a&s magazine's Security 50 for 2016. Security 50 is an annual ranking of the world's largest security manufacturers in the areas of video surveillance, access control and intruder alarms and is based on financial performance.
Cautionary Statement Regarding Forward Looking Statements
This press release contains forward-looking statements that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. You can identify forward-looking statements by words such as "believe," "may," "estimate," "continue," "anticipate," "intend," "plan," "expect," "predict," "potential," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of the risks and uncertainties.
You should not place undue reliance on any forward-looking statements. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable laws.
SOURCE Costar Technologies, Inc.
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