InfoSonics craters after weak Q4 report; forex, supply chain issues blamed

|By:, SA News Editor

"This was a very challenging quarter for us on many fronts," says InfoSonics (IFON -40.7%) CEO Joseph Ram about a Q4 in which revenue fell 16% Q/Q and 43% Y/Y to $10.2M. "The extremely weak currency environment in the Latin American markets we primarily serve worsened in the quarter, and put significant pressure on both our top line revenue and gross profit margin ... In addition, we had a number of supply chain issues during the quarter that have been resolved, but temporarily constrained product flow and sales."

Top-line performance: Unit shipments fell 57% Y/Y, thanks largely to "the reduction of sales to two carrier customers in South America and the Caribbean that [InfoSonics] moved away from earlier in the year, as well as reduced sales to big box retailers in Mexico caused by supply chain constraints and currency related pricing pressures." ASP rose 29% due to a mix shift towards "higher end smartphones in the retail channel compared to the operator channel."

Financials: Gross margin fell to 12.3% from 16.4% in Q3 and 16.5% a year ago. GAAP operating expenses were flat Y/Y at $2.1M - no R&D spend occurred during Q4. InfoSonics ended 2015 with $2.6M in cash, $14M in working capital, and no debt.

Shares have made new 52-week lows. InfoSonics' market cap is now only $16M.

InfoSonics' Q4 results, earnings release

Subscribe for full text news in your inbox