Shares of our Buzz Stock of the Day – InfoSonics Corp. (Nasdaq: IFON) — were up as much as 95 percent today on heavy volume after the wireless handset provider announced strong first quarter earnings.
The company, which serves the Latin American wireless handset and accessories market, announced first quarter earnings of $247,000 or $0.02 per share, compared to a net loss of $413,000 or $0.03 per share in the same quarter of last year. Revenues for the quarter declined to $42.6 million, compared to $67.9 million in the first quarter of 2008. However, net sales increased sequentially by $9.2 million.
Operating expenses decreased were $2.9 million, a decrease of 22% when compared to operating expenses of $3.7 million in the first quarter of 2008, and a decrease of 23% when compared to operating expenses of $3.8 million in the fourth quarter of 2008.
“While we are very encouraged by the improvement in our results over last quarter, we continue to focus on increasing our revenues and gross margins,” said InfoSonics’ president and CEO, Joseph Ram. “In addition we took steps during the quarter to realign our cost structure with our current revenue level. We remain focused on profitability and are working with our vendors; both OEM and proprietary, to better manage our inventory levels and overall expenses.”
We like IFON because the company has a strong balance sheet, generates cash from operations, and is taking the right steps to maintain profitability. The sizable decrease in operating expenses coupled with the company’s ability to generate profit despite a drop in sales makes us bullish on InfoSonics’ future. Last year, the company generated approximately $17 million of operating cash flow on revenue of $213 million. InfoSonics has about $24 million of cash in the bank, and is trading at a lower multiple than many of its competitors.