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Hauppauge Digital Reports Fiscal 2010 Fourth Quarter And Year End Results

“Contributing to the decline in sales in 2010 were very weak sales to personal computer manufacturers. In 2011, we expect the weakened state of the global economy to still be a factor, especially in relation to our sales in Europe.”

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, video conferencing, 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, with administrative offices in Luxembourg, Ireland and Singapore, sales offices in Germany, London, Paris, The Netherlands, Sweden, Italy, Spain, Singapore, Taiwan and California and research and development centers in Hauppauge, New York, Taipei, Taiwan and Braunschweig, Germany. The Company’s Internet web site can be found at http://www.hauppauge.com.

This news release contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this news 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, financing plans, projected or anticipated benefits from acquisitions that we may make, or projections involving anticipated revenues, earnings or other aspects of our operating results or financial position, and the outcome of any contingencies. Any such forward-looking statements are based on current expectations, estimates and projections of management. We intend for these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements. Words such as “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, many of which are beyond our control, that may influence the accuracy of the statements and the projections upon which the statements are based. Factors that could cause actual results to differ materially from those set forth or implied by any forward-looking statement include, but are not limited to, the mix of products sold and the profit margins thereon, order cancellation or a reduction in orders from customers, competitive product offerings and pricing actions, the availability and pricing of key raw materials, dependence on key members of management, successful integration of acquisitions, economic conditions in the United States and abroad, fluctuation of the value of the Euro versus the U.S. dollar, continued operating losses, our ability to obtain financing, our ability to maintain our NASDAQ listing, as well as other risks and uncertainties discussed in the Company’s reports filed with the Securities and Exchange Commission, including, but not limited to, the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2010, the Company’s Form 10-Q for the three months ended December 31, 2009, the Company’s Form 10-Q for the three months ended March 31, 2010 and the Company’s Form 10-Q for the three months ended June 30, 2010. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. 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. All cautionary statements made in this news release should be read as being applicable to all related forward-looking statements wherever they appear.

HAUPPAUGE DIGITAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

     

Three months ended September 30,

2010       2009
     
Net sales $11,599,662 $16,255,305
Cost of sales 8,196,541       12,252,897
Gross profit 3,403,121 4,002,408
 
Selling, general and administrative expenses 3,762,993 4,462,487
Research & development expenses 1,200,254       1,185,534
Loss from operations (1,560,126) (1,645,613)
Other income (expense):
Interest income 1,037 2,885
Interest expense - (13,079)
Foreign currency 14,132       1,551
Total other income (expense) 15,169       (8,643)
Loss before tax provision (1,544,957) (1,654,256)
Deferred tax expense (benefit) (66,353) (164,501)
Current income tax expense 45,748       61,501
Net loss ($1,524,352)       ($1,551,256)
 
Net loss per share-basic and diluted ($0.15) ($0.15)
         
         
 
 
Weighted average shares-basic and diluted 10,072,625 10,054,062
 

HAUPPAUGE DIGITAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

     

Twelve months ended September 30,

2010       2009
     
Net sales $56,918,617 $59,344,538
Cost of sales 38,486,848       46,557,904
Gross profit 18,431,769 12,786,634
 
Selling, general and administrative expenses 15,579,080 16,117,590
Research & development expenses 4,458,915       4,421,935
Loss from operations (1,606,226) (7,752,891)
Other income:
Interest income 5,373 14,217
Interest expense (4,340) (62,557)
Foreign currency 227,902       670,760
Total other income 228,935       622,420
Loss before tax provision (1,377,291) (7,130,471)
Deferred tax expense (benefit) 264,247 (164,501)
Current income tax expense 205,022       177,051
Net loss ($1,846,560)       ($7,143,021)
 
Net loss per share-basic and diluted ($0.18) ($0.71)
         
         
 
 
Weighted average shares-basic and diluted 10,066,637 10,045,449
 

HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
 
     

 

     

September 30,

September 30,
2010       2009
Assets:
 
Current Assets:
Cash and cash equivalents $7,057,904 $8,368,342
Accounts receivables, net of various allowances 4,403,194 9,770,584
Other non trade receivables 2,355,834 4,116,392
Inventories 11,450,565 8,616,800
Deferred tax asset current 1,310,204 1,297,574
Prepaid expenses and other current assets 980,087       928,680
Total current assets 27,557,788 33,098,372
 
Intangible assets, net 3,941,266 4,696,102
Property, plant and equipment, net 544,959 757,488
Security deposits and other non current assets 106,241 108,088
Deferred tax asset non current 610,734       887,611
$32,760,988       $39,547,661
 
 
Liabilities and Stockholders’ Equity:
 
Current Liabilities:
Accounts payable $7,306,221 $12,478,625
Accrued expenses – fees 4,955,540 5,753,546
Accrued expenses 10,266,495 8,131,263
Note payable - 625,045
Income taxes payable 252,090       224,316
Total current liabilities 22,780,346 27,212,795
 
Stockholders' Equity

Common stock $.01 par value; 25,000,000 shares authorized, 10,842,274 and 10,814,042 issued, respectively

108,423 108,140
Additional paid-in capital 17,739,330 17,276,651
Retained earnings (deficit) (1,050,886) 795,674
Accumulated other comprehensive loss (4,410,677) (3,441,262)
Treasury Stock at cost, 760,479 and 759,579 shares, respectively (2,405,548)       (2,404,337)
Total stockholders' equity 9,980,642       12,334,866
$32,760,988       $39,547,661




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