SGOCO Group, Ltd. (NASDAQ: SGOC), (the “Company” or “SGOCO”), a company focused on building its own brands and retail distribution network in the Chinese flat panel display market, including monitors, TVs, and application specific products, today announced its unaudited operating results for the three months ended March 31, 2011.
Financial Highlights First Quarter 2011 vs. First Quarter 2010:
- Total revenues increased by 347% to $87.0 million, compared to $19.5 million;
- Gross profit increased by 133% to $7.3 million, compared to $3.1 million;
- Gross margin was 8.4%, compared to 16.1%;
- Operating income increased by 230% to $5.7 million, compared to $1.7 million;
- Net income increased by 826% to $5.1 million compared to $0.6 million;
- Fully diluted EPS was $0.32, compared to $0.06; and,
- The number of SGOCO Image retail partners was 665, compared to 206.
2011 First Quarter Overview
SGOCO started 2011 on a very strong note with record revenues of $87.0 million. Compared to the first quarter of 2010, revenues were up 347% and compared to the fourth quarter of 2010, revenues rose 4.5%. The SGOCO brands continue to gain recognition in the marketplace based on their high quality. The strong growth was the result of increased customer demand for the Company’s products and expanded production capacity. The Company believes its success stems from its continued focus on its multiple-brand, multiple channel strategy. With the addition of POVIZON and No.10, SGOCO now has 6 brands in its portfolio. The Company continues to target 1,000 SGOCO Image stores by the end of 2011.Revenue Revenue for the first quarter of 2011 was $87.0 million, an increase of 347% from $19.5 million in the first quarter of 2010. As SGOCO’s reputation for high quality products has grown, the Company has seen increasing orders from customers. Sales of the Company’s own brands increased by 225% in the first quarter of 2011 compared to the first quarter of 2010. The trend toward greater sales was also aided by the increased number of SGOCO Image stores with 665 stores as of March 31, 2011 compared to 206 stores as of March 31, 2010. SGOCO’s own brands represented 54% of total revenues. To meet the increased market demand for the Company’s products, the Company operated with expanded production capacity in the first quarter of 2011 compared with the first quarter of 2010. Aiming to improve factory utilization and reduce idle capacity, SGOCO added new OEM customers. OEM revenues accounted for 30% of total revenues in the first quarter of 2011. The remaining 16% of the Company’s revenues are made up of Company produced components and outsourced items such as LED products, network products, and control systems.