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Press Release Source: SOYO Group Inc.
SOYO Updates Financial Guidance for Fiscal Year 2008
Monday May 19, 9:30 am ET
ONTARIO, Calif., May 19, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTC BB:SOYO.OB - News) today announced its updated financial guidance for fiscal year 2008.
Previously, projections for the year 2008 were top line revenue of $140,000,000, and net income of $5-6 million, or approximately 11 cents per share. In the conference call held May 15, 2008, the Company released projections on a quarter by quarter basis. First quarter financial results were in line with the Company's internal projections of $25 million in net revenue, and $.01 per share. For the second quarter, the Company is projecting net revenues of $33 million and EPS of $.02. For the third quarter we are projecting net revenues of $37 million and EPS of $.04. For the fourth quarter we are projecting net revenues of $50 million and EPS of $.05. The Company's 2008 top line revenue projections are $140 million-$145 million. The Company's 2008 net income projections are $5 million-$6 million or $.11-$.12 per share.
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics and IT products such as LCD Monitors, LCD HD Televisions, Bluetooth Devices, Portable Storage, and Home Theater Furniture products and services. Headquartered in Ontario, California, with additional sales offices in Latin America, SOYO sells its products through an extensive network of authorized retailers, distributors, resellers, system integrators, VARs, and ecommerce web sites. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit http://www.honeywellce.com.
``Safe Harbor'' Statement
This release contains certain statements that may be deemed ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words ``plan,'' ``confident that,'' ``believe,'' ``scheduled,'' ``expect,'' or ``intend to,'' and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at http://www.sec.gov.
Contact:
SOYO Inc.
Ashten Giardine, Public Relations and Investor Relations
(909) 292-2504
ashteng@soyo.com
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
Nice find King...Sean Sherks is an awesome fighter, and make that logo look really good on his shirt;) I can't wait to watch that fight. I wish I was watching it on a new Honeywell 65", maybe next one! huh.
Your link wasn't working for me.. But I found Seans video and interview at http://84.ufc.com/
Just noticed the SOYO logo on Sean Sherk's Shirt in this UFC 84 preview. BJ Penn vs Sean Sherk is the main event. Looks like a lot of the Star MMA fighters are represented by SOYO which is great news.
http://sports.yahoo.com/mma/ufcppv/8...14?vid=7701558
SOYO Inc. Reports First Quarter 2008 Financial Results
Thursday May 15, 5:08 pm ET
Net Revenue for the First Quarter Was $24,795,315
Net Revenue Increases 68.8 Percent from First Quarter Fiscal Year 2007
EBITDA Increases 218% over First Quarter 2007
Net Income before Dividends was $460,347
ADVERTISEMENT
ONTARIO, Calif., May 15, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTC BB:SOYO.OB - News) today announced its first quarter financial results for the period ending March 31, 2008.
The Company reported first quarter net revenues of $24,795,315 for the three months ending March 31, 2008, an increase of 68.8% compared to $14,691,110 in the first quarter fiscal year 2007. Gross margin for the first quarter 2008 was 3,106,104, as compared to 2,608,196 for the first quarter fiscal year 2007. Income from operations for the three months ending March 31, 2008 was 809,567 as compared to 414,437 for the same period in 2007. EBITDA grew to $833,000 during the quarter of 2008, from $382,000 during the first quarter of 2007. Net income for the three months ending March 31, 2008 was $460,347, as compared to $522,190 or $.01 per share for the same period in 2007.
The Company will hold a conference call today at 3pm Pacific Time (6pm Eastern) to discuss these financial results. Information for the call is as follows:
Date/Time: Thursday, May 15, 2008 3pm Pacific (6pm Eastern)
U.S./Canada Toll-Free Call-in Number: (866) 830-4434
International Toll-Free Call-in Number: (706) 679-4957
Pass code: # 47478573
It is recommended that participants call in approximately five to ten minutes prior to the beginning of the call. The call will be recorded and posted on SOYO's website at http://www.soyo.com/content/downloads/155/&download_category=Investor+Conference+Call&back.
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics and IT products such as LCD Monitors, LCD HD Televisions, Bluetooth Devices, Portable Storage, and Home Theater Furniture products and services. Headquartered in Ontario, California, with additional sales offices in Latin America, SOYO sells its products through an extensive network of authorized retailers, distributors, resellers, system integrators, VARs, and ecommerce web sites. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit http://www.honeywellce.com.
SOYO Group, Inc. and Subsidiary
Condensed Consolidated Balance Sheets
March 31, December 31,
2008 2007
----------- -----------
(Unaudited) (Restated)
ASSETS
Current Assets
Cash and cash equivalents 3,560,952 1,848,249
Accounts receivable, net of allowance for
doubtful accounts of $ 1,105,663 and
$783,573 at March 31, 2008 and
December 31, 2007 respectively 29,636,628 27,123,985
Inventories, net of allowance for
inventory obsolescence of $222,044 and
$88,114 as of March 31, 2008 and
December 31, 2007 and respectively 15,612,047 12,221,265
Prepaid expenses 723,893 187,749
Deferred income tax assets 582,963 544,688
Deposits 8,766,995 8,808,408
----------- -----------
Total Current Assets 58,883,478 50,734,344
----------- -----------
Investment in 247 MGI 800,000 400,000
Property and equipment 319,252 316,287
Less accumulated depreciation
and amortization (154,248) (141,613)
----------- -----------
165,004 174,674
Deferred income tax - noncurrent 677,037 658,312
Total noncurrent assets 1,642,041 1,232,986
Total Assets $60,525,519 $51,967,330
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $19,051,452 $14,336,196
Accrued liabilities 825,987 789,526
Commercial Loans due to UCB 26,359,020 27,824,490
Gateway Trade Finance 4,279,110 --
----------- -----------
Income Tax Payable 1,170,876 889,518
----------- -----------
Total current liabilities 51,686,445 43,839,730
----------- -----------
Long term payable 0 --
----------- -----------
Total liabilities 51,686,445 43,839,730
----------- -----------
EQUITY
Class B Preferred stock, $0.001 par value,
authorized - 10,000,000 shares, Issued
and outstanding - 3,181,357 shares in
2008 and 2,797,738 shares in 2006 2,263,678 2,187,165
Preferred stock backup withholding (253,356) (230,402)
Common stock, $0.001 par value.
Authorized - 75,000,000 shares, Issued
and outstanding - 52,179,656 shares
in 2008 and 52,004,656 shares in 2007 52,180 52,005
Additional paid-in capital 20,685,530 20,233,500
Accumulated deficit (13,908,958) (14,114,668)
----------- -----------
Total shareholders' Equity 8,839,074 8,127,600
----------- -----------
Total liabilities and shareholders'
equity $60,525,519 $51,967,330
=========== ===========
SOYO Group, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
March 31,
2008 2007
Net revenues $24,795,315 $14,691,110
Cost of revenues 21,689,211 12,082,914
Gross margin 3,106,104 2,608,196
Costs and expenses:
Sales and marketing 427,635 590,856
General and
administrative 1,404,177 1,578,174
Provision for doubtful accounts 452,090 1,438
Depreciation and amortization:
Property and equipment 12,635 23,291
Total costs and expenses 2,296,537 2,193,759
Income from operations 809,567 414,437
Other income (expense):
Interest income 12,107 31,385
Interest expense (385,147) (59,715)
Other income (expense) 400,000 (87,690)
Other income (expense), net 26,960 (116,020)
Income before provision for income
taxes 836,527 298,417
Provision for income taxes 433,180 63,085
Deferred income tax benefit (57,000) (286,858)
Net income (loss) 460,347 522,190
Less: dividends on convertible preferred
stock 254,638 61,763
Net income (loss) attributable to common 205,709 460,427
shareholders
Net income (loss) per common share - .00 .01
Basic and diluted .00 .01
Weighted average number of shares of 50,111,501 49,025,511
common stock outstanding - Basic and 55,067,176 54,706,506
diluted
SOYO Group, Inc. and Subsidiary
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended
March 31,
2008 2007
OPERATING ACTIVITIES
Net Income (loss) 460,347 522,190
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and Amortization 12,635 23,290
Unrealized gain on investment in 247MGI (400,000) --
Non cash payments for director's
compensation
Stock based compensation 212,831 176,794
Provision for doubtful accounts 322,090 1,438
Provision for inventory obsolescence 53,444 --
Changes in operating assets and
liabilities:
(Increase) decrease in:
Accounts Receivable (2,834,733) 230,273
Inventories (3,444,226) (541,848)
Prepaid expenses (536,144) 7,309
Deposits 41,413 (70,133)
Deferred income tax asset - current (38,275) (286,858)
Deferred income tax asset - non current (18,725) --
Increase (Decrease) in:
Accounts payable 4,715,256 (6,931,802)
Accrued liabilities 36,461 3,766
Income tax payable 281,358 --
------------------------
Net cash used in operating activities (1,136,268) (6,865,581)
------------------------
INVESTING ACTIVITIES
Purchase of property and equipment (2,965) (9,791)
Proceeds from sale of equipment
------------------------
Net cash used in investing activities (2,965) (9,791)
------------------------
FINANCING ACTIVITIES
Proceeds from issuance of common stock 61,250 --
Proceeds from accounts receivable
discounting -- 1,294,217
Repayments of accounts receivable
discounting -- (4,882,620)
Proceeds from business loan 4,279,110 11,000,512
Repayment of business loan (1,465,470) --
Payment of backup withholding tax on
accreted dividends on preferred stock (22,954) (18,529)
Short term loan -- (100,000)
------------------------
Net cash used in financing activities 2,851,936 7,293,580
------------------------
CASH AND CASH EQUIVALENTS
Net Increase (Decrease) 1,712,703 418,208
At beginning of Period 1,848,249 1,501,040
------------------------
At End of Period 3,560,952 1,919,248
========================
Non cash investing and financing
activities
Accretion of discount on Class B
preferred stock 76,513 61,763
Stock Option Compensation -- 176,794
Unrealized gain on available for sale
securities 400,000 --
``Safe Harbor'' Statement
This release contains certain statements that may be deemed ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words ``plan,'' ``confident that,'' ``believe,'' ``scheduled,'' ``expect,'' or ``intend to,'' and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at http://www.sec.gov.
Contact:
SOYO Inc.
Public Relations and Investor Relations
Ashten Giardine
(909) 292-2504
ashteng@soyo.com
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
Form 10-Q for SOYO GROUP INC
15-May-2008
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:
This Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, including statements that include the words "believes", "expects", "anticipates", or similar expressions. These forward-looking statements include, but are not limited to, statements concerning the Company's expectations regarding its working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. The forward-looking statements in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from those expressed in or implied by the forward-looking statements contained herein.
Financial Outlook:
For the three months ended March 30, 2008, the Company earned $460,347, or $0.01 per share before dividends on preferred stock.
For the three months ended March 30, 2007, The Company earned $522,190, or .01 per share before dividends on preferred stock.
As a general rule, the Company has been totally reliant upon the cash flows from its operations to fund future growth. In the last few years, the Company has begun and continues to implement the following steps to increase its financial position, liquidity, and long term financial health:
In 2005, the Company completed a small private placement, began factoring invoices to improve cash flows, and converted several million dollars of debt to equity, all of which improved the Company's financial condition.
In 2006, the Company changed factors to a more beneficial arrangement, and entered into a Trade Finance Flow facility with GE Capital to fund "Star" transactions. The agreement provided for GE Capital to guarantee payment, on the
Company's behalf, for merchandise ordered from GE Capital approved manufacturers in Asia. GE Capital guarantees the payment subject to a purchase order from one of our customers. The Company accepts delivery of the goods in the US, and then has the option to either pay for the goods or sell the receivable (from the customer) to our factor, which pays GE Capital.
In March 2007, the Company announced that it had secured a $12 MM Asset Based Credit Facility from UCB, a California bank, to provide funding for future growth.
During the first quarter of 2007, the Company began to use the $12 million asset based credit facility arranged with United Commercial Bank (see Form 8-K dated March 2, 2007). The agreement calls for UCB to provide funds for SOYO to purchase inventory in an amount determined by an evaluation of SOYO's current inventory and accounts receivable. According to the terms of the agreement, all accounts receivable sold to other factors were purchased by UCB.
In April 2007, by mutual agreement of the parties, the maximum loan balance was increased several times. All other terms of the agreement, including the interest rate, maturity date and method of evaluating the Company's inventory and receivables to determine eligible collateral were left unchanged. For reporting purposes, the loan has been segregated from other payables and reported as a separate line item on the balance sheet.
In June 2007, UCB offered to provide the Company with an alternative source of financing- Purchase Order financing. This line differed from all other forms of financing in that the bank was offering to advance funds against our customers specific purchase orders, provided the customer met the bank's stringent credit requirements. The end result is that the Company can use this credit line only by obtaining purchase orders from large customers before ordering the merchandise. The funds would then be advanced to the manufacturer after product was shipped, and once the product was delivered to the customer, and the status of the order was changed from a purchase order to a receivable, the loan would have to be paid back, or the balance transferred to the asset based credit line. The Company began buying merchandise under the Purchase Order financing line in June 2007.
In September 2007, the Company announced to shareholders that it was negotiating with several independent third parties to raise capital. The capital would be used to improve the balance sheet and increase the Company's borrowing capabilities. The Company further stated that with the large increases in sales during the year, all of the Company's credit had been utilized, and that the Company was having difficulties purchasing enough products to maintain the 2007 level of sales growth. As of the date of this report, the Company had not yet agreed with any outside party on any capital transaction.
Critical Accounting Policies:
The Company prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.
The Company operates in a highly competitive industry subject to aggressive pricing practices, pressures on gross margins, frequent introductions of new products, rapid technological advances, continual improvement in product price/performance characteristics, and changing consumer demand.
As a result of the dynamic nature of the business, it is possible that the Company's estimates with respect to the realizability of inventories and accounts receivable may be materially different from actual amounts. These differences could result in higher than expected allowance for bad debts or inventory reserve costs, which could have a materially adverse effect on the Company's financial position and results of operations.
The following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company's condensed consolidated financial statements.
Vendor Programs:
Firm agreements with vendors for price protection, product rebates, marketing and training, product returns and promotion programs are generally recorded as adjustments to product costs, revenue or sales and marketing expenses according to the nature of the program. Depending on market conditions, the Company may implement actions to increase customer incentive offerings, which may result in a reduction of revenue at the time the incentive is offered. The Company records the corresponding cost or expense at the time it has a firm agreement with a vendor.
Accounts Receivable:
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable.
The Company records estimated reductions to revenue for incentive offerings and promotions. Depending on market conditions, the Company may implement actions to increase customer incentive offerings, which may result in an incremental reduction of revenue at the time the incentive is offered. The Company records the corresponding effect on receivable and revenue when the Company offers the incentive to customers. All accruals estimating sales incentives, warranties, rebates and returns are based on historical experience and the Company management's collective experience in anticipating customers actions. These amounts are reviewed and updated each month when financial statements are generated.
Complicating these estimates is the Company's different return policies. The Company does not accept returns from customers for refunds, but does repair merchandise as needed. The cost of the shipping and repairs may be borne by the customer or the Company, depending on the amount of time that has passed since the sale and the product warranty.
The Company has different return policies with different customers. While the Company does not participate in "guaranteed sales" programs, the Company has begun to sell products to several national retail chains. Some of these chains have standard contracts which require the Company to accept returns for credit within standard return periods, usually sixty days. While these return policies are more generous than the Company usually offers, management has made the decision to accept the policies and sell the products to these national chains for both the business volume and exposure such sales generate. These sales have been taking place since late 2005, and returns have consistently been below management's expectations. Therefore, no adjustments to the financial statements have been necessary.
Each month, management reviews the accounts receivable aging report and adjusts the allowance for bad debts based on that review. The adjustment is made based on historical experience and management's evaluation of the collectibility of outstanding accounts receivable over 90 days. At all times, the allowance for bad debts is large enough to cover all receivables that management is not certain it will collect, plus another one percent of the net accounts receivable.
Inventories:
Inventories are stated at the lower of cost or market. Cost is determined by using the average cost method. The Company maintains a perpetual inventory system which provides for continuous updating of average costs. The Company evaluates the market value of its inventory components on a regular basis and reduces the computed average cost if it exceeds the component's market value.
Income Taxes:
The Company accounts for income taxes using the asset and liability method whereby deferred income taxes are recognized for the tax consequences of temporary differences by applying statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities. Changes in deferred tax assets and liabilities include the impact of any tax rate changes enacted during the year. Through 2006, a valuation allowance was provided for the amount of deferred tax assets that, based on available evidence, were not expected to be realized. Beginning in 2007, the Company discontinued the use of the valuation allowance. Based on its current financial condition, current business and profitability forecasts, the Company believes that the benefits accrued as deferred tax assets were more likely than not to be realized in future periods.
Results of Operations:
Three Months Ended March 31, 2008 and 2007::
Net Revenues. Net revenues increased by $10,104,205 or 68.8%, to $24,795,315 in the three months ended March 31, 2008, as compared to $14,691,110 in 2007. The increase in revenues was mainly due to the strong relationship with Office Max that began in 2007. In the first quarter of 2008, sales to Office Max were $5,763,265, which accounted for over 23% of the Company's revenues for the quarter.
Gross Margin. Gross margin was $3,106,104 or 12.5% in 2008, as compared to $2,608,196 or 17.7% in 2007. Gross margins decreased on a percentage basis as the Company increased sales to larger national retail chains. Additionally, higher fuels costs on purchases made FOB shipping point led to higher product costs and subsequently lower gross margins. The Company expects gross margins to stabilize around 15% and remain there throughout the year., as sales of higher margin products increase.
Sales and Marketing Expenses. Selling and marketing expenses decreased by $163,221 to $427,635 in 2008, as compared to $590,856 in 2007. The decrease is due to the use of outside sales reps. The Company began using outside sales reps to open new markets in 2006, and as the sales have grown, the commissions grew through 2007. The Company has not employed a lot of new outside sales reps over the last few quarters, although that number will grow again when the Honeywell products are available for sale in 2008. The Company continues to believe this is a cost effective way to obtain shelf space at various retailers, so the outside commissions are likely to continue to grow larger as the business continues to grow and mature.
General and Administrative Expenses. General and administrative expenses decreased by $173,997 to $1,404,177 in 2008, as compared to $1,578,174 in 2007. During the first part of 2007, the Company was defending itself against several lawsuits and investigations filed by various entities accusing the Company of not processing rebate claims correctly. The Company cooperated with the
investigations, but the cost of defending the investigations and fixing the rebate problems was substantial. The higher expenses incurred in 2007 are partially offset by the non cash expense of the employee stock option plan in 2008. The Company issued 4,905,000 options to employees in 2007. Approximately 700,000 of the options have been exercised, and 520,000 have been forfeited by employees who left the Company. The Company recognizes a charge each quarter for the amortization of the fair value of the options granted.
Bad Debts. The Company recorded a provision for bad debts of $452,090 in the three months ended March 31, 2008, and $1,435 for the three months ended March 31, 2007. The provision has jumped as the Company has had trouble collecting from some smaller regional accounts during the quarter. As a result, the Company has tightened its credit policies to protect against bad debts.
Depreciation and Amortization. Depreciation and amortization of property and equipment was $12,635 for the three months ended March 31, 2008, as compared to $23,291 for the three months ended March 31, 2007. The decrease was caused by the sale of the VoIP assets in December 2007. The Company owns less property and equipment subject to depreciation.
Income from Operations. The income from operations was $809,567 for the three months ended March 31, 2008, as compared to $414,437 for the three months ended March 31, 2007 This is a result of the increased revenues and gross margins described above.
Miscellaneous Income. The miscellaneous income for the three months ended March 31, 2008 amounted to $400,000 representing unrealized gain on investment in 247MGI which was marked-to-market at $0.02 per share. Miscellaneous income was a loss of $87,690 for the three months ended March 31, 2007.
Interest Income. Interest income was $12,107 for the three months ended March 31, 2008, as compared to $31,385 for the three months ended March 31, 2007. The decrease, while insignificant, is due to the Company having less cash on hand due to very tight credit constraints. All available cash is being used to purchase inventory.
Interest Expense. Interest expense was $385,147 for the three months ended March 31, 2008. Interest expense was $59,715 for the three months ended March 31, 2007. The increase was due to a single factor. The Company's revenues have grown significantly throughout the last year, as has the need for capital. The Company is borrowing more money under its credit lines.
Provision for Income Taxes. The Company recognized a provision for income taxes of $433,180 in 2008. Of that amount, $364,000 was for federal income taxes, and the balance for state income taxes. The provision is now necessary as net operating loss carry forwards will no longer offset all of the Company's tax liabilities.
Deferred Income Tax Benefit/ (Expense): The deferred income tax benefit
(expense) was $48,000 for the three months ended March 31, 2008. This is a result of timing differences between GAAP income and taxable income. The deferred income tax benefit was $286,858 in the three months ended March 31, 2007. For more information, see footnote 7 to this report.
Net Income. Net income was $460,347 for the three months ended March 31, 2008, as compared to $522,190 for the three months ended March 31, 2007.
Financial Condition - March 31, 2008:
Liquidity and Capital Resources:
As a general rule, the Company has been totally reliant upon the cash flows from its operations to fund future growth. In the last few years, the Company has begun and continues to implement the following steps to increase its financial position, liquidity, and long term financial health:
In 2005, The Company completed a small private placement, began factoring invoices to improve cash flows, and converted several million dollars of debt to equity, all of which improved the Company's financial condition.
In 2006, the Company changed factors to a more beneficial arrangement, and entered into a Trade Finance Flow facility with GE Capital to fund "Star" transactions. The agreement provided for GE Capital to guarantee payment, on the Company's behalf, for merchandise ordered from GE Capital approved manufacturers in Asia. GE Capital guarantees the payment subject to a purchase order from one of our customers. The Company accepts delivery of the goods in the US, and then has the option to either pay for the goods or sell the receivable (from the customer) to our factor, who pays GE Capital.
In March 2007, the Company announced that it had secured a $12 MM Asset Based Credit Facility from a California bank to provide funding for future growth.
In September 2007, the Company announced to shareholders that it was negotiating with several independent third parties to raise capital. The capital would be used to improve the balance sheet and increase the Company's borrowing capabilities. The Company further stated that with the large increases in sales during the year, all of the Company's credit had been utilized, and that the Company was having difficulties purchasing enough products to maintain the 2007 level of sales growth. As of the date of this report, the Company had not yet agreed with any outside party on any capital transaction.
In March 2008, Ming Chok, Chief Executive Officer, purchased 776,000 shares of the Company's common stock in a private placement at $1.25 per share, At the
same time, he announced plans to invest approximately another $1 million in the Company's common stock during the second quarter of 2008.
Operating Activities. The Company utilized cash of $1,136,268 from operating activities during the three months ended March 31, 2008, as compared to utilizing cash of $6,865,581 in operating activities during the three months ended March 31, 2007.
At March 31, 2008, the Company had cash and cash equivalents of $3,560,952, as compared to $1,848,249 at December 31, 2007.
The Company had working capital of $7,197,033 at March 31, 2008, as compared to working capital of $6,894,614 at December 31, 2007, resulting in current ratios of 1.14:1 and 1.16:1 at March 31, 2008 and December 31, 2007, respectively.
Accounts receivable increased to $29,636,628 at March 31, 2008, as compared to $27,123,985 at December 31, 2007, an increase of $2,512,643. The Company's provision for doubtful accounts increased to $1,105,663 as of March 31, 2008.
Inventories increased to $15,612,047 at March 31, 2008, as compared to $12,221,265 at December 31, 2007, an increase of $3,390,782 or 27.7%. Inventory in transit was $5,062,989 at March 31, 2008.
Accounts payable increased to $19,051,452 at March 31, 2008, as compared to $14,336,196 at December 31, 2007, an increase of $4,715,256. The increase is due to the large increases in accounts receivables and inventories.
Accrued liabilities increased to $825,987 at March 31, 2008, as compared to $789,526 at December 31, 2007, an increase of $36,461 or less than five percent..
Commercial loans due to UCB decreased to $26,359,020 at March 31, 2008 from $27,824,490 at December 31, 2007. The decrease is due to payments the Company made on the Purchase Order financing line.
Due to Gateway Trade Finance was $4,279,110 at March 31, 2008. During March 2008, the Company received a large order from a customer that could not be financed by its current credit facilities. The Company negotiated for Gateway Trade Finance to guarantee payment of the production run. The balance has been partially paid off, but over $2,500,000 is still outstanding as of May 13, 2008. This balance will be paid off during the second quarter. The Company does not plan to utilize external financing like this for future purchases due to the high cost, but may do so on a limited basis if the transaction warrants it.
Principal Commitments:
A summary of the Company's contractual cash obligations as of March 31, 2008, is
as follows:
28
Less than 1
Contractual Cash Obligations year 2-3 years 4-5 years Over 5 years
---------------- ---------------- ------------------- ----------------
Operating Leases $141,797 N/A N/A N/A
Advances from Directors N/A N/A N/A N/A
Notes Payable/ Short Term Loan N/A N/A N/A N/A
Purchase Commitments $5,062,989 N/A
Royalty Payments Due $169,000 $1,178,000 $1,605,000 $448,000
Long Term Debt - - - -
---------------- ---------------- ------------------- ----------------
Total $5,373,786 $1,178,000 $1605,000 $448,000
================ ================ =================== ================
At March 31, 2008, the Company did not have any long term purchase commitment contracts to honor. The only purchase commitments were for inventory already purchased and in transit of $5,062,989.
At March 31, 2008, the Company did not have any material commitments for capital expenditures or have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
On February 8, 2007, SOYO Group announced that the Company had entered into a licensing agreement with Honeywell International Inc., effective January 1st 2007, under which SOYO will supply and market certain consumer electronics products under the Honeywell Brand.
The agreement is for a minimum period of 6.5 (six point five) years and calls for the payment of MINIMUM royalties by SOYO to Honeywell International Inc. totaling $3,840,000 (Three Million, Eight Hundred and Forty Thousand Dollars U.S.). Sales levels in excess of minimum agreed targets will result in associated increases in the royalty payments due. Minimum royalty payments due under the agreement are $424,000 in 2008. Although the Company signed the agreement in 2007 and no sales of Honeywell branded products were made in 2007, $383,000 in royalties were paid to Honeywell International Inc. in 2007, and $255,000 has been paid in 2008.
Off-Balance Sheet Arrangements:
At March 31, 2008, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Commitments and Contingencies:
At March 31, 2008, the Company did not have any material commitments for capital expenditures.
Recent Accounting Pronouncements:
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159") which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 was
effective for the Company on January 1, 2008. The Company does not expect any material impact from applying SFAS 159.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Issues No. 157, "Fair Value Measurements" ("SFAS 157"), which defines the fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement was effective for the Company on January 1, 2008. The Company does not expect any material impact from applying SFAS 157.
In December 2007, the FASB issued Statement No. 141 (revised 2007), "Business Combinations." The new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. This statement is effective for fiscal years beginning January 1, 2009 and the Company believes this will have no impact on its financial statements.
In December, 2007, the FASB issued Statement No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No. 51." This statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective prospectively, except for certain retrospective disclosure requirements, for fiscal years beginning after December 15, 2008. The Company believes this will have no impact on its financial statements.
In March 2008, the Financial Accounting Standards Board (FASB) issued Statement No. 161, "Disclosures about Derivative Instruments and Hedging Activities." This statement requires companies with derivative instruments to disclose information that should enable financial statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and the Company believes this will have no impact on its financial statements.
http://biz.yahoo.com/e/080515/soyo.ob10-q.html
Form 10-Q for SOYO GROUP INC
--------------------------------------------------------------------------------
15-May-2008
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:
This Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, including statements that include the words "believes", "expects", "anticipates", or similar expressions. These forward-looking statements include, but are not limited to, statements concerning the Company's expectations regarding its working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. The forward-looking statements in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008 involve known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to differ materially from those expressed in or implied by the forward-looking statements contained herein.
Financial Outlook:
For the three months ended March 30, 2008, the Company earned $460,347, or $0.01 per share before dividends on preferred stock.
For the three months ended March 30, 2007, The Company earned $522,190, or .01 per share before dividends on preferred stock.
As a general rule, the Company has been totally reliant upon the cash flows from its operations to fund future growth. In the last few years, the Company has begun and continues to implement the following steps to increase its financial position, liquidity, and long term financial health:
In 2005, the Company completed a small private placement, began factoring invoices to improve cash flows, and converted several million dollars of debt to equity, all of which improved the Company's financial condition.
In 2006, the Company changed factors to a more beneficial arrangement, and entered into a Trade Finance Flow facility with GE Capital to fund "Star" transactions. The agreement provided for GE Capital to guarantee payment, on the
Company's behalf, for merchandise ordered from GE Capital approved manufacturers in Asia. GE Capital guarantees the payment subject to a purchase order from one of our customers. The Company accepts delivery of the goods in the US, and then has the option to either pay for the goods or sell the receivable (from the customer) to our factor, which pays GE Capital.
In March 2007, the Company announced that it had secured a $12 MM Asset Based Credit Facility from UCB, a California bank, to provide funding for future growth.
During the first quarter of 2007, the Company began to use the $12 million asset based credit facility arranged with United Commercial Bank (see Form 8-K dated March 2, 2007). The agreement calls for UCB to provide funds for SOYO to purchase inventory in an amount determined by an evaluation of SOYO's current inventory and accounts receivable. According to the terms of the agreement, all accounts receivable sold to other factors were purchased by UCB.
In April 2007, by mutual agreement of the parties, the maximum loan balance was increased several times. All other terms of the agreement, including the interest rate, maturity date and method of evaluating the Company's inventory and receivables to determine eligible collateral were left unchanged. For reporting purposes, the loan has been segregated from other payables and reported as a separate line item on the balance sheet.
In June 2007, UCB offered to provide the Company with an alternative source of financing- Purchase Order financing. This line differed from all other forms of financing in that the bank was offering to advance funds against our customers specific purchase orders, provided the customer met the bank's stringent credit requirements. The end result is that the Company can use this credit line only by obtaining purchase orders from large customers before ordering the merchandise. The funds would then be advanced to the manufacturer after product was shipped, and once the product was delivered to the customer, and the status of the order was changed from a purchase order to a receivable, the loan would have to be paid back, or the balance transferred to the asset based credit line. The Company began buying merchandise under the Purchase Order financing line in June 2007.
In September 2007, the Company announced to shareholders that it was negotiating with several independent third parties to raise capital. The capital would be used to improve the balance sheet and increase the Company's borrowing capabilities. The Company further stated that with the large increases in sales during the year, all of the Company's credit had been utilized, and that the Company was having difficulties purchasing enough products to maintain the 2007 level of sales growth. As of the date of this report, the Company had not yet agreed with any outside party on any capital transaction.
Critical Accounting Policies:
The Company prepared its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result of different assumptions or conditions.
The Company operates in a highly competitive industry subject to aggressive pricing practices, pressures on gross margins, frequent introductions of new products, rapid technological advances, continual improvement in product price/performance characteristics, and changing consumer demand.
As a result of the dynamic nature of the business, it is possible that the Company's estimates with respect to the realizability of inventories and accounts receivable may be materially different from actual amounts. These differences could result in higher than expected allowance for bad debts or inventory reserve costs, which could have a materially adverse effect on the Company's financial position and results of operations.
The following critical accounting policies affect the more significant judgments and estimates used in the preparation of the Company's condensed consolidated financial statements.
Vendor Programs:
Firm agreements with vendors for price protection, product rebates, marketing and training, product returns and promotion programs are generally recorded as adjustments to product costs, revenue or sales and marketing expenses according to the nature of the program. Depending on market conditions, the Company may implement actions to increase customer incentive offerings, which may result in a reduction of revenue at the time the incentive is offered. The Company records the corresponding cost or expense at the time it has a firm agreement with a vendor.
Accounts Receivable:
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectibility is probable.
The Company records estimated reductions to revenue for incentive offerings and promotions. Depending on market conditions, the Company may implement actions to increase customer incentive offerings, which may result in an incremental reduction of revenue at the time the incentive is offered. The Company records the corresponding effect on receivable and revenue when the Company offers the incentive to customers. All accruals estimating sales incentives, warranties, rebates and returns are based on historical experience and the Company management's collective experience in anticipating customers actions. These amounts are reviewed and updated each month when financial statements are generated.
Complicating these estimates is the Company's different return policies. The Company does not accept returns from customers for refunds, but does repair merchandise as needed. The cost of the shipping and repairs may be borne by the customer or the Company, depending on the amount of time that has passed since the sale and the product warranty.
The Company has different return policies with different customers. While the Company does not participate in "guaranteed sales" programs, the Company has begun to sell products to several national retail chains. Some of these chains have standard contracts which require the Company to accept returns for credit within standard return periods, usually sixty days. While these return policies are more generous than the Company usually offers, management has made the decision to accept the policies and sell the products to these national chains for both the business volume and exposure such sales generate. These sales have been taking place since late 2005, and returns have consistently been below management's expectations. Therefore, no adjustments to the financial statements have been necessary.
Each month, management reviews the accounts receivable aging report and adjusts the allowance for bad debts based on that review. The adjustment is made based on historical experience and management's evaluation of the collectibility of outstanding accounts receivable over 90 days. At all times, the allowance for bad debts is large enough to cover all receivables that management is not certain it will collect, plus another one percent of the net accounts receivable.
Inventories:
Inventories are stated at the lower of cost or market. Cost is determined by using the average cost method. The Company maintains a perpetual inventory system which provides for continuous updating of average costs. The Company evaluates the market value of its inventory components on a regular basis and reduces the computed average cost if it exceeds the component's market value.
Income Taxes:
The Company accounts for income taxes using the asset and liability method whereby deferred income taxes are recognized for the tax consequences of temporary differences by applying statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities. Changes in deferred tax assets and liabilities include the impact of any tax rate changes enacted during the year. Through 2006, a valuation allowance was provided for the amount of deferred tax assets that, based on available evidence, were not expected to be realized. Beginning in 2007, the Company discontinued the use of the valuation allowance. Based on its current financial condition, current business and profitability forecasts, the Company believes that the benefits accrued as deferred tax assets were more likely than not to be realized in future periods.
Results of Operations:
Three Months Ended March 31, 2008 and 2007::
Net Revenues. Net revenues increased by $10,104,205 or 68.8%, to $24,795,315 in the three months ended March 31, 2008, as compared to $14,691,110 in 2007. The increase in revenues was mainly due to the strong relationship with Office Max that began in 2007. In the first quarter of 2008, sales to Office Max were $5,763,265, which accounted for over 23% of the Company's revenues for the quarter.
Gross Margin. Gross margin was $3,106,104 or 12.5% in 2008, as compared to $2,608,196 or 17.7% in 2007. Gross margins decreased on a percentage basis as the Company increased sales to larger national retail chains. Additionally, higher fuels costs on purchases made FOB shipping point led to higher product costs and subsequently lower gross margins. The Company expects gross margins to stabilize around 15% and remain there throughout the year., as sales of higher margin products increase.
Sales and Marketing Expenses. Selling and marketing expenses decreased by $163,221 to $427,635 in 2008, as compared to $590,856 in 2007. The decrease is due to the use of outside sales reps. The Company began using outside sales reps to open new markets in 2006, and as the sales have grown, the commissions grew through 2007. The Company has not employed a lot of new outside sales reps over the last few quarters, although that number will grow again when the Honeywell products are available for sale in 2008. The Company continues to believe this is a cost effective way to obtain shelf space at various retailers, so the outside commissions are likely to continue to grow larger as the business continues to grow and mature.
General and Administrative Expenses. General and administrative expenses decreased by $173,997 to $1,404,177 in 2008, as compared to $1,578,174 in 2007. During the first part of 2007, the Company was defending itself against several lawsuits and investigations filed by various entities accusing the Company of not processing rebate claims correctly. The Company cooperated with the
investigations, but the cost of defending the investigations and fixing the rebate problems was substantial. The higher expenses incurred in 2007 are partially offset by the non cash expense of the employee stock option plan in 2008. The Company issued 4,905,000 options to employees in 2007. Approximately 700,000 of the options have been exercised, and 520,000 have been forfeited by employees who left the Company. The Company recognizes a charge each quarter for the amortization of the fair value of the options granted.
Bad Debts. The Company recorded a provision for bad debts of $452,090 in the three months ended March 31, 2008, and $1,435 for the three months ended March 31, 2007. The provision has jumped as the Company has had trouble collecting from some smaller regional accounts during the quarter. As a result, the Company has tightened its credit policies to protect against bad debts.
Depreciation and Amortization. Depreciation and amortization of property and equipment was $12,635 for the three months ended March 31, 2008, as compared to $23,291 for the three months ended March 31, 2007. The decrease was caused by the sale of the VoIP assets in December 2007. The Company owns less property and equipment subject to depreciation.
Income from Operations. The income from operations was $809,567 for the three months ended March 31, 2008, as compared to $414,437 for the three months ended March 31, 2007 This is a result of the increased revenues and gross margins described above.
Miscellaneous Income. The miscellaneous income for the three months ended March 31, 2008 amounted to $400,000 representing unrealized gain on investment in 247MGI which was marked-to-market at $0.02 per share. Miscellaneous income was a loss of $87,690 for the three months ended March 31, 2007.
Interest Income. Interest income was $12,107 for the three months ended March 31, 2008, as compared to $31,385 for the three months ended March 31, 2007. The decrease, while insignificant, is due to the Company having less cash on hand due to very tight credit constraints. All available cash is being used to purchase inventory.
Interest Expense. Interest expense was $385,147 for the three months ended March 31, 2008. Interest expense was $59,715 for the three months ended March 31, 2007. The increase was due to a single factor. The Company's revenues have grown significantly throughout the last year, as has the need for capital. The Company is borrowing more money under its credit lines.
Provision for Income Taxes. The Company recognized a provision for income taxes of $433,180 in 2008. Of that amount, $364,000 was for federal income taxes, and the balance for state income taxes. The provision is now necessary as net operating loss carry forwards will no longer offset all of the Company's tax liabilities.
Deferred Income Tax Benefit/ (Expense): The deferred income tax benefit
(expense) was $48,000 for the three months ended March 31, 2008. This is a result of timing differences between GAAP income and taxable income. The deferred income tax benefit was $286,858 in the three months ended March 31, 2007. For more information, see footnote 7 to this report.
Net Income. Net income was $460,347 for the three months ended March 31, 2008, as compared to $522,190 for the three months ended March 31, 2007.
Financial Condition - March 31, 2008:
Liquidity and Capital Resources:
As a general rule, the Company has been totally reliant upon the cash flows from its operations to fund future growth. In the last few years, the Company has begun and continues to implement the following steps to increase its financial position, liquidity, and long term financial health:
In 2005, The Company completed a small private placement, began factoring invoices to improve cash flows, and converted several million dollars of debt to equity, all of which improved the Company's financial condition.
In 2006, the Company changed factors to a more beneficial arrangement, and entered into a Trade Finance Flow facility with GE Capital to fund "Star" transactions. The agreement provided for GE Capital to guarantee payment, on the Company's behalf, for merchandise ordered from GE Capital approved manufacturers in Asia. GE Capital guarantees the payment subject to a purchase order from one of our customers. The Company accepts delivery of the goods in the US, and then has the option to either pay for the goods or sell the receivable (from the customer) to our factor, who pays GE Capital.
In March 2007, the Company announced that it had secured a $12 MM Asset Based Credit Facility from a California bank to provide funding for future growth.
In September 2007, the Company announced to shareholders that it was negotiating with several independent third parties to raise capital. The capital would be used to improve the balance sheet and increase the Company's borrowing capabilities. The Company further stated that with the large increases in sales during the year, all of the Company's credit had been utilized, and that the Company was having difficulties purchasing enough products to maintain the 2007 level of sales growth. As of the date of this report, the Company had not yet agreed with any outside party on any capital transaction.
In March 2008, Ming Chok, Chief Executive Officer, purchased 776,000 shares of the Company's common stock in a private placement at $1.25 per share, At the
same time, he announced plans to invest approximately another $1 million in the Company's common stock during the second quarter of 2008.
Operating Activities. The Company utilized cash of $1,136,268 from operating activities during the three months ended March 31, 2008, as compared to utilizing cash of $6,865,581 in operating activities during the three months ended March 31, 2007.
At March 31, 2008, the Company had cash and cash equivalents of $3,560,952, as compared to $1,848,249 at December 31, 2007.
The Company had working capital of $7,197,033 at March 31, 2008, as compared to working capital of $6,894,614 at December 31, 2007, resulting in current ratios of 1.14:1 and 1.16:1 at March 31, 2008 and December 31, 2007, respectively.
Accounts receivable increased to $29,636,628 at March 31, 2008, as compared to $27,123,985 at December 31, 2007, an increase of $2,512,643. The Company's provision for doubtful accounts increased to $1,105,663 as of March 31, 2008.
Inventories increased to $15,612,047 at March 31, 2008, as compared to $12,221,265 at December 31, 2007, an increase of $3,390,782 or 27.7%. Inventory in transit was $5,062,989 at March 31, 2008.
Accounts payable increased to $19,051,452 at March 31, 2008, as compared to $14,336,196 at December 31, 2007, an increase of $4,715,256. The increase is due to the large increases in accounts receivables and inventories.
Accrued liabilities increased to $825,987 at March 31, 2008, as compared to $789,526 at December 31, 2007, an increase of $36,461 or less than five percent..
Commercial loans due to UCB decreased to $26,359,020 at March 31, 2008 from $27,824,490 at December 31, 2007. The decrease is due to payments the Company made on the Purchase Order financing line.
Due to Gateway Trade Finance was $4,279,110 at March 31, 2008. During March 2008, the Company received a large order from a customer that could not be financed by its current credit facilities. The Company negotiated for Gateway Trade Finance to guarantee payment of the production run. The balance has been partially paid off, but over $2,500,000 is still outstanding as of May 13, 2008. This balance will be paid off during the second quarter. The Company does not plan to utilize external financing like this for future purchases due to the high cost, but may do so on a limited basis if the transaction warrants it.
Principal Commitments:
A summary of the Company's contractual cash obligations as of March 31, 2008, is
as follows:
28
Less than 1
Contractual Cash Obligations year 2-3 years 4-5 years Over 5 years
---------------- ---------------- ------------------- ----------------
Operating Leases $141,797 N/A N/A N/A
Advances from Directors N/A N/A N/A N/A
Notes Payable/ Short Term Loan N/A N/A N/A N/A
Purchase Commitments $5,062,989 N/A
Royalty Payments Due $169,000 $1,178,000 $1,605,000 $448,000
Long Term Debt - - - -
---------------- ---------------- ------------------- ----------------
Total $5,373,786 $1,178,000 $1605,000 $448,000
================ ================ =================== ================
At March 31, 2008, the Company did not have any long term purchase commitment contracts to honor. The only purchase commitments were for inventory already purchased and in transit of $5,062,989.
At March 31, 2008, the Company did not have any material commitments for capital expenditures or have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
On February 8, 2007, SOYO Group announced that the Company had entered into a licensing agreement with Honeywell International Inc., effective January 1st 2007, under which SOYO will supply and market certain consumer electronics products under the Honeywell Brand.
The agreement is for a minimum period of 6.5 (six point five) years and calls for the payment of MINIMUM royalties by SOYO to Honeywell International Inc. totaling $3,840,000 (Three Million, Eight Hundred and Forty Thousand Dollars U.S.). Sales levels in excess of minimum agreed targets will result in associated increases in the royalty payments due. Minimum royalty payments due under the agreement are $424,000 in 2008. Although the Company signed the agreement in 2007 and no sales of Honeywell branded products were made in 2007, $383,000 in royalties were paid to Honeywell International Inc. in 2007, and $255,000 has been paid in 2008.
Off-Balance Sheet Arrangements:
At March 31, 2008, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Commitments and Contingencies:
At March 31, 2008, the Company did not have any material commitments for capital expenditures.
Recent Accounting Pronouncements:
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159") which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 was
effective for the Company on January 1, 2008. The Company does not expect any material impact from applying SFAS 159.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Issues No. 157, "Fair Value Measurements" ("SFAS 157"), which defines the fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement was effective for the Company on January 1, 2008. The Company does not expect any material impact from applying SFAS 157.
In December 2007, the FASB issued Statement No. 141 (revised 2007), "Business Combinations." The new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. This statement is effective for fiscal years beginning January 1, 2009 and the Company believes this will have no impact on its financial statements.
In December, 2007, the FASB issued Statement No. 160, "Noncontrolling Interests in Consolidated Financial Statements--an amendment of ARB No. 51." This statement establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective prospectively, except for certain retrospective disclosure requirements, for fiscal years beginning after December 15, 2008. The Company believes this will have no impact on its financial statements.
In March 2008, the Financial Accounting Standards Board (FASB) issued Statement No. 161, "Disclosures about Derivative Instruments and Hedging Activities." This statement requires companies with derivative instruments to disclose information that should enable financial statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. This statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 and the Company believes this will have no impact on its financial statements.
Finally..................
It was a 1/3 of todays volume that pushed it at EOD. I would say that is more than not too much volume.IMO
We moved up 5 cents today and the last 3 was at the very end on not too much volume. It jumped from 74 to 77 real quick. I believe the tight hands are going to stay tight as we anticipate a good report. A good report also means the future growth prospects are good and we should see an accelerated PE going forward. We all know what that means. $$$$$$$$$$$$$$$
We definitely have a very strong base here. We need a steady climb goinng forward. Hopefully tomorrows numbers will widen the eyes of many new investors and we start to see the price range we deserve and the AMEX listing we deserve. Good luck.
Looks good going into earnings tomorrow...
We have had a lot of volume the last 2 days and very little movement upward. I haven't watched too closely but it appeared to be mostly buying but very slow ut in the PPS.
Very little buying pressure used to make this stock move hard.
"SOYO DYLM24D6 24" LCD is a GREAT monitor for the money"
http://vids.myspace.com/index.cfm?fuseaction=vids.individual&VideoID=18946741
CC/EARNINGS SUMMARY on 3/31/08
I saw this on another message board and wanted to share.
CC/EARNINGS SUMMARY:
On 3/31/08 SOYO, an up and coming LCD HDTV maker, reported $110M in 2007 revenues up 95% from the $56M reported in 2006. Net income increased to $3.4M or 6c/share compared to 1c/share in 2006.
3/31/08 4Q and FY 2007 earnings release notes:
``2007 was the best year in SOYO's history, with record numbers across the board,' Ming Chok, CEO of SOYO said.
"This is a very exciting time for us. We increased our revenues 95% from 2006, we had our most profitable year ever.... ." 2008 is already off to a great start, and is poised to be an even better year."
"Our entire team worked very hard to make 2007 a successful year for us, and we are all very pleased with these record financial results."
Also on March 31, 2008, Ming Tung Chok, the president and CEO of SOYO announced that he and his wife, Nancy Chu, Chief Financial Officer of the Company today purchased 776,000 shares of the Company's common stock from the Company in a private placement at a price of $1.25 per share.
Mr. Chok further announced his plans to purchase another 750,000 shares of the Company's common stock in a private placement during April 2008 at a price of $1.25 per share.
3/31/08 CC notes:
- Gave guidance for 2008. " At least $140M in revenues and at Least $5M in net income"... assuming no extension on their existing credit limit.
- Non-dilutive financing will be announced soon. Management is not interested in dilutive financing despite many offers to that effect.
- The new Honeywell line of LCD HDTVs ranging from 47" to 82" will be launched in May - June 2008.
- Honeywell LCD HDTVs will be sold at large retailers (Fry's, others) and some of the other avenues they currently use (OSTK, etc)
- The company opted for not selling SOYO HDTVs at WalMart USA. SOYO has had huge success with WalMart Canada where they sell SOYO's Prive brand of LCD TVs. SOYO made the decision not to have to have to depend on a dominant outlet for their products.
- Several new model smaller LCD HDTVs (to 22')and larger monitors (up to 26") will be launched in upcoming days, weeks to address niche mnarkets
- SOYO is prepared to take advantage of the shift to all-digital broadcasting in February 2009. Exec commented that while larger companies take forver to make a decision, SOYO being very lean and focused can roll out products a lot quicker.
- Sales in Mexico are expected to grow significantly
- Currently on a major campaign to attract Hispanic buyers in the US. A virtually untapped segment of the population with lots of cash...and willing to spend it.
- Company officials do not want to resort to a reverse split to get to the minimum $2 share price that AMEX requires for initial listing. They believe that by systematically executing their business plan they will get there soon. They said that they already met all the other AMEX requirements is response to a question from one of the callers.
Press Release Source: SOYO Group Inc.
SOYO to Release 2008 First Quarter Financial Results On May 15, 2008
Tuesday May 13, 9:30 am ET
SOYO Will Also Hold a Shareholder Conference Call On the Same Date
ONTARIO, Calif., May 13, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTC BB:SOYO.OB - News), an innovative provider of computer and consumer electronics products, today announced that it will release 2008 first quarter financial results on May 15, 2008. SOYO will also hold a conference call for its shareholders on that date to discuss the first quarter results, answer any shareholder questions regarding the 10-Q filing and update 2008 guidance.
Details for the call are as follows:
Date/Time: Thursday, May 15, 2008 3pm Pacific (6pm Eastern)
U.S./Canada Toll-Free Call-in Number: (866) 830-4434
International Toll-Free Call-in Number: (706) 679-4957
Pass code: # 47478573
It is recommended that participants call in approximately five to ten minutes prior to the beginning of the call. The call will be recorded and posted on SOYO's website at http://www.soyo.com/content/downloads/155/&download_category=Investor+Conference+Call&back.
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics and IT products such as, LCD Monitors, LCD HD Televisions, Bluetooth Devices, Portable Storage, and Home Theater Furniture products and services. Headquartered in Ontario, California, with additional sales offices in Latin America, SOYO sells its products through an extensive network of authorized retailers, distributors, resellers, system integrators, VARs, and ecommerce web sites. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit http://www.honeywellce.com.
``Safe Harbor'' Statement
This release contains certain statements that may be deemed ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words ``plan,'' ``confident that,'' ``believe,'' ``scheduled,'' ``expect,'' or ``intend to,'' and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at http://www.sec.gov.
Contact:
SOYO Inc.
Public Relations and Investor Relations
Ashten Giardine
(909) 292-2504
ashteng@soyo.com
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
Someone should add Buy.com to the Vendors list of Soyo products!
http://www.buy.com/retail/usersearchresults.asp?querytype=home&qu=soyo&qxt=home&display=col
Well they did say May...glad to see products going on sale!
Honeywell Arius monitors are avaliable for purchase on the SOYO website. On-line retailers are also beginning to show inventory, e.g. Beach Audio has 25, 19-inch Arius monitors, in stock. Looks like SOYO is now shipping product to the retailers. About time.
Hi folks, don't know if this has been mentioned before, but I found some Soyo monitors being sold directly by Amazon.com; the Soyo DYLM1986 and Soyo 19" TFT!
Take a gander at:
http://www.amazon.com/Soyo-DYLM1986-Wide-Monitor-Speakers/dp/B000NKCH2G/ref=sr_1_1?ie=UTF8&s=electronics&qid=1210232175&sr=1-1
And...
http://www.amazon.com/Soyo-TFT-LCD-Monitor-Speakers/dp/B000PGC9EY/ref=sr_1_2?ie=UTF8&s=electronics&qid=1210232752&sr=1-2
I also checked Target.com and they seem to have some Soyo monitors:
http://www.target.com/gp/search/602-0511348-8331850?ie=UTF8&index=target&field-browse=1038576&ref=sr%5Fbx%5F1%5F1&field-keywords=soyo
Airlites avaiable to buy on the SOYO site.
New review for the Honeywell Arius 22, released today.
Mi dios SOYO, get these products on the shelves already.
Press Release Source: SOYO Group Inc.
SOYO Expands Their Television Offerings With the Use of Latest Plasma Technology
Wednesday April 30, 9:30 am ET
SOYO Brand 32 Inch Plasma TV Currently in Production
ONTARIO, Calif., April 30, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTC BB:SOYO.OB - News), today announced its new 32 inch SOYO brand plasma TV, which is currently in production. SOYO originally displayed the plasma TV at CES in January.
The 32 inch plasma TV features a 1,800:1 contrast ratio, a support display resolution of 480p and 720i as well as one HDMI input. With two built-in speakers that deliver enhanced stereo surround sound as well as advanced imaging technology such as Digital Noise Reduction, a Digital Comb Filter and Blackness Enhancement Technology, the Plasma TV delivers a crisp, clear and vibrant picture. The plasma also has 500 nits of brightness, which is beneficial because since there is no back light on Plasma, the brightness half-life is about three times longer than that of other technologies.
``There are several advantages to plasma technology, as compared to other technologies,'' said Harvey Schneider, Director of Sales for SOYO. ``Some of plasma's inherent advantages are a near zero response time, higher brightness and better contrast. This product will be a lower cost alternative to the current LCD technology, and will be available for purchase shortly.''
The Manufacture Suggested Retail Price (MSRP) for the 32 inch plasma will be $799.99 USD, estimated street price is around $499.99 USD. The TV will also include a one year limited warranty.
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics and IT products such as LCD Monitors, LCD HD Televisions, Bluetooth Devices, Portable Storage, and Home Theater Furniture products and services. Headquartered in Ontario, California, with additional sales offices in Latin America, SOYO sells its products through an extensive network of authorized retailers, distributors, resellers, system integrators, VARs, and ecommerce web sites. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit http://www.honeywellce.com.
``Safe Harbor'' Statement
This release contains certain statements that may be deemed ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words ``plan,'' ``confident that,'' ``believe,'' ``scheduled,'' ``expect,'' or ``intend to,'' and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at http://www.sec.gov.
Contact:
SOYO Inc.
Public Relations and Investor Relations
Ashten Giardine
(909) 292-2504
ashteng@soyo.com
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
someone please post a level 2...thanks ahead of time.
Those are awesome reviews...the reviews mention SOYO a lot which I think is very positive considering a lot of people would probably not link Honeywell with SOYO
I found this at BENCHMARK REVIEWS today, it was written Friday 4/25/08 VERY POSITIVE REVIEW..check it out.
http://benchmarkreviews.com/index.php?option=com_content&task=view&id=47&Itemid=1
Officemax has a new SOYO 26" LCD monitor with 2ms response time for 399.99. This model, the DYLM26E6, isn't on the SOYO website yet. Looks nice.
I, for one, am in the market for a 22 or 24 inch monitor, and I can tell you that the Soyo LCD's are very appealing. Hopefully the trend will be for people to upgrade their monitor size (like me) and Soyo will be able to take a large share of the market. I think right now the stock looks very cheap.
Yep. Tigerdirect does a lot of business, and I've been waiting to see when SOYO products would show up there. This is the first time. Hopefully they'll stock the entire SOYO LCD line, along with the Arius/Altura models in the future. The Arius models are starting to show up on the Google Checkout re-sellers, but they're not In Stock yet. Soon...the brick-and-mortars.
Tiger Direct will be a GREAT distributor
The tigerdirect hard sell Info-mercial is pretty funny for the SOYO 22.
4/22/08 -- decent deal on a SOYO 22" at tigerdirect
Press Release Source: SOYO Group Inc.
The SOYO Honeywell Airus LCD Monitor Receives First Independent Review
Tuesday April 15, 9:30 am ET
The Honeywell Airus LCD Monitor Praised for Its Built-in Camera, Ultra-Fast Response Time and Three-Year Warranty
ONTARIO, Calif., April 15, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTC BB:SOYO.OB - News) today announced that the Honeywell Arius(tm) LCD Monitor has received its first independent third-party review from Mr. Aron Schatz at ASE Labs, http://www.aselabs.com.
The review lists the Honeywell Airus(tm) LCD Monitor as ``the all-in-one business solution,'' and praises the monitor's built-in web camera and three-year manufacturer warranty. Mr. Schatz was also impressed with the display's ultra-fast response time which tested well during video and gaming tests.
``At $400, I would consider this a good monitor for a business that needs an all-in-one solution,'' Mr. Schatz concludes in the review, ``Bottom line; Businesses are getting a good monitor from an excellent company and the home user is getting a good monitor with great response time and great features.''
Terry Spencer, SOYO's Director of Sales for the Honeywell Brand of Consumer Electronics products, said, ``We are very pleased the independent reviewers reinforced what our performance tells us: our monitors perform well and carry features relevant to today's consumer and business needs. This validation is critical in today's competitive shopping environment and helps consumers make more informed purchase decisions.''
To read the review in its entirety, please visit http://www.honeywellce.com/#News/Events/Reviews
About SOYO Inc.
SOYO Inc. is an innovative provider of consumer electronics such as LCD Monitors, LCD Televisions, Bluetooth, Portable Storage, LCD Furniture and broadband telecommunications products and services. Headquartered in Ontario, California, with additional sales offices in South America, SOYO sells its products through an extensive network of authorized distributors, resellers, system integrators, VARs, retailers, mail-order catalogs and e-tailers. Products are sold under the SOYO, Dragon, Onyx, Dymond, Honeywell, Le Vello, and Prive brand names. For more information, please visit http://www.soyo.com. For information on the Honeywell Consumer Electronics product lines, please visit http://www.honeywellce.com.
``Safe Harbor'' Statement
This release contains certain statements that may be deemed ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. The words ``plan,'' ``confident that,'' ``believe,'' ``scheduled,'' ``expect,'' or ``intend to,'' and similar conditional expressions, are intended to identify forward-looking statements. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, the availability of components and successful production of the company's products, successful performance of internal plans, the impact of competitive services and pricing, general economic risks and uncertainties, and various other information detailed from time to time in the company's filings with the United States Securities and Exchange Commission. The company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. Please refer to the company's filings at http://www.sec.gov.
Contact:
SOYO Inc.
Ashten Giardine, Public Relations and Investor Relations
(909) 292-2504
ashteng@soyo.com
--------------------------------------------------------------------------------
Source: SOYO Group Inc.
I sold at .83 (too early) on the way up, but I now have a bid in at .70. I think the financing PR will hit soon enough....
PS. I guess something else that sparked my eye was a delivery to the office next to mine. Two Honeywell boxes that looked like flat screen TV's. I couldn't make it out for sure because the door was shutting as I saw them, but I don't know what else would have Honeywell on the side of it like that....
life's too short........just shoot me !!
.70 fills the gap from late march. should bounce soon...
market loved the news !!
SOYO.OB 0.00 0.00% 779 0.80 SOYO GROUP INC
SOYO to Feature Honeywell Consumer Electronics Products At Spring Retail Vision
Show to Take Place April 14-April 16, 2008 in Orlando, Florida
Apr 10, 2008 9:30:00 AM
2008 PrimeNewswire, Inc.
View Additional ProfilesONTARIO, Calif., April 10, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTCBB:SOYO) today announced that it will attend Retail Vision in Orlando, Florida. The show will take place from April 14, 2008 to April 16, 2008 at The Hyatt Regency Grand Cypress. SOYO's exhibit will feature the Honeywell brand of consumer electronics products, part of SOYO's continuing roll out of the Honeywell product line.
Retail Vision is a biannual event that attracts most of the major retailers and online sellers in the United States, Canada and Latin America. Vendors and Manufactures have the opportunity to present their companies and products to these major retailers in a 25-minute boardroom session, as well as to meet in one-on-one appointments. SOYO will have a booth at the show, and will display its LCD TVs, LCD Monitors, Bluetooth and External Storage products from both SOYO and Honeywell product lines.
Terry Spencer, SOYO's Director of Sales for the Honeywell Brand, said, "This is a great opportunity for us to continue to help retailers and resellers who could benefit from carrying the Honeywell product line. With Retail Vision, we are excited to continue launching the Honeywell product line to new retailers and resellers."
SOYO Continues to Target the Spanish Speaking Market
SOYO's 32-inch and 47-inch LCD TVs Now Available Through Shop Latino TV
Apr 9, 2008 9:30:00 AM
2008 PrimeNewswire, Inc.
View Additional ProfilesONTARIO, Calif., April 9, 2008 (PRIME NEWSWIRE) -- SOYO Inc. (OTCBB:SOYO) today announced that its 32-inch and 47-inch SOYO brand of LCD TVs are now available through Shop Latino TV. Additionally, the 32-inch and 47-inch LCD TVs are available through the Shop Latino TV website at www.shoplatinotv.com.
According to Shop Latino, the Spanish speaking population in the U.S. is about 42 million. Consumption within that population has grown 209.3% over the last ten years, as compared to 95.2% of non-Spanish speaking groups. SOYO plans to leverage their partnership with Shop Latino TV to augment their business with the Spanish speaking demographic in the U.S.
"The Spanish speaking population is one market within the United States that has been growing at an exponential rate," Harvey Schneider, Director of Sales for SOYO said. "We feel that this demographic is not targeted as much as it could be, and as such, we think it is a good way for us to continue to raise brand awareness. It is because of this, we feel that the Spanish speaking market is a good market for us to target."
The ASE Labs conclusion:
---------------------
Conclusion:
This monitor is brand new as of this review and the MSRP is $400. I've seen stores that are going to be selling it for a lower price (when they get inventory). At $400, I would consider this a good monitor for a business that needs an all-in-one solution. A home user should be on the lookout for when this product arrives on the market in force and the price is lower. $350 would be an excellent price for the home user for this monitor. I expect the pricing to be around that when the HWLM2216 hits the market in April. Bottom line; Businesses are getting a good monitor from an excellent company and the home user is getting a good monitor with a great response time and features.
I would like to thank Jason from SOYO (and Honeywell) for making this review possible.
-------------------------
Beach Audio has a page up for selling, but it shows no stock yet. They also have one for the 19-inch.
I think this is the first review for the Honeywell/SOYO ARIUS 22" LCD monitor.
They are in boxes now:
OK, I believe we've seen the bottom...upward and onward!
Great performance for 2007
Does anyone know who the other insiders are at SOYO? I noticed the 2 directors, O'Brien and Schneider don't seem to have any shares, but then I came across this statement in their financials.
"the Company recognized over $1,100,000 of expenses from share based compensation to directors and consultants".
During 2007, the Company incurred a non cash expense of $421,555 related to stock options issued to consultants
So who are the Directors with shares worth $1.1 million? And who are the consultants?
Another interesting tid bit from the CC. The agreement with RLTR will have SOYO place $10 certificates in their packaging starting this month. They said they expect to distribute 1 million certificates by this method. I read into this that they will sell 1 million products by end of year. Do not know if this includes Honeywell CE products or not. But that is a big number.
Also stated they are targeting the smaller screen market, as this may be getting looked over by their competitors. Their feeling is that more people will be upgrading their smaller screens in the house because they have already made a larger screen purchase along with the digital signal deadline coming up in early 2009.
The CEO did mention they have received 20-30 different offers for funding but none have been accepted so far. They have been rejected due to dilution and will not sell shares at a discount (PPS is already undervalued). However, he did say they are confident a deal will be reached and be able to announce the details shortly.
We missed because of the weak dollar. Gross margin was 13.0% compared to 16.3% last year. That will change as the dollar strengthens and it should. I think it finally hit bottom. JMO....Carl
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