HAUP $6.99 gained 80c yesterday after reporting record earnings.
Earnings Summary:
** Sales increase of 24% leads to record fiscal year sales of $97.7 million (compared to $78.5M in 2005).
** Net income increases by 74% for fiscal 2006 (25c/share vs. 15c/share in 2005).
** Cash increased from $7.9M in 2005 to $9M in 2006 or $1/share
** ZERO long-term debt
** Yesterday's report highlights the 1st profitable 4Q in the company history. 4Q is HAUP's seasonally weakest quarter (1Q is the strongest and it will be reported in February 2007)
HAUP HIGHGLIGHTS
* MARKET CAP IS LESS THAN $50M
* UNDERVALUED TRADING AT 0.7 P/S
* GROWING PROFITABLY AT 20%/YEAR
* HAUP will introduce several new products at the Consumer Electronics' EXPO show in Vegas in early 2007.
* HAUP will report 1Q 2007, its strongest quarter, in February 2007.
DISCUSSION OF RESULTS (from the earnings report):
Ken Plotkin, Hauppauge's Chief Executive Officer, stated "We believe that our sales increase for the year was due primarily to the growing acceptance of TV as part of the PC multimedia experience, a market we serve with our WinTV-PVR, WinTV-NOVA and WinTV-HVR products.
Helping the sales increase in the quarter was growth in sales of our digital TV tuner receivers for PCs and notebooks plus sales growth of TV receivers for Media Center PCs. In addition, we saw a turnaround in European sales when compared to the previous year's fourth quarter.
During the quarter, we started shipping the WinTV-HVR-950 "stick", our hybrid dual format TV tuner for North America plus the new quad format WinTV-HVR-4000 designed for the European market. The WinTV-HVR-950 stick is a pocket sized, external TV receiver which allows for the viewing of ATSC high definition TV plus NTSC cable TV on your PC or laptop. The WinTV-HVR-4000 is Hauppauge's first product with high-definition satellite TV reception.
For the fiscal year, strong sales of our TV receivers for Media Center PCs plus sales of newly introduced digital TV receivers contributed to a 24% annual sales growth. By keeping corporate expenses under control while we increased our R&D budget, we were able to see a 74% increase in net income and also introduced a record number of new products."
Of note is HAUP recent deal with Replay TV/HAUP deal (among several recent OEM deals). Replay TV and HAUP are now teaming to go after TIVO and others in the sector. Replay TV provides the software and Hauppauge provides the hardware and additional software. Together they provide more flexibility and power than TIVO, including the use of mobile devices, and a fraction of the TIVO's cost.
Replay TV is owned by multi-billion dollar entertaiment/consumer electronics' giant D&M Holdings. D&M owns industry flagships such as Denon, Marantz, McIntosh, Boston Acoustics, Snell Acoustics, Escient, and Replay TV. D&M Holdings acquired Denon and Marantz in 2002; McIntosh in 2003; Replay TV in 2004; Boston Acosutics and Snell in 2005.
Replay TV is a big part of D&M current and future growth plans. So much so that D&M mentions Replay TV, and Hauppauge Digital, on page 34 entitled "Growth Opportunity" of its 58-page November 16, 2006 "FY2006 Interim Financial Results."
Do your DD....
AI
