XWG Good earnings report. Upped guidance
July 27, 2005 08:24 AM US Pacific Timezone
Wireless Xcessories Group Reports Record Second Quarter Results; Sales Increase 49%, Helping Net Income Rise 110 %; Company Increases 2005 Revenue and Earnings Guidance
HUNTINGDON VALLEY, Pa.--(BUSINESS WIRE)--July 27, 2005--Wireless Xcessories Group, Inc. (AMEX:XWG), a nationwide distributor of over 4,000 accessories for cellular phones and other wireless devices, announced today record results for the second quarter ended June 30, 2005.
The company reported revenue of $5,835,000 an increase of 49% compared to $3,905,000 for the same period in fiscal 2004. Wireless Xcessories Group had net income of $ 710,000, or $0.16 per basic share ($0.15 per diluted share), an increase of 110 % compared to net income of $ 338,000, or $0 .07 per basic and diluted share in the same period for 2004. The company did not pay taxes for either Federal or state purposes during this period, or taxes under GAAP.
For the six months ended June 30,2005, Wireless Xcessories Group had revenue of $10,790,000, an increase of 52.9% compared to revenue of $7,056,000 for the same period in 2004. The company had net income of $1,285,000, or $0.29 per basic share ($0.28 per diluted share), an increase of 250% compared to net income of $406,000, or $0.08 per basic and diluted share, for the first six months of fiscal 2004. The company did not pay taxes for either Federal or state purposes during this period, or taxes under GAAP.
Steve Rade, CEO stated: "The combination of new products, increased sales and Internet distribution has resulted in our strong increase in revenue and earnings."
"New products such as our IPOD, MP3, PDA, Bluetooth, and OEM accessories along with the distribution of phones continue to help us penetrate new markets, in addition to funneling more product categories to our regular customer base. The investments we made in additional sales personnel are also paying off. We increased our sales organization by 20%, which has allowed us to expand our marketing to new dealers and provide better service to our current customers. In addition to the increase in our sales force, we saw strong growth from our IndustrialStrengthCellular.com accessory website. As of June 30, we have over 900 partners with 7,000 storefronts. The site serves to enhance our relationships with wireless dealers, who expand their commitment to selling our products by affiliating with our website."
Business Outlook
The company plans for the balance of 2005 to focus on expanding the variety of phone brands it sells and the addition of entertainment accessories like MP3 players. This initiative, along with enhanced sales and marketing activities, allow the Company to raise its full-year revenue guidance from $18.5 million to a range of $22.2 million to $23.5 million. For the full year ended 2004, the company had revenue of $15.3 million.
The company today also increased its full year projected pre-tax net income from its previously announced level of $1.3 million to a range of approximately $2,345,000 to $2,485,000. This represents a 133% to 147% increase versus pre-tax net income of $1 million for the full year in 2004. The company expects to report 2005 full year net income of $0.51 to $0.54 per diluted share, versus $0.21 in fiscal 2004. These estimates assume that the company will pay taxes during the second half of the year for GAAP purposes at a rate of 34%. The company did not pay taxes for GAAP purposes in fiscal 2004.
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