Austin, TX 3/13/12 (StreetBeat) -- CHDT Corporation (OTCBB: CHDO.OB - News) (“Company”), a leader in the design and manufacture of specialty power failure lights and innovator of consumer products, reported revenue of $2.1 million and net income of $27 thousand in the fourth quarter of 2011. For the year, the Company achieved record revenue and net income of $10.2 million and $576 thousand, respectively.Stewart Wallach, CHDT's President and CEO, commented, “We believe our 2011 results demonstrate the effective execution of our strategy to develop and maintain positions of innovative and technical leadership in consumer lighting products. We nearly doubled sales last year and demonstrated the leverage potential of our business model with an 8.5% operating margin. This past year was the culmination of several years’ work to completely overhaul the organization to focus on our core competencies and create a sustainable growth model through the creation of new products, development of a competent and cost-effective logistics structure and establishment of our channels to market. We believe we have gained the respect of leading national retailers throughout the U.S. which we plan to leverage through new product introductions.”
Continued growth in sales in fourth quarter 2011; achieved positive net income
Revenue increased $782 thousand, or 59%, in the fourth quarter of 2011, compared with the prior-year period driven by the gain of additional retail store customers, new product introductions and rising consumer demand for the Company’s products.
Gross profit for the fourth quarter increased $104 thousand, or 24.7%, to $525 thousand from the prior-year period. Gross margin decreased to 25.0% in the fourth quarter of 2011 from 31.9% in the fourth quarter of 2010 primarily due to product, customer and distribution channel mix. The Company recently introduced a domestic distribution strategy which is expected to both drive sales and stronger margins.
Operating income increased sharply to $81 thousand, or 3.8% of revenue, from $33 thousand, or 2.5% of revenue, in the prior-year period reflecting the leverage potential of the organization and the Company's ongoing commitment to controlling expenses. Mr. Wallach noted, “Margin expansion in the quarter is an indicator of our intense focus on managing our limited resources. We reduced costs in 2011 in all cost categories, except product development which are critical investments in our future growth.”
Net income for the fourth quarter improved measurably to $27 thousand from a net loss of $43 thousand in the 2010 fourth quarter.
New products and channel development drove significant growth in 2011; Growing stockholders’ equity
Revenue in 2011 grew 93.8% to a record $10.2 million from $5.3 million in 2010. During 2011, CHDT expanded its product offerings with the addition of wireless motion sensor lights and several new Pathway booklight designs.
Gross profit increased 53.7% to $2.5 million in 2011, compared with 2010. Operating income was $871 thousand, or 8.5% of revenue, up from a loss of $479 thousand in 2010. Net income was $576 thousand in 2011 compared with the prior year’s net loss of $738 thousand.
Cash provided by operating activities during 2011 was $1.3 million. At December 31, 2011, stockholders’ equity was $1.6 million up from $942 thousand at December 31, 2010.
Capturing market share for growth in 2012 and beyond; expanding margin potential
The Company’s recently announced domestic distribution strategy is expected to drive sales growth as it enables the Company to serve a larger group of potential retailers. In addition, the anticipated shift of sales from direct import to domestic programming over the course of 2012 is expected to deliver stronger margins.
Mr. Wallach noted, “We are expanding our lighting product lines to add features and aesthetics that we believe will be well received by a broader audience of consumers interested in the functionality of power failure lights, but requiring a more decorative appeal. Many of our new innovations were previewed at the International Housewares Show and reception by our current and prospective retail store customers was strong.”
Mr. Wallach concluded, “Competition is expected to be more intense as we expand our market share. We believe focusing on innovative niche products that may have been overlooked or underexploited by our competitors provides us a measurable competitive advantage so we can deepen our market penetration in the consumer lighting space. Our ongoing product developments in conjunction with our domestic distribution strategy should bode well for another year of growth both organically and through the addition of second-tier retail accounts."
Webcast and Teleconference to Review Results and Outlook
CHDT will host a live webcast and conference call today beginning at 10:00 a.m. Eastern Time. During the call, Stewart Wallach, President and Chief Executive Officer and Gerry McClinton, Chief Financial Officer and Chief Operating Officer, will review the financial and operating results and discuss CHDT’s corporate strategy and outlook. A question-and-answer session will follow. The conference call can be accessed by dialing (201) 689-8562.
A telephonic replay will be available from 1:00 p.m. Eastern Time the day of the teleconference until 11:59 p.m. EDT on Tuesday, March 20, 2012. To listen to a replay of the call, dial (858) 384-5517 and enter replay pin number 389454. Alternatively, the archive of the webcast will be available on the Company’s website at www.chdtcorp.com. A transcript will also be posted to the Company’s website, once available.
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