Zunicom, Inc. Announces Results for Second Quarter 2006
CARROLLTON, Texas--Aug. 14, 2006--Zunicom, Inc. (OTCBB:ZNCM), parent company to Universal Power Group, Inc. ("UPG") and AlphaNet Hospitality Systems, Inc. ("AlphaNet"), today announced its financial results for the three and six-month periods, ended June 30, 2006.Financial highlights for the Three-Month Period Ended June 30, 2006 Compared to the Three-Month Period Ended June 30, 2005:
-- Consolidated revenues increased 14% or $3,000,795 to $23,956,711 in the 2006 period from $20,955,916 in the 2005 period.
-- Combined net income attributable to common shareholders for the 2006 period was $613,118, or $0.07 basic and $0.06 diluted income per share compared to $474,689, or $0.06 basic and $0.05 diluted income per share attributable to common shareholders for the comparable 2005 period.
-- Revenue contribution from UPG in the 2006 period was $23,505,352, a 15% increase over the 2005 contribution of $20,446,237. The increase is mainly attributable to increased sales of battery, battery related and battery powered products, sales to new customers, sales to existing accounts and sales to an existing security and third party logistics account.
-- AlphaNet's revenues decreased 11% to $451,359 in the 2006 from $509,679 in the 2005 period. The decrease is attributable to the continued decline in customer usage of the InnFax(TM) product due to de-installations of Innfax(TM) product from hotel properties, and a higher percentage of revenue sharing with hotels on The Office(TM) product.
Financial highlights for the Six-Month Period Ended June 30, 2005 Compared to Six-Month Period Ended June 30, 2004:
-- Consolidated revenues increased 16% to $45,153,932 in the 2006 period from $38,784,314 in the 2005 period.
-- Combined net income attributable to common shareholders for the 2006 period was $1,065,396, or $0.12 basic and $0.11 diluted income per share, compared to net income attributable to common shareholders for the 2005 period of $706,774, or $0.08 basic and diluted income per share.
-- UPG's revenues in the 2006 period increased 17% to $44,245,976 from $37,848,809 in the 2005 period.
-- AlphaNet's revenues decreased 3% to $907,956 in the 2006 period from $935,505 in the 2005 period.
"We are pleased to see continued growth in UPG's overall business in the sale of batteries, and related portable power products to existing and new accounts," said Ian Edmonds, Zunicom's Executive Vice President. "Many facets of AphaNet's performance have been affected by transitions in our marketplace. However, the AlphaNet team continues to pursue business alliances through direct marketing efforts."
About Zunicom, Inc.
Zunicom, Inc. (www.zunicom.com) through its wholly owned subsidiary, Universal Power Group, Inc (www.upgi.com), is a leading provider of third-party logistics and supply chain management services, batteries, security products and related portable power products to various industries and through its wholly-owned subsidiary AlphaNet Hospitality Systems, Inc. (www.alphanet.net), provide business communication services to the hospitality industry.
This release contains a number of forward-looking statements concerning the current expectations as to future results of operations, future growth and future performance of Zunicom, Inc. within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially depending on the various factors set forth under the caption "Risk Factors" in the company's annual report on Form 10-K for the year ended December 31, 2005 and accordingly, should be read in conjunction with the company's SEC filings.
ZUNICOM, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
2006 2005
------------ ------------
CURRENT ASSETS
Cash and cash equivalents $1,656,943 $731,626
Accounts receivable - trade, net of
allowance for doubtful accounts of
$238,891 and $226,931 9,794,152 8,446,086
Accounts receivable - other 146,394 114,802
Inventories - finished goods, net of
allowance for obsolescence of $248,663
and $158,663 17,073,494 19,144,410
Prepaid expenses and other current assets 437,265 665,802
------------ ------------
Total current assets 29,108,248 29,102,726
------------ ------------
PROPERTY AND EQUIPMENT
Facsimile and business center equipment 980,890 974,674
Machinery and equipment 585,231 578,815
Computer equipment 145,454 144,133
Furniture and fixtures 313,910 272,937
Leasehold improvements 311,056 303,597
Vehicles 151,598 151,598
------------ ------------
2,488,139 2,425,754
Less accumulated depreciation and
amortization (1,776,893) (1,698,786)
------------ ------------
Net property and equipment 711,246 726,968
------------ ------------
OTHER ASSETS 33,073 34,923
------------ ------------
TOTAL ASSETS $29,852,567 $29,864,617
============ ============
ZUNICOM, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2006 2005
------------ ------------
CURRENT LIABILITIES
Line of credit $12,673,963 $9,261,435
Notes payable - related party -- 217,128
Current portion of long-term debt 21,557 20,968
Accounts payable 7,691,607 12,632,315
Accrued liabilities 801,207 311,957
Other current liabilities 55,496 51,837
------------ ------------
Total current liabilities 21,243,830 22,495,640
------------ ------------
LONG-TERM DEBT, less current portion 14,411 25,339
DEFERRED RENT, less current portion 196,849 210,512
STOCKHOLDERS' EQUITY
Preferred stock - $1.00 par value,
1,000,000 shares authorized; 86,988 and
88,988 Class A Preferred Shares issued
and outstanding; liquidation preference
of $456,687 as of June 30, 2006 86,988 88,988
Common stock - $0.01 par value; 50,000,000
shares authorized; 8,627,466 and
8,614,750 shares issued and outstanding 86,275 86,148
Common stock pending issuance (250,000
shares) 2,500 --
Additional paid-in capital 14,799,659 14,601,331
Accumulated deficit (6,577,945) (7,643,341)
------------ ------------
Total stockholders' equity 8,397,477 7,133,126
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $29,852,567 $29,864,617
============ ============
ZUNICOM, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS
OF OPERATIONS
For the Three and Six Months Ended June 30, 2006 and 2005
For the three months ended For the six months ended
-------------------------- -------------------------
June 30, June 30,
-------------------------- -------------------------
2006 2005 2006 2005
------------- ------------ ------------ ------------
REVENUES
Sales $23,505,352 $20,446,237 $44,245,976 $37,848,809
Service revenue 451,359 509,679 907,956 935,505
------------- ------------ ------------ ------------
23,956,711 20,955,916 45,153,932 38,784,314
COST OF REVENUES
Cost of goods
sold 20,236,163 17,833,911 38,046,168 33,091,289
Direct servicing
costs 145,782 113,122 286,272 228,306
------------- ------------ ------------ ------------
20,381,945 17,947,033 38,332,440 33,319,595
------------- ------------ ------------ ------------
GROSS PROFIT 3,574,766 3,008,883 6,821,492 5,464,719
OPERATING EXPENSES
Selling, general
and
administrative 2,662,620 2,286,966 5,178,759 4,272,039
Depreciation and
amortization of
property and
equipment 77,264 76,797 153,091 160,582
------------- ------------ ------------ ------------
2,739,884 2,363,763 5,331,850 4,432,621
------------- ------------ ------------ ------------
INCOME FROM
OPERATIONS 834,882 645,120 1,489,642 1,032,098
OTHER INCOME
(EXPENSES)
Interest expense
(including $0,
$33,098, $8,293
and $76,229 to
related parties) (221,448) (155,384) (411,221) (296,471)
Other, net 7,332 (6,121) 3,430 (9,746)
------------- ------------ ------------ ------------
(214,116) (161,505) (407,791) (306,217)
------------- ------------ ------------ ------------
INCOME BEFORE
PROVISION
FOR INCOME TAXES 620,766 483,615 1,081,851 725,881
PROVISION FOR
INCOME TAXES -- -- -- --
------------- ------------ ------------ ------------
NET INCOME $620,766 $483,615 $1,081,851 $725,881
============= ============ ============ ============
Net income
attributable to
common
stockholders $613,118 $474,689 $1,065,396 $706,774
============= ============ ============ ============
ZUNICOM, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS
OF OPERATIONS
For the Three and Six Months Ended June 30, 2006 and 2005
(Continued)
For the three months ended For the six months ended
-------------------------- --------------------------
June 30, June 30,
-------------------------- --------------------------
2006 2005 2006 2005
------------- ------------ ------------ ------------
Net income per
share
attributable
to common
stockholders
Basic $0.07 $0.06 $0.12 $0.08
============= ============ ============ ============
Diluted $0.06 $0.05 $0.11 $0.08
============= ============ ============ ============
Number of
weighted average
shares of common
stock
outstanding
Basic 8,873,836 8,528,281 8,796,784 8,522,211
============= ============ ============ ============
Diluted 9,486,343 9,122,041 9,616,341 9,046,399
============= ============ ============ ============