Wednesday, integrated multi-platform marketing company Acorn International, Inc.(ATV) reported a swing to profit in the third quarter from last year, essentially on revenues that grew 28%. Looking ahead, the company lowered its outlook for the fiscal 2009.
Acron's third quarter net income attributable to the company was US$2.65 million or US$0.09 per ADS compared to a net loss of US$10.77 million or US$0.38 per ADS in the year ago period.
Acron posted a third quarter profit from continuing operations attributable to the company of US$2.65 million or US$0.09 per ADS compared to a loss of US$11.89 million or US$0.42 per ADS last year.
Results for the quarter included share-based compensation expenses of US$0.2 million, while the year ago quarter included a loss of US$8.6 million non-cash charge for the impairment of goodwill and intangible assets. Excluding these items, income from continuing operations attributable to Acron was US$2.86 million or US$0.10 per ADS compared to a loss of US$2.31 million or US$0.08 per ADS in the prior year quarter.
Quarterly net revenues of Acron rose 28% to US$91.84 million,from US$71.72 million in the comparable quarter last year.
Direct sales for the quarter decreased 7.5% due to lower sales in the mobile phones sector, while revenue from distribution sales increased 89.5% year-over-year as a result of the strong sales performance of the company's Ozing electronic learning products, as well as the consolidation of Yiyang Yukang's mobile handset sales.
Gross margin for the quarter was 43.7%,compared to 48.4% in the same quarter last year.
The company reported third quarter income from operations of US$3.61 million, compared to a loss from operations of US$8.55 million in the same quarter last year.
Cost of sales for the third quarter was US$51.8 million, an increase of 39.8% from US$37.0 million in the third quarter of 2008, mainly on increased costs for distribution sales.
Total operating expenses for the quarter increased to US$43.26 million from US$36.47 million in the previous year quarter.
For the nine-month period,the company reported net income of US$22.54 million or US$0.76 per ADS, compared to a net loss of US$16.18 million or US$0.56 per ADS in the prior year. Year-to-date revenue was US$227.88 million compared to US$175.94 million last year.
Looking forward to the full year, the company said due to various challenges and unfavorable conditions, it was lowering its financial outlook for 2009. The company now expects net income from continuing operations, excluding share-based compensation expenses and non-recurring impairment charges, to be in the range of US$10 million - US$11 million and net revenues in the range of US$280 million to US$290 million. ATV is currently trading at US$5.76, down US$0.04 or 0.69% on the NYSE
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