SYS-CON MEDIA Authors: Adine Deford, Cynthia Dunlop, Harry Trott, Xenia von Wedel, Peter Silva

News Feed Item

Communications Systems, Inc. Reports Fourth Quarter and Full Year 2012 Results

MINNETONKA, Minn., March 12, 2013 /PRNewswire/ -- Communications Systems, Inc. (NASDAQ: JCS) today reported financial results for its fourth quarter and full year ended December 31, 2012.

For the three months ended December 31, 2012, the Company had net income of $92,000 or $0.01 per diluted share, on sales of $25,757,000, compared to a 2011 fourth quarter loss of ($574,000) or ($0.07) per diluted share, on sales of $25,338,000.  For the twelve months ended December 31, 2012, net income was $2,238,000, or $.26 per diluted share, on sales of $104,250,000. In fiscal 2011, the Company earned $9,798,000 or $1.15 per diluted share, on sales of $143,775,000.

William G. Schultz, President and CEO commented:  "We encountered a difficult economic environment in 2012, primarily related to lower Federal Government spending for networking initiatives, which affected both our Transition Networks and JDL Technologies business units.  In addition, year-over-year comparisons are challenging due to the large one-time project in our Transition Networks business unit that contributed $32 million in 2011 revenue."  Schultz continued, "While we are not satisfied with our overall 2012 performance, we are encouraged by several positive aspects in our business and by our opportunities in 2013 and beyond.

"In the 2012 fourth quarter, Suttle continued its strong growth by increasing revenue to $11,863,000, a 25% increase over the 2011 fourth quarter.  For the full year 2012, Suttle grew revenue 13% over 2011 to $45,030,000, buoyed by resurgence in the housing market, specifically in multi-tenant-dwelling construction.  We also continued to invest in the Suttle business to create new products, including fiber optic and copper connectivity solutions.  While Suttle's sales outside the United States declined 31% in 2012 compared to 2011, we continue to see strong opportunities in Latin America, South America, Europe, Middle East and Canada.  We have added resources to take advantage of these opportunities and will continue to invest in these markets in 2013.  Suttle has a strong Telco customer base and is focused on selling new products to existing customers and expanding its products sales to new customers globally.

"As mentioned earlier JDL Technologies was affected by lower spending by an education customer, resulting in 2012 annual revenues of $5,377,000, a 57% decline from 2011.  In the fourth quarter of 2012, JDL Technologies was selected as one of the partners for a project with the Miami-Dade County Public School District ("M-DCPS"), the fourth largest public school district in the United States.  This new business will contribute up to $23 million in revenue to JDL Technologies, most of which will be realized in 2013.  As mentioned in our October 23, 2012 press release, although this project will contribute to CSI's overall profitability, the M-DCPS project is primarily hardware; therefore the Company's margins from this project will be significantly lower than the margins from JDL's historical projects, which have included a significant value-added service component.

"JDL has begun to expand its education services outside of South Florida, and in the 2013 first quarter, it was awarded a project for DeSoto Public Schools in Central Florida worth roughly $400,000.  In addition to growing in the education market, JDL Technologies continues to expand the customer base for its managed services, virtualization and migration-to-the-cloud products and services, and is focused on offering these services to small- and medium-sized businesses in the healthcare and commercial markets.

"During the fourth quarter of 2012, Transition Networks introduced a new Network Interface Device and its Converge™ Enterprise Management Software.  These products further expand Transition Networks' portfolio for the Telco market providing more functionality and easier management and provisioning for customers.  For the full year 2012, Transition Networks performance declined due primarily to the large one-time project in 2011.  It has also been negatively affected by the slowdown in Federal Government spending.  We continue to invest in Transition Networks and grow its capabilities to better serve its Telco, enterprise, industrial, and security and surveillance markets.  Our 2011 Patapsco acquisition has been an important addition to Transition Networks' capabilities to serve the mobile backhaul and government markets.  The Patapsco integration has enabled us to develop new products that combine these two companies' technologies to penetrate our existing market and expand into new markets.  In January 2013, Transition Networks also received the Carrier Ethernet 2.0 from the Metro Ethernet Forum for one of its new products.  This product and certification will allow easier deployment of Carrier Ethernet services and enable Transition Networks to expand in this market. Despite its 2012 decline, we believe Transition Networks is well positioned to continue growing over the long term.

"We are proud of our 2012 progress implementing our new Enterprise Resource Planning (ERP) system, which will significantly strengthen our long-term performance by standardizing all CSI business units on a common platformThe ERP system will bring efficiencies in the cycle from product concept to product development to bringing products to market; it will enable us to lower manufacturing costs and better manage our supply chain; and it will give us many tools to provide improved customer service.  Although implementing this new ERP system has been a significant investment, we expect to achieve substantial dividends in improved execution and enhanced service to our customers.  Our first business unit will start operating on this new system in the second quarter of 2013 and all business units will be converted by the end of the second quarter 2014.

Mr. Schultz closed: "CSI's strategy is focused on growing our current customers with continued investment to offer new products and services.  We will also invest to enter new markets, particularly outside the US, and make investments in technology that will make us more competitive. These investments are vital for our long term growth and we are excited by the opportunities in each of our business units."

Further Information

Further information regarding the Company's results and related matters will be provided in the Company's Form 10-K report for the year ended December 31, 2012, which will be filed on March 15, 2013.

Cautionary Statement
From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, the Communications Systems Inc. may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans which are typically preceded by the words "believes," "expects," "anticipates," "intends" or similar expressions. For these forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties, including those disclosed in our periodic filings with the SEC, which could cause actual performance, activities or plans after the date the statements are made to differ significantly from those indicated in the forward-looking statements when made.

About Communications Systems
Communications Systems, Inc. provides physical connectivity infrastructure and services for global deployments of broadband networks. Focusing on innovative, cost-effective solutions, CSI provides customers the ability to deliver, manage, and optimize their broadband network services and architecture. From the integration of fiber optics in any application and environment to efficient home voice and data deployments to optimization of data and application access, CSI provides the tools for maximum utilization of the network from the edge to the user. With partners and customers in over 50 countries, CSI has built a reputation as a reliable global innovator focusing on quality and customer service.

 

CSI CONSOLIDATED SUMMARY OF EARNINGS

Selected Income Statement Data





Unaudited


Unaudited






Three Months Ended


Three Months Ended


Twelve Months Ended


Twelve Months Ended






December 31, 2012


December 31, 2011


December 31, 2012


December 31, 2011


Sales



$

25,756,788

$

25,337,994

$

104,249,654

$

143,775,051


Gross margin




10,132,508


10,555,783


41,496,891


58,895,127


Operating income




201,362


(363,062)


3,396,118


17,514,920


Income before income taxes




195,211


(380,064)


3,397,680


17,619,990


Income taxes




103,250


194,213


1,159,566


7,822,124


Net income



$

91,961

$

(574,277)

$

2,238,114

$

9,797,866














Basic net income per share



$

0.01

$

(0.07)

$

0.26

$

1.16


Diluted net income per share



$

0.01

$

(0.07)

$

0.26

$

1.15


Cash dividends per share



$

0.16

$

0.15

$

0.64

$

0.60














Average basic shares outstanding




8,517,212


8,465,823


8,508,497


8,448,612


Average dilutive shares outstanding




8,490,086


8,521,183


8,519,021


8,495,873






























Selected Balance Sheet Data












           Unaudited












December 31, 2012


December 31, 2011


















Total assets



$

112,534,645

$

116,658,916






Cash , cash equivalents and investments




35,947,647


46,034,821






Property, plant and equipment, net




14,474,913


14,019,019






Long-term liabilities




3,297,808


3,740,710






Stockholders' equity




93,995,393


97,530,560


















 

SOURCE Communications Systems, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
"We help companies that are using a lot of Software as a Service. We help companies manage and gain visibility into what people are using inside the company and decide to secure them or use standards to lock down or to embrace the adoption of SaaS inside the company," explained Scott Kriz, Co-founder and CEO of Bitium, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
15th Cloud Expo, which took place Nov. 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, expanded the conference content of @ThingsExpo, Big Data Expo, and DevOps Summit to include two developer events. IBM held a Bluemix Developer Playground on November 5 and ElasticBox held a Hackathon on November 6. Both events took place on the expo floor. The Bluemix Developer Playground, for developers of all levels, highlighted the ease of use of Bluemix, its services and functionalit...
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
Some developers believe that monitoring is a function of the operations team. Some operations teams firmly believe that monitoring the systems they maintain is sufficient to run the business successfully. Most of them are wrong. The complexity of today's applications have gone far and beyond the capabilities of "traditional" system-level monitoring tools and approaches and requires much broader knowledge of business and applications as a whole. The goal of DevOps is to connect all aspects of app...
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
When an enterprise builds a hybrid IaaS cloud connecting its data center to one or more public clouds, security is often a major topic along with the other challenges involved. Security is closely intertwined with the networking choices made for the hybrid cloud. Traditional networking approaches for building a hybrid cloud try to kludge together the enterprise infrastructure with the public cloud. Consequently this approach requires risky, deep "surgery" including changes to firewalls, subnets...
Want to enable self-service provisioning of application environments in minutes that mirror production? Can you automatically provide rich data with code-level detail back to the developers when issues occur in production? In his session at DevOps Summit, David Tesar, Microsoft Technical Evangelist on Microsoft Azure and DevOps, will discuss how to accomplish this and more utilizing technologies such as Microsoft Azure, Visual Studio online, and Application Insights in this demo-heavy session.
DevOps is all about agility. However, you don't want to be on a high-speed bus to nowhere. The right DevOps approach controls velocity with a tight feedback loop that not only consists of operational data but also incorporates business context. With a business context in the decision making, the right business priorities are incorporated, which results in a higher value creation. In his session at DevOps Summit, Todd Rader, Solutions Architect at AppDynamics, discussed key monitoring techniques...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water,...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happe...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!