Welcome!

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
In his session at 20th Cloud Expo, Brad Winett, Senior Technologist for DDN Storage, will present several current, end-user environments that are using object storage at scale for cloud deployments including private cloud and cloud providers. Details on the top considerations of features and functions for selecting object storage will be included. Brad will also touch on recent developments in tiering technologies that deliver single solution and an end-user view of data across files and objects...
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, discussed how AI can simplify cloud operations. He covered the following topics: why cloud mana...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
In his session at 21st Cloud Expo, Michael Burley, a Senior Business Development Executive in IT Services at NetApp, described how NetApp designed a three-year program of work to migrate 25PB of a major telco's enterprise data to a new STaaS platform, and then secured a long-term contract to manage and operate the platform. This significant program blended the best of NetApp’s solutions and services capabilities to enable this telco’s successful adoption of private cloud storage and launching o...
Enterprises are universally struggling to understand where the new tools and methodologies of DevOps fit into their organizations, and are universally making the same mistakes. These mistakes are not unavoidable, and in fact, avoiding them gifts an organization with sustained competitive advantage, just like it did for Japanese Manufacturing Post WWII.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settl...
Docker containers have brought great opportunities to shorten the deployment process through continuous integration and the delivery of applications and microservices. This applies equally to enterprise data centers as well as the cloud. In his session at 20th Cloud Expo, Jari Kolehmainen, founder and CTO of Kontena, discussed solutions and benefits of a deeply integrated deployment pipeline using technologies such as container management platforms, Docker containers, and the drone.io Cl tool. H...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...