DynaVox Reports Third Quarter Fiscal 2011 Results:
(GLOBE NEWSWIRE) -- DynaVox (Nasdaq:DVOX), the world's leading provider of communication and education products for individuals with significant speech, language and learning disabilities, today announced results for the third quarter ended April 1, 2011.
For the third quarter ended April 1, 2011, net sales were $28.7 million, an increase of 1.0% compared to net sales of $28.4 million for the third quarter ended April 2, 2010. Sales of the Company's speech generating devices increased 1.3% to $22.7 million, and sales of its special education software were flat at $6.0 million from the prior year.
Gross profit for the third quarter of fiscal year 2011 declined 7.3% to $19.9 million, compared to $21.5 million in the third quarter of the prior year. The Company's gross profit margin was 69.6%, compared to 75.8% in the prior year. The gross margin decline was due mainly to a less favorable device product mix, slightly lower margin on software sales, reduced royalty revenue, and an inventory obsolescence charge of approximately $0.5 million mainly related to a previously acquired product line. Excluding the inventory obsolescence charge, gross margin was 71.2% for the third quarter and 70.9% for the first 39 weeks of fiscal 2011, representing declines of 460 basis points and 440 basis points, respectively, from the corresponding prior-year periods.
Operating income was $3.8 million in the third quarter of fiscal year 2011, compared to operating income of $5.3 million in the same period a year ago. Operating income for the third quarter of fiscal year 2011 included a $1.0 million impairment loss related to intangible assets and fixed assets acquired as part of the Company's product acquisition in July 2009. Operating expenses, excluding the impairment loss, decreased $1.1 million compared to the prior year's third quarter of $16.2 million. Excluding the $0.5 million inventory obsolescence charge and the $1.0 million impairment loss, operating income was $5.3 million for the third quarter and $6.2 for the first 39 weeks of fiscal 2011.
Third quarter GAAP net income was $0.7 million, or $0.07 per share. Adjusted pro forma net income and adjusted pro forma net income per share, as defined below, were $2.6 million, or $0.09 per share, for the third quarter of fiscal year 2011.
Adjusted EBITDA, as defined below, declined 14.0% in the third quarter of fiscal year 2011 to $6.5 million, from $7.6 million in the previous year.
"In spite of the ongoing macroeconomic challenges, during the third quarter we saw some signs of improvements and our consolidated top line was roughly equal to the last year," said Ed Donnelly, DynaVox's Chief Executive Officer. "Sales trends across both devices and software provide validation of our efforts to adapt to the environment as well as the fact that the demand for our products and services remains intact. We are encouraged by the steady sequential upside trend in our U.S. device business, which comprises almost three fourths of our total revenue."
Results for the Thirty-Nine Weeks Ended April 1, 2011
For the thirty-nine weeks ended April 1, 2011, net sales declined 7.0% to $75.8 million, compared to $81.2 million in the same period last year.
Gross profit for the first thirty-nine weeks of fiscal 2011 declined 13.1% to $53.2 million, compared to $61.2 million in the same period last year. The Company's gross profit margin decreased to 70.2% from 75.3% in the same period last year.
Operating income for the thirty-nine weeks ended April 1, 2011 was $4.7 million, compared to $15.2 million in the prior year period.
GAAP net income for the thirty-nine weeks ended April 1, 2011 was $0.3 million, or $0.03 per share. Adjusted pro forma net income for the thirty-nine weeks, as defined by the Company, was $2.1 million, or $0.07 per share.
Adjusted EBITDA for the first thirty-nine weeks of fiscal 2011 was $11.2 million, compared to $20.8 million in the same period last year.
Fiscal 2011 Guidance
For fiscal year 2011, the Company now projects net sales to decline in the range of 6% to 8% compared to the previously expected decline of 10% to 15% from fiscal year 2010. The Company continues to expect Adjusted EBITDA for fiscal year 2011 to be between $19.0 million and $23.0 million and adjusted pro forma net income per share in the range of $0.21 to $0.27 per share.
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