Costar Technologies, Inc. Announces Financial Results For the First Quarter Ended March 31, 2021

·7 min read

($ in thousands except per share amounts)

COPPELL, Texas, May 13, 2021 /PRNewswire/ -- Costar Technologies, Inc. (the "Company") (OTC Markets Group: CSTI) announced today its financial results for the first quarter ended March 31, 2021.

Financial Results for the Quarter Ended March 31, 2021

  • Revenues of $10,782, a 36.7% decrease compared to the first quarter of 2020.

  • Operating expenses were down 34.0% to $4,368, compared to $6,617 in the first quarter of 2020.

  • GAAP net loss of $799 or ($0.49) per diluted share, compared to GAAP net loss of $193, or ($0.12) per diluted share, in the first quarter of 2020.

  • Adjusted earnings of ($481), or ($0.29) per diluted share, compared to $156, or $0.10 per diluted share, for the quarter ended Mach 31, 2020. Adjusted earnings, a non-GAAP measure, is defined below.

  • Adjusted EBITDA of ($118), compared to $500 for the quarter ended March 31, 2020. Adjusted EBITDA, a non-GAAP measure, is defined below.

Scott Switzer, the Company's Interim Chief Executive Officer stated, "Typically the first quarter is our slowest time of year and 2021 was no exception. While our sales were soft in the first quarter, we are starting to see the market return to pre-Covid activity, as opportunities open and sales activity increases. We continue to focus on aligning our product development to meet our customers' needs. The expansion of our line of NDAA compliant cameras in the second quarter positions us to meet high demand in the marketplace. With our new camera line and increased activity in the retail vertical, we have high confidence in delivering significantly improved results in the coming quarters."

Sarah Ryder, the Company's Chief Financial Officer went on to say, "The slower than anticipated reopening of the economy negatively impacted our first quarter revenues. This, combined with an unusually strong first quarter in the prior year, drove the significant decline in year-over-year sales. Conversely, operating expenses were down $2.25M from the prior year first quarter and project delays in the first quarter of 2021 contributed to strong April sales. With the rapid pace of the vaccine rollout, return to work and improving economic conditions, we remain optimistic about our 2021 financial performance."

The Company's independent auditors completed their analysis of the Company's financial condition. The Independent Auditor's Report, including financial statements and applicable footnote disclosures, is available on our website at www.costartechnologies.com.

Non-GAAP Financial Measures

The Company defines adjusted earnings, a non-GAAP measure, as net income (loss) excluding stock-based compensation and amortization of acquisition-related intangible assets. The Company defines adjusted EBITDA, a non-GAAP measure, as earnings before interest, taxes, depreciation, amortization and stock-based compensation. The following tables reconcile the non-GAAP financial measures disclosed in this release to GAAP net income (loss):


Quarter
Ended 3/31/21

Quarter
Ended 3/31/20

Adjusted Earnings

(481)

156

Less:



Stock-Based Compensation

(4)

(32)

Intangible Amortization

(314)

(317)

Net Loss

(799)

(193)





Quarter
Ended 3/31/21

Quarter
Ended 3/31/20

Adjusted EBITDA

(118)

500

Less:



Interest

(245)

(291)

Income Taxes (Benefit)

(10)

65

Depreciation

(108)

(118)

Intangible Amortization

(314)

(317)

Stock-Based Compensation

(4)

(32)

Net Loss

(799)

(193)

These reconciliations of GAAP to non-GAAP measures should be considered together with the Company's financial statements. These non-GAAP measures are not meant as a substitute for GAAP, but are included solely for informational and comparative purposes. The Company's management believes that this information can assist investors in evaluating the Company's operational trends, financial performance, and cash generating capacity. Management believes these non-GAAP measures allow investors to evaluate the Company's financial performance using some of the same measures as management. However, the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding, similarly captioned, GAAP measures.

About Costar Technologies, Inc.

Costar Technologies, Inc. develops, designs, manufactures and distributes a range of security solution products including surveillance cameras, lenses, digital video recorders and high-speed domes. The Company also develops, designs and distributes industrial vision products to observe repetitive production and assembly lines, thereby increasing efficiency by detecting faults in the production process. Headquartered in Coppell, Texas, the Company's shares currently trade on the OTC Markets Group under the ticker symbol "CSTI". Costar was ranked as the 40th largest company in a&s magazine's Security 50 for 2020. Security 50 is an annual ranking by the magazine of the world's largest security manufacturers in the areas of video surveillance, access control and intruder alarms, based on sales revenue.

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements, including statements regarding the Company's ability to grow revenue and earnings, that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including but not limited to risks related to the ability to diversify business across vertical markets, secure new customer wins, and launch new products. You can often identify forward-looking statements by words such as "believe," "may," "estimate," "continue," "anticipate," "intend," "plan," "expect," "predict," "potential," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations, but they involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of the risks and uncertainties.

You should not place undue reliance on any forward-looking statements. The Company assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable laws.

COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES

















CONSOLIDATED BALANCE SHEETS








(AMOUNTS SHOWN IN THOUSANDS)





















March 31, 2021


December 31, 2020






(Reviewed)



(Audited)

ASSETS












Current assets








Cash and cash equivalents



$

88


$

480

Accounts receivable, less allowance for doubtful accounts






of $182 and $175, respectively


5,768



8,579

Inventories




14,435



14,225

Prepaid expenses and other current assets



1,743



2,170


Total current assets




22,034



25,454










Non-current assets









Property and equipment, net




425



533

Deferred financing costs, net




10



20

Intangible assets, net




6,097



6,411

Goodwill





5,574



5,574

Right of use assets, net




1,946



2,185

Other non-current assets




149



149


Total non-current assets



14,201



14,872











Total assets



$

36,235


$

40,326











LIABILITIES AND STOCKHOLDERS' EQUITY
























Current liabilities








Accounts payable



$

5,116


$

4,591

Accrued expenses and other current liabilities


5,511



5,141

Line of credit




9,250



13,024

Current maturities of long-term debt, net of unamortized






financing fees




3,396



3,592

Current maturities of lease liabilities



939



1,049


Total current liabilities



24,212



27,397










Long-Term liabilities








Payroll Protection Program loan



3,025



3,025

Deferred tax liability




116



116

Non-current maturities of lease liabilities



1,194



1,340


Total long-term liabilities



4,335



4,481


Total liabilities




28,547



31,878










Stockholders' Equity








Preferred stock








Common stock




3



3

Additional paid-in capital




157,725



157,686

Accumulated deficit




(145,519)



(144,720)

Less common stock held in treasury, at cost



(4,521)



(4,521)


Total stockholders' equity



7,688



8,448











Total liabilities and stockholders' equity

$

36,235


$

40,326










COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES



















CONSOLIDATED STATEMENTS OF OPERATIONS









(AMOUNTS SHOWN IN THOUSANDS, EXCEPT NET INCOME PER SHARE)

































Three Months Ended March 31,






2021


2020






(Reviewed)


(Reviewed)












Net revenues



$

10,782


$

17,028


Cost of revenues




6,962



10,378












Gross profit




3,820



6,650












Selling, general and administrative expenses



3,601



5,185












Engineering and development expense



767



1,432

















4,368



6,617












Income (loss) from operations



(548)



33












Other expenses










Interest expense




(245)



(291)



Other income, net




4





Total other expenses, net




(241)



(291)












Loss before taxes




(789)



(258)


Income tax provision (benefit)



10



(65)












Net Loss



$

(799)


$

(193)






















Net loss per share:










Basic



$

(0.49)


$

(0.12)























Diluted



$

(0.49)


$

(0.12)






















Weighted average shares outstanding:









Basic




1,643



1,586























Diluted




1,643



1,586


Cision
Cision

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SOURCE Costar Technologies, Inc.