HUNTINGDON VALLEY, Pa., March 31, 2015 (GLOBE NEWSWIRE) -- Wireless Xcessories Group, Inc. (WIRX.PK), a nationwide manufacturer and distributor of electronic and cellular accessories, announced unaudited results for the year ended December 31, 2014.
Sales
The Company reported 2014 full year's net sales of $34,644,715 compared to $35,858,315 for 2013, a decrease of approximately 3.4%.
Losses from Operations
Full Year Losses from operations were $(840,000) or $(.21) per share in 2014, compared to a loss from operations of $(109,024) or $(.03) per share in 2013.
Included in the loss were the following extraordinary non- recurring items:
- Approximately $350,000 of non- recurring expenses, which were related to restructuring, including severance payments and other related expenses.
- There will be tax benefits that mitigate some of these losses, but we have not included any tax benefit or completed our computation of any final tax benefit or applied any tax reserves for the year based on our pre- tax loss. At such time as our auditors have completed their reviews and are in a position to sign off on final numbers we will adjust our accounts accordingly for all tax effects.
Other (Expense)
Other (expense) was a net expense of $24,711 in 2014, compared to expense of $21,045 in 2013, the increase was principally due to an increase of net interest expense of approximately $18,500 due to increased use of borrowed funds in 2014 offset by losses on disposal of property and equipment in 2013 of $15,647.
Key Financial Comparisons
The Company had working capital of approximately $7.4 million, on December 31, 2014 and total shareholder equity was approximately $7.5 million. There was total debt outstanding at December 31, 2014 of $2,490,000 related to a secured Revolving Term Note with a major Bank.
Management Comments
Steve Rade, CEO stated, "2014 results were disappointing as our sales were off by 3.4 % for the year. The drop was a result of many factors, including continued consolidation in the Dealer base and, in particular, our largest carrier market which is Verizon. Though we expect and are zoning in on other opportunities opening in other markets such as Sprint which plans to open over 1,000 new doors and other markets we have started making inroads in 2014 as the year progressed."
Additionally, lack of new smartphone introductions during the first nine months of the year did not spur traffic into our Dealer base which contributed to an overall slower rate of consumer handset upgrades.
These factors, combined with an overall very competitive pricing environment, reduced our gross profit from the prior year. The Company was able to lesson the impact of the margin pressures by continuing its right rightsizing and cost reductions while still significantly improving its sales and purchasing infrastructure to meet the dynamic market, and supply issues the Company is facing.
OtterBox
Our primary case vendor, OtterBox has decided to restructure its USA distribution program. Wireless Xcessories Group, Inc. was notified that we were one of five distributers terminated from the program effective 4/1/2015. We immediately made arrangements to become a master distributer of a competing case manufacturer whose product line we believe offers higher quality combined with lower pricing and better profit margins.
It remains to be seen how many of our customers will be willing to transition to this new line. We intend to report financial results much sooner after the end of each reporting quarter to let our stockholders know about our progress in replacing this lost volume and gross profit contribution.
About Wireless Xccessories Group
Wireless Xccessories Group, Inc. designs, manufactures and distributes accessories for cellular phones. The Company offers in excess of 3,500 items that include batteries; hands free devices, car and travel chargers, as well as a variety of carrying cases. The Company sells to dealers and distributors through an in-house sales force and directly from its website, http://www.wirexgroup.com