I am long IFON and agree there are some encouraging items in this report. I also don't claim to be the most savy financial analyst, so please correct me if I'm wrong. But I couldn't help but notice this:
"Other income in the second quarter of 2013 included $527,000 related to the legal defeasance of a previously recorded supplier obligation that had been included in accrued expenses on our balance sheet. The net loss for the second quarter of 2013 was $47,000, or $0.00 per share, compared to a net loss of $265,000, or $0.02 per share, in the second quarter of 2012."
In other words, if not for the good fortune of this one-time legal settlement, IFON would have been in the hole for $574,000 ($47k plus $527k), which would have amounted to at least -4 cents a share. That would have been disastrous.
It's good we continue to ship units, and good to see 20% profit margins (I think). And so very, very close to profitability. But perhaps not as close as it first appears? Help me out...
pj, it was a fair point regarding the other income, but 192K of non-recurring expenses were also included. Going forward, expenses should be reduced by another $125K/q from the $500K/yr savings expected from the restructuring. That means current quarter (Q3) expenses should be down more than 300K. Assuming IFON will not do any more cuts in expenses, they need about $250K more in gross profits to break even. That can be accomplished by increased sales and/or improved gross margin percentage. Sequentially, they have accomplished both. Sales were up $500K sequentially and profit margin up from 17.7% to 20.7%.
An interesting number to look at is the US sales which grew from $151K in Q1 to $424K in Q2. Hopefully they can grow that number significantly. As the veryKool models are getting more advanced, hopefully the margins will increase as well.
Overall, I am very pleased with the veryKool sales numbers.