Q-Line Sales Reach Record Level of $1.6 Million
SPRINGFIELD, Mo., Aug. 10 /PRNewswire-FirstCall/ -- SLS International (AMEX:SLS), a leading provider of premium quality sound systems for professional (recording studio, concert, etc.), cinema and home entertainment markets, today announced results for its 2006 second quarter ended June 30, 2006. The Company reported revenue of $2,722,297, an increase of 218% compared to $855,353 for the same period in 2005, due to increased demand for the Company's Q-Line product line and an increase in sales from its Cinema product series. Gross margins increased from 21% in the first quarter to 27% in the 2006 second quarter. Gross margin in the 2005 second quarter was 26%.
SLS had revenue for the six month period ended June 30, 2006 of $3,692,794, a 120% increase compared to $1,680,073 in the same six-month period in fiscal 2005. Revenue increased due to stronger sales of the Company's Q-Line product line and increased sales from its core professional and commercial lines.
The Company reported a net loss from operations for the second quarter ended June 30, 2006 of $(2.2) million, compared to a net loss from operations of $(2.4) million in the year-earlier period. The decrease in the net loss was a result of increased sales of the Company's products, partially offset by higher general and administrative expenses associated with the launch of the Q Line Gold Home Theater System in over 600 Best Buy stores. The 2006 second quarter net loss included non-cash expenses of $461,920. SLS had a net loss available to common stockholders of $(3.4) million, or $(0.07) per share, compared to a net loss of $(2.2) million, or $(0.05) per share in the second quarter of 2005. The 2006 results included a charge of $1.3 million for a dividend associated with the valuation of Class D warrants. In the comparable period in fiscal 2005 the Company recognized income of $368,522 relating to the warrants.
For the six months ended June 30, 2006, SLS had a net loss from operations of $(5.3) million, compared to a net loss of $(5.1) million in the first six months of fiscal 2005. The Company had a net loss available to common stockholders of $(7.0) million, or $(0.15) per share, compared to $(7.3) million, or $(0.17) per share in the comparable period in 2005. The 2006 results included a loss of $1.3 million in connection with the valuation of Class D warrants, while the 2005 results included a gain of $1.3 million in connection with the valuation of the same class of warrants.
On June 30, 2006, the Company had a backlog of orders of approximately $446,000, from orders for its professional and commercial products.
"We continue to generate significant revenue from our Cinema and Professional systems," said John Gott, SLS International's Chairman and Chief Executive Officer. "Sales of our Cinema Series loudspeaker systems have increased more than five-fold this year, as movie theaters increasingly recognize that our ribbon-driver technology provides a competitive advantage and enhances the movie experience of their patrons. We believe that retail consumers will recognize the visible difference that our ribbon-driver technology offers, as the commercial and professional markets have done for years. We continue to explore several new consumer retail distribution methods for our Q Line and other Home Theater products to add to our current Best Buy relationship. We believe the Company is well positioned to continue its growth." About SLS Based in Ozark, Mo., SLS International, Inc. is a 30-year-old manufacturer and developer of new proprietary patent-pending ultra-high fidelity Ribbon Driver loudspeakers, patented Evenstar Digital Amplifiers and sound systems for the commercial, home entertainment, professional and music markets. SLS has perfected the ribbon-driver technology enabling their loudspeakers to achieve exceptional inner detail and accuracy with 20% to 30% less distortion of typical compression driver and dome tweeters. SLS speakers and systems are used in high-profile venues such as NBC/MSNBC's 2002 and 2004 Olympics studios, the Recording Academy's Grammy Producers SoundTable events, and for the NAMM winter show, providing sound in the AVID Technology booth just to name a few. For more information, visit http://www.slsaudio.com/.
Safe Harbor Matters discussed in this press release contain forward-looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company with the Securities and Exchange Commission. DATASOURCE: SLS International, Inc.
CONTACT: Andrew Hellman, CEOcast, Inc. for SLS International, +1-212-732-4300 Web site: http://www.slsaudio.com/
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