Vista, Calif. — Citing strong sales of satellite radio products, Directed’s earnings for the first quarter, ended May 15, and surged to $4 million, up from $1.4 million for the quarter a year ago.
Excluding a tax benefit, earnings were $3.6 million, up 134 percent. Net sales increased 43 percent to $74.3 million, and the company increased its guidance for the year to net sales of $365 million to $375 million.
While sales of remote starters were down for the quarter due to a warm January, satellite radio gross sales nearly tripled to $36 million, up from $13 million for the quarter a year ago, said the company. Gross sales of security and entertainment products for the quarter totaled $39.2 million, down from $40.5 million for the quarter a year ago.
Directed, however, expects security and entertainment sales to grow by more than “mid-single digits” for the full year and satellite radio sales to grow in excess of 35 percent, said chief financial officer John Morberg.
Also expected to fuel sales this year is Best Buy’s plans to extend the Magnolia Hi-Fi chain by 200 stores, which will broaden distribution for Directed’s Definitive Audio brand, particularly in the latter half of the year, Directed said.
Speaking at an earnings conference call, Directed president/CEO Jim Minarik said, “We continue to hold the number one position in the security and convenience industry.” He said gross profits for the quarter increased 22.3 percent to $22.8 million, although gross margins declined to 30.6 percent from 35.7 percent due to the increase in sales of satellite radio, which carry lower margins than security and entertainment products.
Kevin Duffy, corporate development and investor relations senior VP, said Directed will pursue further acquisitions. Directed announced earlier this month that it completed the acquisition of Canadian security company Astroflex.