Control4 Swings To Loss In Q1 - Twice

Control4 Swings To Loss In Q1

Backlogged new-product shipments limit sales gains to 1%
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Salt Lake City – Home-automation supplier Control4 swung to a loss in the first quarter and said a small 1 percent increase in sales was caused by backlogged shipments of new products.

Revenue for the quarter rose 1 percent to $32.1 million, and net loss hit $4.23 million compared to a year-ago net loss of $539,000.

In 2014’s fourth quarter and full fiscal year, Control 4 posted net income of $3.9 million and $8.2 million, respectively.

First-quarter North American sales rose 1 percent to $24.4 million.

The company also reported that it added 84 North American dealers in the quarter, bringing its active dealer base to 2,614. It international dealer base grew by 64 to 718.

Total first-quarter shipments of home-automation controllers fell to 13,931 from the year-ago quarter’s 16,224.

The company’s non-GAAP net loss for the quarter was $1.2 million compared to year-ago non-GAAP net income of $0.8 million. The metric excludes operating expenses incurred with the acquisition in January of Nexus Technologies, which offers Leaf-branded A/V distribution products.

CFO Dan Strong pointed to backlogged new-product shipments as the reason for meager sales growth. "Demand for our newly announced products has been strong,” he said. “We ended the quarter with a higher than normal product backlog which impacted our revenue in the first quarter.”

He said he expects revenue growth to pick up in the second quarter, when the company will “continue to invest in R&D and sales and marketing to bolster our new product development capabilities and to strengthen our dealer network with enhanced channel programs and direct-to-consumer marketing."

The company revised down its forecasts for 2015 revenue growth to a 10-15 percent increase from 2014 revenue compared to prior guidance of 16-20 percent growth over 2014, broker-dealer Canaccord Genuity said in a research report.

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