Hauppauge Digital Reports 3Q Results

Hauppauge Digital, a developer of digital video TV and data broadcast receiver products for personal computers, reported financial results for the third fiscal quarter and nine month period ended June 30.

In a release dated August 14, the company stated:

Third quarter results:

- Net sales were $13.1 million for the third quarter of fiscal 2009, a decline of approximately 33 percent from the $19.4 million reported for the previous year's third quarter.

- The company incurred a net loss of $1,887,382 for the third fiscal quarter ended June 30, compared to a net loss of $1,117,563 for the third fiscal quarter ended June 30, 2008. Net loss per share for the third fiscal quarter ended June 30, was $0.19 on a basic and diluted basis, compared to a net loss per share of $0.11 on a basic and diluted basis for the third fiscal quarter ended June 30, 2008.

Nine month results:

- Net sales were $43.1 million for the nine months ended June 30, compared to $74 million for the nine months ended June 30, 2008, a decrease of approximately 42 percent.

- The company incurred a net loss of $5,591,765 for the nine months ended June 30, compared to net loss of $179,653 for the nine months ended June 30, 2008. Net loss per share for the nine months ended June 30, was $0.56 on a basic and diluted basis, compared to net loss per share of $0.02 on a basic and diluted basis for the nine months ended June 30, 2008.

Ken Plotkin, Hauppauge's Chief Executive Officer said, "Our WinTV and PCTV products are sold primarily through the retail computer products sales channel, which has been a challenged market from the onset of the current economic recession. Though we are disappointed in the drop in sales this quarter compared with fiscal 2008, we are encouraged by some trends we are seeing in the market.

"The sales declines we have seen in the North American market over the last six quarters seem to be stabilizing. Though it is always difficult to forecast a bottom, we are seeing trends in the U.S. market which seem to indicate that our North American sales may start to increase as we move into the holiday selling season. In Europe, though we remain challenged in key markets such as the UK and Germany, the U.S. dollar has declined against the euro and therefore has been a boost to our profit margins. But it's too early to tell when the trend will move upward on sales in Europe.

"Later on this year, Microsoft expects to launch its new consumer operating system, Windows 7. We look forward to Windows 7 as it gives live TV, enabled by our WinTV and PCTV products, a prominent spot in the Windows 7 Media Center application. Most of our new product development efforts over the last twelve months have been aimed at Windows 7.

"With the expense reductions we have made over the past 18 months, and the continuing push in new product development we are making in our three R&D facilities, we believe Hauppauge is well positioned in both sales channels and our product pipeline to take advantage of the new opportunities created by the global economy as it recovers and the expected introduction of Windows 7.

"On a personal note, we are sorry to report the passing of our friend and Board member, Neal Page. We have worked with Neal as a customer, an advisor to the company and, in the past six years, as a Board member. Neal's understanding and keen analysis of the PC video market will be missed."

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