Comarco, Inc. sees rebound in second half of the year
On a midday Friday conference call, Comarco, Inc. (Nasdaq: CMRO) CEO Tom Franza said the wireless products company plans to rebound from an abysmal quarter with new contracts and resellers.
“Fiscal 2008 is a transition year with our financial performance being weak during the first half and building in the second half,” Franza said on the call.
Before Friday’s opening bell, Comarco reported revenue of $5.4 million for the first quarter ended April 30, compared with $10.6 million in the same period of 2006. The company recorded a $1.6 million loss, or $0.22 per share, down from a $0.6 million loss, or $0.08 per share, a year earlier.
“This business is historically choppy and difficult to predict. We are currently between cycles and industry demand is sluggish,” Franza said. “We are working on strategic initiatives that we believe will provide excellent opportunities for substantial revenue growth and improve results and we expect to see the benefits of these initiatives later this year.”
The Lake Forest, Calif.-based company signed a non-exclusive distribution agreement with computing devices maker Kensington Technology Group that allows Comarco to expand to additional partners, Franza said. Comarco is also developing a travel adapter for a notebook computer maker and is expected to ship about 0.3 million units in the second half of the year, he said. The company is also on track to introduce a new product line in the second half, Franza added.
On June 8, Mobility Electronics, Inc. filed a patent infringement lawsuit against Comarco. While the company denies any wrongdoing, Franza said Comarco has implemented a new manufacturing arrangement to “avoid any possible dispute.”
“Except for the legal expense, the outcome of the lawsuit should have no impact on Comarco or its customers with regard to future sales,” Franza said.
As of today, Franza said Comarco has $21.6 million in cash and that the company is “confident that we have sufficient cash to carry us through this transition period and allow us to execute on our strategy.”
In midday trading, shares of Comarco were up $0.14, or 2.28%, at $6.27.
