Hypercom Corp. (HYC) filed Quarterly Report for the period ended 2009-09-30.
Hypercom Corp. is a global provider of electronic payment solutions, including multi-function point-of-sale terminals, peripherals, network products, Ascendent payment and transaction software and Internet-based and electronic commerce payment solutions. On a global basis Hypercom delivers the services and technology infrastructure required to quickly integrate and deploy new payment applications. These applications provide competitive value-added programs, improved business performance and low total cost of ownership. Hypercom Corp. has a market cap of $189.17 million; its shares were traded at around $3.46 with and P/S ratio of 0.43.
Highlight of Business Operations:
Net revenue for the nine months ended September 30, 2009 was $292.9 million, a 7.3% decrease over the nine months ended September 30, 2008. The primary reasons for the decrease were the following: (i) reduced demand; (ii) lower foreign currency exchange rates on foreign denominated revenue in Europe; (iii) component shortages that impacted our ability to fully meet our third quarter demand, which we estimate would have contributed up to approximately $5.0 million in additional third quarter revenue; and (iv) our exit of a marginally profitable service contract with a large customer in Brazil, which reduced service revenue in the nine month period by approximately $6.5 million. These factors were offset by incremental revenue from the acquisition of TeT, which was not included in our results for the first quarter of 2008.
Gross profit for the nine months ended September 30, 2009 was $92.2 million or 31.5% of revenue, compared to $92.0 million or 29.1% of revenue for the nine months ended September 30, 2008. Gross margin, net of amortization of purchased intangible assets, for the nine months ended September 30, 2009 includes a 35.3% product gross margin and a 23.9% service gross margin, compared to product and service gross margins of 32.7% and 22.3%, respectively, for the same period in 2008. The increase in product gross margin was due to improved contract manufacturing pricing, a favorable product mix selling higher margin networking and unattended products, as well as the lack of transition costs for our move to third party manufacturing during the nine months ended September 30, 2009, compared to the same period in 2008. The increase in service gross margin results primarily from higher margin service revenue in Europe from the TeT acquisition and the exit of a marginally profitable $18.0 to $20.0 million annual-revenue service contract in Brazil during the third quarter of 2009.
Operating expenses, net of amortization of purchased intangible assets, for the nine months ended September 30, 2009 were $92.5 million or 31.6% of revenue, compared to $98.9 million or 31.3% of revenue for the same period in 2008. The decrease relates to reduced R&D costs, variable selling and marketing expenses, as well as lower general and administrative costs due to the exclusion of TeT from our first quarter results in 2008, along with cost saving synergies associated with the restructuring of the TeT operations after the acquisition.
As a result of these actions, we incurred charges of $0.4 million and $2.3 million during the three and nine months ended September 30, 2009. The $0.4 million in the third quarter of 2009 was recorded in operating expenses and included in SEMEA, while, of the $2.3 million year-to-date in 2009, $0.8 million was recorded in costs of revenue and $1.5 million was recorded in operating expenses. Of the $2.3 million, $0.9 million was recorded in the Americas, $0.7 million in SEMEA, $0.4 million in NEMEA, and $0.3 million in Shared Cost Centers.
Rate This Article: |
  |