COMARCO Inc. (CMRO, Financial) filed Annual Report for the period ended 2012-01-31.
Comarco Inc has a market cap of $1.3 million; its shares were traded at around $0.17 . Comarco Inc had an annual average earning growth of 57.7% over the past 5 years.
The fiscal 2012 decrease in the total cost of revenue of $17.8 million compared to fiscal 2011 is attributable to reduced product costs, freight, expedite and other costs, supply chain overhead and Recall accruals incurred during fiscal 2012 offset by an increase in inventory reserve and scrap charges and a settlement with a former supplier. The product costs incurred in fiscal 2012 decreased by $16.1 million or 77 percent compared to fiscal 2011 which is generally consistent with our 72 percent decrease in revenue. As previously discussed, we announced a voluntary product safety recall of approximately 500,000 units of our Bronx 90-watt universal AC power adapter sold to our distributer, Targus. Included in the cost of revenue fiscal 2012 and fiscal 2011, is an accrual for the estimated product costs associated with the Recall of $0.2 million and $0.3 million, respectively.
During the second quarter of fiscal 2012 we accrued a charge of $0.4 million relating to a settlement reached with Anam Electronics (Anam) relating to purchase commitments made to support the Targus business. There are no similar charges in the prior fiscal year. The supply chain overhead expenses decreased $1.4 million or 46 percent in fiscal 2012 compared to fiscal 2011. In the fourth quarter of fiscal 2011, in conjunction with the notification received from Targus of the non-renewal of the Targus Agreement and the resulting uncertainty relating to the volume of future sales to Targus, we accelerated the depreciation on all Manhattan related tooling and equipment, which accounts for approximately $0.3 million of the prior year balance. The remaining decrease is due to reductions in personnel and related costs as we reduced our labor force across all departments late in the third quarter of fiscal 2011.
The fiscal 2012 decrease in selling, general and administrative expenses of $0.7 million compared to fiscal 2011 relates primarily to decreased personnel and related costs. During the third quarter of fiscal 2012, our former Vice President of Sales and Marketing and interim Chief Executive Officer was terminated and a settlement of $40,000 paid in the third fiscal quarter is included in the amounts above. At the present time the sales and marketing function is performed by various consultants who are focused on digital media and search engine optimization to assist with generation of sales on our newly launched website www.chargesource.com.
We generally issue purchase orders to our suppliers with delivery dates from four to six weeks from the purchase order date. In addition, we regularly provide significant suppliers with rolling six-month forecasts of material and finished goods requirements for planning and long-lead time parts procurement purposes only. We are committed to accepting delivery of materials pursuant to our purchase orders subject to various contract provisions that allow us to delay receipt of such order or allow us to cancel orders beyond certain agreed lead times. Such cancellations may or may not include cancellation costs payable by us. In the past, we have been required to take delivery of materials from our suppliers that were in excess of our requirements and we have previously recognized charges and expenses related to such excess material. During fiscal 2012, we incurred expenses relating to cancellation of purchase orders to Anam in the amount of $0.4 million, which amount was recorded in cost of revenue in our consolidated statement of operations. If we are unable to adequately manage our suppliers and adjust such commitments for changes in demand, we may incur additional inventory expenses related to excess and obsolete inventory. Such expenses could have a material adverse effect on our business, results of operations, and financial position. Our fixed purchase commitments at January 31, 2012 totaled $0.7 million, of which approximately $0.2 million was cancelable as of January 31, 2012.
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Comarco Inc has a market cap of $1.3 million; its shares were traded at around $0.17 . Comarco Inc had an annual average earning growth of 57.7% over the past 5 years.
Highlight of Business Operations:
During fiscal 2012 and fiscal 2011, shipments to Targus, our exclusive retail distributor, totaled $1.2 million and $19.3 million or 15 percent and 67 percent of total revenue, respectively. In fiscal 2012 and fiscal 2011, shipments to Lenovo, our most significant OEM customer, totaled $5.3 million and $8.5 million or 66 percent and 29 percent of total revenue, respectively. In addition, in fiscal 2012 and 2011, Dell accounted for revenue totaling $1.4 million and $0.9 million, or 17 percent and 3 percent of total revenue, respectively. For more information regarding our customers, see Note 4 of the Notes to the Consolidated Financial Statements included in Item 8 of this report.The fiscal 2012 decrease in the total cost of revenue of $17.8 million compared to fiscal 2011 is attributable to reduced product costs, freight, expedite and other costs, supply chain overhead and Recall accruals incurred during fiscal 2012 offset by an increase in inventory reserve and scrap charges and a settlement with a former supplier. The product costs incurred in fiscal 2012 decreased by $16.1 million or 77 percent compared to fiscal 2011 which is generally consistent with our 72 percent decrease in revenue. As previously discussed, we announced a voluntary product safety recall of approximately 500,000 units of our Bronx 90-watt universal AC power adapter sold to our distributer, Targus. Included in the cost of revenue fiscal 2012 and fiscal 2011, is an accrual for the estimated product costs associated with the Recall of $0.2 million and $0.3 million, respectively.
During the second quarter of fiscal 2012 we accrued a charge of $0.4 million relating to a settlement reached with Anam Electronics (Anam) relating to purchase commitments made to support the Targus business. There are no similar charges in the prior fiscal year. The supply chain overhead expenses decreased $1.4 million or 46 percent in fiscal 2012 compared to fiscal 2011. In the fourth quarter of fiscal 2011, in conjunction with the notification received from Targus of the non-renewal of the Targus Agreement and the resulting uncertainty relating to the volume of future sales to Targus, we accelerated the depreciation on all Manhattan related tooling and equipment, which accounts for approximately $0.3 million of the prior year balance. The remaining decrease is due to reductions in personnel and related costs as we reduced our labor force across all departments late in the third quarter of fiscal 2011.
The fiscal 2012 decrease in selling, general and administrative expenses of $0.7 million compared to fiscal 2011 relates primarily to decreased personnel and related costs. During the third quarter of fiscal 2012, our former Vice President of Sales and Marketing and interim Chief Executive Officer was terminated and a settlement of $40,000 paid in the third fiscal quarter is included in the amounts above. At the present time the sales and marketing function is performed by various consultants who are focused on digital media and search engine optimization to assist with generation of sales on our newly launched website www.chargesource.com.
We generally issue purchase orders to our suppliers with delivery dates from four to six weeks from the purchase order date. In addition, we regularly provide significant suppliers with rolling six-month forecasts of material and finished goods requirements for planning and long-lead time parts procurement purposes only. We are committed to accepting delivery of materials pursuant to our purchase orders subject to various contract provisions that allow us to delay receipt of such order or allow us to cancel orders beyond certain agreed lead times. Such cancellations may or may not include cancellation costs payable by us. In the past, we have been required to take delivery of materials from our suppliers that were in excess of our requirements and we have previously recognized charges and expenses related to such excess material. During fiscal 2012, we incurred expenses relating to cancellation of purchase orders to Anam in the amount of $0.4 million, which amount was recorded in cost of revenue in our consolidated statement of operations. If we are unable to adequately manage our suppliers and adjust such commitments for changes in demand, we may incur additional inventory expenses related to excess and obsolete inventory. Such expenses could have a material adverse effect on our business, results of operations, and financial position. Our fixed purchase commitments at January 31, 2012 totaled $0.7 million, of which approximately $0.2 million was cancelable as of January 31, 2012.
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