Costar Technologies, Inc. Announces Financial Results for the Second Quarter Ended June 30, 2022

(in thousands of dollars, except per share amounts)

Coppel, Texas, August 15, 2022 /PRNewswire/ — Costar Technologies, Inc. (the “Company”) (OTC Markets Group: CSTI) today announced its financial results for the second quarter ended June 30, 2022.

Financial results for the quarter ended June 30, 2022

  • Income from $12,393a decrease of 15.8% compared to the second quarter of 2021.

  • Operating expenses were down 9.9% at $4,159compared to $4,615 in the second quarter of 2021.

  • GAAP net loss of ($337) Where ($0.20) per diluted share, compared to GAAP net income of $4,862Where $2.94 per diluted share, in the second quarter of 2021.

  • Adjusted profit of ($92)Where ($0.06) per diluted share, compared to $371Where $0.22 per diluted share, for the quarter ended June 30, 2021. Adjusted earnings, a non-GAAP measure, is defined below.

  • Adjusted EBITDA of $194compared to $783 for the quarter ended June 30, 2021. Adjusted EBITDA, a non-GAAP measure, is defined below.

Scott SwitzerlandCEO of the company, said, “Costar continues to grow with strong demand for our products, producing a steady stream of orders and growing our order backlog to a record high of $11.2 million at the end of the second trimester. Additionally, we have resolved numerous supply chain issues that will allow us to begin processing the backlog in the third quarter. For the remainder of the year, our focus is on generating revenue, reducing debt and improving shareholder value.”

Sarah Ryderthe company’s chief financial officer, went on to say, “Supply chain challenges pushed second quarter revenue potential into the second half of the year, resulting in revenue consistent with the prior quarter, but down from the second quarter of the previous year. Despite inflationary pressures, we managed controllable costs, reducing operating expenses by a quarter of a million dollars from the first quarter. With a strong backlog and booking activity, we are on track to deliver strong revenue and profit growth in the second half of the year.

The Company’s independent auditors have completed their analysis of the Company’s financial condition. The independent accountant’s review report, including financial statements and applicable footnotes, is available on our website at www.costartechnologies.com.

Non-GAAP Financial Measures

The Company defines adjusted earnings, a non-GAAP measure, as net income (loss) excluding stock-based compensation, amortization of acquisition-related intangibles, cancellation of PPP loan and accumulation of employee retention credit. The Company defines Adjusted EBITDA, a non-GAAP measure, as earnings before interest, taxes, depreciation, amortization, stock-based compensation, PPP loan forgiveness and employee retention credit accumulation. The following tables reconcile the non-GAAP financial measures disclosed in this news release to GAAP revenue (loss):

Trimester
Ended
06/30/22

Trimester
Ended
06/30/21

Six months
Ended
06/30/22

Six months
Ended
06/30/21

Adjusted profit

(92)

371

(391)

(110)

Less:

Stock-based compensation

(3)

(31)

(seven)

(35)

Intangible amortization

(242)

(314)

(485)

(628)

PPP loan forgiveness

3,060

3,060

Employee Loyalty Credit Accumulation

1,776

29

1,776

Net profit (net loss)

(337)

4,862

(854)

4,063

Trimester
Ended
06/30/22

Trimester
Ended
06/30/21

Six months
Ended
06/30/22

Six months
Ended
06/30/21

Adjusted EBITDA

194

783

178

665

Less:

Interest

(252)

(255)

(473)

(500)

Income taxes

(seven)

(57)

(15)

(67)

Depreciation

(27)

(100)

(81)

(208)

Intangible amortization

(242)

(314)

(485)

(628)

Stock-based compensation

(3)

(31)

(seven)

(35)

PPP loan forgiveness

3,060

3,060

Employee Loyalty Credit Accumulation

1,776

29

1,776

Net profit (net loss)

(337)

4,862

(854)

4,063

These reconciliations of GAAP measures to non-GAAP measures should be considered with the Company’s financial statements. These non-GAAP measures are not intended to replace GAAP, but are included for information and comparison purposes only. The Company’s management believes that this information may assist investors in evaluating the Company’s operating trends, financial performance and cash-generating ability. Management believes that these non-GAAP measures allow investors to evaluate the Company’s financial performance using some of the same measures as management. However, non-GAAP financial measures should not be considered a substitute for (or superior to) the corresponding GAAP measures bearing the same legend.

About Costar Technologies, Inc.

Costar Technologies, Inc. develops, designs, manufactures and distributes a product line of security solutions including surveillance cameras, lenses, digital video recorders and high-speed domes. The Company also develops, designs and distributes machine vision products to observe repetitive production and assembly lines, thereby increasing efficiency by detecting defects in the production process. Based at Copell, TX, the Company’s shares are currently trading on the OTC Markets group under the symbol “CSTI”. Costar was ranked 40e the largest company in a&s magazine’s Security 50 rankings for 2020. Security 50 is the magazine’s annual ranking of the world’s largest security manufacturers in the fields of video surveillance, access control and intruder alarms, based on turnover.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the Company’s ability to grow its revenues and earnings, which are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially. of those expressed or implied by the forward-looking statements. statements, including, but not limited to, risks relating to the ability to diversify into vertical markets, win new customers and launch new products. You can often identify forward-looking statements by words such as “believe”, “may”, “estimate”, “go”, “anticipate”, “intend”, “plan”, “expect”. , “predict”, “potential”. ,” or the negative form of these terms or other comparable terminology. These forward-looking statements are based on management’s current expectations, but involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in forward-looking statements due to risks and uncertainties.

You should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting the forward-looking information, except to the extent required by applicable law.

COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED RESULTS
(AMOUNTS SHOWN IN THOUSANDS)

June 30, 2022

December 31, 2021

(Examined)

(Checked)

ASSETS

Current assets

Cash and cash equivalents

$

3

$

4

Accounts receivable, less allowance for doubtful accounts

$282 and $205, respectively

5,923

6,544

Inventories

19,178

15,069

Prepaid expenses and other current assets

3,222

3,562

Total current assets

28,326

25,179

Non-current assets

Property and equipment, net

82

164

Intangible assets, net

4,789

5,274

Good will

5,574

5,574

Rights of use, net

1,060

1,214

Other non-current assets

117

114

Total non-current assets

11,622

12,340

Total assets

$

39,948

$

37,519

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$

8,948

$

6,935

Accrued expenses and other current liabilities

3,133

3,894

Credit line

11,942

9,337

Current maturities of long-term debt, net of unamortized items

financing costs

2,414

2,807

Current lease debt maturities

624

732

Total current liabilities

27,061

23,705

Long-term liabilities

Deferred tax liability

179

179

Non-current maturities of lease debts

525

608

Total long-term liabilities

704

787

Total responsibilities

27,765

24,492

Equity

Favorite stock

Ordinary actions

3

3

Premium

157,909

157,899

Accumulated deficit

(141,208)

(140,354)

Fewer common shares held in cash, at cost

(4,521)

(4,521)

Total shareholder equity

12,183

13,027

Total Liabilities and Equity

$

39,948

$

37,519

COSTAR TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS
(AMOUNTS SHOWN IN THOUSANDS, EXCEPT NET EARNINGS PER SHARE)

Quarter ended June 30

Semester ended June 30

2022

2021

2022

2021

(Examined)

(Examined)

(Examined)

(Examined)

Net income

$

12,393

$

14,717

$

25,182

$

25,499

Revenue cost

8,325

9,728

17,013

16,690

Gross profit

4,068

4,989

8,169

8,809

Selling, general and administrative expenses

3,657

3,764

7,495

7,365

Engineering and development costs

502

851

1,087

1,618

4,159

4,615

8,582

8,983

Operating income (loss)

(91)

374

(413)

(174)

Other income (expenses)

Interest expense

(252)

(255)

(473)

(500)

Other income, net

13

4,800

47

4,804

Total other income (expenses), net

(239)

4,545

(426)

4,304

Loss before tax

(330)

4,919

(839)

4,130

Provision for income tax

seven

57

15

67

Net profit (loss)

$

(337)

$

4,862

$

(854)

$

4,063

Net (income) loss per share:

Basic

$

(0.20)

$

2.94

$

(0.52)

$

2.47

Diluted

$

(0.20)

$

2.94

$

(0.52)

$

2.46

5879

5879

Weighted average number of shares outstanding:

Basic

1,654

1,652

1,653

1,648

Diluted

1,654

1,655

1,653

1,650

Quote

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SOURCE Costar Technologies, Inc.

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