ProLink Holdings Corp. (BULLETIN BOARD: PLKH), the provider of digital advertising screens for the golf course market and global positioning golf course management systems, has announced financial results for its second quarter, ended 30th June, 2008.
Some of the highlights of the second quarter include:
• Total revenue for the 2008 second quarter of $6.7 million increased 22.1% compared to $5.5 million in the 2007 second quarter.
• Record revenue from Domestic System sales and Refinances — 71.0% increase to $5.2 million, as compared to $3.1 million in the year-earlier period.
• Service Revenue continued to grow, increasing 16.4% to $775,000 versus $666,000 for the 2007 second quarter.
• Gross Margin improved by $1.1 million increasing to $3.3 million in the 2008 second quarter, from $2.2 million in the year-earlier period.
• Operating expenses declined $733,000 or 17.9% to $3.4 million (including $250,000 of litigation expense related to the collection efforts of a Company receivable and actions to protect patents) from $4.1 million in the 2007 second quarter.
“The Company’s second quarter results demonstrate the continued momentum we are generating in the domestic market, as reflected by another quarter of strong domestic sales,” said Danny Lam, president of ProLink Solutions.
“Despite a challenging economic environment, customers in the United States continue to recognize the value that the ProLink System provides, as reflected by domestic new system sales growth of 30%. This follows a strong 2008 first quarter. Refinances grew at an impressive 185%, continuing to demonstrate our customers‘ commitment to our systems as a key revenue center at the golf course.
“We have begun to work with our new international distributors generating approximately $600,000 in sales outside of the U.S. market sales during the second quarter and we believe that we will begin to see an increase in international revenue during the second half of the year as our organizations gain more time and momentum working together.
“Our cost reduction program launched in mid-2007 has begun to show results with an 18% reduction in operating expenses for the 2008 second quarter which has helped to reduce operating loss by $1.8 million. Second quarter operating expenses declined to 50.6% of revenue from 75.2% during the 2007 second quarter. We continue to seek ways to further reduce costs through operating efficiencies.”
“While we are pleased by the strength in our domestic operations, we continue to focus on several additional areas that have the potential to bring the company to profitability,” said Lawrence Bain, ProLink’s chief executive officer.
“We continue to seek new distributors in other international markets that will grow sales and support our customer base in foreign countries. We also have in place the people and relationships to drive advertising revenue. While we are disappointed the economic downturn has adversely impacted advertisers in several of our key target markets, we are still on track with our long-term business strategy.”
The Company reported second quarter revenue of $6.7 million compared to $5.5 million in the second quarter of 2007.
Second quarter revenue from New Domestic System sales and refinancing of $5.2 million compared to $3.1 million in the 2007 second quarter, a 71% increase while International System Revenue declined from $1.6 million to $0.6 million, as a result of the termination by the company of its largest international distributor during the fourth quarter of 2007.
Advertising revenue remained relatively flat at $0.1 million when compared to the year earlier period. Service revenue increased from $0.7 million to $0.8 million. Gross margin for the 2008 second quarter was approximately 49.4%, compared to 40.1% in the 2007 second quarter.
For the 2008 second quarter, operating expenses were $3.4 million, compared to the 2007 second quarter of $4.1 million. Sales and marketing expenses were $0.7 million, compared to $0.9 million in the three months ended June 30, 2007. General and administrative costs were $1.9 million compared to the year-earlier period of $2.2 million. The 2008 second quarter results also include approximately $250,000 in legal expense related to the company’s lawsuit against two competitors alleging patent infringement, and collection litigation against one of the company’s former distributors.
The net income (loss) applicable to common stockholders for the three months ended 30 June 2008 was $(0.5) million or $(0.01) per share, compared to $(1.9) million or $(0.05) per share in the same period in 2007.
For the six months ended 30th June 2008, ProLink had revenue of $12.4 million compared to $12.2 million in the six months ended 30th June 2007. Domestic System sales during the first half of 2008 were $9.7 million, a 74% growth over the first six months of 2007. Gross margins as a percentage of revenues for this period were 47.2% which represented a 5% growth over the first half of 2007. Operating expenses fell from 2007 levels by 17% to $7.0 million.
ProLink had a loss before depreciation, amortization, interest expense and stock-based compensation of $(0.4) million, compared to a loss of $(2.2) million in the year earlier period. ProLink had a net loss of $(2.1) million, or $(0.04) per share for the six months ended 30th June 2008, compared to $(7.7) million or $(0.20) per share in the six months ended 30th June 2007. Litigation expense was approximately $400,000 year to date.
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