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Monster Digital, Inc. Reports Financial Results for the First Quarter Ended March 31, 2017

1 week ago

SIMI VALLEY, CA–(Marketwired – May 19, 2017) – Monster Digital, Inc. ( NASDAQ : MSDI ), (“Monster Digital” or “the Company”), which develops, markets and distributes Monster Digital® branded products for use in high-performance consumer electronics, mobile products and computing applications, today announced its unaudited financial results for the quarter ended March 31, 2017.

Monster Digital reported revenues of $951,000 for the three-month period ended March 31, 2017 compared to revenues of $538,000 for the comparable 2016 fiscal period. The Company’s product mix has shifted significantly away from memory products to higher margin sports action and VR camera products.

The Company also announced it has retained New York City-based investment bank, The Benchmark Company, LLC (“Benchmark”) as financial advisor, to assist the Board of Directors in conducting a comprehensive review of strategic alternatives. The review is focused on maximizing the value of the Company, and the possible alternatives under review may include a business combination or merger, an equity or debt financing, disposition of assets or similar alternative. No assurance can be given that any strategic alternative will be carried out.

David H. Clarke, Chairman and CEO, commented, “Although we believe we have excellent products offered under a well known brand name, we have clearly had difficulty getting sufficient sales traction. Recent months have seen increasing competition in sports action and virtual reality cameras resulting in declining prices for most of our products. Under these circumstances, it is entirely appropriate to conduct a review to determine if there is a course of action which will enhance our prospects and value to our shareholders.”

Financial Highlights for the First Quarter Ended March 31, 2017

Net sales for the three months ended March 31, 2017 increased approximately 77% to $951,000 from $538,000 for the three months ended March 31, 2016. In the three months ended March 31, 2017, sales in our action sports camera line represented 87% of our total sales. In three months ended March 31, 2016, sales in our action sports camera line represented 24% of our total sales.

Gross profit as a percentage of net sales was (4.9%) in the three months ended March 31, 2017, compared to a gross profit 8.7% in the three months ended March 31, 2016. In the current quarter of 2017, as we continue to disengage from lower margin memory product sales, we have sold certain memory product items for which we no longer have a customer base at a negative gross margin and have reduced prices on certain sports action and virtual reality cameras in order to be more competitive.

The net loss for the three months ended March 31, 2017 was approximately $2.2 million, or $(0.28) per basic and diluted share, compared to a net loss of approximately $1.9 million, or $(0.50) per basic and diluted share, for the three months ended March 31, 2016.

Unaudited Three Months Ended March 31,
(Dollars in thousands, except earnings per share)                  2017                2016
Net sales $ 951 $ 538
Cost of goods sold 998 491
Gross profit (47) 47
Gross profit margin -4.9% 8.7%
Loss from operations (2,308) (1,629)
Net loss $ (2,241) $ (1,881)
Basic and diluted loss per share $ (0.28) $ (0.50)
Basic and diluted weighted average 7,992 3,748

About Monster Digital, Inc.
Monster Digital develops, markets and distributes Monster branded products for use in high-performance consumer electronics, mobile products and computing applications. The Company designs and engineers premium action sports cameras and accessories, in addition to advanced data storage and memory products for professionals and consumers.

Monster and Monster Digital are registered trademarks of Monster Products, Inc. in the U.S. and other countries.

For more information about the company, please visit http://www.monsterdigital.com

About The Benchmark Company, LLC

The Benchmark Company is a full-service investment banking and financial advisory firm with a sales & trading platform servicing institutional clients in all major markets in the US and internationally; a team of research analysts covering companies in the Technology, Defense & Homeland Security, Media, Publishing, Broadcasting, Business Services, Consumer/Retail, China and Healthcare sectors; and an investment banking team providing corporate finance and advisory services to small- and mid-sized companies. Benchmark is headquartered in New York with offices in 10 other financial centers in the US.

For more information about The Benchmark Company, LLC, visit its website at http://www.benchmarkcompany.com

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