Connected IO reports revenue boosting quarter, slashes overheads by 40%
Connected IO (ASX: CIO) pleased its shareholders this morning with news that it generated over $660,000 in combined cash receipts and accrued revenues so far this quarter.
The device manufacturer said its strong rate of commercial activity is made up of cash receipts totalling $410,000, generated through purchase orders received in previous quarters, as well as $250,000 of accrued revenue via shipped and invoiced product most of which will be received in Q3 2018.
In addition, Connected IO confirmed that purchase orders received this quarter now exceed $650,000, derived mostly from large customers making recurring orders. It is expected these purchase orders will be converted to cash receipts before the end of 2018.
All in all, the company says it has notched $1,310,000 in total cash receipts, accrued revenue and purchase orders this quarter.
The news helped the stock into the top bracket of today’s biggest gainers on the ASX, now trading at $0.017 per share and up around 13% so far today.
Making money by saving it
In addition to its strong revenue performance, Connected IO said its US overheads have been “successfully reduced by 40% through the restructuring of duties and reduction of non-essential and non-performing cost centres.”
The tech company also said that it has re-negotiated its manufacturing costs through economies of scale as manufacturing demand increases. These reductions are expected to translate into an increase in sales margins from 30% to approximately 50% on some of its products.
Both savings will assist with an improved financial structure moving forward, the company said.
CIO is focused on converting a significant amount of current inventory to cash receipts and is confident this will occur in the June and September quarters through developing opportunities in North America and Australia.
Late last month, Connected IO announced the first product shipment to its Australian distribution channel M2M Connectivity to bolster its security, surveillance, digital signage, and energy management hardware product range.
The deal will see Connected IO and M2MC delivering solutions providing simple failover of routers from ADSL/NBN to LTE, leveraging the huge installed base of routers in the market, including some of Australia’s largest telecommunications and electronics companies.
In February, Connected IO agreed to collaborate with a US-based cyber-security company to help it develop a production line of co-branded Category 1 routers over the next 3 years.
“CIO has built a solid recurring customer base in the North American market. Over 80% of our business is generated from existing customers. CIO can now accurately report on the sectors generating business volume and can leverage these statistics to focus on revenue generating opportunities,” said Mr Yakov Temov, CEO of Connected IO.