The second quarter financial results for smart home manufacturer Control4 Corporation (Nasdaq: CTRL) recorded a record $61.4 million in revenue, up 15 percent from 2016. In those revenues are $3.4 million for Triad product sales. Q2 is the first full quarter of Control4’s ownership of Triad, which was bought for $9.6 million in February 2017.
According to Control4 CFO Mark Novakovich, the high-margin Triad line helped boost the company’s overall gross margins and cash flows, showing that the Salt Lake City-based firm “effectively funded the acquisition of Triad in just six months.”
Chairman and CEO Martin Plaehn says Triad’s product line carries a margin in the “high 30s” and the company has plans to boost the margin to the low 40-percent range.
The company’s revenues for the first six months of 2017 were $111.6 million, up 16 percent. Its gross margins were 52.3 percent. Control4 has $64.9 million in unrestricted cash, cash equivalents and net marketable securities on hand, no bank debt, and $30 million in borrowing capacity. Novakovich says the company is well poised for additional acquisitions.
“Our strong balance sheet and expected cash flows from operations enable us to continue to pursue growth through acquisitions and other investments that leverage our sales channel and are strategically aligned with our core business vision,” he noted in a call to investors.
Plaehn noted, “I am pleased to report very solid financial performance as Control4 continues to build a stronger and growing company, driven by consistent robust operational execution combined with product and channel leadership in the connected home industry.”
Plaehn added that adoption by Control4 dealers of Triad products has been “steadily expanding.” Also, 2,100 Control4 dealers now install Pakedge networking devices, which the company purchased in January 2016.
“We intend to apply similar business strategy to Triad products, as well as expand revenue opportunities within the channel by selling to dealers who are interested only in our networking or audio solution,” he added.
Plaehn also announced that more than 10,000 of its home automation systems are operating with Amazon Alexa voice control, which may quell the notion that voice control is purely a DIY play that undercuts CE pros' businesses. The actual connection of the Amazon Alexa to a Control4 system can be done by the homeowner, but Plaehn sees that as a strong reinforcement for smart home control, not a deterrent. Read more.
Shares of the company are trading at $22.71 as of press time.
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