ZAGG Reports Third Quarter 2009 Earnings
http://www.businesswire.com/news/home/20091112006272/en
Record Revenues for Third Quarter Up 116% YTD
SALT LAKE CITY--(Business Wire)--
ZAGG Inc. (NASDAQ: ZAGG), a leading producer of mobile electronics accessories
including the popular invisibleSHIELD and ZAGGaudio brands, announces successful
results for the third quarter of Fiscal Year 2009, ended September 30, 2009.
ZAGG highlighted a 42% increase in revenues when compared to third quarter 2008
and also reported positive fully diluted earnings per share of $0.04 for the
second quarter 2009. For the nine months ended September 30, 2009, ZAGG had a
116% increase in revenues when compared to the nine months ended September 30,
2008 and also reported positive fully diluted earnings per share of $0.14 for
the same period.
During the quarter, a decline in website sales as a percentage of revenue
adversely affected gross margins. With the expected launch of ZAGGskins in Q4
2009, we expect gross margins to increase. On November 11, 2009 we pre-released
ZAGGskins to our ZAGG Zealots email database to test front and back end
capabilities. A full launch of ZAGGskins can be expected in the next couple of
weeks. ZAGGskins will offer our unique invisibleSHIELD protection with full
printed customization at a comparable pricing point to competing customizable
sticker applications. We believe ZAGGskins will be widely used and quickly
accepted as people look to customize and protect their consumer electronics. The
expected success of ZAGGskins will propel high margin website sales. In
addition, starting in Q4 2009, ZAGG expects raw material costs to materially
decrease, thus further increasing gross margins.
"ZAGG`s growth is consistent and reliable, this is our fifth consecutive record
revenue producing quarter and we believe we will continue to grow for the
foreseeable future," said Robert G. Pedersen II, President and CEO of ZAGG. "We
look forward to discussing our future initiatives with our investors, including
ZAGGskins, ZAGGsparq and ZAGGbox, and expanding opportunities with national
retail, international, and wireless partners."
The Company will host an investor conference call Friday, November 13, 2009 at
11:00 AM EST to answer questions regarding the results from their Form 10-Q for
the three and nine months ended September 30, 2009. To participate in the call
please dial (877) 407-0782. Interested parties may also listen via the Internet
at the event website and on the Company website at: www.ZAGG.com. The call will
be available for replay for 30 days by dialing (877) 660-6853 and entering
account number 286 and call ID number 337196.
Financial Results
Net sales for the quarter ended September 30, 2009 were $9,728,528, an increase
of 42% compared to net sales of $6,854,916 for the quarter ended September 30,
2008. Net sales for the nine months ended September 30, 2009 were $26,964,159,
an increase of 116% compared to net sales of $12,460,812 for the nine months
ended September 30, 2008.
Gross profit for the quarter ended September 30, 2009 was $5,206,973, or 54% of
sales, compared to $4,437,928, or 65% of sales, in the quarter ended September
30, 2008. Gross profit for the nine months ended September 30, 2009 was
$15,908,256, or 59% of sales, compared to $8,540,809, or 69% of sales for the
nine months ended September 30, 2008. We reported net income of $908,081 or
$0.04 per fully diluted share for the quarter ended September 30, 2009, compared
to net income of $889,743 or $0.05 per fully diluted share for the quarter ended
September 30, 2008. We reported net income of $3,130,585 or $0.14 per fully
diluted share for the nine months ended September 30, 2009, compared to net
income of $950,278 or $0.05 per fully diluted share for the nine months ended
September 30, 2008.
For more information about ZAGG, please visit the investor relations page on
www.ZAGG.com. This calendar of events may be subject to change without notice.
About ZAGG Inc.:
ZAGG is dedicated to protecting and enhancing the mobile experience. ZAGG
designs, manufactures, and distributes protective clear coverings and
accessories for consumer electronic and hand-held devices, worldwide under the
brand names invisibleSHIELD(TM) and ZAGGaudio(TM). ZAGG has also introduced beta
testing of AppSpace.com, an online destination for the fast-growing mobile app
market, combined with the networking power of social media. The invisibleSHIELD
is a protective, high-tech patented film covering, designed for iPods, laptops,
cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices,
and other items. The patent-pending invisibleSHIELD application of clear
protective film covering a device is the first scratch protection solution of
its kind on the market, and has sold millions of units. Currently, ZAGG offers
over 4,000 precision pre-cut designs with a lifetime replacement warranty
through ZAGG.com, major retailers like Best Buy, Radio Shack, and Cricket,
resellers, college bookstores, Mac stores, mall kiosks, and other online
retailers. The company continues to increase its product lines to offer
additional electronic accessories and services to its tech-savvy customer base,
including upcoming technologies like ZAGGbox, to be introduced at CES 2010, and
HzO, a breakthrough gadget waterproofing technology. For more product or
investor information, please visit the company's web site at www.ZAGG.com.
Safe Harbor Statement:
This release contains "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and such forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. "Forward-looking statements" describe future expectations,
plans, results, or strategies and are generally preceded by words such as "may,"
"future," "plan" or "planned," "will" or "should," "expected," "anticipates,"
"draft," "eventually" or "projected." You are cautioned that such statements are
subject to a multitude of risks and uncertainties that could cause future
circumstances, events, or results to differ materially from those projected in
the forward-looking statements, including the risks that actual results may
differ materially from those projected in the forward-looking statements as a
result of various factors, and other risks identified in filings made by the
company with the Securities and Exchange Commission.
ZAGG INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2009 2008
ASSETS
Current assets
Cash $ 2,102,779 $ 1,065,652
Accounts receivable, net 5,878,412 3,593,887
Inventories 3,488,350 1,913,297
Prepaid expenses and other current assets 2,854,625 676,077
Notes receivable 513,000 513,000
Convertible bridge loan 1,151,000 -
Deferred income tax assets - 81,663
Total current assets 15,988,166 7,843,576
Property and equipment, net 808,459 549,370
Deferred income tax assets - 4,937
Deposits and other assets 9,688 9,688
Intangible assets, net 97,773 47,344
Total assets $ 16,904,086 $ 8,454,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ - $ 20,223
Accounts payable 2,473,835 1,626,390
Accrued liabilities 136,645 212,754
Accrued wages and wage related expenses 151,086 121,112
Deferred revenue 269,737 366,590
Deferred income tax liability 1,235,948 -
Sales returns liability 335,574 291,119
Total current liabilities 4,602,825 2,638,188
Total liabilities 4,602,825 2,638,188
Stockholders' equity
Common stock, $0.001 par value; 50,000,000 shares authorized; 21,690,195 and 19,163,995 shares issued and outstanding, respectively
21,691 19,165
Warrants to purchase common stock 456,579 739,338
Additional paid-in capital 7,470,076 3,808,280
Cumulative translation adjustment (133,894 ) (106,630 )
Retained earnings 4,486,809 1,356,574
Total stockholders' equity 12,301,261 5,816,727
Total liabilities and stockholders' equity $ 16,904,086 $ 8,454,915
ZAGG INCORPORATED AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, 2009 September 30, 2008 September 30, 2009 September 30, 2008
Net sales $ 9,728,528 $ 6,854,916 $ 26,964,159 $ 12,460,812
Cost of sales 4,521,555 2,416,988 11,055,903 3,920,003
Gross profit 5,206,973 4,437,928 15,908,256 8,540,809
Operating expenses:
Advertising and marketing 1,327,126 1,169,073 4,168,854 2,483,356
Selling, general and administrative 2,408,559 1,898,149 6,801,112 4,715,538
Total operating expenses 3,735,685 3,067,222 10,969,966 7,198,894
Income from operations 1,471,288 1,370,706 4,938,290 1,341,915
Other income (expense):
Interest expense (62,034 ) (796 ) (64,654 ) (3,470 )
Interest and other income 49,107 49,139 141,381 178,069
Total other (expense) income (12,927 ) 48,343 76,727 174,599
Income before provision for income taxes 1,458,361 1,419,049 5,015,017 1,516,514
Income tax provision (550,280 ) (529,306 ) (1,884,432 ) (566,236 )
Net income $ 908,081 $ 889,743 $ 3,130,585 $ 950,278
Basic net income per common share $ 0.04 $ 0.05 $ 0.15 $ 0.05
Diluted net income per common share $ 0.04 $ 0.05 $ 0.14 $ 0.05
Weighted average number of shares outstanding - basic 21,540,033 18,981,386 20,630,819 18,956,290
Weighted average number of shares outstanding - diluted 24,252,718 19,436,146 22,902,264 19,290,502
Media Contact:
ZAGG Inc.
Nathan Nelson
801-263-0699, ext. 107
nnelson@zagg.com
Investor Relations:
ZAGG Inc.
Brandon O`Brien, CFO
801-263-0699, ext. 122
brandon@zagg.com
Copyright Business Wire 2009
