Company Reports $0.11 EPS for Year End 2008 and $0.06 EPS for Q4 2008
ZAGG Inc. (OTCBB: ZAGG) leading producer of mobile electronics accessories including the popular invisibleSHIELD™, announces significant increase in revenues for 2008 and positive net income for the year and fourth quarter ended December 31, 2008.
“Our careful planning and hard work have only just begun to pay off for our supporters and investors,” said Robert G. Pedersen II, President and CEO of ZAGG. “With wider economic concerns to consider, it is very encouraging that we have achieved this level of growth and profitability. We have already reached our goal of positive net income in 2008, which is noteworthy considering ZAGG is still a very young company. The good news is we have every reason to believe this trend of profitability will continue for the foreseeable future.”
“Recent partnerships with the leading retail outlets Best Buy and Carphone Warehouse in Europe have been one of the key factors to our outstanding year in 2008, and have really helped promote the invisibleSHIELD brand,” said Pedersen. “We have also seen great results from our international distribution and continued online success, which have also been instrumental to our success.”
The Company will host an investor conference call on Monday, March 30, 2009 at 11:00 AM EDT to answer questions regarding the results from our Form 10-K for the 12 months ended December 31, 2008. 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 317626. A podcast of the event will also be available at online or via Investor Calendar’s RSS feed.
Financial Results
Net sales for the three months ended December 31, 2008 were $7,330,791, an increase of 249% compared to net sales of $2,101,151 for the three months ended December 31, 2007. Net sales for the year ended December 31, 2008 were $19,791,603, an increase of 285% compared to net sales of $5,135,715 for the year ended December 31, 2007.
Gross profit for the fourth quarter of 2008 was $4,657,076, or 64% of sales, compared to $1,450,019, or 69% of sales, in the fourth quarter of 2007. Gross profit for the year ended December 31, 2008 was $13,197,885, or 67% of sales, compared to $3,794,865, or 74% of sales. We reported net income of $1,148,684 or $0.06 per share in the fourth quarter of 2008 compared to net income of $289,806 or $0.00 per share in the fourth quarter of 2008. We reported net income of $2,098,962 or $0.11 for the year ended December 31, 2008 compared to a net loss of ($759,511) or ($0.05) for the year ended December 31, 2007.
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 Inc. designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELD™ and ZAGGaudio™. 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 3,000 precision pre-cut designs with a lifetime replacement warranty through online channels, big box retailers like Best Buy, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories and services to its tech-savvy customer base. 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 | |||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| December 31, | |||||||||||
| 2008 | 2007 | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash | $ | 1,065,652 | $ | 2,129,215 | |||||||
| Accounts receivable, net | 3,593,887 | 402,446 | |||||||||
| Inventories | 1,913,297 | 447,044 | |||||||||
| Prepaid advertising | - | 204,976 | |||||||||
| Prepaid expenses and other current assets | 676,077 | 122,107 | |||||||||
| Notes receivable | 513,000 | - | |||||||||
| Deferred income tax assets | 81,663 | 12,829 | |||||||||
| Total current assets | 7,843,576 | 3,318,617 | |||||||||
| Property and equipment, net | 549,370 | 328,077 | |||||||||
| Deferred income tax assets | 4,937 | 444,118 | |||||||||
| Deposits and other assets | 9,688 | 30,547 | |||||||||
| Intangible assets, net | 47,344 | 46,894 | |||||||||
| Total assets | $ | 8,454,915 | $ | 4,168,253 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Notes payable | $ | 20,223 | $ | 42,090 | |||||||
| Accounts payable | 1,626,390 | 505,575 | |||||||||
| Accrued liabilities | 212,754 | 35,814 | |||||||||
| Accrued wages and wage related expenses | 121,112 | 95,537 | |||||||||
| Deferred revenue | 366,590 | 100,911 | |||||||||
| Sales returns liability | 291,119 | 23,861 | |||||||||
| Total current liabilities | 2,638,188 | 803,788 | |||||||||
| Total liabilities | 2,638,188 | 803,788 | |||||||||
| Stockholders’ equity | |||||||||||
|
Common stock, $0.001 par value; 50,000,000 shares authorized; |
19,165 | 18,855 | |||||||||
| Warrants to purchase common stock | 739,338 | 750,476 | |||||||||
| Additional paid-in capital | 3,808,280 | 3,341,388 | |||||||||
| Cumulative translation adjustment | (106,630) | (3,866) | |||||||||
| Retained earnings (deficit) | 1,356,574 | (742,388) | |||||||||
| Total stockholders’ equity | 5,816,727 | 3,364,465 | |||||||||
| Total liabilities and stockholders’ equity | $ | 8,454,915 | $ | 4,168,253 | |||||||
| ZAGG INCORPORATED AND SUBSIDIARY | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
| For the Years Ended December 31, | ||||||||||
| 2008 | 2007 | |||||||||
| Net sales | $ | 19,791,603 | $ | 5,135,715 | ||||||
| Cost of sales | 6,593,718 | 1,340,850 | ||||||||
| Gross profit | 13,197,885 | 3,794,865 | ||||||||
| Operating expenses: | ||||||||||
| Advertising and marketing | 3,976,015 | 944,715 | ||||||||
| Selling, general and administrative | 6,842,921 | 4,087,700 | ||||||||
| Total operating expenses | 10,818,936 | 5,032,415 | ||||||||
| Income (loss) from operations | 2,378,949 | (1,237,550) | ||||||||
| Other income (expense): | ||||||||||
| Interest expense | (6,022) | (31,452) | ||||||||
| Interest and other income | 227,223 | 60,671 | ||||||||
| Total other income (expense) | 221,201 | 29,219 | ||||||||
| Income (loss) before (provision) benefit for income taxes | 2,600,150 | (1,208,331) | ||||||||
| Income tax (provision) benefit | (501,188) | 448,820 | ||||||||
| Net income (loss) | $ | 2,098,962 | $ | (759,511) | ||||||
| Basic net income (loss) per common share | $ | 0.11 | $ | (0.05) | ||||||
| Diluted net income (loss) per common share | $ | 0.11 | $ | (0.05) | ||||||
| Weighted average number of shares outstanding – basic | 18,971,399 | 16,139,177 | ||||||||
| Weighted average number of shares outstanding – diluted | 19,265,229 | 16,139,177 | ||||||||
ZAGG Inc.
Nate Nelson, 801-263-0699, ext. 107 (Media)
nate@zagg.com
Brandon O’Brien, CFO, 801-263-0699, ext. 122 (Investor Relations)
brandon@zagg.com
