Revenues Up 184%, Company Reports $ 0.05 EPS For First Quarter
ZAGG Inc. (OTCBB:ZAGG), a leading producer of mobile electronics accessories including the popular invisibleSHIELDTM and award-winning ZAGGaudioTM brands, announces successful financial results for the first quarter of Fiscal Year 2009, ended March 31, 2009. ZAGG highlighted a record-breaking quarter with revenues of almost $8.1 million dollars, a nearly 184% increase when compared to first quarter 2008. Earnings per share for ZAGG were $0.05 for the first quarter 2009.
“Even during these challenging economic times, ZAGG continues to see unprecedented demand for its products. Much of our success can be attributed to the ability to execute on our business plan. We look forward to rolling out new products and services over the remainder of the year that will continue our rapid growth track for years to come,” said Robert G. Pedersen II, President and CEO of ZAGG.
“We continue to see great results from our strong partnerships with Best Buy and Carphone Warehouse, and plan to continue announcing new partnerships that will contribute to ZAGG’s success,” said Pedersen. “This will be the best year ever for ZAGG, and if economic conditions continue to improve, we are well-poised for even more accelerated growth.”
The Company will host an investor conference call today, Thursday, May 14, 2009 at 11:00 AM EDT, to answer questions regarding the results from our Form 10-Q for the 3 months ended March 31, 2009. To participate in the call please dial (877) 407-9210. 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 322566.
Financial Results
Net sales for the first quarter of 2009 were $8,090,951, an increase of 184% compared to net sales of $2,845,362 for the first quarter of 2008.
Gross profit for the first quarter of 2009 was $5,195,808, or 64.2% of sales, compared to $2,067,620, or 73.8% of sales, in the first quarter of 2008. We reported net income of $1,028,240 or $0.05 per share in the first quarter of 2008 compared to a net loss of ($114,171) or ($0.01) per share in the first quarter of 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 Inc designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide under the brand names invisibleSHIELDTM and ZAGGaudioTM. 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 | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited) | ||||||||||
| March 31, | December 31, | |||||||||
| 2009 | 2008 | |||||||||
| ASSETS | ||||||||||
| Current assets | ||||||||||
| Cash | $ | 1,028,547 | $ | 1,065,652 | ||||||
| Accounts receivable, net | 4,267,669 | 3,593,887 | ||||||||
| Inventories | 3,128,715 | 1,913,297 | ||||||||
| Prepaid expenses and other current assets | 1,436,988 | 676,077 | ||||||||
| Notes receivable | 513,000 | 513,000 | ||||||||
| Deferred income tax assets | - | 81,663 | ||||||||
| Total current assets | 10,374,919 | 7,843,576 | ||||||||
| Property and equipment, net | 634,752 | 549,370 | ||||||||
| Deferred income tax assets | - | 4,937 | ||||||||
| Deposits and other assets | 9,688 | 9,688 | ||||||||
| Intangible assets, net | 46,220 | 47,344 | ||||||||
| Total assets | $ | 11,065,579 | $ | 8,454,915 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Current liabilities | ||||||||||
| Notes payable | $ | 14,281 | $ | 20,223 | ||||||
| Accounts payable | 2,301,625 | 1,626,390 | ||||||||
| Accrued liabilities | 184,386 | 212,754 | ||||||||
| Accrued wages and wage related expenses | 121,424 | 121,112 | ||||||||
| Deferred revenue | 182,654 | 366,590 | ||||||||
| Deferred income tax liability | 528,634 | - | ||||||||
| Sales returns liability | 533,017 | 291,119 | ||||||||
| Total current liabilities | 3,866,021 | 2,638,188 | ||||||||
| Total liabilities | 3,866,021 | 2,638,188 | ||||||||
| Stockholders’ equity | ||||||||||
| Common stock, $0.001 par value; 50,000,000 shares authorized; | ||||||||||
| 19,392,328 and 19,163,995 shares issued and outstanding, respectively | 19,393 | 19,165 | ||||||||
| Warrants to purchase common stock | 731,379 | 739,338 | ||||||||
| Additional paid-in capital | 4,171,662 | 3,808,280 | ||||||||
| Cumulative translation adjustment | (107,339 | ) | (106,630 | ) | ||||||
| Retained earnings | 2,384,463 | 1,356,574 | ||||||||
| Total stockholders’ equity | 7,199,558 | 5,816,727 | ||||||||
| Total liabilities and stockholders’ equity | $ | 11,065,579 | $ | 8,454,915 | ||||||
| ZAGG INCORPORATED AND SUBSIDIARY | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2009 | 2008 | ||||||||||
| Net sales | $ | 8,090,951 | $ | 2,845,362 | |||||||
| Cost of sales | 2,895,143 | 777,742 | |||||||||
| Gross profit | 5,195,808 | 2,067,620 | |||||||||
| Operating expenses: | |||||||||||
| Advertising and marketing | 1,454,871 | 790,022 | |||||||||
| Selling, general and administrative | 2,137,045 | 1,504,843 | |||||||||
| Total operating expenses | 3,591,916 | 2,294,865 | |||||||||
| Income (loss) from operations | 1,603,892 | (227,245 | ) | ||||||||
| Other income (expense): | |||||||||||
| Interest expense | (2,442 | ) | (1,702 | ) | |||||||
| Interest and other income | 42,048 | 47,776 | |||||||||
| Total other income | 39,606 | 46,074 | |||||||||
| Income (loss) before (provision) benefit for income taxes | 1,643,498 | (181,171 | ) | ||||||||
| Income tax (provision) benefit | (615,258 | ) | 67,000 | ||||||||
| Net income (loss) | $ | 1,028,240 | $ | (114,171 | ) | ||||||
| Basic net income (loss) per common share | $ | 0.05 | $ | (0.01 | ) | ||||||
| Diluted net income (loss) per common share | $ | 0.05 | $ | (0.01 | ) | ||||||
| Weighted average number of shares outstanding – basic | 19,185,642 | 18,863,885 | |||||||||
| Weighted average number of shares outstanding – diluted | 19,869,440 | 18,863,885 | |||||||||
Media Contact:
ZAGG Inc
Nathan Nelson
801-263-0699 ext. 107
nnelson@zagg.com
or
Investor Relations:
ZAGG Inc
Brandon O’Brien, CFO
801-263-0699, ext. 122
brandon@zagg.com
