Cobra Electronics Reports Improved Second Quarter Results; Net Income Increases by 53.5%.CHICAGO Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. -- Cobra Electronics Corporation (Nasdaq: COBR COBR Cabinet Office Briefing Room (British Parliament) COBR Continuous Oscillatory Baffled Reactor ), a leading global manufacturer of mobile communications and navigation products, today announced that its net income increased 53.5 percent, to $723,000 in the second quarter of 2005 from $471,000 in the second quarter of 2004. This strong performance was driven by a 33.7 percent increase in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight as compared to the prior year, as well as a lower effective tax rate due to the non-taxable non-taxable adj → nicht steuerpflichtig non-taxable adj non-taxable income → reddito non imponibile nature of the life insurance proceeds received in the first quarter of this year. Cobra also maintained its strong financial position, ending the second quarter with no interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid debt. For the quarter, Cobra reported net income of $723,000, or $.11 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $471,000, or $.07 per diluted share, in the second quarter of 2004. Sales increased by 33.7 percent, to $33.7 million, from $25.2 million in the prior year's quarter. Gross margin for the second quarter was 25.6 percent, compared to 27.1 percent in the second quarter of 2004. Selling, general and administrative expenses declined to 23.0 percent of sales, or $7.7 million, as compared to $6.1 million, or 24.0 percent of sales in the second quarter of 2004. Cobra also benefited from a lower effective tax rate in the second quarter of 2005 due to the non-taxable nature of life insurance proceeds received in the first quarter as a result of the death of Cobra's former chief executive officer. "Cobra's sales increase in the second quarter reflected improved sales in nearly all of our product lines as compared to the second quarter of 2004. In particular, our two-way radio A voice network that provides an always-on connection enabling the user to just "push the button and talk." Also called "dispatch radio," two-way radio has traditionally been used by police, fire, taxi and other mobile fleets. , radar detection and Citizens Band radio citizens band radio: see radio. product lines recorded sales substantially greater than one year earlier," said Jim Bazet, Cobra's President and Chief Executive Officer. "Cobra also benefited from sales of mobile navigation products, which were not available for sale in the second quarter of 2004, and experienced a substantial increase in international sales, driven in part by the approval in the third quarter of last year of higher-powered two-way radios in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ." Mr. Bazet also discussed the decline in gross margins from the second quarter of the prior year. "The increase in demand for Cobra's two-way radios, radar detection and Citizens Band radios was driven by opportunities with new customers, as well as increased demand from current customers. We elected to meet this increase by flying product into the U.S. rather than risking an out-of-stock position for these accounts. Additionally, Cobra has continued to support the efforts of our customers to reduce excess inventories of older mobile navigation products to ensure that shelf space is available for the new products shipping in September September: see month. and these programs have adversely impacted gross margins." Selling, general and administrative expenses declined as a percent of sales in the second quarter, to 23.0 percent from 24.0 percent in the second quarter of 2004, although expenses increased to $7.7 million from $6.1 million. The increase in expenses was primarily driven by the increase in sales, as variable selling expenses accounted for much of the increase. Additionally, Cobra incurred operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. associated with the company's new ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. system and consulting expenses incurred in connection with the company's compliance program relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the requirements of Section 404 of the Sarbanes-Oxley Act See SOX. . Cobra maintained its strong balance sheet position during the second quarter. The company had no interest-bearing debt as of June June: see month. 30, 2005, the same position as one year earlier, and $12.2 million in cash, as compared to $9.1 million one year earlier. Inventory increased to $20.7 million from $19.5 million the prior year. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying at the end of the quarter increased to $20.1 million from $13.6 million as a result of the increase in sales offset, in part, by fewer days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). . Net book value per share as of June 30, 2005 increased to $10.27 from $8.94 one year ago. Mr. Bazet also provided the company's outlook for the third quarter of 2005 and reaffirmed the guidance provided previously for the year. "Cobra is forecasting that both revenues and net income in 2005 will exceed those of 2004, without taking into account the income from the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. events from the first quarter but taking into account the lower effective tax rate that will continue for the balance of the year. Both our new product lines and our legacy product lines will contribute to this improved performance. As we announced previously, Cobra will be introducing three new mobile navigation products in the third quarter of 2005, including one with traffic information for approximately 50 metropolitan areas. Marine products are also forecasted to show improvement as we penetrate new retailers and introduce new products, including chartplotters for recreational boaters. Our other product categories, including radar detection and citizens band radios, are showing strength as well, and are expected to contribute to a strong year. As we look to the third quarter, we anticipate that both sales and earnings are likely to be greater than those of the third quarter of 2004." Cobra will be conducting a conference call on July July: see month. 29, 2005 at 11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss second quarter results as well as its current strategies and outlook. The call can also be accessed live or through replay via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.cobra.com. About Cobra Electronics Cobra Electronics is a leading global manufacturer of communication and navigation products, with a track record of delivering innovative and award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" products. Building upon its leadership position in the GMRS/FRS two-way radio, radar detector  This article or section may deal primarily with the U.S. and may not present a worldwide view. and citizens band industries,
Cobra identified new growth opportunities and has aggressively expanded
into the GPS, mobile navigation and marine markets over the last several
months. The Consumer Electronics Association, Forbes and Deloitte &
Touche have all recently recognized Cobra for the company's
innovation and industry leadership. To learn more about Cobra
Electronics, please visit the Cobra site at www.cobra.com.Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are based on management's current expectations and subject to risks and uncertainties. Actual results may differ materially from these expectations due to factors such as the acceptance of Cobra's new and existing products by customers, the continued success of Cobra's cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts and the continuation of key distribution channel relationships. Please refer to Cobra's filings with the Securities and Exchange Commission for a more detailed discussion of factors that may affect Cobra's performance.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts, unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------- ---------------------
June 30, June 30, June 30, June 30,
2005 2004 (1) 2005 2004 (1)
--------- ---------- ---------- ----------
Net sales $ 33,672 $ 25,186 $ 52,963 $ 47,853
Cost of sales 25,064 18,351 40,171 35,877
--------- ---------- ---------- ----------
Gross profit 8,608 6,835 12,792 11,976
Selling, general and
administrative expenses 7,730 6,057 14,062 11,976
---------------------- --------- ---------- ---------- ----------
Operating income
(loss) 878 778 (1,270) 0
Other income (expense):
Interest expense (24) (25) (49) (54)
Other, net 4 (15)(1) 9,124 (93)(1)
--------- ---------- ---------- ----------
Income (loss) before
taxes 858 738 7,805 (147)
Tax provision (benefit) 135 267 (1) 1,415 (54)(1)
--------- ---------- ---------- ----------
Net income (loss) $ 723 $ 471 $ 6,390 $ (93)
========= ========== ========== ==========
Net income (loss) per
common share:
Basic $ 0.11 $ 0.07 $ 0.99 $ (0.01)
Diluted $ 0.11 $ 0.07 $ 0.97 $ (0.01)
========= ========== ========== ==========
Weighted average shares
outstanding:
Basic 6,445 6,445 6,445 6,434
Diluted 6,583 6,625 6,576 6,628
========= ========== ========== ==========
(1) Other expense and tax provision for the three months ended June
30, 2004 increased by $48,000 and decreased by $18,000, respectively,
and other expense and tax benefit for the six months ended June 30,
2004 increased by $82,000 and $30,000, respectively, to comply with
GAAP requirements for Cobra's step by step prorated share of Horizon's
net loss under the Equity Method of Accounting adopted as of the first
quarter 2005.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
ASSETS: June 30, December 31, June 30,
2005 2004 (1) 2004 (1)
----------- ------------- --------
Current assets:
Cash $ 12,154 $ 2,600 $ 9,052
Accounts receivable, net 20,147 27,181 13,644
Inventories, net 20,670 19,551 19,479
Other current assets 14,532 10,887 (1) 9,228 (1)
----------- ------------- --------
Total current assets 67,503 60,219 51,403
Net property, plant and
equipment 6,919 6,795 6,618
Total other assets 12,498 15,206 15,931
----------- ------------- --------
Total assets $ 86,920 $ 82,220 $ 73,952
=========== ============= ========
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current liabilities:
Accounts payable $ 6,284 $ 4,785 $ 3,501
Accrued liabilities 5,499 8,307 (1) 3,548 (1)
----------- ------------- --------
Total current liabilities 11,783 13,092 7,049
----------- ------------- --------
Non-current liabilities:
Deferred taxes 2,621 3,206 3,836
Deferred compensation 5,937 5,564 5,012
Other long-term liabilities 394 399 466
----------- ------------- --------
Total non-current liabilities 8,952 9,169 9,314
----------- ------------- --------
----------- ------------- --------
Total shareholders' equity 66,185 59,959 (1) 57,589 (1)
----------- ------------- --------
----------- ------------- --------
Total liabilities and
shareholders' equity $ 86,920 $ 82,220 $ 73,952
=========== ============= ========
(1) Other current assets, accrued liabilities and retained earnings
as of December 31, 2004 decreased by $274,000, $106,000 and $168,000,
respectively, and also decreased as of June 30, 2004 by $146,000,
$55,000 and $91,000, respectively, to comply with GAAP requirements
for Cobra's step by step prorated share of Horizon's net loss under
the Equity Method of Accounting adopted as of the first quarter 2005.
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