Cobra Electronics Third Quarter Net Income Increases 46%; Net Sales Increase 17.9%.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 46 percent, to $571,000 in the third quarter of 2004 from $391,000 in the third quarter of 2003. This increase in earnings was driven by a 17.9 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 continued management of selling, general and administrative expenses. Cobra also maintained its strong financial position, concluding the third quarter with $1.5 million of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid debt, down from $4.4 million in the prior year's third quarter. For the quarter, Cobra reported net sales of $31.0 million, an increase of 17.9 percent from $26.3 million in the third quarter of the prior year. Gross margin for the third quarter was 26.2 percent, compared to 26.9 percent in the third quarter of 2003. Selling, general and administrative expenses, which were $7.3 million in the current quarter as compared to $6.6 million in the prior year's quarter, declined as a percentage of net sales to 23.6 percent from 25.1 percent. The 46 percent increase in net income to $571,000 from $391,000 in the prior year's quarter resulted in an increase in earnings per fully 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 to $.09 from $.06 in the third quarter of 2003. "We are pleased to be able to report to our shareholders an increase in both sales and net income for this quarter," said Jim Bazet, Cobra's President and Chief Executive Officer. "Our sales increase reflects the successful introduction and national distribution of our new mobile navigation product, the NAVONE 3000(TM), as well as a strong showing from our radar detection and Citizens Band radio citizens band radio: see radio. product categories. Additionally, Cobra's international business was up sharply. In Europe, sales of our new line of two-way radios 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. and our new marine radio products were strong. Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. sales also increased substantially as the government moved to permit the sale of longer-range GMRS GMRS General Mobile Radio Service GMRS General Mobilization Reserve Stock GMRS Ground Marker Release System GMRS Global Mobility Readiness Squadron (USAF) two-way radios. Offsetting these increases, in part, were declines in Cobra's domestic two-way radio business, as average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. and unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. reflected the maturation maturation /mat·u·ra·tion/ (mach-u-ra´shun) 1. the process of becoming mature. 2. attainment of emotional and intellectual maturity. 3. of this category." Mr. Bazet also addressed the decline in gross margins for the quarter. "The intense competition in the two-way radio business continues to impact gross margins as retailers are pushing for lower price points and other incentives to drive traffic," said Bazet. "However, Cobra was able to offset this decline in gross margin by closely managing selling, general and administrative expenses and reducing those expenses to 23.6 percent of sales from 25.1 percent in the prior year." On a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis, net income has increased by 53.6 percent to $530,000, as compared to net income of $345,000 for the first nine months of 2003. Sales have increased by 7.3 percent, to $78.9 million from $73.5 million for the same period of 2003. Earnings per fully diluted share were $.08 for the first nine months of 2004, as compared to $.05 for the same period of 2003. Cobra maintained its strong balance sheet position during the third quarter. The company had interest-bearing debt of $1.5 million as of September 30, 2004, as compared to $4.4 million one year earlier. Inventory decreased to $25.7 million from $30.5 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 $21.8 million from $15.3 million as a result of increased sales; 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). declined from the prior year. Net book value per share on September 30, 2004 increased to $9.04 from $8.76 one year ago. Mr. Bazet also provided the company's outlook for the fourth quarter of 2004 and reaffirmed the guidance provided previously for the year. "The fourth quarter continues to look strong, although there are warning signs in the economy, such as reduced consumer confidence and high fuel prices that cannot be ignored. We are forecasting that the fourth quarter will have sales and earnings higher than the fourth quarter of 2003. As a result, we continue to forecast that sales and earnings for the year also will be higher than those of 2003." Cobra will be conducting a conference call on October 26, 2004 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 third 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 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 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and quarterly reports on Form 10-Q Form 10-Q See 10-Q. filed 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 Nine Months
Ended Ended
--------------------- ---------------------
September September September September
30, 30, 30, 30,
2004 2003 2004 2003
--------------------------------------------
Net sales $31,014 $26,304 $78,867 $73,481
Cost of sales 22,874 19,232 58,751 53,538
--------------------- ---------------------
Gross profit 8,140 7,072 20,116 19,943
Selling, general and
administrative expenses 7,312 6,615 19,288 19,483
--------------------- ---------------------
Operating income 828 457 828 460
Other income (expense):
Interest expense (26) (43) (80) (103)
Other, net 104 238 93 214
--------------------- ---------------------
Income before taxes 906 652 841 571
Tax provision 335 261 311 226
--------------------- ---------------------
Net income $ 571 $ 391 $ 530 $ 345
===================== =====================
Net income per common
share:
Basic $ 0.09 $ 0.06 $ 0.08 $ 0.05
Diluted $ 0.09 $ 0.06 $ 0.08 $ 0.05
===================== =====================
Weighted average shares
outstanding:
Basic 6,445 6,420 6,437 6,420
Diluted 6,559 6,506 6,607 6,491
===================== =====================
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
ASSETS: September December September
30, 31, 30,
2004 2003 2003
----------- -------- ---------
Current assets:
Cash $ 1,319 $ 4,736 $ 2,360
Accounts receivable, net 21,788 22,437 15,250
Inventories, net 25,667 20,668 30,466
Other current assets 9,127 8,550 10,889
----------- -------- ---------
Total current assets 57,901 56,391 58,965
Net property, plant and equipment 6,563 6,707 6,665
Total other assets 17,109 13,135 12,523
----------- -------- ---------
Total assets $ 81,573 $ 76,233 $ 78,153
=========== ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 7,618 $ 3,073 $ 5,324
Accrued liabilities 4,641 6,932 4,286
----------- -------- ---------
Total current liabilities 12,259 10,005 9,610
----------- -------- ---------
Non-current liabilities:
Long-term debt 1,485 0 4,359
Deferred taxes 3,836 3,836 3,673
Deferred compensation 5,285 4,556 4,300
Other long-term liabilities 465 135 0
----------- -------- ---------
Total non-current liabilities 11,071 8,527 12,332
----------- -------- ---------
----------- -------- ---------
Total shareholders' equity 58,243 57,701 56,211
----------- -------- ---------
----------- -------- ---------
Total liabilities and shareholders'
equity $ 81,573 $ 76,233 $ 78,153
=========== ======== =========
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