Mobility Electronics Reports 24% Year over Year Revenue Growth for First Quarter of 2006.SCOTTSDALE Scottsdale, city (1990 pop. 130,069), Maricopa co., central Ariz.; settled in 1895 by Winfield Scott, inc. 1951. It is a resort and retirement center in the Phoenix metropolitan area. , Ariz. -- Mobility Electronics, Inc. (Nasdaq:MOBE MOBE Marketing Opportunities in Business and Entertainment ): HIGHLIGHTS --First quarter revenues grow 24% to $22.8 million --First quarter low-power In electronics, the term low-power means one of two things about a device:
--Significant new low-power programs finalized See finalization. or launched with a major tier one carrier, Brightpoint Brightpoint, Inc. (NASDAQ: CELL) is a leading global communications technology firm that specializes in the distribution of wireless devices and in providing customized logistics services to the wireless industry. , Best Buy (both On-Line and a 10-store test program), CompUSA CompUSA, Inc. is a retailer and reseller of consumer electronics, technology products and computer services. CompUSA serves consumer retail, small-to-medium businesses, corporate, government and education customers. , Sears and others --Expanded high-power high-pow·ered also high-pow·er adj. Having great power or energy; dynamic: She's on a high-powered career track. Adj. 1. programs with two top-tier OEMs Mobility Electronics, Inc. (Nasdaq:MOBE), a leading provider of innovative portable power and computing computing - computer solutions, today reported financial results for the first quarter ended March 31, 2006. Total revenue was $22.8 million in the first quarter of 2006, an increase of 24% over revenue of $18.4 million in the first quarter of 2005. Net loss was $1.3 million, or ($0.04) 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, in the first quarter of 2006, compared with a net loss of $927,000, or ($0.03) per diluted share, in the same quarter of the prior year. Excluding non-cash compensation charges, net loss was $745,000, or ($0.02) per diluted share, in the first quarter of 2006, compared with a net loss of $589,000, or ($0.02) per diluted share, in the same quarter of the prior year. Excluding non-cash compensation charges and one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement expenses of $508,000, net loss was $237,000, or ($0.01) per fully diluted share. "We generated strong year-over-year revenue growth this quarter despite weaker than expected sales to RadioShack (RadioShack Corporation, Ft. Worth, TX, www.radioshackcorporation.com) A retailer of consumer electronics parts and products that started in 1919 as Tandy Corporation, a family leather business. In 1963, Tandy acquired nine Radio Shack stores in Boston. ," said Charlie Mollo, President and Chief Executive Officer of Mobility Electronics. "In all other areas, we generally met or exceeded our sales targets. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we made significant progress in penetrating penetrating breaching the tissues of the body. the wireless carrier and distributor market with our low-power products, which we believe represents our largest market opportunity. We have finalized the implementation details for our initial test program with a tier one wireless carrier, and we have also signed up, through Motorola (Motorola, Inc., Schaumburg, IL, www.motorola.com) A leading manufacturer of semiconductor devices, electronics, telecommunications and satellite systems. Founded in Chicago in 1928 by Paul V. , a major domestic wireless distributor in Brightpoint. We expect to make shipments to both of these accounts in the second quarter. "We are also making good progress in expanding the retail distribution for the low-power products. During the first quarter, we achieved strong initial results with both CompUSA and Best Buy, which in addition to offering our products online has now launched a 10-store test program. We believe the combination of our penetration of the wireless market and our expanding retail distribution positions us well for a strong holiday season later this year," said Mr. Mollo. Product Area Highlights --Sales of power products, handheld handheld: see personal digital assistant. connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. products, and expansion and docking docking tail amputation. See dock1. products represented 70%, 20%, and 7%, respectively, of overall Company sales in the quarter. --Unit sales of universal power products for high-power mobile electronic (ME) devices, which includes portable computers, were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 327,000 units in the first quarter, an increase of 15% over the first quarter of 2005. --Unit sales of universal power adapters An external power supply for laptop computers and just about every portable or semi-portable electronic device on the market. Also called an "AC adapter," it contains a rectifier to convert AC current to DC and a transformer to convert voltage from 120 down to 9, 12, 15 or whatever is for low-power ME devices were approximately 374,000 units in the first quarter of 2006, a decrease of 71% from the first quarter of 2005. The decrease over the prior year was due primarily to a reduction in sales to RadioShack. --Revenue from the sale of power products for high-power ME devices was $13.0 million in the first quarter of 2006, an increase of 10% over the same period of the prior year. --Revenue from the sale of power products for low-power ME devices was $3.0 million in the first quarter of 2006, an increase of 161% over the same period of the prior year. --Revenue from the sale of all power products was $16.0 million, an increase of 24% over the same period of the prior year. --Revenue from the sale of connectivity products was $6.2 million in the first quarter of 2006, an increase of 34% over the same period of the prior year. Financial Highlights Gross margin was 30.5% in the first quarter of 2006, compared to 29.8% in the first quarter of 2005, and 27.7% in the fourth quarter of 2005. The improvement in gross margin from the fourth quarter of 2005 is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the improved economics on sales of low-power products to RadioShack. Total 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. in the first quarter of 2006 were $8.3 million, including $518,000 of non-cash compensation charges and $258,000 of severance expense, or 36.3% of revenue. Total operating expenses for the first quarter of 2006 included $1.4 million in external legal fees primarily related to several different litigation matters, including the Company's ongoing intellectual property enforcement action and the Portsmith litigation that was settled during the quarter. Legal expenses increased 134% over the first quarter of 2005. The Company's balance sheet remained strong with $26.9 million in cash, cash equivalents, and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments at March 31, 2006. The Company continued to have no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and had a current ratio of 3.2 at March 31, 2006. Outlook In the second quarter of 2006, the Company believes that total revenue will be approximately $26.0 million, and expects fully-diluted earnings per share (excluding non-cash compensation charges) to be $0.01 per share. Commenting on Mobility's outlook for the year, Mr. Mollo said, "We believe there are several catalysts that will help drive increasing sales and profits as we move through 2006. In our low-power business, we expect to see a positive impact from a rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in sales to RadioShack, increasing sales to our new accounts in the wireless carrier, retailer, and distributor channels, and the launch of our jointly developed power products with Energizer. In our high-power business, we expect to see continuing growth in sales through both retail and OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and channels, driven by continuing sales increases through Targus Business Targus (corporation) is a manufacturer of computer equipment (mostly related to mobile computing) and accessories such as notebook computer storage cases. Fiction Targus is a name of people and places in several fictional worlds. and Dell, as well as higher sales of our 90-watt Lenovo (Lenovo, Purchase, NY, www.lenovo.com) Asia's largest PC manufacturer, founded in China in 1984 by Liu Chuanzhi from the Chinese Academy of Sciences. In the late 1980s, the company, first known as Legend, introduced a circuit board that generated Chinese characters on Western-made PCs and power adapters following the release of a number of new high-power notebooks by Lenovo. We believe the visibility on our sales pipeline has never been better, and we expect to deliver strong results in the second half of 2006 while also continuing to make the necessary investments to support the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth of the Company." About Mobility Electronics, Inc. Mobility Electronics, Inc., based in Scottsdale, Arizona Scottsdale (O'odham Vaṣai S-vaṣonĭ) is a city in Maricopa County, Arizona, United States, adjacent to Phoenix. Scottsdale has become internationally recognized as a premier and posh tourist destination, while maintaining its own identity and culture as " , is a developer of universal power adapters for high-power (e.g., portable computers) and low-power (e.g., mobile phones, PDAs, digital cameras, etc.) mobile electronic devices, and is also the creator Creator may refer to:
adj. Slang Having a bisexual orientation. [From the likening of a bisexual person to an appliance that works on either alternating or direct current. power adapters for high- and low-power mobile electronic devices. All these adapters leverage the Company's itip technology, which enables one power adapter to power/charge hundreds of brands and thousands of models of mobile electronic devices through the use of interchangeable in·ter·change·a·ble adj. That can be interchanged: interchangeable items of clothing; interchangeable automotive parts. in itips. The Company also offers hardware products for handheld devices; expansion and docking products for servers, desktop and portable computers; and other accessories for the mobile electronic device market. Mobility Electronics' products are available at www.igo.com as well as through leading resellers, retailers and OEM partners. For additional information call 480-596-0061, or visit www.mobilityelectronics.com. Mobility Electronics and iGo are registered trademarks of Mobility Electronics, Inc. All other trademarks or registered trademarks are the property of their respective owners. This press 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 Section 21E of the Securities Exchange Act of 1934. The words "believe," "expect," "anticipate," and other similar statements of expectations identify forward-looking statements. Forward-looking statements in this press release include expectations regarding the Company's financial performance in the second quarter of 2006, increased sales and profitability throughout 2006; beliefs regarding major catalysts that are expected to drive further growth and profitability for the Company, including a rebound in sales to RadioShack, increasing sales to wireless carriers and distributors, and the impact of jointly developed products with Energizer; and continued growth in sales of power products for high-power ME devices driven by a new power adapter program for Dell and higher sales of 90-watt power adapters to Lenovo. These forward-looking statements are based largely on management's expectations and involve known and unknown risks, uncertainties and other factors, which may cause the Company's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Risks that could cause results to differ materially from those expressed in these forward-looking statements include, among others, the loss of, and failure to replace, any significant customers; the timing and success of product development efforts and new product introductions, including internal development projects as well as those being pursued with strategic partners; the inability to create broad consumer awareness and acceptance for the Company's products; the timing and success of product developments, introductions and pricing of competitors; the timing of substantial customer orders; the availability of qualified personnel; the availability and performance of suppliers and subcontractors; the ability to expand and protect the Company's proprietary rights and intellectual property; the successful resolution of unanticipated and pending litigation matters; market demand and industry and general economic or business conditions; and other factors to which this press release refers. Additionally, other factors that could cause actual results to differ materially from those set forth in, contemplated by, or underlying these forward-looking statements are included in our 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. for the year ended December December: see month. 31, 2005 under the heading "Risk Factors." In light of these risks and uncertainties, the forward-looking statements contained in this press release may not prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, or any facts, events, or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" that may bear upon forward-looking statements. Additionally, we do not undertake any responsibility to update you on the occurrence of unanticipated events which may cause actual results to differ from those expressed or implied by these forward-looking statements.
Mobility Electronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(000's except per share data)
(unaudited)
Three months
ended
March 31,
-----------------
2006 2005
-------- --------
Net revenue $22,837 $18,358
Gross profit 6,957 5,477
Selling, engineering and administrative expenses 8,293 6,442
-------- --------
loss from operations (1,336) (965)
Interest income (expense), net 303 38
Other income (expense), net 20 -
Litigation settlement expense (250) -
-------- --------
Net loss $(1,263) $(927)
======== ========
Net loss per share -- Basic and diluted $(0.04) $(0.03)
======== ========
Weighted avg common shares outstanding:
Basic and diluted 30,929 28,601
======== ========
Mobility Electronics, Inc. and Subsidiaries
Selected Other Data
Three months
ended
March 31,
----------------
2006 2005
-------- -------
Reconciliation of non-GAAP Financial Measure - net loss to net loss
before non-cash equity compensation:
Net loss $(1,263) $(927)
Non-cash equity compensation 518 338
-------- -------
Net loss before non-cash equity compensation $(745) $(589)
======== =======
Diluted net loss per share before non-cash equity
compensation $(0.02) $(0.02)
======== =======
Reconciliation of non-GAAP Financial Measure - net loss to net loss
before non-cash equity compensation, severance expense, and
litigation settlement expense:
Net loss $(1,263) $(927)
Non-cash equity compensation 518 338
Severance expense 258 -
Litigation settlement expense 250 -
-------- -------
Net loss before non-cash equity compensation,
severance expense, and litigation
settlement expense $(237) $(589)
======== =======
Diluted net loss per share before non-cash equity
compensation, severance expense, and
litigation settlement expense $(0.01) $(0.02)
======== =======
Reconciliation of non-GAAP Financial Measure - net loss to earnings
before interest, taxes, depreciation and amortization (EBITDA):
Net loss $(1,263) $(927)
Interest (income) expense, net (303) (38)
Depreciation and amortization 459 466
Non-cash equity compensation 518 338
-------- -------
EBITDA $(589) $(161)
======== =======
This information is being provided because management believes these
are key metrics to the investment community and assist in the
understanding and analysis of period-to-period operating performance.
Net loss before non-cash equity compensation, net loss before non-cash
equity compensation, severance expense, and litigation settlement
expense and EBITDA should be considered in addition to, not as a
substitute for, or superior to, measures of financial performance in
accordance with GAAP.
Mobility Electronics, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(000's)
March December
31, 31,
2006 2005
----------- --------
(unaudited)
ASSETS
Cash and cash equivalents $11,798 $13,637
Short-term investments 15,133 20,286
Accounts receivable, net 19,089 18,778
Inventories 15,087 13,373
Prepaid expenses and other current assets 468 565
----------- --------
Total current assets 61,575 66,639
Other assets, net 17,107 17,271
----------- --------
Total assets $78,682 $83,910
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $18,974 $23,737
Long-term liabilities - 824
----------- --------
Total liabilities 18,974 24,561
Total stockholders' equity 59,708 59,349
----------- --------
Total liabilities and
stockholders' equity $78,682 $83,910
=========== ========
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