Mobility Electronics Settles Portsmith Litigation.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 NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MOBE MOBE Marketing Opportunities in Business and Entertainment ), a leading provider of innovative portable power and computing computing - computer solutions, announced today that it has settled the 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. which arose from its acquisition of Portsmith, Inc. in February February: see month. 2002 that has been pending in the District Court of the Fourth Judicial District of the State of Idaho Idaho (ī`dəhō), one of the Rocky Mt. states in the NW United States. It is bordered by Montana and Wyoming (E), Utah and Nevada (S), Oregon and Washington (W), and the Canadian province of British Columbia (N). , as well as the United States District Court for the District of Idaho The United States District Court for the District of Idaho is the Federal district court whose jurisdiction comprises the state of Idaho (except for the part of the state within Yellowstone National Park, which is under the jurisdiction of the United States District Court for the , as previously disclosed in the Company's periodic filings with the Securities and Exchange Commission. Under the terms of the settlement agreement executed on February 15, 2006, Mobility has agreed to pay the plaintiffs the aggregate sum of $3.0 million in cash, release one plaintiff from the repayment of a $484,000 obligation, and issue 82,538 shares of Mobility Electronics common stock to one plaintiff that were earned pursuant to the earn-out Earn-out Refers to an additional payment in a merger or acquisition that is not part of the original acquisition cost, which is based on the acquired company's future earnings relative to a level determined by the merger agreement. provisions of the acquisition, but were not previously issued. All parties involved have agreed to release each other and their affiliates from any and all claims that they may have against the other. The parties have agreed that the resolution of this lawsuit lawsuit: see procedure; tort. does not constitute an admission or concession of liability or fault by either party. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standard No. 5, "Accounting for Contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. " (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 5), as a result of this settlement, the Company has recorded an additional $4.3 million charge against its fourth quarter 2005 financial results prepared in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Although the settlement is a subsequent event that did not exist until February 15, 2006, SFAS No. 5 requires that the expense related to the settlement be charged to the period in which the underlying litigation was in existence and for which the Company has not yet reported in its financial statements filed with the Securities and Exchange Commission. On February 9, 2006, the Company announced a net loss of $1.1 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, for the three months ended December December: see month. 31, 2005, and net income of $9.3 million, or $0.29 per diluted share, for the year ended December 31, 2005. The additional charge of $4.3 million results in a net loss of $5.4 million, or ($0.18) per diluted share, for the three months ended December 31, 2005, and net income of $5.0 million, or $0.16 per diluted share, for the year ended December 31, 2005. The charge will be reflected in the Company's financial results for both the three months and the year ended December 31, 2005 filed with the Securities and Exchange Commission 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. . Revised financial tables are included on the following pages. 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 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 portable computers and mobile electronic devices (e.g., mobile phones, PDAs, digital cameras, etc.) and creator of the patented intelligent tip ("itip(TM)") technology. Mobility Electronics' iGo(R) brand offers a full line of AC, DC and combination AC/DC AC/DC 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 portable computers and mobile electronic devices. All these adapters leverage the Company's itips 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 tips. The Company also offers hardware products for handheld handheld: see personal digital assistant. 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 (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 partners. For additional information call 480-596-0061, or visit www.mobilityelectronics.com. Mobility Electronics and iGo are registered trademarks, and ...improving your mobile experience is a trademark of Mobility Electronics, Inc. All other trademarks or registered trademarks are the property of their respective owners. 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, including, in particular, the anticipated after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. charge to the Company's fourth quarter results as a result of the litigation settlement. These forward-looking statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In particular, factors that could cause actual results to differ materially from those in the forward-looking statements include a change in the accounting treatment for the costs associated with the settlement; unanticipated future expenses or litigation arising out of, or related to, the settlement agreement or the matters covered by the settlement agreement; and other factors detailed in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made and are not guarantees of future performance. We undertake no obligation to publicly update or revise any forward-looking statements.
Mobility Electronics, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(000's except per share data)
(unaudited)
Three months ended Year ended
December 31, December 31,
------------------ ------------------
2005 2004 2005 2004
------- ------- -------- -------
(restated) (restated)
Net revenue $23,611 $20,559 $ 85,501 $70,213
Gross profit 6,534 6,104 25,847 20,919
Selling, engineering and
administrative expenses 7,966 5,445 28,711 22,617
------- ------- -------- -------
Income (loss) from
operations (1,432) 659 (2,864) (1,698)
Interest income (expense), net 330 21 813 (72)
Other income (expense), net (4,289) 20 7,343 36
Provision for income tax - - 285 -
------- ------- -------- -------
Income (loss) from
continuing operations (5,391) 700 5,007 (1,734)
Discontinued operations
Loss from discontinued
operations of handheld
software product line - - - (466)
------- ------- -------- -------
Net income (loss) $(5,391) $ 700 $ 5,007 $(2,200)
======= ======= ======== =======
Net income (loss) per share:
Basic $ (0.18) $ 0.02 $ 0.17 $ (0.08)
Diluted $ (0.18) $ 0.02 $ 0.16 $ (0.08)
Weighted avg common shares
outstanding:
Basic 30,778 28,404 30,004 28,027
Diluted 30,778 29,916 32,003 28,027
Mobility Electronics, Inc. and Subsidiaries
Selected Other Data
Reconciliation of non-GAAP Financial Measure - net income (loss)
to net income (loss) before gain on sale of intellectual property
assets, settlement of litigation, provision for income tax, and
non-cash equity compensation:
Three months ended Year ended
December 31, December 31,
------------------ ------------------
2005 2004 2005 2004
------- ------- -------- -------
(restated) (restated)
Net income (loss) $(5,391) $ 700 $ 5,007 $(2,200)
Gain on sale of intellectual
property assets - - (11,632) -
Settlement of litigation 4,283 - 4,283 -
Provision for income tax - - 285 -
Non-cash equity compensation 387 79 1,498 184
------- ------- -------- -------
Net income (loss) before
gain on sale of intellectual
property assets, provision
for income tax, and non-cash
equity compensation $ (721) $ 779 $ (559) $(2,016)
======= ======= ======== =======
Diluted net income (loss) before
gain on sale of intellectual
property assets, provision for
income tax, and non-cash equity
compensation per share $ (0.02) $ 0.03 $ (0.02) $ (0.07)
======= ======= ======== =======
Reconciliation of non-GAAP Financial Measure - net
income (loss) to earnings before interest, taxes,
depreciation and amortization (EBITDA):
Net income (loss) $(5,391) $ 700 $ 5,007 $(2,200)
Interest (income) expense, net (330) (21) (813) 72
Provision for income tax - - 285 -
Depreciation and amortization 438 451 1,978 1,952
Non-cash equity compensation 387 79 1,498 184
------- ------- -------- -------
EBITDA $(4,896) $ 1,209 $ 7,955 $ 8
======= ======= ======== =======
This information is being provided because management believes it is a
key metric to the investment community and assists in the
understanding and analysis of period-to-period operating performance.
Net income (loss) before gain on sale of intellectual property assets,
provision for income tax, and non-cash equity compensation 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)
December 31, December 31,
2005 2004
----------- -----------
(unaudited) (restated)
ASSETS
Cash and cash equivalents $ 13,637 $ 12,768
Short-term investments 20,286 -
Accounts receivable, net 18,778 16,905
Inventories 13,373 7,513
Prepaid expenses and other current
assets 565 443
----------- -----------
Total current assets 66,639 37,629
Other assets, net 17,271 17,788
----------- -----------
Total assets $ 83,910 $ 55,417
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 23,737 $ 14,253
Long-term liabilities 824 463
----------- -----------
Total liabilities 24,561 14,716
Total stockholders' equity 59,349 40,701
------------ ------------
Total liabilities and
stockholders' equity $ 83,910 $ 55,417
=========== ===========
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