CHICAGO, April 27, 2012 /PRNewswire/ -- Cobra Electronics Corporation (NASDAQ: COBR), a leading global designer and marketer of mobile communications and navigation products, today reported net income of $339,000, or $0.05 per share, for the first quarter of 2012 as compared to a net loss of $819,000, or $0.13 per share, for the first quarter of 2011. In addition, operating income of $161,000 was achieved for the current quarter as compared to an operating loss of $822,000 in the same quarter last year. This significant improvement in operating income reflected an increase in net sales to $26.4 million from $22.4 million in the first quarter of 2011 and an increase in gross margin to 28.7 percent from 26.0 percent in the prior year's first quarter.
For the first quarter of 2012, consolidated net sales increased by $4.0 million, or 17.7 percent, with the Cobra segment reporting an increase in net sales of $4.3 million, or 23.2 percent, and the Performance Products Limited ("PPL") segment reporting a decrease of $362,000, or 9.7 percent. The sales increase for the Cobra segment included higher European sales as well as higher domestic sales of Two Way Radios, Citizens Band Radios, Phone products and Detection products. European sales included in the Cobra segment more than doubled reflecting significantly higher Detection and Two Way Radio sales. Higher domestic Citizens Band Radio sales included sales of the new 25 LX, which is based on the popular 29 LX introduced last year, while the increase in Phone product sales included sales of wireless headsets to help professional drivers comply with new legislation regarding hands free mobile phone usage. The PPL sales decline was attributable to lower sales of Truckmate(TM) navigation products, however, this was partially offset by higher sales of Snooper Shotsaver(TM)( )golf GPS units.
"We are pleased to report an operating income in the current quarter, our best first quarter financial performance since 2008. This was driven by significant increases in net sales and gross margin over the first quarter of last year that resulted from the continued success of our new and award winning existing products as well as new and expanded distribution, particularly in Europe," said Jim Bazet, Cobra's Chairman and Chief Executive Officer.
Consolidated gross margin increased to 28.7 percent from 26.0 percent in the prior year's first quarter primarily as a result of an improved product mix in both segments. The gross margin for the Cobra segment improved to 27.4 percent from 25.2 percent in the first quarter of 2011 as higher margin products, such as iRadar(TM), recorded significant sales increases. PPL's gross margin increased to 38.1 percent from 30.1 percent last year reflecting both an improved product mix and reduced amortization expense for intangible assets that were included in the original purchase price of PPL.
Selling, general and administrative expenses increased to $7.4 million in the current quarter from $6.7 million in the prior year's first quarter. Variable selling expenses increased consistent with the net sales increase, while higher fixed expenses, principally in the Cobra segment, included increases in employee compensation expenses, legal fees as well as media and trade show expenses, all of which were necessary in order to support continued strong sales growth.
Other income increased $229,000 compared to the prior year's quarter primarily due to a $455,000 gain on the cash surrender value of life insurance that the Company owns for the purpose of funding deferred compensation programs for some current and former officers of the Company as compared to a $220,000 gain in the first quarter of 2011. A tax provision of $62,000 was recorded in the current quarter as compared to a $7,000 tax benefit in the first quarter of 2011 mainly due to higher income for Cobra Electronics Europe Limited.
Interest-bearing debt was $13.4 million as of March 31, 2012 compared to $13.0 million at March 31, 2011. Cash on hand at March 31, 2012 was $1.2 million as compared to $1.1 million at March 31, 2011. Inventory at the end of the first quarter increased to $30.2 million from $28.8 million the prior year and accounts receivable at the end of the quarter were $17.0 million, an increase from $16.2 million one year earlier.
In discussing the outlook for the second quarter of 2012, as well as the entire year, Mr. Bazet said, "The Company anticipates better results in the second quarter of 2012 than in the second quarter of 2011. The Company also expects to achieve higher profitability in 2012 driven by the introduction of innovative and award winning new products as well as new and expanded distribution and marketing channels. In addition, we feel that the continued improvement in the global economy will favorably impact our business in 2012."
Cobra will be conducting a conference call on April 27, 2012 at 11:00 a.m. EDT to discuss first quarter results as well as its current strategies and outlook. The call can also be accessed live or through replay via the Internet at http://www.cobra.com.
About Cobra Electronics
Cobra Electronics is a leading global designer and marketer 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 and Citizens Band radio industries, Cobra identified new growth opportunities and has aggressively expanded into the marine market and has expanded its European operations. The Consumer Electronics Association, Forbes and Deloitte & Touche have all 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.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are 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 efforts and the continuation of key distribution channel relationships. Please refer to Cobra's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, for a more detailed discussion of factors that may affect Cobra's performance.
Condensed Consolidated Statements of Operations (in thousands, except per share amounts, unaudited) For the Three Months Ended -------------------------- March 31, March 31, 2012 2011 ---- ---- Net sales $26,418 $22,439 Cost of sales 18,830 16,603 Gross profit 7,588 5,836 Selling, general and administrative expense 7,427 6,658 Earnings (loss) from operations 161 (822) Other (expense) income: Interest expense (253) (268) Other, net 493 264 Earnings (loss) before taxes 401 (826) Tax provision (benefit) 62 (7) Net earnings (loss) $339 $(819) ==== ===== Net earnings (loss) per common share: Basic $0.05 $(0.13) Diluted $0.05 $(0.13) Weighted average shares outstanding: Basic 6,562 6,486 Diluted 6,580 6,486
Condensed Consolidated Balance Sheets (in thousands, unaudited) ASSETS: March 31, December 31, March 31, 2012 2011 2011 ---- ---- ---- Current assets: Cash $1,150 $1,033 $1,081 Accounts receivable, net 17,008 23,400 16,190 Inventories, net 30,154 34,093 28,798 Other current assets 2,347 2,726 3,191 Total current assets 50,659 61,252 49,260 Property, plant and equipment, net 5,305 5,367 5,365 Total other assets 14,332 13,976 14,940 Total assets $70,296 $80,595 $69,565 ======= ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $3,975 $7,368 $8,046 Accrued liabilities 6,095 8,910 6,132 Short-term debt 13,352 18,655 13,026 Total current liabilities 23,422 34,933 27,204 Non-current liabilities: Deferred taxes 1,156 1,159 1,537 Deferred compensation 7,549 7,392 7,124 Other long- term liabilities 647 588 562 Total non- current liabilities 9,352 9,139 9,223 Equity: Shareholders' equity - Cobra 37,522 36,523 33,110 Non- controlling interest 0 0 28 Total equity 37,522 36,523 33,138 Total liabilities and shareholders' equity $70,296 $80,595 $69,565 =======
SOURCE Cobra Electronics Corporation