Attached files
| file | filename |
|---|---|
| 8-K - ZAGG, INC. FORM 8-K - ZAGG Inc | form8k.htm |
| EX-99.2 - EXHIBIT 99.2 - ZAGG Inc | ex992.htm |
| EX-99.4 - EXHIBIT 99.4 - ZAGG Inc | ex994.htm |
| EX-99.3 - EXHIBIT 99.3 - ZAGG Inc | ex993.htm |
Exhibit 99.1
ZAGG INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
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2013
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2012
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 15,031 | $ | 20,177 | ||||
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Accounts receivable, net of allowances of $2,540 in 2013 and $2,974 in 2012
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46,591 | 54,561 | ||||||
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Inventories
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44,539 | 39,988 | ||||||
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Prepaid expenses and other current assets
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2,403 | 9,547 | ||||||
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Deferred income tax assets
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7,917 | 6,912 | ||||||
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Total current assets
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116,481 | 131,185 | ||||||
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Investment in HzO
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- | 2,013 | ||||||
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Property and equipment, net of accumulated depreciation at $5,778 in 2013 and $3,317 in 2012
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5,004 | 4,862 | ||||||
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Goodwill
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- | 1,484 | ||||||
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Intangible assets, net of accumulated amortization at $23,431 in 2013 and $13,790 in 2012
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41,219 | 57,905 | ||||||
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Deferred income tax assets
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11,377 | 6,596 | ||||||
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Note receivable
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801 | 583 | ||||||
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Other assets
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588 | 1,457 | ||||||
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Total assets
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$ | 175,470 | $ | 206,085 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$ | 15,207 | $ | 19,027 | ||||
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Income taxes payable
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6,359 | 3,062 | ||||||
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Accrued liabilities
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2,608 | 3,754 | ||||||
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Accrued wages and wage related expenses
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891 | 2,554 | ||||||
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Deferred revenue
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159 | 722 | ||||||
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Current portion of note payable
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- | 6,000 | ||||||
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Sales returns liability
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7,872 | 6,697 | ||||||
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Total current liabilities
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33,096 | 41,816 | ||||||
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Revolving line of credit
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- | 22,173 | ||||||
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Noncurrent portion of note payable
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17,543 | 18,000 | ||||||
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Total liabilities
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50,639 | 81,989 | ||||||
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Stockholders' equity
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Common stock, $0.001 par value; 100,000 shares authorized;
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32,331 and 31,215 shares issued in 2013 and 2012, respectively
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32 | 31 | ||||||
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Additional paid-in capital
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82,807 | 77,234 | ||||||
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Accumulated other comprehensive income
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93 | (57 | ) | |||||
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Note receivable collateralized by stock
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(348 | ) | (566 | ) | ||||
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Treasury stock, 1,756 and 0 common shares in 2013 and 2012 respectively, at cost
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(9,997 | ) | - | |||||
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Retained earnings
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52,244 | 47,454 | ||||||
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Total stockholders' equity
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124,831 | 124,096 | ||||||
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Total liabilities and stockholders' equity
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$ | 175,470 | $ | 206,085 | ||||
1
ZAGG INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
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Three Months Ended
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Twelve Months Ended
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December 31, 2013
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December 31, 2012
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December 31, 2013
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December 31, 2012
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Net sales
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$ | 66,818 | $ | 87,482 | $ | 219,356 | $ | 264,425 | ||||||||
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Cost of sales
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42,332 | 48,900 | 132,236 | 143,880 | ||||||||||||
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Gross profit
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24,486 | 38,582 | 87,120 | 120,545 | ||||||||||||
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Operating expenses:
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Advertising and marketing
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2,359 | 4,312 | 8,952 | 12,495 | ||||||||||||
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Selling, general and administrative
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11,342 | 15,095 | 46,356 | 53,330 | ||||||||||||
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Impairment of goodwill and intangibles
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11,246 | 11,497 | 11,246 | 11,497 | ||||||||||||
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Amortization of definite-lived intangibles
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2,451 | 2,418 | 9,620 | 9,732 | ||||||||||||
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Total operating expenses
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27,398 | 33,322 | 76,174 | 87,054 | ||||||||||||
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Income (loss) from operations
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(2,912 | ) | 5,260 | 10,946 | 33,491 | |||||||||||
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Other income (expense):
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Interest expense
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(85 | ) | (2,802 | ) | (575 | ) | (6,321 | ) | ||||||||
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Loss from equity method investment in HzO
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(177 | ) | (1,385 | ) | (2,013 | ) | (2,866 | ) | ||||||||
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Other income and (expense)
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264 | (170 | ) | 127 | (406 | ) | ||||||||||
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Total other income (expense)
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2 | (4,357 | ) | (2,461 | ) | (9,593 | ) | |||||||||
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Income (loss) before provision for income taxes
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(2,910 | ) | 903 | 8,485 | 23,898 | |||||||||||
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Income tax (provision) or benefit
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866 | (710 | ) | (3,695 | ) | (9,393 | ) | |||||||||
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Net income (loss)
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(2,044 | ) | 193 | 4,790 | 14,505 | |||||||||||
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Earnings per share
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Basic earnings (loss) per share
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$ | (0.07 | ) | $ | 0.01 | $ | 0.16 | $ | 0.48 | |||||||
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Diluted earnings (loss) per share
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$ | (0.07 | ) | $ | 0.01 | $ | 0.15 | $ | 0.46 | |||||||
2
ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(Unaudited)
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Unaudited Supplemental Data
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The following information is not a financial measure under generally accepted accounting principals (GAAP). In addition, it should not be construed as an
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alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash
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flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial
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information because we believe that it is helpful to some investors as a measure of our operations. We caution investors that non-GAAP financial information,
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by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other
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reporting periods and with the results of other companies.
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Adjusted EBITDA Reconciliation
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Three months ended
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Twelve months ended
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December 31, 2013
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December 31, 2012
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December 31, 2013
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December 31, 2012
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Net income (loss) in accordance with GAAP
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$ | (2,044 | ) | $ | 193 | $ | 4,790 | $ | 14,505 | ||||||||||||
| Adjustments: | |||||||||||||||||||||
| a. Stock based compensation expense | 964 | 1,096 | 4,126 | 6,018 | |||||||||||||||||
| b. Impairment of goodwill and intangibles | 11,246 | 11,497 | 11,246 | 11,497 | |||||||||||||||||
| c. Depreciation and amortization | 3,036 | 3,059 | 12,196 | 11,561 | |||||||||||||||||
| d. Impairment of investment in private company | - | - | 591 | - | |||||||||||||||||
| e. Other (income) expense | (2 | ) | 4,357 | 2,461 | 9,593 | ||||||||||||||||
| f. Provision (benefit) for income taxes | (866 | ) | 710 | 3,695 | 9,393 | ||||||||||||||||
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Adjusted EBITDA
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$ | 12,334 | $ | 20,912 | $ | 39,105 | $ | 62,567 | |||||||||||||
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Pro forma Net Income Reconciliation - Three and Twelve Months Ended December 31, 2013
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Three months ended
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Twelve months ended
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December 31, 2013
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December 31, 2012
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December 31, 2013
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December 31, 2012
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Net income (loss) in accordance with GAAP
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$ | (2,044 | ) | $ | 193 | $ | 4,790 | $ | 14,505 | ||||||||||||
| Adjustments: | |||||||||||||||||||||
| a. Stock based compensation expense | 964 | 1,096 | 4,126 | 6,018 | |||||||||||||||||
| b. Impairment of goodwill and intangibles | 11,246 | 11,497 | 11,246 | 11,497 | |||||||||||||||||
| c. Amortization of intangibles | 2,478 | 2,439 | 9,701 | 9,801 | |||||||||||||||||
| d. Impairment of investment in private company | - | - | 591 | - | |||||||||||||||||
| e. Other expense excluding cash interest expense and loss on equity method investment | (264 | ) | 170 | (127 | ) | 406 | |||||||||||||||
| f. Non-cash deferred loan costs charge | 57 | 1,509 | 147 | 1,509 | |||||||||||||||||
| g. Former CEO departure expense | - | - | - | 910 | |||||||||||||||||
| h. Loss on equity method investment | 177 | 1,385 | 2,013 | 2,866 | |||||||||||||||||
| i. Income tax effects |
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(5,539 | ) * | (6,392 | ) * | (9,598 | ) * | (11,529 | ) | ||||||||||||
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Pro forma net income
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$ | 7,075 | $ | 11,897 | $ | 22,889 | $ | 35,983 | |||||||||||||
| Pro forma diluted EPS | $ | 0.23 | $ | 0.37 | $ | 0.73 | $ | 1.14 | |||||||||||||
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Weighted average number of shares outstanding - diluted
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31,358 | 31,735 | 31,459 | 31,656 | |||||||||||||||||
| * For comparative purposes, we applied an annualized statutory tax rate of 38.5% | |||||||||||||||||||||
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