Attached files
| file | filename |
|---|---|
| EX-99.3 - SUPPLEMENTAL FINANCIAL INFORMATION - CFO COMMENTARY ON THIRD QUARTER 2017 FINANC - ZAGG Inc | f8k110117ex99-3_zagg.htm |
| 8-K - CURRENT REPORT - ZAGG Inc | f8k110117_zagginc.htm |
| EX-99.2 - RESULTS OF OPERATIONS PRESS RELEASE DATED NOVEMBER 1, 2017 - ZAGG Inc | f8k110117ex99-2_zagg.htm |
Exhibit 99.1
ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 11,394 | $ | 11,604 | ||||
| Accounts receivable, net of allowances of $1,221 in 2017 and $824 in 2016 | 96,830 | 83,835 | ||||||
| Inventories | 72,005 | 72,769 | ||||||
| Prepaid expenses and other current assets | 3,531 | 3,414 | ||||||
| Income tax receivable | 138 | 2,814 | ||||||
| Total current assets | 183,898 | 174,436 | ||||||
| Property and equipment, net of accumulated depreciation of $20,950 in 2017 and $18,371 in 2016 | 15,066 | 17,755 | ||||||
| Goodwill | 12,272 | 12,272 | ||||||
| Intangible assets, net of accumulated amortization of $63,596 in 2017 and $55,298 in 2016 | 42,286 | 53,362 | ||||||
| Deferred income tax assets | 44,652 | 50,363 | ||||||
| Other assets | 1,635 | 2,541 | ||||||
| Total assets | $ | 299,809 | $ | 310,729 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 82,742 | $ | 85,022 | ||||
| Accrued liabilities | 23,825 | 22,216 | ||||||
| Sales returns liability | 29,342 | 28,373 | ||||||
| Accrued wages and wage related expenses | 5,649 | 6,169 | ||||||
| Deferred revenue | 214 | 273 | ||||||
| Line of credit | 16,264 | 31,307 | ||||||
| Current portion of long-term debt, net of deferred loan costs of $65 in 2017 and 2016 | 6,185 | 10,484 | ||||||
| Total current liabilities | 164,221 | 183,844 | ||||||
| Noncurrent portion of long-term debt, net of deferred loan costs of $92 in 2017 and $141 in 2016 | 9,283 | 9,623 | ||||||
| Total liabilities | 173,504 | 193,467 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value; 100,000 shares authorized; 34,057 and 33,840 shares issued in 2017 and 2016, respectively | $ | 34 | $ | 34 | ||||
| Additional paid-in capital | 95,106 | 92,782 | ||||||
| Accumulated other comprehensive loss | (944 | ) | (2,114 | ) | ||||
| Treasury stock, 6,065 and 5,831 common shares in 2017 and 2016 respectively, at cost | (37,636 | ) | (36,145 | ) | ||||
| Retained earnings | 69,745 | 62,705 | ||||||
| Total stockholders' equity | 126,305 | 117,262 | ||||||
| Total liabilities and stockholders' equity | $ | 299,809 | $ | 310,729 | ||||
ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net sales | $ | 134,398 | $ | 124,662 | $ | 342,571 | $ | 286,928 | ||||||||
| Cost of sales | 86,006 | 81,516 | 229,749 | 189,180 | ||||||||||||
| Gross profit | 48,392 | 43,146 | 112,822 | 97,748 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing | 2,627 | 3,389 | 7,703 | 8,578 | ||||||||||||
| Selling, general and administrative | 26,720 | 25,607 | 78,727 | 70,243 | ||||||||||||
| Loss on disputed mophie purchase price | - | 24,317 | - | 24,317 | ||||||||||||
| Transaction costs | 96 | 145 | 611 | 2,467 | ||||||||||||
| Impairment of intangible asset | - | - | 1,959 | - | ||||||||||||
| Amortization of long-lived intangibles | 3,014 | 2,398 | 9,040 | 9,909 | ||||||||||||
| Total operating expenses | 32,457 | 55,856 | 98,040 | 115,514 | ||||||||||||
| Income (loss) from operations | 15,935 | (12,710 | ) | 14,782 | (17,766 | ) | ||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (417 | ) | (575 | ) | (1,527 | ) | (1,367 | ) | ||||||||
| Other income (expense) | 18 | (81 | ) | 67 | (272 | ) | ||||||||||
| Total other expense | (399 | ) | (656 | ) | (1,460 | ) | (1,639 | ) | ||||||||
| Income (loss) before provision for income taxes | 15,536 | (13,366 | ) | 13,322 | (19,405 | ) | ||||||||||
| Income tax (provision) benefit | (5,760 | ) | 6,261 | (6,281 | ) | 7,963 | ||||||||||
| Net income (loss) | $ | 9,776 | $ | (7,105 | ) | $ | 7,041 | $ | (11,442 | ) | ||||||
| Earnings (Loss) per share: | ||||||||||||||||
| Basic earnings (loss) per share | $ | 0.35 | $ | (0.25 | ) | $ | 0.25 | $ | (0.41 | ) | ||||||
| Diluted earnings (loss) per share | $ | 0.34 | $ | (0.25 | ) | $ | 0.25 | $ | (0.41 | ) | ||||||
| 2 |
ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(Unaudited)
Unaudited Supplemental Data
The following is not a financial measure under generally accepted accounting principals (GAAP). In addition, this should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash 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 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, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.
| Adjusted EBITDA Reconciliation | Three months ended | Nine months ended | ||||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Net income (loss) in accordance with GAAP | $ | 9,776 | $ | (7,105 | ) | $ | 7,041 | $ | (11,442 | ) | ||||||||
| Adjustments: | ||||||||||||||||||
| a. | Stock based compensation expense | 899 | 1,386 | 2,535 | 3,679 | |||||||||||||
| b. | Depreciation and amortization | 5,486 | 4,989 | 16,505 | 16,484 | |||||||||||||
| c. | Other (income) expense | 399 | 656 | 1,460 | 1,639 | |||||||||||||
| d. | Impairment of intangible asset | - | - | 1,959 | - | |||||||||||||
| e. | mophie transaction costs | 96 | 145 | 611 | 2,467 | |||||||||||||
| f. | mophie fair value inventory write-up related to acquisition | - | (739 | ) | - | 2,586 | ||||||||||||
| g. | mophie restructuring charges | - | 138 | 437 | 1,201 | |||||||||||||
| h. | mophie employee retention bonus | - | 300 | 346 | 500 | |||||||||||||
| i. | Loss on disputed mophie purchase price | - | 24,317 | - | 24,317 | |||||||||||||
| j. | Income tax benefit | 5,760 | (6,261 | ) | 6,281 | (7,963 | ) | |||||||||||
| Adjusted EBITDA | $ | 22,416 | $ | 17,826 | $ | 37,175 | $ | 33,468 | ||||||||||
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