ZAGG Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - March 7, 2018

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EX-10.3 - EXHIBIT 10.3 - ZAGG Inca201703078kex103.htm
EX-99.5 - EXHIBIT 99.5 - ZAGG Inca201703078kex995.htm
EX-99.4 - EXHIBIT 99.4 - ZAGG Inca201703078kex994.htm
EX-99.3 - EXHIBIT 99.3 - ZAGG Inca201703078kex993.htm
EX-99.2 - EXHIBIT 99.2 - ZAGG Inca201703078kex992.htm
EX-10.4 - EXHIBIT 10.4 - ZAGG Inca201703078kex104.htm
EX-10.2 - EXHIBIT 10.2 - ZAGG Inca201703078kex102.htm
EX-10.1 - EXHIBIT 10.1 - ZAGG Inca201703078kex101.htm
8-K - ZAGG Inca201703078kcover.htm


ZAGG INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per par value)
(Unaudited)
 
2017
 
2016
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
24,989

 
$
11,604

Accounts receivable, net of allowances of $734 and $824 in 2017 and 2016, respectively
123,220

 
83,835

Inventories
75,046

 
72,769

Prepaid expenses and other current assets
4,547

 
3,414

Income tax receivable
—

 
2,814

Total current assets
227,802

 
174,436

 
 
 
 
Property and equipment, net of accumulated depreciation of $12,540 and $18,371 in 2017 and 2016, respectively
13,444

 
17,755

Goodwill
12,272

 
12,272

Intangible assets, net of accumulated amortization of $66,639 and $55,298 in 2017 and 2016, respectively
39,244

 
53,362

Deferred income tax assets
24,403

 
50,363

Other assets
3,426

 
2,541

Total assets
$
320,591

 
$
310,729

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

Current liabilities
 

 
 

Accounts payable
$
96,472

 
$
85,022

Income tax payable
2,052

 
—

Accrued liabilities
10,515

 
22,216

Sales returns liability
32,189

 
28,373

Accrued wages and wage related expenses
5,652

 
6,169

Deferred revenue
315

 
273

Line of credit
23,475

 
31,307

Current portion of long-term debt, net of deferred loan costs of $141 and $65 in 2017 and 2016, respectively
13,922

 
10,484

Total current liabilities
184,592

 
183,844

 
 
 
 
Non-current portion of long-term debt, net of deferred loan costs of $0 and $141 in 2017 and 2016, respectively
—

 
9,623

Total liabilities
184,592

 
193,467

 
 
 
 
Stockholders' equity
 

 
 

Common stock, $0.001 par value; 100,000 shares authorized; 34,104 and 33,840 shares issued in 2017 and 2016, respectively
34

 
34

Additional paid-in capital
96,145

 
92,782

Accumulated other comprehensive income (loss)
(348
)
 
(2,114
)
Treasury stock, 6,065 and 5,831 common shares at cost in 2017 and 2016, respectively
(37,637
)
 
(36,145
)
Retained earnings
77,805

 
62,705

 
 
 
 
Total stockholders' equity
135,999

 
117,262

Total liabilities and stockholders' equity
$
320,591

 
$
310,729






ZAGG INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
 
For the Three Months Ended December 31,
 
For the Years Ended December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net sales
$
176,924

 
$
114,929

 
$
519,495

 
$
401,857

Cost of sales
120,748

 
85,075

 
350,497

 
274,255

Gross profit
56,176

 
29,854

 
168,998

 
127,602

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Advertising and marketing
3,399

 
3,862

 
11,101

 
12,440

Selling, general and administrative
26,671

 
25,986

 
105,398

 
96,229

(Gain) loss on disputed mophie purchase price
(6,967
)
 
—

 
(6,967
)
 
24,317

Transaction costs
114

 
124

 
725

 
2,591

Impairment of intangible asset
—

 
—

 
1,959

 
—

Amortization of definite-lived intangibles
3,007

 
3,476

 
12,047

 
13,385

Total operating expenses
26,224

 
33,448

 
124,263

 
148,962

 
 
 
 
 
 
 
 
Income (loss) from operations
29,952

 
(3,594
)
 
44,735

 
(21,360
)
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Interest expense
(555
)
 
(484
)
 
(2,081
)
 
(1,851
)
Other income (expense)
633

 
(76
)
 
698

 
(348
)
Total other expense
78

 
(560
)
 
(1,383
)
 
(2,199
)
 
 
 
 
 
 
 
 
Income (loss) before provision for income taxes
30,030

 
(4,154
)
 
43,352

 
(23,559
)
 
 
 
 
 
 
 
 
Income tax (provision) benefit
(21,971
)
 
9

 
(28,252
)
 
7,972

 
 
 
 
 
 
 
 
Net income (loss)
$
8,059

 
$
(4,145
)
 
$
15,100

 
$
(15,587
)
 
 
 
 
 
 
 
 
Earnings (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
0.29

 
$
(0.15
)
 
$
0.54

 
$
(0.56
)
Diluted earnings (loss) per share
$
0.28

 
$
(0.15
)
 
$
0.53

 
$
(0.56
)





ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON- U.S. GAAP FINANCIAL INFORMATION TO U.S. GAAP
(in thousands)
(Unaudited)

 
Unaudited Supplemental Data
 
 
 
 
 
 
 
 
 
 
 
 
 
The following information is not a financial measure under generally accepted accounting principals (GAAP). In addition, it 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.
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Years Ended December 31,
 
Adjusted EBITDA Reconciliation
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) in accordance with GAAP
$
8,059

 
$
(4,145
)
 
$
15,100

 
$
(15,587
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
a.
Stock based compensation expense
1,067

 
151

 
3,602

 
3,830

 
 
b.
Depreciation and amortization
5,382

 
5,787

 
21,888

 
22,270

 
 
c.
Impairment of intangible asset
—

 
—

 
1,959

 
—

 
 
d.
Other (income) expense
(76
)
 
560

 
1,383

 
2,199

 
 
e.
mophie transaction expenses
(611
)
 
124

 
—

 
2,591

 
 
f.
mophie fair value inventory write-up related to acquisition
—

 
—

 
—

 
2,586

 
 
g.
mophie restructuring charges
—

 
959

 
437

 
2,160

 
 
h.
mophie employee retention bonus
—

 
341

 
346

 
841

 
 
i.
Loss on disputed mophie purchase price (2016 only)
—

 
—

 
—

 
24,317

 
 
j.
Provision for income taxes
21,971

 
(9
)
 
28,252

 
(7,972
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
35,792

 
3,768

 
72,967

 
37,235



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