Exhibit 99.1

 

ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)

 

   June 30,   December 31, 
   2017   2016 
         
ASSETS        
         
Current assets        
Cash and cash equivalents  $14,330   $11,604 
Accounts receivable, net of allowances of $784 in 2017 and $824 in 2016   72,956    83,835 
Inventories   65,376    72,769 
Prepaid expenses and other current assets   3,717    3,414 
Income tax receivable   1,193    2,814 
Total current assets   157,572    174,436 
           
Property and equipment, net of accumulated depreciation of $21,856 in 2017 and $18,371 in 2016   15,631    17,755 
Goodwill   12,272    12,272 
Intangible assets, net of accumulated amortization of $60,556 in 2017 and $55,298 in 2016   45,327    53,362 
Deferred income tax assets   49,331    50,363 
Other assets   1,541    2,541 
Total assets  $281,674   $310,729 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current liabilities          
Accounts payable  $62,237   $85,022 
Accrued liabilities   22,798    22,216 
Sales returns liability   27,794    28,373 
Accrued wages and wage related expenses   5,635    6,169 
Deferred revenue   209    273 
Line of credit   30,683    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   155,541    183,844 
           
Noncurrent portion of long-term debt, net of deferred loan costs of $108 in 2017 and $141 in 2016   10,829    9,623 
           
Total liabilities   166,370    193,467 
           
Stockholders’ equity:          
Common stock, $0.001 par value; 100,000 shares authorized; 34,047 and 33,840 shares issued in 2017 and 2016, respectively  $34   $34 
Additional paid-in capital   94,207    92,782 
Accumulated other comprehensive loss   (1,270)   (2,114)
Treasury stock, 6,065 and 5,831 common shares in 2017 and 2016 respectively, at cost   (37,637)   (36,145)
Retained earnings   59,970    62,705 
           
Total stockholders’ equity   115,304    117,262 
Total liabilities and stockholders’ equity  $281,674   $310,729 

 

 1 

 

 

ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

 

   Three Months Ended   Six Months Ended 
   June 30,
2017
   June 30,
2016
   June 30,
2017
   June 30,
2016
 
                 
Net sales  $115,227   $99,833   $208,173   $162,266 
Cost of sales   79,403    68,960    143,743    107,664 
Gross profit   35,824    30,873    64,430    54,602 
                     
Operating expenses:                    
Advertising and marketing   2,070    2,275    5,076    5,189 
Selling, general and administrative   24,952    24,880    52,006    44,635 
Transaction costs   300    305    515    2,322 
Impairment of intangible asset   -    -    1,959    - 
Amortization of long-lived intangibles   3,005    4,765    6,026    7,511 
Total operating expenses   30,327    32,225    65,582    59,657 
                     
Income (loss) from operations   5,497    (1,352)   (1,152)   (5,055)
                     
Other income (expense):                    
Interest expense   (619)   (604)   (1,110)   (792)
Other income (expense)   67    9    48    (191)
Total other expense   (552)   (595)   (1,062)   (983)
                     
Income (loss) before provision for income taxes   4,945    (1,947)   (2,214)   (6,038)
                     
Income tax benefit (provision)   (1,542)   901    (521)   1,703 
                     
Net income (loss)  $3,403   $(1,046)  $(2,735)  $(4,335)
                     
Earnings (loss) per share:                    
Basic earnings (loss) per share  $0.12   $(0.04)  $0.10   $(0.16)
Diluted earnings (loss) per share  $0.12   $(0.04)  $0.10   $(0.16)

 

 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   Six months ended 
   June 30,
2017
   June 30,
2016
   June 30,
2017
   June 30,
2016
 
                 
Net loss in accordance with GAAP  $3,403   $(1,046)  $(2,735)  $(4,335)
                     
Adjustments:                    
                     
a.  Stock based compensation expense   966    957    1,636    2,291 
b.  Depreciation and amortization   5,233    7,232    11,022    11,494 
c.  Other (income) expense   552    595    1,062    983 
d. mophie transaction costs   300    305    515    2,322 
e.  mophie fair value inventory write-up related to acquisition   -    2,169    -    3,325 
f.  mophie restructuring charges   23    1,062    438    1,062 
g.  mophie employee retention bonus   46    200    346    200 
h.  Impairment of intangibles asset   -    -    1,959    - 
i.  Income tax benefit   1,542    (901)   521    (1,703)
                     
Adjusted EBITDA  $12,065   $10,573   $14,764   $15,639 

 

 

3

 


The following information was filed by Zagg Inc (ZAGG) on Tuesday, August 1, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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