Cobra Electronics Reports Fourth Quarter Results

               Cobra Electronics Reports Fourth Quarter Results

Lower Western European Sales Impact Operating Income

PR Newswire

CHICAGO, Feb. 20, 2013

CHICAGO, Feb. 20, 2013 /PRNewswire/ -- Cobra Electronics Corporation (NASDAQ:
COBR), a leading global designer and marketer of mobile communications and
navigation products, today reported net income of $1.4 million, or $0.21 per
share for the fourth quarter of 2012 as compared to net income of $2.0
million, or $0.31 per share for the fourth quarter of 2011. In addition,
operating income was $1.4 million for the current quarter compared to $2.3
million in the same quarter last year. These reductions reflected a drop in
net sales to $35.7 million from $37.5 million and a gross margin of 28.8
percent compared to 31.4 percent in the prior year period. For the year, Cobra
reported net income of $3.2 million, or $0.48 per share, as compared to a net
income of $3.1 million, or $0.47 per share in the prior year and operating
income of $3.3 million as compared to $4.7 million in 2011.

Consolidated net sales were $35.7 million compared to $37.5 million in the
fourth quarter of 2011, with the Cobra segment reporting lower sales of
$496,000, or 1.5 percent and the Performance Products Limited ("PPL") segment
reporting a decrease of $1.3 million, or 31.0 percent. The sales drop for the
Cobra segment resulted from lower European sales of Two Way radios and lower
domestic sales of Truck Navigation products and Two Way radios, but was
partially offset by higher domestic sales of Citizens Band radios. The lower
domestic Truck Navigation sales reflected more promotional pricing this
quarter due to increased competition while the lower domestic Two Way radio
sales resulted from lower sell-through at a major retailer in part due to the
economic climate in the fourth quarter. The increase in domestic Citizens Band
radio sales reflected a pick-up in Travel Center sales. The PPL sales
decrease was attributable to lower sales of Truckmate™ navigation products as
a result of a difficult economic environment and increased competition in the
fourth quarter.

"While we are disappointed to report a lower operating performance from the
fourth quarter of 2011, we believe that our results are reflective of the slow
and uneven pace of the global economic recovery as well as the particularly
difficult economic conditions across Western Europe. However, we are still
optimistic about Cobra's ability to achieve improved results in 2013" said Jim
Bazet, Cobra's Chairman and Chief Executive Officer.

Consolidated gross margin was 28.8 percent compared to 31.4 percent in the
fourth quarter of 2011 primarily as a result of a less favorable product mix
in the Cobra segment. The gross margin for the Cobra segment was 28.0 percent
versus 31.2 percent in the same quarter last year as higher margin products
represented a smaller percentage of total sales and as a result of an
unfavorable foreign exchange impact. PPL's gross margin increased to 38.9
percent from 32.6 percent last year reflecting mainly an improved product mix.

Selling, general and administrative expenses decreased to $8.9 million in the
fourth quarter from $9.5 million in the prior year's quarter. The decrease
related to both variable selling expenses, which declined consistent with net
sales, and lower fixed expenses, principally in the Cobra segment, that
represented mainly lower management incentive and bad debt expenses. However,
these decreases were partially offset by higher legal fees related to an
ongoing patent infringement lawsuit that the Company believes is without merit
and is vigorously defending.

Interest expense for the fourth quarter of 2012 was $271,000 compared to
$308,000 for the fourth quarter of 2011 due to a lower interest rate. Other
income was $337,000 compared to other income of $351,000 in the prior year's
quarter. A tax provision of $83,000 was recorded in the current quarter as
compared to a $302,000 tax provision in the fourth quarter of 2011 mainly as a
result of a lower required state tax provision for Illinois due to the lower
pretax income.

Interest-bearing debt increased to $20.3 million as of December 31, 2012
compared to $18.7 million at December 31, 2011. Cash on hand at December 31,
2012 was $1.8 million as compared to $1.0 million at December 31, 2011 due to
the timing of cash receipts. Inventory at the end of the fourth quarter
increased to $38.1 million from $34.1 million the prior year as a result of
the lower than expected sales in the third quarter of 2012. Accounts
receivable at the end of the quarter were $20.9 million, a decrease from $23.4
million one year earlier.

For the year ended December 31, 2012, consolidated net sales for Cobra
decreased by 3.5 percent, to $118.9 million from $123.3 million mainly due to
the sales drop in the third quarter compared to the same quarter last year.
Gross margin was 29.0% for the year ended December 31, 2012, which was
slightly lower than 29.3% for the prior year. These decreases resulted in
operating income of $3.3 million for the year ended December 31, 2012 as
compared to operating income of $4.7 million for the prior year.

In December 2012, Cobra completed an amendment and extension of its bank
agreement through July 16, 2016, increasing its revolving asset-based facility
from $30.0 million to $35.0 million. The amended facility also provides
further liquidity due to higher availability on certain assets and a lower
interest rate. Additionally, the amended facility increases the amount of
permitted capital expenditures to a maximum of $4.0 million per year from $3.5
million per year.

In discussing the outlook for the first quarter of 2013, as well as the entire
year, Mr. Bazet said, "Absent legal fees related to the ongoing patent
infringement lawsuit, the Company expects to achieve a slightly lower
operating income in the first quarter of 2013 than in the first quarter of
2012 due to certain initial load-ins of new products that will not be
repeated. The Company anticipates a higher level of profitability in 2013 as
compared to 2012 as Cobra's business will be more successful in the current
economic environment from the introduction of innovative new products, many of
which were well received at the recent Consumer Electronics Show, and planned
new distribution Worldwide."

Cobra will be conducting a conference call on February 20, 2013 at 11:00 a.m.
EDT to discuss fourth quarter results as well as its current strategies and
outlook. The call can also be accessed live or through replay via the
Internet at

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

Safe Harbor
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     For the Twelve Months
                           Ended                    Ended
                           Dec 31,     Dec 31,    Dec 31,      Dec 31,
                           2012         2011        2012          2011
Net sales                  $  35,732    $  37,506   $  118,906    $  123,259
Cost of sales                 25,429       25,732      84,378        87,162
      Gross profit            10,303       11,774      34,528        36,097
Selling, general and          8,921        9,504       31,236        31,351
administrative expense
      Earnings from           1,382        2,270       3,292         4,746
Other (expense)
      Interest expense        (271)        (308)       (1,036)       (1,103)
      Other, net              337          351         1,022         (387)
Earnings before taxes         1,448        2,313       3,278         3,256
Tax provision                 83           302         108           169
Net earnings               $  1,365     $  2,011    $  3,170      $  3,087
Net earnings per common
      Basic                $  0.21      $  0.31     $  0.48       $  0.47
      Diluted              $  0.21      $  0.31     $  0.48       $  0.47
Weighted average shares
      Basic                   6,611        6,540       6,599         6,526
      Diluted                 6,621        6,545       6,613         6,526

                            Condensed Consolidated Balance Sheets
                            (in thousands, unaudited)
ASSETS:                                       December 31,    December 31,
                                              2012           2011
Current assets:
       Cash                                $ 1,785        $ 1,033
       Accounts receivable, net               20,943         23,400
       Inventories, net                       38,068         34,093
       Other current assets                   3,071          2,726
       Total current assets                   63,867         61,252
Property, plant and equipment, net            5,323          5,367
Total other assets                            14,300         13,976
Total assets                                $ 83,490       $ 80,595
Current liabilities:
       Accounts payable                     $ 5,598        $ 7,368
       Accrued liabilities                    7,931          8,910
       Short-term debt                        20,284         18,655
       Total current liabilities              33,813         34,933
Non-current liabilities:
       Deferred taxes                         886            1,159
       Deferred compensation                  7,781          7,392
       Other long-term liabilities            750            588
       Total non-current liabilities          9,417          9,139
       Shareholders' equity - Cobra           40,260         36,523
       Total equity                           40,260         36,523
Total liabilities and shareholders' equity  $ 83,490       $ 80,595

SOURCE Cobra Electronics Corporation

Contact: Investors: Jim Bazet, Chairman and CEO, Cobra Electronics
Corporation, 773-804-6265,, Media: Chris Doyle, Annual
Reports, Inc., 317-736-8838,
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