Cobra Electronics Reports Return To Profitability

              Cobra Electronics Reports Return To Profitability

Net Sales Increase 4.9% but Lower Gross Margin Results in Lower Operating
Income than Last Year

PR Newswire

CHICAGO, Nov. 8, 2013

CHICAGO, Nov. 8, 2013 /PRNewswire/ --Cobra Electronics Corporation (NASDAQ:
COBR), a leading global designer and marketer of mobile communications and
navigation products, today reported net income of $394,000, or $0.06 per
share, for the third quarter of 2013 as compared to net income of $564,000, or
$0.09 per share, for the third quarter of 2012. In addition, there was
operating income of $124,000 for the current quarter compared to operating
income of $304,000 in the same quarter last year. These results reflected a
drop in gross margin of more than two points that was partially offset by an
increase in net sales and lower selling, general and administrative (S,G&A)
expenses.

Consolidated net sales were $29.0 million compared to $27.7 million in the
third quarter of 2012, with the Cobra segment reporting a $1.5 million, or
6.2%, increase in sales and the Performance Products Limited ("PPL") segment
reporting a sales decrease of $122,000, or 3.3%. The sales increase for the
Cobra segment resulted from higher domestic sales of Detection products,
Two-Way radios, and a new category, Dash Cams, which were limited as a result
of supplier constraints. The increase in sales of Detection products
reflected strong demand for certain new products and the higher sales of
Two-Way radios resulted from improved sell-through and additional placement.
However, these increases were partially offset by a decrease in sales of Truck
Navigation products as a result of lower sell-through at travel centers and
increased competition. The PPL sales decrease was attributable to a continued
difficult economic environment in Europe and increased competition in
Truckmate™ navigation products.

Consolidated gross margin was 25.7 percent compared to 28.1 percent in the
third quarter of 2012 primarily as a result of a less favorable sales mix and
competitive pricing pressures. The gross margin for the Cobra segment was 24.7
percent compared to 27.0 percent in the third quarter of last year due to
increased sales of lower margin products and more close-out sales at reduced
margins. Also contributing to the lower gross margin in the Cobra segment were
competitive pricing pressures on sales of Detection products into Eastern
Europe. PPL's gross margin decreased to 32.7 percent from 35.3 percent last
year reflecting mainly competitive pricing pressures and an unfavorable
product mix.

"We are pleased with the growth in revenue, however, we remain disappointed
that our margins were lower than both our expectations and compared to the
third quarter of 2012. Nevertheless, we believe that the increase in net
sales and a return to profitability in the third quarter of 2013 are
encouraging signs that our Company has turned the corner heading into the
fourth quarter, which is typically the strongest quarter of our Company's
fiscal year" said Jim Bazet, Cobra's Chairman and Chief Executive Officer.

SG&A expenses were $7.3 million in the third quarter of 2013 compared to $7.5
million in the prior year's quarter. Fixed expenses declined as a result of
lower management incentive expense and implementation of expense reduction
measures. However, these decreases were partially offset by higher variable
selling expenses, which reflected an increase in sales to customers with
higher promotional funds.

Interest expense for the third quarter of 2013 was $205,000 compared to
$277,000 for the third quarter of 2012 primarily due to lower debt. Other
income was $359,000 compared to other income of $336,000 in the prior year's
quarter primarily due to a higher gain on the cash surrender value of life
insurance that the Company owns for the purpose of funding deferred
compensation programs for certain current and former officers of the Company.
A tax benefit of $116,000 was recorded in the current quarter as compared to a
$201,000 tax benefit in the third quarter of 2012 mainly due to a drop in the
UK tax rate for PPL.

Interest-bearing debt decreased to $19.8 million as of September 30, 2013
compared to $22.6 million at September 30, 2012. Cash on hand at September 30,
2013 was $2.3 million as compared to $3.4 million at September 30, 2012 mainly
due to the timing of cash receipts. Inventory at the end of the third quarter
decreased to $37.5 million from $38.9 million at September 30, 2012 as a
result of the higher sales. Accounts receivable at the end of the quarter were
$15.2 million, a decrease from $17.9 million one year earlier.

The Company did not meet the required minimum fixed charge coverage ratio for
the third quarter under its credit agreement by a small margin largely due to
the timing of certain sales. The Company is working with its lenders to
finalize the terms of an amendment to the credit agreement containing a waiver
of any third quarter non-compliance with the minimum fixed charge coverage
ratio and increasing the applicable margin under the credit agreement.

On a year-to-date basis, consolidated net sales were $76.2 million compared to
$83.2 million for the same period of 2012. In addition to the sales decrease,
a lower gross margin of more than two points and significantly increased SG&A
expenses for the Fleming patent litigation resulted in an operating loss of
$3.5 million for the first nine months of 2013 as compared to a $1.9 million
operating income for the prior year's period. The net loss for the
year-to-date was $3.1 million, or $0.47 per share, as compared to a net income
of $1.8 million or $0.27 per share in the prior year's period.

In discussing the outlook for the fourth quarter of 2013, as well as the
entire year, Mr. Bazet said, "We are continuing to implement several actions
which began in the third quarter of 2013 that are aimed at significantly
improving our financial performance. Some of these actions include
substantially reducing operating expenses, adding meaningful sales of several
exciting new products and taking certain steps to promote and improve
distributor sales. We believe that these steps will enable the Company to
achieve a higher operating income in the fourth quarter of 2013 than in the
fourth quarter of 2012. However, even absent the Fleming litigation expenses,
the Company anticipates a lower operating income in fiscal year 2013 compared
to fiscal year 2012 due to the losses experienced in the first half of 2013."

Cobra will be conducting a conference call on November 8, 2013 at 10:30 a.m.
EDT to discuss third quarter results as well as its current strategies and
outlook. The call can also be accessed live or through replay via the
Internet at http://www.cobra.com.

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 www.cobra.com.

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 Nine Months
                            Ended                    Ended
                            Sept 30,    Sept 30,   Sept 30,     Sept 30,
                            2013         2012        2013          2012
Net sales                   $  29,038    $  27,672   $  76,245     $  83,174
Cost of sales                  21,579       19,893      55,872        58,949
    Gross profit               7,459        7,779       20,373        24,225
Selling, general and           7,335        7,475       23,840        22,315
administrative expense
    Earnings (loss) from       124          304         (3,467)       1,910
    operations
Other (expense) income:
    Interest expense           (205)        (277)       (515)         (765)
    Other, net                 359          336         798           685
Earnings (loss) before         278          363         (3,184)       1,830
taxes
Tax (benefit) provision        (116)        (201)       (103)         25
Net earnings (loss)         $  394       $  564      $  (3,081)    $  1,805
Net earnings (loss) per
common share:
    Basic                   $  0.06      $  0.09     $  (0.47)     $  0.27
    Diluted                 $  0.06      $  0.09     $  (0.47)     $  0.27
Weighted average shares
outstanding:
    Basic                      6,611        6,611       6,611         6,595
    Diluted                    6,611        6,633       6,611         6,610



                          Condensed Consolidated Balance Sheets
                          (in thousands, unaudited)
ASSETS:                                     Sept 30,    Dec 31,    Sept 30,
                                           2013         2012        2012
Current assets:
       Cash                             $ 2,258      $ 1,785     $ 3,434
       Accounts receivable, net            15,238       20,943      17,894
       Inventories, net                    37,507       38,068      38,946
       Other current assets                3,448        3,071       3,293
       Total current assets                58,451       63,867      63,567
Property, plant and equipment, net         5,519        5,323       5,373
Total other assets                         15,044       14,300      14,309
Total assets                             $ 79,014     $ 83,490    $ 83,249
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
       Accounts payable                  $ 6,034      $ 5,598     $ 5,870
       Accrued liabilities                 6,150        7,931       6,442
       Short-term debt                     19,849       20,284      22,578
       Total current liabilities           32,033       33,813      34,890
Non-current liabilities:
       Deferred taxes                      783          886         914
       Deferred compensation               7,896        7,780       7,730
       Other long-term liabilities         714          751         742
       Total non-current liabilities       9,393        9,417       9,386
Shareholders' equity                       37,588       40,260      38,973
Total liabilities and shareholders'      $ 79,014     $ 83,490    $ 83,249
equity

SOURCE Cobra Electronics Corporation

Website: http://www.cobra.com
Contact: Investor Contact: Jim Bazet, Chairman and CEO, Cobra Electronics
Corporation, 773-804-6265, jbazet@cobra.com; Media Contact: Chris Doyle,
Annual Reports, Inc., 317-736-8838, chrisdoyle@annualreportsinc.com
 
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