Cobra Electronics Reports Increased Operating Income

             Cobra Electronics Reports Increased Operating Income

Despite lower net sales, operating income increases in the fourth quarter

PR Newswire

CHICAGO, Feb. 19, 2014

CHICAGO, Feb. 19, 2014 /PRNewswire/ -- Cobra Electronics Corporation (NASDAQ:
COBR), a leading global designer and marketer of mobile communications and
navigation products, today reported net income of $1.9 million or $0.29 per
share, for the fourth quarter of 2013 as compared to net income of $1.4
million, or $0.21 per share, for the fourth quarter of 2012. In addition,
there was operating income of $1.8 million for the current quarter compared to
operating income of $1.4 million in the same quarter last year. These results
reflected a decrease in selling, general and administrative ("SG&A") expense
that was partially offset by slightly lower net sales and gross margin.

Consolidated net sales were $35.0 million compared to $35.7 million in the
fourth quarter of 2012, with the Cobra segment reporting a $1.5 million, or
4.5%, drop in sales and the Performance Products Limited ("PPL") segment
reporting a sales increase of $724,000, or 25.4%. The lower sales for the
Cobra segment resulted from a drop in domestic sales of Detection and Truck
Navigation products, partially offset by increases in European sales and a new
category, Dash Cams. The lower sales of Detection products reflected reduced
sales at two large retailers that continued to face headwinds in a challenging
retail market and the drop in sales of Truck Navigation products resulted from
lower sell-through experienced by travel centers generally and increased
competition. European sales in the Cobra segment increased 26.8% primarily due
to higher sales of radar detectors and a new line of marine radios. The PPL
sales increase was attributable to a 40.6% increase in sales of Truckmate™
navigation products.

Consolidated gross margin was 28.3 percent compared to 28.8 percent in the
fourth quarter of 2012 primarily as a result of a less favorable sales mix and
seasonal promotions in the PPL segment. The gross margin for the Cobra segment
was 28.1 percent compared to 28.0 percent in the fourth quarter 2012 as a
result of the introduction of new Citizens Band radio models in South America.
PPL's gross margin decreased to 30.8 percent from 38.9 percent last year
reflecting mainly more close-out sales at reduced margins and seasonal
promotions for certain products.

"We are pleased to report a healthy increase in operating income in the fourth
quarter 2013, which was driven by significantly reduced SG&A expense. In
addition, we are encouraged by the net sales generated by several new products
introduced in the quarter, the significant increase in European net sales and
an increase in gross margin for the Cobra segment" said Jim Bazet, Cobra's
Chairman and Chief Executive Officer.

SG&A expenses were $8.1 million in the fourth quarter of 2013 compared to $8.9
million in the prior year's quarter. Variable selling expenses declined
consistent with net sales. Fixed expenses decreased as a result of lower legal
and management incentive expenses and the implementation of expense reduction
measures.

Interest expense for the fourth quarter of 2013 was $263,000 compared to
$271,000 for the fourth quarter of 2012 primarily due to lower average debt
during the quarter. Other income was $482,000 compared to other income of
$337,000 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 provision of $46,000 was recorded in the
current quarter as compared to an $83,000 tax provision in the fourth quarter
of 2012 mainly due to a drop in the UK tax rate for PPL.

Interest-bearing debt increased to $20.7 million as of December 31, 2013
compared to $20.3 million at December 31, 2012. Cash on hand at December 31,
2013 was $3.1 million as compared to $1.8 million at December 31, 2012 mainly
due to the timing of foreign cash receipts. Inventory at the end of the fourth
quarter decreased to $35.8 million from $38.1 million at December 31, 2012 as
a result of tight inventory management. Accounts receivable at the end of the
quarter were $19.3 million, a decrease from $20.9 million one year earlier,
which primarily reflected the lower sales in the Cobra segment.

Due mostly to the Company's performance in the third quarter of 2013, the
Company did not meet the required minimum fixed charge coverage ratio for the
fourth quarter under its credit agreement (which is measured on a rolling four
quarter basis). The Company is working with its lenders to finalize the form
of a waiver of the fourth quarter non-compliance with the minimum fixed charge
coverage ratio.

For the fiscal year, consolidated net sales were $111.2 million compared to
$118.9 million for the same period of 2012. In addition to decreased sales, a
lower gross margin of nearly two points and significantly increased SG&A
expense for the Fleming patent litigation in the first two quarters of 2013
resulted in an operating loss of $1.7 million for fiscal year 2013 as compared
to a $3.3 million operating income for the prior fiscal year. The net loss
for the fiscal year was $1.1 million, or $0.17 per share, as compared to a net
income of $3.2 million or $0.48 per share in the prior year.

In discussing the outlook for the first quarter of 2014, as well as the entire
year, Mr. Bazet said, "In 2014, we will be focusing on building on the
momentum of the fourth quarter of last year. The Company expects the seasonal
operating loss in the first quarter of 2014 to be substantially smaller than
the first quarter of 2013. In addition, the Company anticipates a
significantly improved level of operating income in 2014 due to the
introduction of many exciting and innovative new products, which were well
received at the recent Consumer Electronics Show, as well as planned
geographic expansion of our distribution and increased penetration into online
sales channels."

Cobra will be conducting a conference call on February 19, 2014 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 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 Twelve Months
                            Ended                    Ended
                            Dec 31,     Dec 31,    Dec 31,      Dec 31,
                            2013         2012        2013          2012
Net sales                   $  34,992    $  35,732   $  111,237    $  118,906
Cost of sales                  25,076       25,429      80,948        84,378
    Gross profit               9,916        10,303      30,289        34,528
Selling, general and           8,148        8,921       31,988        31,236
administrative expense
    Earnings (loss) from       1,768        1,382       (1,699)       3,292
    operations
Other (expense) income:
    Interest expense           (263)        (271)       (778)         (1,036)
    Other, net                 482          337         1,280         1,022
Earnings (loss) before         1,987        1,448       (1,197)       3,278
taxes
Tax provision (benefit)        46           83          (57)          108
Net earnings (loss)         $  1,941     $  1,365    $  (1,140)    $  3,170
Net earnings (loss) per
common share:
    Basic                   $  0.29      $  0.21     $  (0.17)     $  0.48
    Diluted                 $  0.29      $  0.21     $  (0.17)     $  0.48
Weighted average shares
outstanding:
    Basic                      6,605        6,611       6,609         6,599
    Diluted                    6,605        6,621       6,609         6,613



Condensed Consolidated Balance Sheets
(in thousands, unaudited)
ASSETS:                                       December 31,   December 31,
                                              2013           2012
Current assets:
       Cash                                $ 3,059        $ 1,785
       Accounts receivable, net               19,338         20,943
       Inventories, net                       35,810         38,068
       Other current assets                   3,686          3,071
       Total current assets                   61,893         63,867
Property, plant and equipment, net            5,453          5,323
Total other assets                            15,460         14,300
Total assets                                $ 82,806       $ 83,490
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
       Accounts payable                     $ 5,726        $ 5,598
       Accrued liabilities                    7,221          7,931
       Short-term debt                        20,673         20,284
       Total current liabilities              33,620         33,813
Non-current liabilities:
       Deferred taxes                         653            886
       Deferred compensation                  7,910          7,780
       Other long-term liabilities            714            751
       Total non-current liabilities          9,277          9,417
Shareholders' equity                          39,909         40,260
Total liabilities and shareholders' equity  $ 82,806       $ 83,490



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; or Media Contact: Chris Doyle,
Annual Reports, Inc., 317-736-8838, chrisdoyle@annualreportsinc.com
 
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