Cobra Electronics Reports First Quarter Results

               Cobra Electronics Reports First Quarter Results

Despite slightly lower net sales, seasonal operating loss is slightly smaller

PR Newswire

CHICAGO, April 25, 2014

CHICAGO, April 25, 2014 /PRNewswire/ --Cobra Electronics Corporation (NASDAQ:
COBR), a leading global designer and marketer of mobile communications and
navigation products, today reported a net loss of $1.7 million or $0.25 per
share, for the first quarter of 2014 as compared to a net loss of $1.5
million, or $0.23 per share, for the first quarter of 2013. In addition, there
was an operating loss of $1.6 million for the current quarter compared to an
operating loss of $1.7 million in the same quarter last year. The smaller
seasonal operating loss reflected a decrease in selling, general and
administrative ("SG&A") expense that was partially offset by lower net sales
and gross margin.

Consolidated net sales were $21.4 million compared to $21.6 million in the
first quarter of 2013, with the Cobra segment reporting a $378,000, or 2.1%,
drop in sales and the Performance Products Limited ("PPL") segment reporting a
sales increase of $182,000, or 5.8%. The lower sales for the Cobra segment
resulted from a drop in sales of Detection products, partially offset by
increases in sales of Truck Navigation products and Dash Cams. The lower sales
of Detection products reflected reduced sales at certain larger domestic
customers that experienced slow store traffic in the first quarter due in part
to the extended and harsh winter weather, and the economic conditions in
Eastern Europe. Truck Navigation sales increased primarily due to the
introduction of a new product, the 6500 PRO HD. The PPL sales increase was
attributable to sales of Dash Cam products, which were not sold in the same
quarter of last year and the effect of foreign currency changes.

Consolidated gross margin was 27.0 percent compared to 28.9 percent in the
first quarter of 2013 primarily as a result of a less favorable sales mix and
some close-out sales at reduced margins. The gross margin for the Cobra
segment was 26.0 percent compared to 27.4 percent in first quarter 2013, which
reflected less sales of higher margin products and close-out sales of certain
Detection models at lower margins. PPL's gross margin decreased to 32.7
percent from 37.4 percent last year due mainly to sales of certain older
products at reduced margins.

"The Company typically experiences a seasonal operating loss in the first
quarter, although the loss was slightly smaller in the first quarter of 2014
than in the same quarter last year due to significantly reduced SG&A expense.
The extended and harsh winter weather and economic conditions in Eastern
Europe in the first quarter of 2014 negatively impacted store traffic and net
sales. Our history has shown that when the consumer shows up in the stores,
our products sell-through well" said Jim Bazet, Cobra's Chairman and Chief
Executive Officer.

SG&A expenses were $7.4 million in the first quarter of 2014 compared to $8.0
million in the prior year's quarter. Fixed expenses decreased as a result of
lower legal and employee compensation expenses. 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 first quarter of 2014 was $257,000 compared to
$160,000 for the first quarter of 2013 primarily due to a higher average
interest rate. Other income was $206,000 compared to other income of $353,000
in the prior year's quarter primarily due to a lower 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 $22,000 was recorded in the current quarter
as compared to a $1,000 tax benefit in the first quarter of 2013.

Interest-bearing debt decreased to $13.2 million as of March 31, 2014 compared
to $18.2 million at March 31, 2013. Cash on hand at March 31, 2014 was $3.4
million as compared to $4.9 million at March 31, 2013 mainly due to the timing
of cash receipts. Inventory at the end of the first quarter increased to $33.7
million from $33.1 million at March 31, 2013 primarily as a result of the
lower sales in the Cobra segment. Accounts receivable at the end of the
quarter were $10.0 million, a decrease from $13.6 million one year earlier,
which mainly reflected higher sales to customers with shorter payment terms.

The Company did not meet the required minimum amount of trailing twelve month
EBITDA as defined under its credit agreement for the first quarter. The
Company is currently working with its lenders to finalize the form of a waiver
of the first quarter non-compliance with the credit agreement.

In discussing the outlook for the second quarter of 2014, as well as the
entire year, Mr. Bazet said, "The Company anticipates an operating income in
the second quarter and an improved level of operating income for fiscal year
2014 due to the initial load-ins of new placement for many exciting and
innovative new products as well as the implementation of growth initiatives
and continued cost and expense reduction measures."

Cobra will be conducting a conference call on April 25, 2014 at 11:00 a.m. EDT
to discuss first 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 Ended
                                             March 31,     March 31,
                                             2014           2013
Net sales                                      $21,381       $21,577
Cost of sales                                  15,602        15,342
          Gross profit                         5,779         6,235
Selling, general and administrative expense    7,416         7,961
          Loss from operations                 (1,637)       (1,726)
Other (expense) income:
          Interest expense                     (257)         (160)
          Other, net                           206           353
Loss before taxes                              (1,688)       (1,533)
Tax benefit                                    (22)          (1)
Net loss                                       $ (1,666)     $ (1,532)
Net loss per common share:
          Basic                                $  (0.25)    $  (0.23)
          Diluted                              $  (0.25)    $  (0.23)
Weighted average shares outstanding:
          Basic                                6,603         6,611
          Diluted                              6,603         6,611



                      Condensed Consolidated Balance Sheets
                      (in thousands, unaudited)
ASSETS:                                March 31,    December       March
                                                    31,             31,
                                      2014          2013            2013
Current assets:
      Cash                         $ 3,390       $ 3,059         $ 4,933
      Accounts receivable, net        10,038        19,338          13,627
      Inventories, net                33,707        35,810          33,115
      Other current assets            3,820         3,686           3,114
      Total current assets            50,955        61,893          54,789
Property, plant and equipment,        5,277         5,453           5,253
net
Total other assets                    15,446        15,460          14,321
Total assets                        $ 71,678      $ 82,806        $ 74,363
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current liabilities:
      Accounts payable              $ 4,892       $ 5,726         $ 2,375
      Accrued liabilities             6,189         7,221           6,253
      Short-term debt                 13,217        20,673          18,219
      Total current liabilities       24,298        33,620          26,847
Non-current liabilities:
      Deferred taxes                  634           653             818
      Deferred compensation           7,846         7,910           7,845
      Other long-term                 636           714             704
      liabilities
      Total non-current               9,116         9,277           9,367
      liabilities
Shareholders' equity                  38,264        39,909          38,149
Total liabilities and               $ $71,678     $ 82,806        $ $74,363
shareholders' 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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