Exhibit 99.1
ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
| June 30, | December 31, | |||||||
| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 12,480 | $ | 26,433 | ||||
| Accounts receivable, net of allowances of $2,555 in 2012 and $2,070 in 2011 | 40,463 | 45,450 | ||||||
| Inventories | 34,214 | 29,622 | ||||||
| Prepaid expenses and other current assets | 5,875 | 1,593 | ||||||
| Deferred income tax assets | 5,902 | 5,132 | ||||||
| Total current assets | 98,934 | 108,230 | ||||||
| Investment in HzO | 3,943 | 4,879 | ||||||
Property and equipment, net of accumulated depreciation at $2,428 in 2012 and $1,857 in 2011 | 4,746 | 4,162 | ||||||
| Deferred income tax assets | 82 | 82 | ||||||
| Goodwill | 6,925 | 6,925 | ||||||
Intangible assets, net of accumulated amortization at $8,912 in 2012 and $3,989 in 2011 | 68,839 | 73,691 | ||||||
| Note receivable | 583 | 1,349 | ||||||
| Other assets | 3,279 | 3,010 | ||||||
| Total assets | $ | 187,331 | $ | 202,328 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 16,298 | $ | 16,013 | ||||
| Income taxes payable | 916 | 4,294 | ||||||
| Accrued liabilities | 2,235 | 3,886 | ||||||
| Accrued wages and wage related expenses | 1,312 | 1,468 | ||||||
| Deferred revenue | 346 | 320 | ||||||
| Current portion of note payable | - | 2,372 | ||||||
| Sales returns liability | 5,524 | 5,387 | ||||||
| Total current liabilities | 26,631 | 33,740 | ||||||
| Revolving line of credit | 2,612 | 23,332 | ||||||
| Noncurrent portion of note payable | 41,000 | 42,628 | ||||||
| Total liabilities | 70,243 | 99,700 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $0.001 par value; 100,000 shares authorized; | ||||||||
| 30,326 and 29,782 shares issued and outstanding, respectively | 30 | 30 | ||||||
| Additional paid-in capital | 74,153 | 70,248 | ||||||
| Accumulated other comprehensive income | (401 | ) | (33 | ) | ||||
| Note receivable collateralized by stock | (566 | ) | (566 | ) | ||||
| Retained earnings | 43,872 | 32,949 | ||||||
| Total stockholders' equity | 117,088 | 102,628 | ||||||
| Total liabilities and stockholders' equity | $ | 187,331 | $ | 202,328 | ||||
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ZAGG INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |||||||||||||
| Net sales | $ | 61,636 | $ | 38,788 | $ | 117,115 | $ | 65,765 | ||||||||
| Cost of sales | 33,231 | 21,027 | 61,777 | 34,357 | ||||||||||||
| Gross profit | 28,405 | 17,761 | 55,338 | 31,408 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Advertising and marketing | 2,301 | 2,616 | 4,743 | 5,128 | ||||||||||||
| Selling, general and administrative | 12,848 | 10,189 | 24,590 | 16,410 | ||||||||||||
| Amortization of definite-lived intangibles | 2,469 | 710 | 4,891 | 760 | ||||||||||||
| Total operating expenses | 17,618 | 13,515 | 34,224 | 22,298 | ||||||||||||
| Income from operations | 10,787 | 4,246 | 21,114 | 9,110 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense | (986 | ) | (159 | ) | (2,507 | ) | (170 | ) | ||||||||
| Loss from equity method investment in HzO | (473 | ) | - | (936 | ) | - | ||||||||||
| Other income and (expense) | 224 | 8 | (22 | ) | 8 | |||||||||||
| Total other expense | (1,235 | ) | (151 | ) | (3,465 | ) | (162 | ) | ||||||||
| Income before provision for income taxes | 9,552 | 4,095 | 17,649 | 8,948 | ||||||||||||
| Income tax provision | (3,740 | ) | (1,497 | ) | (6,726 | ) | (3,091 | ) | ||||||||
| Net income | 5,812 | 2,598 | 10,923 | 5,857 | ||||||||||||
| Net loss attributable to noncontrolling interest | - | 145 | - | 196 | ||||||||||||
| Net income attributable to stockholders | $ | 5,812 | $ | 2,743 | $ | 10,923 | $ | 6,053 | ||||||||
| Earnings per share attributable to stockholders: | ||||||||||||||||
| Basic earnings per share | $ | 0.19 | $ | 0.11 | $ | 0.36 | $ | 0.25 | ||||||||
| Diluted earnings per share | $ | 0.18 | $ | 0.10 | $ | 0.35 | $ | 0.23 | ||||||||
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ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP
(in thousands, except per share amounts)
(Unaudited)
| Unaudited Supplemental Data | ||||||||||||||||||||
| The following information is not a financial measure under generally accepted accounting principals (GAAP). In addition, it 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 one 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, 2012 | June 30, 2011 | June 30, 2012 | June 30, 2011 | |||||||||||||||||
| Net income attributable to stockholders in accordance with GAAP | $ | 5,812 | $ | 2,743 | $ | 10,923 | $ | 6,053 | ||||||||||||
| Adjustments: | ||||||||||||||||||||
| a. | Stock based compensation expense | 1,494 | 1,962 | 2,836 | 2,268 | |||||||||||||||
| b. | Depreciation and amortization | 2,862 | 878 | 5,679 | 1,055 | |||||||||||||||
| c. | iFrogz acquisition expenses | - | 1,816 | - | 1,825 | |||||||||||||||
| d. | iFrogz inventory fair value write up | - | 579 | - | 579 | |||||||||||||||
| e. | Provision for income taxes | 3,740 | 1,497 | 6,726 | 3,091 | |||||||||||||||
| f. | Other (income) expense | 1,235 | 151 | 3,465 | 162 | |||||||||||||||
| g. | Noncontrolling interest | - | (145 | ) | - | (196 | ) | |||||||||||||
| Adjusted EBITDA | $ | 15,143 | $ | 9,481 | $ | 29,629 | $ | 14,837 | ||||||||||||
| Diluted Adjusted EBITDA per common share | $ | 0.48 | $ | 0.35 | $ | 0.94 | $ | 0.55 | ||||||||||||
| Weighted average number of shares outstanding - diluted | 31,738 | 27,279 | 31,577 | 26,749 | ||||||||||||||||
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