ZAGG (ZAGG) 8-K Results of Operations and Financial Condition

Exhibit 99.1

ZAGG INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)

	March 31,			December 31,
	2015			2014
ASSETS
Current assets
Cash and cash equivalents	$	14,727		$	9,461
Accounts receivable, net of allowances of $1,802 in 2015 and $1,910 in 2014		44,087			75,729
Inventories		48,128			48,378
Prepaid expenses and other current assets		1,441			2,681
Deferred income tax assets		10,774			10,774
Total current assets		119,157			147,023
Property and equipment, net of accumulated depreciation at $8,429 in 2015 and $7,659 in 2014		7,092			7,300
Intangible assets, net of accumulated amortization at $35,397 in 2015 and $33,242 in 2014		29,253			31,408
Deferred income tax assets		14,203			14,290
Note receivable		801			801
Other assets		475			457
Total assets	$	170,981		$	201,279
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	27,938		$	49,379
Income taxes payable		2,475			6,464
Accrued liabilities		4,304			6,910
Accrued wages and wage related expenses		2,291			2,600
Deferred revenue		182			179
Sales returns liability		3,808			8,674
Total current liabilities		40,998			74,206
Total liabilities		40,998			74,206
Stockholders' equity
Common stock, $0.001 par value; 100,000 shares authorized;
33,082 and 32,686 shares issued in 2015 and 2014, respectively		33			33
Additional paid-in capital		85,716			85,154
Accumulated other comprehensive loss		(1,747	)		(895	)
Note receivable collateralized by stock		(348	)		(348	)
Treasury stock, 3,569 and 3,569 common shares in 2015 and 2014 respectively, at cost		(19,576	)		(19,576	)
Retained earnings		65,905			62,705
Total stockholders' equity		129,983			127,073
Total liabilities and stockholders' equity	$	170,981		$	201,279

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ZAGG INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	March 31, 2015			March 31, 2014
Net sales	$	57,216		$	49,003
Cost of sales		34,258			31,225
Gross profit		22,958			17,778
Operating expenses:
Advertising and marketing		2,631			2,008
Selling, general and administrative		12,754			11,403
Amortization of definite-lived intangibles		2,134			2,427
Total operating expenses		17,519			15,838
Income from operations		5,439			1,940
Other income (expense):
Interest expense		(27	)		(44	)
Other income		80			90
Total other income, net		53			46
Income before provision for income taxes		5,492			1,986
Income tax provision		(2,292	)		(998	)
Net income	$	3,200		$	988
Earnings per share:
Basic earnings per share	$	0.11		$	0.03
Diluted earnings per share	$	0.11		$	0.03

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ZAGG INC AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP

(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 a 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
			March 31, 2015			March 31, 2014
Net income in accordance with GAAP			$	3,200		$	988
	Adjustments:
	a.	Stock based compensation expense		876			520
	b.	Depreciation and amortization		2,940			3,020
	c.	Other (income) expense		(53	)		(46	)
	d.	Provision for income taxes		2,292			998
Adjusted EBITDA			$	9,255		$	5,480

Pro forma Net Income Reconciliation - Three Months Ended March 31,2015 and 2014			Three months ended
			March 31, 2015				March 31, 2014
Net income in accordance with GAAP			$	3,200			$	988
	Adjustments:
	a.	Stock based compensation expense		876				520
	b.	Amortization of intangibles		2,155				2,447
	c.	Other expense excluding cash interest expense		(65	)			(73	)
	d.	Income tax effects		(1,164	)	*		(1,107	)	*
Pro forma net income			$	5,002			$	2,775
Pro forma diluted EPS			$	0.17			$	0.09
Weighted average number of shares outstanding - diluted				29,678				30,864

* For comparative purposes, we applied an annualized statutory tax rate of 39.23% in 2015 and 38.25% in 2014.

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