EXHIBIT 99.1
(MOBILITY ELECTRONICS LOGO)
WE MAKE MOBILE COMPUTING EASIER
WWW.MOBILITYELECTRONICS.COM
FOR IMMEDIATE RELEASE
CONTACTS: Tony Rossi Charlie Mollo
FRB | Weber Shandwick Mobility Electronics
310-407-6563 480-596-0061, ext. 153
trossi@webershandwick.com cmollo@mobl.com
MOBILITY ELECTRONICS REPORTS 96%
INCREASE IN SECOND QUARTER YEAR-OVER-YEAR REVENUES
HIGHLIGHTS
o REVENUES INCREASE TO $13.1 MILLION, EXCEEDING GUIDANCE
o OVER 80,000 UNITS OF JUICE SHIPPED IN SECOND QUARTER; OVER 250,000
UNITS ON ORDER
o MAJOR STRATEGIC DISTRIBUTION ARRANGEMENTS SIGNED WITH KENSINGTON AND
FELLOWES
o JUICE LAUNCHED IN 3,500 RADIOSHACK STORES IN US; ADDITIONAL 800 STORES
IN NORTH AMERICA TO LAUNCH IN Q3
o COMARCO PATENT DISPUTE SETTLED
SCOTTSDALE, Ariz., July 22, 2003 -- Mobility Electronics, Inc. (Nasdaq: MOBE), a
leading provider of innovative portable computing solutions for the mobile
computer user, today reported financial results for the second quarter ended
June 30, 2003. Revenue was $13.1 million in the second quarter of 2003, an
increase of 96% over revenue of $6.7 million in the second quarter of 2002, and
an increase of 10% over revenue of $12.0 million in the first quarter of 2003.
Net loss for the second quarter of 2003 was $1.4 million, or ($0.07) per diluted
share, compared with a net loss of $3.0 million, or ($0.19) per diluted share,
in the same period of the prior year.
Financial results in the second quarter of 2003 were impacted by approximately
$700,000 of expenses that are not expected to recur in the third quarter of
2003, and are due primarily to legal expenses related to the Company's
intellectual property rights litigation. The recent patent litigation settlement
with Comarco, Inc. will significantly reduce Mobility's legal expenses for the
foreseeable future.
-more-
Mobility Electronics Reports 96% Increase in Second Quarter Year-Over-Year
Revenues
Page 2 of 6
"We continue to experience exceptional sales momentum," said Charlie Mollo,
President and Chief Executive Officer of Mobility Electronics. "This marks the
fourth consecutive quarter in which our revenues have increased over the
previous quarter. The acquisitions we completed in 2002 and recent product
introductions such as Juice(TM), Pitch(TM) and Quickoffice Premier(TM) have
positioned the Company in growing, niche areas of mobile computing where demand
is healthy. We continue to build a strong line-up of OEM, reseller and retail
accounts for our new products, which has provided us with excellent visibility
to additional revenue growth and attaining profitability in the second half of
2003."
KENSINGTON AND FELLOWES STRATEGIC DISTRIBUTION ALLIANCES
During the quarter, Mobility closed two major strategic distribution alliances,
one with the Kensington Technology Group and one with Fellowes. Both of these
relationships represent formidable distribution capability and will
significantly increase the reach of Mobility's products.
Kensington is the technology division of Fortune Brands, a multi-billion dollar
company with such brands as Titleist, Day-Timer, ACCO, and Jim Beam, and has a
well established computer product offering and worldwide distribution network.
Similarly, Fellowes is a major provider of a broad range of electronic products
with a well established worldwide distribution network. Collectively, these
companies have their mobile products in tens of thousands of retail locations
including Best Buy, Circuit City, Sam's Club, Wal-Mart, Office Depot, and
Staples, among many others.
PRODUCT AREA HIGHLIGHTS
The following are the notable second quarter highlights in each product area:
POWER PRODUCTS
o Sales of power adapters, which include the Company's Juice product,
grew 35% on a sequential quarter basis. Sales of batteries decreased
for the same period, resulting in overall growth in power product sales
of 18% on a sequential quarter basis. Power products now represent 47%
of overall company sales.
o Over 80,000 units of Juice, the new all-in-one power adapter, were
shipped to a broad range of customers.
o Sell-through for Juice has exceeded the Company's expectations and
re-orders have been received from numerous customers, including Apple
Computer, RadioShack, and many others.
o As planned, Juice was in approximately 5,000 retail locations by the
end of the second quarter of 2003.
o The distribution channels for Juice were significantly expanded through
the addition of major OEM, retailer and reseller accounts, and the
establishment of major partnerships with Kensington, Fellowes and
RadioShack.
o The current Juice backlog and commitments for future quarters exceeds
250,000 units, at least 100,000 of which are expected to ship in the
remainder of 2003.
Mobility Electronics Reports 96% Increase in Second Quarter Year-Over-Year
Revenues
Page 3 of 6
ENHANCEMENT PRODUCTS FOR HANDHELD COMPUTING, PDA AND MOBILE PHONE DEVICES
o Handheld hardware and software product sales grew by 23% on a
sequential quarter basis, and now represent about 31% of overall
company sales.
o The Company's intelligent PDA cradles continue to be received well in
vertical markets such as industrial automation and pharmaceutical field
trials, and sales increased by 78% over the previous year.
o Additional agreements were signed to bundle the Company's Quickoffice
software with new smartphones. Mobility's software is now included in
the offerings of Kyocera, Handspring, AlphaSmart, Samsung and
Synchrologic, among several other notable technology companies.
o The Company's Mobilefile software won the distinguished "Palm OS(R)
Powered Up Award" from PalmSource.
EXPANSION AND DOCKING PRODUCTS
o Expansion and docking products represented 12% of revenue in the
quarter.
o The 7 Slot 64-bit/66MHz PCI Expansion System was introduced, which will
enhance the Company's ability to penetrate the server and storage
markets.
"We are seeing strong end-user demand for our new products, which is partially
attributable to positive exposure in publications such as BusinessWeek, The Wall
Street Journal and most recently Newsweek," said Mr. Mollo.
FINANCIAL HIGHLIGHTS
Revenues of $13.1 million represent the fourth consecutive quarter of strong
sequential quarterly growth. Gross margin was 35.3% in the second quarter of
2003, compared to 23.0% in the second quarter of 2002. The introduction of
higher margin products and increased production volumes contributed to the
year-over-year improvement in gross margin.
Total operating expenses in the second quarter of 2003 were $6.0 million, or 46%
of revenue, compared to $4.6 million, or 69% of revenue, in the second quarter
of 2002.
As discussed previously, total operating expenses in the second quarter of 2003
were negatively impacted by approximately $700,000 of expenses that are not
expected to recur in the third quarter of 2003, primarily the result of legal
fees related to the Company's patent litigation.
PRODUCT DEVELOPMENT
Mobility continues to work with its development partners and intends to
introduce a broad range of products that leverage its first mover position in
markets such as the universal AC/DC power adapter. The Company has several new
products scheduled for introduction each quarter in all of its main product
areas.
"The initial success of our recent product introductions is evidence that our
product development efforts are highly aligned with the needs of mobile
professionals," said Mr. Mollo. "We have a strong pipeline of new products in
development that will enable the Company to further leverage the OEM and channel
relationships we have built and profitably grow Mobility's revenues to
significantly higher levels in the years ahead."
Mobility Electronics Reports 96% Increase in Second Quarter Year-Over-Year
Revenues
Page 4 of 6
OUTLOOK
Mobility expects revenues to be approximately $14 million in the third quarter
of 2003 and approximately $15 million in the fourth quarter. For the full year
2003, the Company continues to expect revenues to increase by at least 70% over
2002. Revenue in the second half of 2003 is expected to be positively impacted
by the domestic launch of the Kensington-branded version of Juice in the third
quarter, the subsequent European launch in the fourth quarter of 2003, a
domestic launch by Fellowes in the fourth quarter of 2003, and continued
traction in 4,300 RadioShack stores in the United States and Canada.
With the additional revenue growth, stable gross margin and reduced operating
expenses projected, Mobility expects continued improvement in bottom line
performance in the third quarter of 2003. Continued revenue growth in the fourth
quarter of 2003 is expected to result in positive net income, followed by at
least 50% year over year revenue growth in 2004.
"We have dramatically reduced our cost structure and improved our gross margin,
which has brought down our breakeven level," said Mr. Mollo. "Our path to
profitability is directly linked to additional revenue growth, which we expect
will come from the new OEM programs and channel relationships that are scheduled
to start in the second half of 2003. Each product area is performing well and
has clear catalysts in place that will lead to additional growth and our
near-term profitability."
ABOUT MOBILITY ELECTRONICS, INC.
Mobility Electronics, Inc., based in Scottsdale, Ariz., is a leader in the
mobile computing industry, designing, developing and marketing products that
allow users to get more from their mobile computing devices. The company's
innovative solutions include power devices, software and accessories for
handheld and notebook computers, as well as docking stations, connectivity,
expansion and video products for portable computers.
Mobility Electronics' brands include both the iGo and Magma product lines. iGo's
flagship products include the industry's only combination AC/DC power adapter,
Juice(TM) as well as first-to-market handheld software and accessory products
such as Quickoffice(TM) and Pitch(TM). The company's Magma line of expansion
products enables PCI expansion solutions for desktop and mobile computing users.
Mobility Electronics products are available directly via the company's
award-winning website (www.igo.com) as well as through the company's global
distribution base of leading resellers, retailers and OEM partners. For
additional information on Mobility Electronics' products and services, call
480-596-0061, or visit its Web site at www.mobilityelectronics.com.
iGo is a registered trademark and Juice, Quickoffice and Pitch are trademarks of
Mobility Electronics, Inc. All other registered and unregistered trademarks are
the property of their respective owners.
This release may contain forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995, which involve risks and uncertainties.
Among the important factors which could cause actual results to differ
materially from those in the forward-looking statements are economic,
competitive and technological factors effecting the company's operations,
markets, products, services and prices, as well as other factors detailed in the
company's filings with the Securities and Exchange Commission.
Mobility Electronics Reports 96% Increase in Second Quarter Year-Over-Year
Revenues
Page 5 of 6
MOBILITY ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S EXCEPT PER SHARE DATA)
(unaudited)
<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
Net revenue $ 13,119 $ 6,687 $ 25,090 $ 13,606
Gross profit 4,630 1,535 8,820 3,380
Selling, engineering and administrative expenses 6,048 4,605 11,358 9,007
Other income (expense), net (13) 106 31 322
-------- -------- -------- --------
Net loss before cumulative effect of change
in accounting principle (1,431) (2,964) (2,507) (5,305)
Cumulative effect of change in accounting principle -- -- -- (5,627)
-------- -------- -------- --------
Net loss (1,431) (2,964) (2,507) (10,932)
Beneficial conversion costs of preferred stock -- -- (445) --
-------- -------- -------- --------
Net loss attributable to common stockholders $ (1,431) $ (2,964) $ (2,952) $(10,932)
======== ======== ======== ========
Net loss per share:
Net loss per share before cumulative effect of
change in accounting principle $ (0.07) $ (0.19) $ (0.14) $ (0.34)
Cumulative effect of change in accounting principle -- -- -- (0.36)
-------- -------- -------- --------
Basic and diluted $ (0.07) $ (0.19) $ (0.14) $ (0.70)
======== ======== ======== ========
Weighted avg common shares outstanding:
Basic and diluted 21,344 15,846 20,860 15,609
======== ======== ======== ========
SELECTED OTHER DATA
Reconciliation of net loss attributable to common stockholders
to EBITDA, less certain other non-cash charges:
Net loss attributable to common stockholders $ (1,431) $ (2,964) $ (2,952) $(10,932)
Other income, net 13 (106) (31) (322)
Depreciation and amortization 459 402 1,007 877
Cumulative effect of change in accounting principle -- -- -- 5,627
Beneficial conversion costs of preferred stock -- -- 445 --
-------- -------- -------- --------
EBITDA, less certain other non-cash charges $ (959) $ (2,668) $ (1,531) $ (4,750)
======== ======== ======== ========
</Table>
This information is being provided because management believes it is a key
metric to the investment community and assists in the understanding and analysis
of period-to-period operating performance. EBITDA should be considered in
addition to, not as a substitute for, or superior to, measures of financial
performance in accordance with GAAP.
Mobility Electronics Reports 96% Increase in Second Quarter Year-Over-Year
Revenues
Page 6 of 6
MOBILITY ELECTRONICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000'S)
<Table>
<Caption>
JUNE 30, DECEMBER 31,
2003 2002
----------- ------------
(unaudited)
ASSETS
Cash and cash equivalents $ 795 $ 3,166
Accounts receivable, net 12,451 7,245
Inventories 6,469 4,414
Prepaid expenses and other current assets 239 176
------- -------
Total current assets 19,954 15,001
Other assets, net 13,168 13,368
------- -------
Total assets $33,122 $28,369
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $13,382 $ 9,356
Long-term liabilities -- 1,385
------- -------
Total liabilities 13,382 10,741
Total stockholders' equity 19,740 17,628
------- -------
Total liabilities and stockholders' equity $33,122 $28,369
======= =======
</Table>
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