ZAGG Reports Third Quarter 2016 Net Sales Growth Of 87% To $124.7 Million

SALT LAKE CITY, Nov. 01, 2016 (GLOBE NEWSWIRE) -- ZAGG Inc (NASDAQ:ZAGG), a leading global mobile lifestyle company, today announced financial results for the third quarter ending September 30, 2016.

Highlights (Comparisons versus third quarter of 2015)
  • Net sales increased 87% to a third quarter record of $124.7 million, compared to $66.8 million; net sales (excluding mophie results) increased $18.2 million (+27%) to $84.9 million
  • Gross margin of $43.1 million (35% of net sales), compared to $24.9 million (37% of net sales); gross margin (excluding mophie results) increased 500 basis points to 42% of net sales compared to 37%
  • GAAP loss per share of $(0.25); Adjusted earnings per share of $0.29
  • Non-cash net mophie impairment charge of $24.3 million related to disputes in acquisition-date value of working capital
  • 2016 annual net sales and Adjusted EBITDA forecast revised

"We're pleased with our results for the quarter and for the first nine months of the year, with record sales and strong operating performance," commented Randy Hales, President and Chief Executive Officer of ZAGG Inc. "However, we are disappointed with the mophie operating results to date.  Consequently, I have assumed the role of interim president at mophie to accelerate the return to profitability and improve overall operating performance while we search for a new president." 

2016 Third Quarter (Comparisons versus 2015)
 (in millions, except per share amounts)                                      September 30, 2016   September 30, 2015 
 Net Sales       $ 124.7          $ 66.8    
 Gross Profit (Gross Profit %) $43.1 (35%) $24.9 (37%)
 Net (Loss) Income $ (7.1 ) $ 3.7  
 Diluted (Loss) Earnings per Share $ (0.25 ) $ 0.13  
 Adjusted EBITDA (Adjusted EBITDA %) $17.8 (14%) $9.9 (15%)
 Adjusted Net Income* $ 8.3   $ 3.7  
 Adjusted Earnings per Share* $ 0.29   $ 0.13  
             

*Reflects add-back of costs incurred directly related to the mophie acquisition, net of tax, including: (1) $0.7 million in amortization from mophie acquired intangibles, (2) $0.1 million of transaction costs, (3) $(0.8) million in cost of goods sold impact related to the fair value write-up of mophie inventory at acquisition, (4) $0.4 million in mophie restructuring charges and mophie employee retention bonuses, and (5) a net $24.3 million non-cash charge associated with a dispute with the former mophie shareholders over the acquisition date value of the mophie working capital accounts. There is no impact on 2015 as all charges occurred during 2016.

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