EX-99.1 2 p13392exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(IGO LOGO)
     
CONTACTS:
  Tony Rossi
 
  Financial Relations Board
 
  213-486-6545
 
  trossi@frbir.com
IGO REPORTS THIRD QUARTER 2008 FINANCIAL RESULTS
Q3 2008 Highlights:
  •   Net income of $0.02 per share in Q3 2008 compared to net loss of ($0.02) per share in Q3 2007
 
  •   Net income excluding non-cash equity compensation and divested businesses was $0.03 per share in Q3 2008 compared to net loss of ($0.00) per share in Q3 2007
 
  •   Book value increases to $1.22 per share at September 30, 2008
SCOTTSDALE, Ariz., October 22, 2008 — iGo, Inc. (Nasdaq: IGOI), a leading provider of innovative portable power and computing solutions, today reported financial results for the third quarter ended September 30, 2008. Total revenue was $20.1 million in the third quarter of 2008, compared with revenue of $19.0 million in the third quarter of 2007.
Excluding revenues related to business lines divested during and subsequent to the end of the first quarter of 2007 (handheld and expansion/docking), total revenues were $18.1 million in the third quarter of 2008, compared to $17.1 million in the same quarter of the prior year. According to Generally Accepted Accounting Principles in the United States (U.S. GAAP), iGo must consolidate the operating results of Mission Technology Group, the acquirer of the Company’s expansion/docking business, into its financial results until such time as the Company’s financial interest in the performance of Mission Technology Group no longer meets the criteria for consolidation.
Net income was $649,000, or $0.02 per share, in the third quarter of 2008, compared with a net loss of $760,000, or ($0.02) per share, in the same quarter of the prior year.
Excluding non-cash compensation expense and the operating results of the divested businesses, net income was $1.1 million, or $0.03 per share, in the third quarter of 2008, compared to a net loss of $155,000, or ($0.00) per share, in the third quarter of 2007. A detailed reconciliation of GAAP to non-GAAP financial results is provided in the financial tables at the end of this release.
Michael D. Heil, President and Chief Executive Officer of iGo, commented, “We are executing well on our growth strategies and generated double-digit increases in sales of both high- and low-power chargers during the third quarter. We are seeing steady progress in driving sales growth through all of our key channels, including retail, private label, and wireless carrier. The solid sales growth and tight expense control helped deliver a strong improvement in profitability.”
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iGo, Inc.
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Third Quarter Product Area Highlights
•   Unit sales of universal chargers for high-power mobile electronic (ME) devices, such as portable computers, were approximately 322,000 units in the third quarter of 2008.
 
•   Unit sales of universal chargers for low-power ME devices, such as mobile phones, PDAs, MP3 players and digital cameras, were approximately 787,000 units in the third quarter of 2008.
 
•   Revenue from the sale of power products for high-power ME devices was $11.8 million in the third quarter of 2008, an increase of 10.5% from $10.7 million in the same period of the prior year. An increase in sales through the retail and private label channels of $2.7 million more than offset a decline in sales through the OEM channel of $1.6 million.
 
•   Revenue from the sale of power products for low-power ME devices was $6.3 million in the third quarter of 2008, an increase of 10.4% from $5.7 million in the same period of the prior year.
Financial Highlights
Gross margin was 30.6% in the third quarter of 2008, compared to 30.0% in the third quarter of 2007. Excluding the operations of the divested businesses, gross margin was 28.3% in the third quarter of 2008, compared to 28.0% in the third quarter of 2007.
Total operating expenses in the third quarter of 2008 were $5.6 million, compared with $6.8 million in the third quarter of 2007. Excluding non-cash equity compensation expense and the operations of the divested businesses, operating expenses were $4.3 million in the third quarter of 2008, or 23.9% of revenue (excluding revenue from divested businesses), compared to $5.3 million in the third quarter of 2007, or 31.2% of revenue (excluding revenue from divested businesses). The decline in operating expenses as a percentage of revenue reflects the impact of the lower cost structure following the restructuring actions taken during 2007.
Excluding assets of the divested businesses, the Company’s balance sheet remained strong with $26.0 million in cash, cash equivalents, and short-term investments at September 30, 2008. The Company continued to have no long-term debt and had a book value per share of $1.22 based on 31.9 million common shares issued and outstanding at September 30, 2008.
Outlook
The Company has elected not to provide U.S. GAAP-based financial guidance for the fourth quarter of 2008 because Mission Technology Group does not prepare financial forecasts. However, Mission Technology Group’s revenue and operating results for the fourth quarter of 2008 are not expected to be more or less significant to the Company’s consolidated financial results than they were for the third quarter of 2008.
On a non-GAAP basis, which excludes revenue from divested businesses, the Company believes that revenue will range from $17 million to $18 million in the fourth quarter of 2008. The Company also believes that net income, excluding the operating results of divested businesses and non-cash equity compensation, will range from $0.00 to $0.01 per share.

 

 

iGo, Inc.
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Mr. Heil commented on the Company’s outlook, “We are steadily adding new accounts as our sales pipeline matures and we gain traction with our new approach of bundling chargers and interchangeable tips in the same package for particular retailers. During the fourth quarter, we are launching new programs with Dixon’s Group in Europe, Wal-Mart Canada, and Hudson News and ZoomSystems in the United States, among others. We expect these new programs will help offset the seasonal decline in revenues that we typically experience after holiday season orders are shipped in the third quarter. As our distribution continues to expand, we believe we are creating a foundation for sustainable growth in revenue and earnings.”
Non-GAAP Financial Measures
Although the Company consolidates the operating results of Mission Technology Group, the acquirer of its docking/expansion business, for accounting purposes under U.S. GAAP, the Company believes that the discussion of operating results excluding the handheld and expansion/docking lines of business and non-cash equity compensation allows management and investors to evaluate and compare the Company’s operating performance on a more meaningful and consistent manner. In addition, management uses these measures internally for evaluation of the performance of the business, including the allocation of resources. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP.
About iGo, Inc.
iGo, Inc., based in Scottsdale, Arizona, is a developer of universal chargers for laptop computers and mobile electronic devices (e.g., mobile phones, PDAs, digital cameras, etc.) and creator of the patented iGo® intelligent tip technology. iGo offers a full line of AC, DC and combination AC/DC chargers for laptop computers and low-power mobile electronic devices. All of these chargers leverage iGo’s intelligent tip technology, which enables one charger to power/charge hundreds of brands and thousands of models of mobile electronic devices through the use of interchangeable tips.
iGo’s products are available at www.iGo.com as well as through leading resellers and retailers. For additional information call 480-596-0061, or visit www.igo.com.
iGo is a registered trademark of iGo, Inc. All other trademarks or registered trademarks are the property of their respective owners.
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. The words “believe,” “expect,” “anticipate,” “should,” and other similar statements of expectations identify forward-looking statements. Forward-looking statements in this press release include expectations regarding the Company’s financial performance in the fourth quarter of 2008; the expectation that Mission Technology Group’s revenue and operating results for the fourth quarter of 2008 will not be more or less significant to the Company’s consolidated financial results than they were for the third quarter of 2008; the expectation that revenue from new programs with Dixon’s Group, Hudson News, and ZoomSystems will offset the seasonal decline in revenues the Company typically experiences in the fourth quarter; and the belief that the Company is creating a foundation for sustainable growth in revenue and earnings. These forward-looking statements are based largely on management’s expectations and involve known and unknown risks, uncertainties and other factors, which may cause the Company’s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Risks that could cause results to differ materially from those expressed in these forward-looking statements

 

 

iGo, Inc.
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include, among others, the loss of, and failure to replace, any significant customers; the inability of the Company’s new sales and marketing strategy to generate broader consumer awareness, increased adoption rates, or impact sell-through rates at the retail and wireless carrier level; the timing and success of product development efforts and new product introductions, including internal development projects as well as those being pursued with strategic partners; the timing and success of product developments, introductions and pricing of competitors; the timing of substantial customer orders; the availability of qualified personnel; the availability and performance of suppliers and subcontractors; the ability to expand and protect the Company’s proprietary rights and intellectual property; the successful resolution of unanticipated and pending litigation matters; market demand and industry and general economic or business conditions; and other factors to which this press release refers. Additionally, other factors that could cause actual results to differ materially from those set forth in, contemplated by, or underlying these forward-looking statements are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 under the heading “Risk Factors.” In light of these risks and uncertainties, the forward-looking statements contained in this press release may not prove to be accurate. The Company undertakes no obligation to publicly update or revise any forward-looking statements, or any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Additionally, the Company does not undertake any responsibility to update you on the occurrence of unanticipated events which may cause actual results to differ from those expressed or implied by these forward-looking statements.
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iGo, Inc.
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iGo, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(000’s except per share data)
(unaudited)
                                 
    Three months ended     Nine months ended  
    September 30,     September 30,  
    2008     2007     2008     2007  
Net revenue
   $ 20,091     $ 19,039     $ 57,583     $ 57,410  
 
                                
Gross profit
     6,145       5,705       17,127       13,231  
 
                                
Selling, engineering and administrative expenses
     5,612       6,791       18,305       23,697  
 
                        
Income (loss) from operations
     533       (1,086 )     (1,178 )     (10,466 )
Interest income (expense), net
     190       291       668       847  
Gain on disposal of assets and other income, net
     136       95       397       2,235  
Litigation settlement income
     —       —       672       —  
 
                        
Income (loss) before minority interest
     859       (700 )     559       (7,384 )
Minority interest
     (210 )     (60 )     (210 )     (187 )
 
                        
Net income (loss)
   $ 649     $ (760 )   $ 349     $ (7,571 )
 
                        
 
                                
Net loss per share — basic and diluted
                                
Basic
   $ 0.02     $ (0.02 )   $ 0.01     $ (0.24 )
Diluted
   $ 0.02     $ (0.02 )   $ 0.01     $ (0.24 )
 
                                
Weighted avg common shares outstanding — basic and diluted
                                
Basic
     31,881       31,391       31,745       31,568  
Diluted
     34,482       31,391       34,350       31,568  
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iGo, Inc.
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iGo, Inc. and Subsidiaries
Selected Other Data
(unaudited)
Reconciliation of non-GAAP Financial Measure — Operating results by product line to net income (loss) before non-cash equity compensation by product line:
                                                 
    Three months ended     Three months ended  
    September 30, 2008     September 30, 2007  
    Power,                     Power,              
    Keyboards     Expansion &             Keyboards     Expansion &        
    & Corporate     Handheld     Total     & Corporate     Handheld     Total  
Net revenue
   $ 18,077     $ 2,014     $ 20,091     $ 17,128     $ 1,911     $ 19,039  
 
                                                
Gross profit
     5,116       1,029       6,145       4,799       906       5,705  
 
                                                
Selling, engineering and administrative expenses
     4,855       757       5,612       6,031       760       6,791  
 
                                    
Income (loss) from operations
     261       272       533       (1,232 )     146       (1,086 )
Interest income (expense), net
     186       4       190       281       10       291  
Other income (expense), net
     110       26       136       106       (11 )     95  
 
                                    
Income (loss) before minority interest
     557       302       859       (845 )     145       (700 )
Minority interest
     —       (210 )     (210 )     —       (60 )     (60 )
 
                                    
Net income (loss)
     557       92       649       (845 )     85       (760 )
Non-cash equity compensation
     529       —       529       690       —       690  
 
                                    
Net income (loss) as adjusted
   $ 1,086     $ 92     $ 1,178     $ (155 )   $ 85     $ (70 )
 
                                    
 
                                                
Net income (loss) per share as adjusted
   $ 0.03     $ 0.00     $ 0.03     $ (0.00 )   $ 0.00     $ (0.00 )
 
                                                
Weighted avg common shares outstanding — diluted:
     34,482       34,482       34,482       31,391       31,391       31,391  

 

 

iGo, Inc.
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iGo, Inc. and Subsidiaries
Selected Other Data Continued
(unaudited)
Reconciliation of non-GAAP Financial Measure — Selling, engineering and administrative expenses by product line to selling, engineering and administrative expenses before non-cash equity compensation by product line:
                                                 
    Three months ended     Three months ended  
    September 30, 2008     September 30, 2007  
    Power,                     Power,              
    Keyboards     Expansion &             Keyboards     Expansion &        
    & Corporate     Handheld     Total     & Corporate     Handheld     Total  
Selling, engineering and administrative expenses
   $ 4,855     $ 757     $ 5,612     $ 6,031     $ 760     $ 6,791  
Non-cash equity compensation
     (529 )     —       (529 )     (690 )     —       (690 )
 
                                    
Selling, engineering and administrative expenses as adjusted
   $ 4,326     $ 757     $ 5,083     $ 5,341     $ 760     $ 6,101  
 
                                    
This information is being provided because management believes these are key metrics to the investment community and assist in the understanding and analysis of operating performance. Operating results by product line and corresponding net income (loss) before non-cash equity compensation by product line; and selling, engineering and administrative expenses by product line and corresponding selling, engineering and administrative expenses before non-cash equity compensation should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP.

 

 

iGo, Inc.
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iGo, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(000’s)
(unaudited)
                 
    September 30,     December 31,  
    2008     2007  
ASSETS
                
 
                
Cash and cash equivalents
   $ 19,595     $ 15,908  
Short-term investments
     7,116       9,026  
Accounts receivable, net
     16,261       16,924  
Inventories
     4,017       7,406  
Prepaid expenses and other current assets
     486       445  
 
            
Total current assets
     47,475       49,709  
Long-term investments
     —       —  
Other assets, net
     3,208       4,441  
 
            
Total assets
   $ 50,683     $ 54,150  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities
   $ 11,026     $ 16,311  
Minority interest
     594       384  
 
            
Total liabilities
     11,620       16,695  
 
                
Total stockholders’ equity
     39,063       37,455  
 
                
 
            
Total liabilities and stockholders’ equity
   $ 50,683     $ 54,150  
 
            

 

 

iGo, Inc.
Page 9 of 9
iGo, Inc. and Subsidiaries
Selected Other Data
(unaudited)
Reconciliation of non-GAAP Financial Measure — Balance sheet excluding accounts of Mission Technology Group.
                                 
    September 30, 2008  
    iGo     Mission Tech     Eliminations     Consolidated  
ASSETS
                                
 
                                
Cash and cash equivalents
   $ 18,894     $ 701     $ —     $ 19,595  
Short-term investments
     7,116       —       —       7,116  
Accounts receivable, net
     15,753       567       (59 )     16,261  
Inventories
     3,299       950       (232 )     4,017  
Prepaid expenses and other current assets
     388       98       —       486  
 
                        
Total current assets
     45,450       2,316       (291 )     47,475  
Long-term investments
     —       —       —       —  
Other assets, net
     3,913       1,449       (2,154 )     3,208  
 
                        
Total assets
   $ 49,363     $ 3,765     $ (2,445 )   $ 50,682  
 
                        
 
                                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                
 
                                
Current liabilities
   $ 10,340     $ 745     $ (59 )   $ 11,026  
Minority interest
     594       2,500       (2,500 )     594  
 
                        
Total liabilities
     10,934       3,245       (2,559 )     11,620  
 
                                
Total stockholders’ equity
     38,429       520       114       39,063  
 
                                
 
                        
Total liabilities and stockholders’ equity
   $ 49,363     $ 3,765     $ (2,445 )   $ 50,683  
 
                        
 
                                
Reconciliation of non-GAAP Financial Measure — Cash, cash equivalents and investments excluding accounts of Mission Technology Group.
 
                                
Cash and cash equivalents
   $ 18,894     $ 701     $ —     $ 19,595  
Short-term investments
     7,116       —       —       7,116  
 
                        
Total cash, cash equivalents, short-term investments
   $ 26,010     $ 701     $ —     $ 26,711  
 
                        
This information is being provided because management believes these are key metrics to the investment community and assist in the understanding and analysis of financial position. Balance sheet excluding the accounts of Mission Technology Group and related eliminations and cash, cash equivalents, and investments excluding the accounts of Mission Technology Group should be considered in addition to, not as a substitute for, or superior to, measures of financial position in accordance with GAAP.
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