Nevada
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001-34528
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20-2559624
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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3855 South 500 West, Suite J
Salt Lake City, Utah
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84115
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(Address of principal executive offices)
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(Zip Code)
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(Former name or former address, if changed since last report)
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[ ]
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Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
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[ ]
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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99.1 | Supplemental Information for the Three and Six Months Ended June 30, 2013 |
99.2 | Press Release Dated August 1, 2013. |
/s/ BRANDON T. O’BRIEN |
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June 30,
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December 31,
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|||||||
2013
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2012
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|||||||
ASSETS
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Current assets
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Cash and cash equivalents
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$ | 13,557 | $ | 20,177 | ||||
Accounts receivable, net of allowances of $3,154 in 2013 and $2,974 in 2012
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31,285 | 54,561 | ||||||
Inventories
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46,835 | 39,988 | ||||||
Prepaid expenses and other current assets
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5,336 | 9,547 | ||||||
Deferred income tax assets
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7,510 | 6,912 | ||||||
Total current assets
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104,523 | 131,185 | ||||||
Investment in HzO
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789 | 2,013 | ||||||
Property and equipment, net of accumulated depreciation at $4,751 in 2013 and $3,317 in 2012
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4,291 | 4,862 | ||||||
Goodwill
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1,484 | 1,484 | ||||||
Intangible assets, net of accumulated amortization at $18,511 in 2013 and $13,790 in 2012
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53,123 | 57,905 | ||||||
Deferred income tax assets
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6,596 | 6,596 | ||||||
Note receivable
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720 | 583 | ||||||
Other assets
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767 | 1,457 | ||||||
Total assets
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$ | 172,293 | $ | 206,085 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Accounts payable
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$ | 12,305 | $ | 19,027 | ||||
Income taxes payable
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2,030 | 3,062 | ||||||
Accrued liabilities
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2,309 | 3,754 | ||||||
Accrued wages and wage related expenses
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921 | 2,554 | ||||||
Deferred revenue
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186 | 722 | ||||||
Current portion of note payable
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8,000 | 6,000 | ||||||
Sales returns liability
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3,862 | 6,697 | ||||||
Total current liabilities
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29,613 | 41,816 | ||||||
Revolving line of credit
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4,648 | 22,173 | ||||||
Noncurrent portion of note payable
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14,000 | 18,000 | ||||||
Total liabilities
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48,261 | 81,989 | ||||||
Stockholders' equity
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Common stock, $0.001 par value; 100,000 shares authorized;
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||||||||
31,574 and 31,215 shares issued in 2013 and 2012, respectively
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32 | 31 | ||||||
Additional paid-in capital
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79,659 | 77,234 | ||||||
Accumulated other comprehensive income
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(337 | ) | (57 | ) | ||||
Note receivable collateralized by stock
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(428 | ) | (566 | ) | ||||
Treasury stock, 797 and 0 common shares in 2013 and 2012 respectively, at cost
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(5,999 | ) | - | |||||
Retained earnings
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51,105 | 47,454 | ||||||
Total stockholders' equity
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124,032 | 124,096 | ||||||
Total liabilities and stockholders' equity
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$ | 172,293 | $ | 206,085 | ||||
Three Months Ended
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Six Months Ended
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June 30, 2013
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June 30, 2012
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June 30, 2013
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June 30, 2012
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Net sales
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$ | 51,198 | $ | 61,636 | $ | 102,669 | $ | 117,115 | ||||||||
Cost of sales
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29,663 | 33,231 | 62,135 | 61,777 | ||||||||||||
Gross profit
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21,535 | 28,405 | 40,534 | 55,338 | ||||||||||||
Operating expenses:
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Advertising and marketing
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1,914 | 2,301 | 4,253 | 4,743 | ||||||||||||
Selling, general and administrative
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11,831 | 12,848 | 24,110 | 24,590 | ||||||||||||
Amortization of definite-lived intangibles
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2,374 | 2,469 | 4,748 | 4,891 | ||||||||||||
Total operating expenses
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16,119 | 17,618 | 33,111 | 34,224 | ||||||||||||
Income from operations
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5,416 | 10,787 | 7,423 | 21,114 | ||||||||||||
Other income (expense):
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Interest expense
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(144 | ) | (986 | ) | (371 | ) | (2,507 | ) | ||||||||
Loss from equity method investment in HzO
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(617 | ) | (473 | ) | (1,224 | ) | (936 | ) | ||||||||
Other income and (expense)
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(27 | ) | 224 | (47 | ) | (22 | ) | |||||||||
Total other expense
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(788 | ) | (1,235 | ) | (1,642 | ) | (3,465 | ) | ||||||||
Income before provision for income taxes
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4,628 | 9,552 | 5,781 | 17,649 | ||||||||||||
Income tax provision
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(1,854 | ) | (3,740 | ) | (2,130 | ) | (6,726 | ) | ||||||||
Net income
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2,774 | 5,812 | 3,651 | 10,923 | ||||||||||||
Earnings per share:
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Basic earnings per share
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$ | 0.09 | $ | 0.19 | $ | 0.12 | $ | 0.36 | ||||||||
Diluted earnings per share
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$ | 0.09 | $ | 0.18 | $ | 0.12 | $ | 0.35 | ||||||||
Adjusted EBITDA Reconciliation
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Three Months Ended
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Six Months Ended
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June 30, 2013
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June 30, 2012
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June 30, 2013
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June 30, 2012
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Net income attributable to stockholders in accordance with GAAP
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$ | 2,774 | $ | 5,812 | $ | 3,651 | $ | 10,923 | |||||||||||||
Adjustments:
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a. |
Stock based compensation expense
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1,331 | 1,494 | 2,368 | 2,836 | ||||||||||||||||
b. |
Depreciation and amortization
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3,120 | 2,862 | 6,214 | 5,679 | ||||||||||||||||
c. |
Impairment of investment in private company
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591 | - | 591 | - | ||||||||||||||||
d. |
Provision for income taxes
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1,854 | 3,740 | 2,130 | 6,726 | ||||||||||||||||
e. |
Other (income) expense
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788 | 1,235 | 1,642 | 3,465 | ||||||||||||||||
Adjusted EBITDA
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$ | 10,458 | $ | 15,143 | $ | 16,596 | $ | 29,629 | |||||||||||||
Pro forma Net Income Reconciliation
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Three Months Ended
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Six Months Ended
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June 30, 2013
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June 30, 2012
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June 30, 2013
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June 30, 2012
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Net income in accordance with GAAP
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$ | 2,774 | $ | 5,812 | $ | 3,651 | $ | 10,923 | |||||||||||||
Adjustments:
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a. |
Stock based compensation expense
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1,331 | 1,494 | 2,368 | 2,836 | ||||||||||||||||
b. |
Amortization of intangibles
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2,394 | 2,488 | 4,782 | 4,923 | ||||||||||||||||
c. |
Other (income) expense excluding cash interest expense and loss on equity method investment
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57 | (224 | ) | 107 | 22 | |||||||||||||||
d. |
Loss on equity method investement
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617 | 473 | 1,224 | 936 | ||||||||||||||||
e. |
Impairment of investment in private company
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591 | - | 591 | - | ||||||||||||||||
f. |
Income tax effects
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(1,447 | ) * | (1,437 | ) | (2,776 | ) * | (2,976 | ) | ||||||||||||
Pro forma net income
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$ | 6,317 | $ | 8,606 | $ | 9,947 | $ | 16,664 | |||||||||||||
Pro forma EPS
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$ | 0.20 | $ | 0.27 | $ | 0.32 | $ | 0.53 | |||||||||||||
Weighted average number of shares outstanding - diluted
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31,218 | 31,738 | 31,471 | 31,577 | |||||||||||||||||
·
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Net sales of $51.2 million
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·
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Adjusted EBITDA of $10.5 million
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·
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GAAP diluted EPS of $0.09 and pro forma diluted EPS of $0.20
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·
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Cash flow from operations year-to-date of over $19.0 million
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·
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Paid down $15.1 million on line of credit and term note
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·
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Reaffirms 2013 revenue guidance; introduces new Adjusted EBITDA guidance
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·
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Net sales of $51.2 million versus $61.6 million
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·
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Gross margins of 42.1% versus 46.1%
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·
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Adjusted EBITDA of $10.5 million versus $15.1 million
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·
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GAAP diluted EPS of $0.09 versus $0.18
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·
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Generated over $5.0 million in operating cash flow or over $19.0 million year-to-date
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·
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Paid down $13.1 million on line of credit and $2.0 million on term note
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·
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invisibleSHIELD sales represented 38% of net sales versus 41%
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·
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Keyboard sales represented 25% of net sales versus 28%
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·
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iFrogz Audio represented 21% of net sales versus 15%
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