8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 Date of Report (Date of earliest event reported):  August 1, 2013

 ZAGG Inc

 (Exact name of registrant as specified in its charter)

Nevada	001-34528	20-2559624
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3855 South 500 West, Suite J Salt Lake City, Utah	84115
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:   (801) 263-0699

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02                      Results of Operations and Financial Condition.

On August 1, 2013, ZAGG Inc (the “Registrant”) issued a press release announcing the results of operations for the three and six months ended June 30, 2013, and made publicly available certain supplemental financial information. The supplemental financial information is furnished with this report as Exhibit 99.1 and the press release is furnished with this report as Exhibit 99.2.

The Registrant also held its earnings conference call on August 1, 2013.

The information furnished under this Item 2.02 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, regardless of any general incorporation by reference language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01                      Financial Statements and Exhibits.

Exhibit No.                                Description

99.1	Supplemental Information for the Three and Six Months Ended June 30, 2013
99.2	Press Release Dated August 1, 2013.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ZAGG Inc

By:  

/s/ BRANDON T. O’BRIEN

Brandon T. O’Brien  

Chief Financial Officer

Date: August 1, 2013

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EX-99.1

Exhibit 99.1

ZAGG INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)

	June 30,			December 31,
	2013			2012
ASSETS
Current assets
Cash and cash equivalents	$	13,557		$	20,177
Accounts receivable, net of allowances of $3,154 in 2013 and $2,974 in 2012		31,285			54,561
Inventories		46,835			39,988
Prepaid expenses and other current assets		5,336			9,547
Deferred income tax assets		7,510			6,912
Total current assets		104,523			131,185
Investment in HzO		789			2,013
Property and equipment,net of accumulated depreciation at $4,751 in 2013 and $3,317 in 2012		4,291			4,862
Goodwill		1,484			1,484
Intangible assets, net of accumulated amortization at $18,511 in 2013 and $13,790 in 2012		53,123			57,905
Deferred income tax assets		6,596			6,596
Note receivable		720			583
Other assets		767			1,457
Total assets	$	172,293		$	206,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	12,305		$	19,027
Income taxes payable		2,030			3,062
Accrued liabilities		2,309			3,754
Accrued wages and wage related expenses		921			2,554
Deferred revenue		186			722
Current portion of note payable		8,000			6,000
Sales returns liability		3,862			6,697
Total current liabilities		29,613			41,816
Revolving line of credit		4,648			22,173
Noncurrent portion of note payable		14,000			18,000
Total liabilities		48,261			81,989
Stockholders' equity
Common stock, $0.001 par value; 100,000 shares authorized;
31,574 and 31,215 shares issued in 2013 and 2012, respectively		32			31
Additional paid-in capital		79,659			77,234
Accumulated other comprehensive income		(337	)		(57	)
Note receivable collateralized by stock		(428	)		(566	)
Treasury stock, 797 and 0 common shares in 2013 and 2012 respectively, at cost		(5,999	)		-
Retained earnings		51,105			47,454
Total stockholders' equity		124,032			124,096
Total liabilities and stockholders' equity	$	172,293		$	206,085

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ZAGG INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Net sales	$	51,198		$	61,636		$	102,669		$	117,115
Cost of sales		29,663			33,231			62,135			61,777
Gross profit		21,535			28,405			40,534			55,338
Operating expenses:
Advertising and marketing		1,914			2,301			4,253			4,743
Selling, general and administrative		11,831			12,848			24,110			24,590
Amortization of definite-lived intangibles		2,374			2,469			4,748			4,891
Total operating expenses		16,119			17,618			33,111			34,224
Income from operations		5,416			10,787			7,423			21,114
Other income (expense):
Interest expense		(144	)		(986	)		(371	)		(2,507	)
Loss from equity method investment in HzO		(617	)		(473	)		(1,224	)		(936	)
Other income and (expense)		(27	)		224			(47	)		(22	)
Total other expense		(788	)		(1,235	)		(1,642	)		(3,465	)
Income before provision for income taxes		4,628			9,552			5,781			17,649
Income tax provision		(1,854	)		(3,740	)		(2,130	)		(6,726	)
Net income		2,774			5,812			3,651			10,923
Earnings per share:
Basic earnings per share	$	0.09		$	0.19		$	0.12		$	0.36
Diluted earnings per share	$	0.09		$	0.18		$	0.12		$	0.35

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ZAGG INC AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION TO GAAP

(in thousands, except per share amounts)

(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 one 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						Six Months Ended
				June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Net income attributable to stockholders in accordance with GAAP				$	2,774		$	5,812		$	3,651		$	10,923
	Adjustments:
		a.	Stock based compensation expense		1,331			1,494			2,368			2,836
		b.	Depreciation and amortization		3,120			2,862			6,214			5,679
		c.	Impairment of investment in private company		591			-			591			-
		d.	Provision for income taxes		1,854			3,740			2,130			6,726
		e.	Other (income) expense		788			1,235			1,642			3,465
Adjusted EBITDA				$	10,458		$	15,143		$	16,596		$	29,629
Pro forma Net Income Reconciliation				Three Months Ended						Six Months Ended
				June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012
Net income in accordance with GAAP				$	2,774		$	5,812		$	3,651		$	10,923
	Adjustments:
		a.	Stock based compensation expense		1,331			1,494			2,368			2,836
		b.	Amortization of intangibles		2,394			2,488			4,782			4,923
		c.	Other (income) expense excluding cash interest expense and loss on equity method investment		57			(224	)		107			22
		d.	Loss on equity method investement		617			473			1,224			936
		e.	Impairment of investment in private company		591			-			591			-
		f.	Income tax effects		(1,447	)  *		(1,437	)		(2,776	)  *		(2,976	)
Pro forma net income				$	6,317		$	8,606		$	9,947		$	16,664
Pro forma EPS				$	0.20		$	0.27		$	0.32		$	0.53
Weighted average number of shares outstanding - diluted					31,218			31,738			31,471			31,577

* For comparative purposes, we applied an annualized statutory tax rate of 38.25%

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EX-99.2

Exhibit 99.2

ZAGG Inc Reports Financial Results for Second Quarter 2013

· Net sales of $51.2 million

· Adjusted EBITDA of $10.5 million

· GAAP diluted EPS of $0.09 and pro forma diluted EPS of $0.20

· Cash flow from operations year-to-date of over $19.0 million

· Paid down $15.1 million on line of credit and term note

· Reaffirms 2013 revenue guidance; introduces new Adjusted EBITDA guidance

SALT LAKE CITY—August 1, 2013 --  ZAGG Inc (NASDAQ: ZAGG), a market leader in innovative mobile device accessories and technologies, today announced financial results for the second quarter ended June 30, 2013.

“Recent industry data confirms ZAGG as one of the leading brands in the mobile computing accessories market. ZAGG is the number one brand by revenue in tablet accessories, and iFrogz is one of the top five brands in personal audio during the last year in terms of units sold. These results from the latest market data reports validate the success of our brand and product strategies,” said Randy Hales, president and CEO.  “In response to our reduced sales this year, we focused aggressively on cost management resulting in improved gross margin and EBITDA during the quarter. My increased involvement in sales and today’s announcement of Jason Schwartz joining the company as COO adds additional management focus on top line growth and profitability.”

Second Quarter Highlights (second quarter 2013 versus second quarter 2012)

· Net sales of $51.2 million versus $61.6 million

· Gross margins of 42.1% versus 46.1%

· Adjusted EBITDA of $10.5 million versus $15.1 million

· GAAP diluted EPS of $0.09 versus $0.18

· Generated over $5.0 million in operating cash flow or over $19.0 million year-to-date

· Paid down $13.1 million on line of credit and $2.0 million on term note

· invisibleSHIELD sales represented 38% of net sales versus 41%

· Keyboard sales represented 25% of net sales versus 28%

· iFrogz Audio represented 21% of net sales versus 15%

Second Quarter Results

Net sales for the second quarter of 2013 decreased 16.9% to $51.2 million from $61.6 million in the same quarter last year.  Last year’s second quarter benefited from the sale of high ASP tablet products for the iPad 3 which launched in Mid-March of 2012.

Revenue by channel was 86% through indirect channels, 9% through ZAGG.com and iFrogz.com and 5% through the Company’s mall cart and kiosk programs.

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Gross profit for the second quarter was $21.5 million or 42.1% of net sales, versus $28.4 million or 46.1% of net sales in the second quarter of the prior year. Gross profit as a percentage of sales was impacted by the shift in product mix as sales of invisibleSHIELD products, our highest margin product category, decreased as a percentage of overall sales compared to the second quarter of 2012; while sales of iFrogz audio products, a lower margin product category, increased as a percentage of overall sales compared to the second quarter of 2012.

Operating income for the second quarter of 2013 was $5.4 million compared to operating income of $10.8 million for the second quarter of 2012.

Net income for the second quarter of 2013 was $2.8 million or $0.09 per diluted share as compared to net income of $5.8 million or $0.18 per diluted share in the second quarter of 2012.

Pro forma net income for the second quarter of 2013 was $6.3 million or $0.20 per diluted share as compared to pro forma net income of $8.6 million or $0.27 per diluted share in the second quarter of 2012.

Adjusted EBITDA for the second quarter of 2013 was $10.5 million versus $15.1 million of Adjusted EBITDA in the second quarter of 2012.

About Non-GAAP Financial Information

ZAGG considers earnings before stock-based compensation expense, depreciation and amortization, other income/expense, impairment of investment, and provision for income taxes ("Adjusted EBITDA") to be an important financial indicator of the Company's operational strength and the performance of its business.

In addition, ZAGG considers earnings before stock-based compensation expense, amortization, impairment of investment, and other income/expense (excluding cash interest expense), net of tax effects where applicable, (“pro forma net income”) to be a valuable metric in respect of the operational performance of the Company.

These results should be considered in addition to results prepared in accordance with generally accepted accounting principles ("GAAP"), but should not be considered as a substitute for, or superior to, GAAP results.

A reconciliation of the differences between Adjusted EBITDA and pro forma net income, and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Operations included below.

Outlook

In a press release dated July 16, 2013, the Company revised full year revenue guidance for 2013 down to a range of $245 million - $252 million from the previous range of $274 million - $280 million. The Company will also revise full year Adjusted EBITDA guidance to $41.0 million - $ 42.2 million from the previous range of $55 million - $57 million. Our new Adjusted EBITDA guidance reflects our anticipated investment against sales and product for the remainder of the year, possible increase in air freight expenses for product that will ship with new mobile device launches, and marketing spend for new products being launched in the second half of the year.

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Conference Call

A conference call will be held today at 5:00 p.m. EDT to review these results. Interested parties may access via the Internet on the Company’s website at:

http://investors.zagg.com.

Non-GAAP Financial Disclosure

Investors are cautioned that the Adjusted EBITDA (earnings before stock-based compensation expense, depreciation and amortization, other income/expense, impairment of investment, and provision for income taxes) and pro forma net income (earnings before stock-based compensation expense, amortization, impairment of investment, and other income/expense [excluding cash interest expense], net of tax effects where applicable) contained in this press release are not financial measures under generally accepted accounting principles. In addition, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. For comparative purposes, we applied an annualized statutory tax rate of 38.25% to derive the pro forma net income and pro forma EPS. We present this financial information because we believe that it is helpful to some investors as a measure of our performance. 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 current results with our results from other reporting periods and with the results of other companies.

Safe Harbor Statement

This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "may," "future," "plan" or "planned," "will" or "should," "expected," "anticipates," "draft," "eventually" or "projected." You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in filings made by the company with the Securities and Exchange Commission.

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About ZAGG Inc:

ZAGG Inc and its subsidiaries (collectively, the “Company”, or “ZAGG”) design, produce, and distribute creative product solutions such as protective coverings, keyboards, keyboard cases, earbuds, portable batteries, and device cleaning accessories for mobile devices under the family of ZAGG brands. Within the family of the ZAGG brands are products sold under the following names:  invisibleSHIELD®, ZAGGskins™, ZAGGbuds™, ZAGGsparq™, ZAGGfolio™, ZAGGmate™, ZAGGkeys™, ZAGGkeys PRO™, ZAGGkeys PRO Plus™, ZAGGkeys PROfolio, ZAGGkeys PROfolio+, ZAGGkeys MINI 7, and ZAGGkeys MINI 9.

In addition, the Company designs, produces, and distributes cases, Near-Field Audio™ amplifying speakers, earbuds, traditional headphones, and gaming headphones for mobile devices under the family of iFrogz brands in the value-priced lifestyle sector. Within the iFrogz brand portfolio are products sold under the following names: iFrogz™, Earpollution™, Caliber™, and Animatone™.

Investor Relations:

Genesis Select Corp.

Kim Rogers-Carrete, 303-415-0200

krogersc@genesisselect.com

or

Media:

LANE PR

Jane Taber, 503-546-7888

jane@lanepr.com

or

Company:

ZAGG Inc

Nathan Nelson, 801-263-0699 ext. 107

nnelson@zagg.com

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