EX-99.1 2 v123829_ex99-1.htm
 
FOR IMMEDIATE RELEASE:

ZAGG Inc. ANNOUNCES NEARLY 250% INCREASE IN YEAR-TO-DATE SALES
Company Reports Positive Net Income for Second Quarter and Year-to-Date 2008

Salt Lake City, Utah – August 14, 2008 - ZAGG Inc. (OTCBB: ZAGG), the world’s first provider of a unique protective film covering under the brand name invisibleSHIELD, today announced significant increase in revenues over the second quarter of 2007 and positive net income for the second quarter and for the six months ended June 30, 2008.

“These results come from successful execution of an aggressive business plan, and the new level of sales and growth should be very encouraging to our investors,” said Robert G. Pedersen II, President and CEO of ZAGG. “To have such an outstanding jump in sales is bound to create challenges, of course, but I am very pleased with how we have responded and continue to respond to these new opportunities.”

“Our website sales have never been stronger, and our distribution partnerships are really helping to move the invisibleSHIELD brand forward,” said Pedersen. “Even as we are announcing an almost 250% increase in sales, we are confident that there is nowhere to go but up.”

These events will be discussed in further detail during the investor conference call scheduled for Friday, August 15, 2008 at 1:00 PM ET. Executives will be available to answer questions, and information will be presented regarding the results as reported in Form 10-Q for the three and six months ended June 30, 2008. To participate in the call please dial 877-407-9210 (201-689-8049 for international callers). Interested parties may also listen via the Internet at: www.investorcalendar.com and on the Company website at: www.ZAGG.com The call will be available for replay for 30 days by dialing 877-660-6853 (201-612-7415 for international callers) and entering account number 286 and call ID number 293716.

Financial Results

Net sales for the second quarter of 2008 were $2,739,176, an increase of 240.5% compared to net sales of $804,458 for the second quarter of 2007. Net sales for the six months ended June 30, 2008 were $5,584,597, an increase of 249.6% compared to net sales of $1,597,306 for the six months ended June 30, 2007.

Gross profit for the second quarter of 2008 was $2,026,962, or 74% of sales, compared to $203,672, or 74.7% of sales, in the second quarter of 2007. Gross profit for the six months ended June 30, 2008 was $4,094,591, or 73.3% of sales, compared to $1,206,475, or 75.5% of sales. We reported net income of $174,703 or $0.01 per share in the second quarter of 2008 compared to a net less of ($48,293) or ($0.00) per share in the second quarter of 2007. We reported net income of $60,532 or $0.00 for the six months ended June 30, 2008 compared to a net loss of ($318,865) or ($0.02) for the six months ended June 30, 2007.

 
About ZAGG Inc:
ZAGG Inc designs, manufactures, and distributes protective clear coverings and accessories for consumer electronic and hand-held devices, worldwide. ZAGG’s flagship brand, the invisibleSHIELD, is a protective, high-tech film covering, designed for iPods, laptops, cell phones, digital cameras, PDAs, watch faces, GPS systems, gaming devices, and other items. The patent-pending invisibleSHIELD application is the first scratch protection solution of its kind on the market, and has sold over one million units. Currently, ZAGG offers over 2,500 precision pre-cut designs with a lifetime replacement warranty through online channels, resellers, college bookstores, Mac stores and mall kiosks. The company continues to increase its product lines to offer additional electronic accessories to its tech-savvy customer base, as well as an expanded array of invisibleSHIELD products for other industries. For more information please visit the company’s web site at www.ZAGG.com.

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 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.
 
Media Contact:
ZAGG Inc
Robert Pedersen II, president and CEO
801-263-0699 ext. 110
robert@zagg.com
or
Alpaytac Inc.
Caroline Rubenstein
312-245-9805 ext. 110
caroline@alpaytac.com

Investor Relations:
ZAGG Inc
Brandon O’Brien, CFO
(801) 263-0699 ext. 122
brandon@zagg.com
 
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

   
June 30,
 
December 31,
 
       
  
2008
  
2007
  
           
ASSETS
              
               
Current assets
              
Cash
  
$
475,940
  
$
2,129,215
  
Accounts receivable, net
   
821,161
   
402,446
 
Inventories
    
680,509
   
447,044
 
Prepaid advertising
    
244,482
   
204,976
 
Prepaid expenses and other current assets
    
892,121
   
122,107
 
Deferred income tax assets
    
12,829
   
12,829
 
               
Total current assets
    
3,127,042
   
3,318,617
 
               
Property and equipment, net
   
447,253
   
328,077
 
               
Deferred income tax assets
    
407,188
   
444,118
 
               
Deposits and other assets
    
30,537
   
30,547
 
               
Intangible assets, net
    
46,535
   
46,894
 
               
Total assets
  
$
4,058,555
  
$
4,168,253
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
             
               
Current liabilities
              
Notes payable
  
$
29,655
  
$
42,090
  
Accounts payable
    
236,693
   
505,575
 
Accrued liabilities
    
41,997
   
35,814
 
Accrued wages and wage related expenses
    
101,283
   
95,537
 
Deferred licensing revenue
    
71,703
   
100,911
 
Sales returns liability
    
66,658
   
23,861
 
               
Total current liabilities
    
547,989
   
803,788
 
               
Total liabilities
    
547,989
   
803,788
 
               
Stockholders' equity
             
Common stock, $0.001 par value; 50,000,000 shares authorized; 18,893,995 and 18,853,995 shares issued and outstanding, respectively
    
18,895
   
18,855
 
Warrants to purchase common stock
    
750,476
   
750,476
 
Additional paid-in capital
    
3,422,169
   
3,341,388
 
Cumulative translation adjustment
    
882
   
(3,866
)
Accumulated deficit
    
(681,856
)
  
(742,388
)
               
Total stockholders' equity
    
3,510,566
   
3,364,465
 
               
Total liabilities and stockholders' equity
  
$
4,058,555
  
$
4,168,253
  
 
See accompanying notes to condensed consolidated financial statements.
 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

   
Three Months Ended
  
Three Months Ended
  
Six Months Ended
  
Six Months Ended
  
   
  
June 30, 2008
  
June 30, 2007
  
June 30, 2008
  
June 30, 2007
  
                   
                   
Net sales
  
$
2,739,176
  
$
804,458
  
$
5,584,597
  
$
1,597,306
  
Cost of sales  
    
712,214
   
203,672
   
1,490,006
   
390,831
 
                           
Gross profit  
    
2,026,962
   
600,786
   
4,094,591
   
1,206,475
 
                           
Operating expenses:
                          
Advertising and marketing
    
484,728
   
79,188
   
1,274,792
   
254,231
 
Selling, general and administrative  
    
1,343,778
   
554,037
   
2,849,199
   
1,246,785
 
                           
Total operating expenses  
    
1,828,506
   
633,225
   
4,123,991
   
1,501,016
 
                           
Income (loss) from operations
    
198,456
   
(32,439
)
  
(29,400
)
  
(294,541
)
                           
Other income (expense):
                          
Interest expense
    
(972
)
  
(20,231
)
  
(2,674
)
  
(26,099
)
Interest and other income  
    
81,149
   
3,969
   
129,536
   
4,085
 
                           
Total other income (expense)  
    
80,177
   
(16,262
)
  
126,862
   
(22,014
)
                           
Income (loss) before benefit (provision) for income taxes
    
278,633
   
(48,701
)
  
97,462
   
(316,555
)
                           
Income tax benefit (provision)  
    
(103,930
)
  
408
   
(36,930
)
  
(2,310
)
                           
Net income (loss)  
  
$
174,703
  
$
(48,293
)
$
60,532
  
$
(318,865
)
                           
Basic net income (loss) per common share  
  
$
0.01
  
$
(0.00
)
$
0.00
  
$
(0.02
)
                           
Diluted net income (loss) per common share  
  
$
0.01
  
$
(0.00
)
$
0.00
  
$
(0.02
)
                           
Weighted average number of shares outstanding - basic  
    
18,884,105
   
15,168,995
   
18,884,050
   
14,596,739
 
                           
Weighted average number of shares outstanding - diluted  
    
18,936,055
   
15,168,995
   
18,976,547
   
14,596,739
 
 
See accompanying notes to condensed consolidated financial statements.