UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-511
COBRA ELECTRONICS CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE 36-2479991
(State of incorporation) (I.R.S. Employer Identification No.)
6500 WEST CORTLAND STREET
CHICAGO, ILLINOIS 60635
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 889-8870
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.33 1/3 Per Share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
--- ---
Number of shares of Common Stock of Registrant outstanding at May 5,
1995: 6,226,648
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
Cobra Electronics Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the Three Months Ended
(Unaudited)
-----------------------------
<S> <C> <C>
March 31, March 31,
1995 1994
------------- -------------
Net sales.......................... $ 20,737 $ 18,481
Cost of sales...................... 16,938 14,890
------------- -------------
Gross profit..................... 3,799 3,591
Selling, general and
administrative expense........... 3,762 3,167
------------- -------------
Operating income................. 37 424
Other expense:
Interest expense................. 315 219
Other, net....................... 15 103
------------- -------------
Income(loss)before taxes........... (293) 102
Provision (benefit)for taxes....... --- ---
------------- -------------
Net income(loss)................... $ (293) $ 102
============= =============
Net income(loss)per share.......... $ (0.05) $ 0.02
============= =============
Weighted average number of common
shares and common share
equivalents outstanding.......... 6,227 6,232
============= =============
Cash dividends..................... None None
============= =============
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
Cobra Electronics Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands)
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
1995 1994
(Unaudited) (Unaudited)
------------ ------------
<S> <C> <C>
ASSETS:
Current assets:
Cash............................... $ 258 $ 197
Receivables, less allowance for
doubtful accounts of $764 at
March 31, 1995 and $638
at December 31, 1994............. 11,979 10,280
Inventories, primarily finished
goods............................ 16,523 15,627
Other current assets............... 1,613 1,399
------------ ------------
Total current assets............... 30,373 27,503
------------ ------------
Property, plant and equipment,
at cost:
Land............................... 593 593
Building and improvements.......... 6,853 6,848
Tooling and equipment.............. 14,231 13,837
------------ ------------
21,677 21,278
Accumulated depreciation and
amortization..................... (14,742) (14,294)
------------ ------------
Net property, plant and equipment.. 6,935 6,984
------------ ------------
Other assets......................... 5,953 5,855
------------ ------------
Total assets......................... $ 43,261 $ 40,342
============ ============
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
Cobra Electronics Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(dollars in thousands)
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
1995 1994
(Unaudited) (Unaudited)
------------ ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Current liabilities:
Accounts payable................... $ 5,919 $ 3,422
Accrued liabilities................ 6,302 6,030
Short-term debt.................... 11,904 11,461
------------ ------------
Total current liabilities.......... 24,125 20,913
------------ ------------
Shareholders' equity:
Preferred stock, $1 par value,
shares authorized-1,000,000;
none issued...................... --- ---
Common stock, $.33 1/3 par
value, 12,000,000 shares
authorized; 7,039,100 issued
and 6,226,648 outstanding at
both March 31, 1995 and
December 31, 1994................ 2,345 2,345
Paid-in capital.................... 22,118 22,118
Retained earnings.................. 1,831 2,124
------------ ------------
26,294 26,587
Treasury stock, at cost............ (5,545) (5,545)
Note receivable from officer's
exercise of stock options........ (1,613) (1,613)
------------ ------------
Total shareholders' equity......... 19,136 19,429
------------ ------------
Total liabilities and shareholders'
equity............................. $ 43,261 $ 40,342
============ ============
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
Cobra Electronics Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
(Unaudited)
-----------------------------
March 31, March 31,
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income(loss) from operations........ $ (293) $ 102
Adjustments to reconcile net income
(loss) from operations to net cash
provided by operating activities:
Depreciation and amortization......... 488 500
Changes in assets and liabilities:
Receivables......................... (1,699) 5,017
Inventories......................... (896) 123
Other current assets................ (238) (392)
Other assets........................ 113 (54)
Accounts payable.................... 2,497 (200)
Accrued liabilities................. 272 (315)
------------- -------------
Net cash provided by operating
activities.......................... 244 4,781
------------- -------------
Cash flows from investing activities:
Capital expenditures.................. (402) (130)
Net cash used for discontinued
operation........................... (224) (142)
------------- -------------
Net cash used for investing
activities.......................... (626) (272)
------------- -------------
Cash flows from financing activities:
Net borrowing (repayments) under
line-of-credit agreement............ 443 (4,225)
------------- -------------
Net cash provided by (used for)
financing activities................ 443 (4,225)
------------- -------------
Net increase in cash 61 284
Cash at beginning of period 197 176
------------- -------------
Cash at end of period $ 258 $ 460
============= =============
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE>
Cobra Electronics Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. The Condensed
Consolidated Balance Sheet as of December 31, 1994 has been derived from
the audited consolidated balance sheet as of that date. It is suggested
that these financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest annual
report on Form 10-K. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the results
of operations for the interim periods a fair statement of such
operations. All such adjustments are of a normal recurring nature. The
results of operations of any interim period are not necessarily
indicative of the results that may be expected for a fiscal year.
(1) PURCHASE ORDERS AND COMMITMENTS:
At March 31, 1995, the Company had outstanding purchase orders with
foreign suppliers totaling approximately $28.2 million compared to $22.3
million as of March 31, 1994.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
ANALYSIS OF RESULTS OF OPERATIONS
First Quarter 1995 vs. First Quarter 1994:
- --------------------------------------------
Sales for the first quarter of 1995 increased by 12.2% to $20.7 million
compared to $18.5 million for the prior year period. The sales growth
was primarily due to increased sales of CB radios, which reflected strong
demand for several of the Company's models, including the new weather-alert CBs
that were introduced in the second quarter of 1994. Sales for
the Company's other product lines approximated the prior year.
Gross margin declined slightly to 18.3% in the current period from 19.4%
for the prior year. The decline was due to higher service costs,
primarily in connection with the expansion of the Company's consumer
hotline, (1-800-COBRA22). Although the expansion of the consumer hotline
began in the first quarter of 1994, the associated ongoing costs were not
fully realized until the second quarter of 1994. This expansion was
implemented to enable the Company to answer all of its calls from
consumers for installation and operational assistance--to partially
offset the lack of skilled sales personnel in many retail stores--as well
as for information on where to purchase Company products.
Selling, general and administrative expenses increased to $3.8 million in
the current quarter compared to $3.2 million in the prior year. The
increase was due primarily to higher marketing and product development
costs incurred to increase sales by expanding the Company's distribution
and product offerings. Also, payroll costs increased over the prior year
reflecting additions to strengthen senior management and sales staff.
Interest expense for the current quarter increased $96,000 compared to
the prior year. Interest rates under the Company's line-of-credit
agreement are tied to market interest rates, which have increased from
the prior year period.
LIQUIDITY AND CAPITAL RESOURCES
Operating activities generated cash of $244,000 during the current
period. Increases in receivables and inventories were funded primarily
by an increase in accounts payable. The higher accounts payable balance
reflected increased obligations for purchases of inventory from
suppliers. Capital expenditures of $402,000 related primarily to
investments in tooling for new products. At March 31, 1995, the Company
had approximately $5 million of unused credit line.
<PAGE>
PART II
OTHER INFORMATION
Items 1, 2, 3, 4 and 5 Not Applicable.
- -------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits:
Exhibit No. Description
----------- ------------------------------------------------
27 Financial data schedule required under
Article 5 of Regulation S-X
b) During the quarter, the Company filed Current Reports on Form 8-K
as follows:
Form Type Date of Report Items Reported
---------- -------------- --------------------------------------
Form 8-K 1/11/95 Item 5. Other Events
<PAGE>
SIGNATURE
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 thereunto duly authorized.
COBRA ELECTRONICS CORPORATION
By Gerald M. Laures
----------------------------
Gerald M. Laures
Vice President - Finance,
and Corporate Secretary
Dated: May 12, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 258
<SECURITIES> 0
<RECEIVABLES> 11,979
<ALLOWANCES> 764
<INVENTORY> 16,523
<CURRENT-ASSETS> 30,373
<PP&E> 21,677
<DEPRECIATION> 14,742
<TOTAL-ASSETS> 43,261
<CURRENT-LIABILITIES> 24,125
<BONDS> 0
<COMMON> 2,345
0
0
<OTHER-SE> 16,791
<TOTAL-LIABILITY-AND-EQUITY> 43,261
<SALES> 20,737
<TOTAL-REVENUES> 20,737
<CGS> 16,938
<TOTAL-COSTS> 16,938
<OTHER-EXPENSES> 3,762
<LOSS-PROVISION> 92
<INTEREST-EXPENSE> 315
<INCOME-PRETAX> (293)
<INCOME-TAX> 0
<INCOME-CONTINUING> (293)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (293)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
<PAGE>
</TABLE>
