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Cobra Q2 Sales Flat, Losses Narrow

7/27/2007 09:38:00 AM Eastern

Chicago — Cobra Electronics reported essentially flat sales and a narrowing operating loss for the second quarter, ended June 30.

Sales totaled $39.2 million, compared with sales of $39.6 million for the period a year ago, as sales of the recently acquired Performance Products Limited offset a decline in sales at Cobra.

The company’s operating loss narrowed to $1.3 million from an operating loss of $3.9 million for the quarter last year, and net loss declined by 84 percent to $434,000, down from $2.7 million in the prior year.

Cobra president/CEO Jim Bazet said, “We are pleased to report to our shareholders a reduced loss in the second quarter as compared to last year. However, this was a challenging quarter for Cobra and we did not meet our own expectations for both sales and earnings.

“Sales for the Cobra segment declined by 10.5 percent, as the two-way radio, Citizens Band radio and mobile navigation lines each experienced shortfalls relative to last year. Conversely, we were pleased with the sales performance of our radar detection line, as well as the sales of Cobra Electronics Europe Limited, which sells two-way radios, marine chart plotters and VHF radios, radar detectors and Citizens Band radios throughout Europe,” he added.

In addition, he said, “Performance Products Limited, acquired in the fourth quarter of last year, had a positive impact on sales and operating profitability, although it was not yet accretive to results after consideration of the interest expense on acquisition debt."

Cobra said it remains the leader in worldwide two-way radio sales and its sales in Europe increased by more than 60 percent over the year-ago quarter and sales to Canada and other International customers increased nearly 36 percent. Sales declined, however, in the United States by 11.1 percent.

Radar detector sales for Cobra remain strong, with a U.S. increase of 3.2 percent and a seven-fold international sales increase. The company said its new high-end R7G and R9G detectors with GPS-based speed camera detection were well received and have just begun shipping.

CB sales are flat with last year but are expected to surpass last year’s sales for the year.

GPS sales showed a significant decline “due in part to a competitor securing a promotional opportunity at QVC that Cobra had received in the prior year.”

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