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Cobra Q2 Sales, Net Increase

7/29/2002 08:42:00 AM Eastern

Chicago - With Cobra's new lines of two-way radios as the primary highlight, Cobra Electronics posted a 5.2 percent sales increase during the three months, hitting $36.3 million, up from $34.5 million in the year-ago period.

Net income climbed to $621,000 in the second quarter, up from $374,000 in the same three months in 2001.

Gross margin in the second quarter, ended June 30, increased 50 basis points, to 25.4 percent, compared with 24.9 percent in the same quarter last year.

'Despite an uncertain economic environment, we were able to generate sales growth,' said Jim Bazet, president/CEO.

Regarding profitability, Bazet was pleased to report the progress in improving gross margins in the second quarter over the prior year as well as an increase of 2.8 points over the first quarter. 'Gross margins and selling expenses continued to be adversely impacted by sales of older radar detector and two-way radio models for which pricing and other incentives were necessary to make room for our new products,' he said.

For the six months, sales dropped 11.1 percent, down to $57.3 million, from $64.5 million in the prior year. Gross margin for the first half slipped 110 basis points, to 24.4 percent, down from 25.5 percent in the same period last year.

Net income decreased to $385,000 in the six months, down from $1.1 million year over year. The six months last year included non-recurring expenses of about $800,000 on an after-tax basis associated with a terminated acquisition.

Looking ahead, Cobra said its expects further strengthening of its gross margin throughout the year since its sales efforts will be focused almost entirely on new models. In the third quarter, Cobra expects continued profitability and year-over-year growth in sales.

For the 12 months, the company remains cautious regarding the overall economic outlook and has moderated its forecast provided in the first quarter. It anticipates results will be approximately in line with those of 2001, both from a top-line and bottom-line perspective.