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Cobra Reports Higher Q4 Results

3/07/2011 12:01:00 AM Eastern

CHICAGO — Cobra Electronics reported
higher net earnings and sales
for the fourth quarter of 2010, as compared
with the prior-year period.

Net earnings were $2.3 million in
Q4 2010, compared with $1.8 million
in 2009. This includes a $1.2 million
tax benefit due to a one-time election
to carry back net operating losses.

The earnings improvement resulted
from higher net sales, which increased
by $2.1 million, or 6.3 percent, to
$34.8 million, compared with $32.8
million in the prior year’s quarter, Cobra
said. Higher gross margin, which
increased 2.1 points, to 27.9 percent,
from 25.8 percent in the fourth quarter
of 2009, also contributed to the rise,
the company added.

For the year, Cobra reported net income
of $1.6 million, compared with a
net loss of $10.3 million (which also included
a net $8.4 million tax valuation
allowance charge), in the prior year.

Segment sales increased 9.7 percent
in the fourth quarter, driven by
strong sales in CB radios as well as
several new product introductions: the
iRadar, PhoneLynx and 7750 Platinum
truck navigation product.

For the year, consolidated net sales
increased $5.3 million, or 5 percent,
to $110.5 million from $105.2 million
in 2009. The increase for the Cobra
segment was $2.5 million, or 2.7 percent,
while the increase for the PPL
segment was $2.8 million, or 23.5 percent.
The increase in Cobra segment
net sales was attributable primarily to
higher sales of CB radios domestically,
the company said, as well as to
an increase in European sales. These
increases were partially offset by a
decline in sales of radar detection domestically.

The increase in net sales for PPL
was primarily higher sales of satellite
navigation products.

“Because of the improvement in
net sales and gross margin and lower
selling, general and administrative expense,
the company had operating
income of $1.8 million for 2010, compared
to an operating loss of $3.7 million
in 2009, a favorable swing of $5.5
million,” said Jim Bazet, Cobra chairman
and CEO.

Consolidated net earnings in 2010
were $1.6 million, compared with a net
loss of $10.3 million in 2009. This contained
a tax provision of $6.8 million,
including the $8.4 million tax valuation
allowance charge and $1.2 million tax
benefit. Net earnings for 2010 included
a $380,000 tax benefit, which resulted
from an additional refund under the
2009 one-time election to carry back
net operating losses and a prospective
reduction in the U.K. corporate tax rate,
the company said.

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