Chicago — Cobra Electronics reported a $20.8 million net loss for the fourth quarter due to a write-down of $20.1 million triggered by the falling price of its stock, but said it expects to be profitable this year.
During a call with analysts today, the company said it is now the only supplier of two-way radios to Wal-Mart and that the company is entering the iPod accessories market, as well as the markets for LED and work lights and Internet radios.
The net loss for the fourth quarter, ended Dec. 31, was $20.8 million, compared with a net loss in the prior year of $3.7 million. Most of the loss was caused by the reduction in share prices, which triggered the impairment charge, and a loss of $778,000 in the cash surrender value of company life insurance.
Cobra president and CEO Jim Bazet said Cobra eliminated 16 positions, trimmed $1.2 million in expenses and also cut down back inventory.
Gross profits for the quarter were $8.1 million, compared with $5.2 million a year ago. Net sales declined to $28.3 million, from $45.4 million a year ago, with $3.4 million of this decline due to the company’s exit of the mainstream portable GPS sector. Sales of two-way radios, radar detectors and CB radios also declined due to weak store traffic and competitive pressures, the company said.
Cobra’s gross margins improved over last year to 28.6 percent from 11.5 percent, much of that due to write-downs in the prior year.
Selling, general and administrative expenses declined to $8.2 million in the fourth quarter from $11.3 million as the company curtailed expenses.
Bazet said, “Our plan for the coming year is to maximize cash flows in our core Cobra product lines. At the same time, we are proceeding with the launch of new PPL products, such as asset tracking tools and GPRS-enabled speed-camera locators that will continuously provide drivers with up-to-date road-hazard information. Cobra expects to be profitable in 2009, with revenues at approximately the same levels as in 2008.”