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Cobra's Q1 Sales Soar 44%, While Income Increases 15%

5/21/2001 02:00:00 AM Eastern

CHICAGO — Given a big boost mainly by the rapid expansion of its domestic family radio service (FRS) business, Cobra Electronics reported a 44 percent jump in sales for the first quarter, to $30.6 million, compared with $21.3 million in the year-ago first quarter.

Net income during the first quarter ended March 31 climbed 15 percent, to $722,000, compared with $628,000 in the same three months in 2000.

FRS is one of the fastest growing segments of the two-way mobile communications industry, said Cobra, and plays a key role in the company's growth strategy. In 2001, domestic FRS factory sales are expected to grow 20 percent to $444 million, said Cobra.

In the first quarter, domestic sales of Cobra's microTALK FRS two-way radios more than tripled, compared with the same three months last year.

"Our continued top- and bottom-line increases demonstrate the success of our growth strategies, which are unleashing the full potential of our FRS business, rapid international expansion and extension of our distribution network," said Jim Bazet, president/CEO.

Cobra said gross margin decreased 120 basis points in the first quarter, to 27.6 percent, compared with 28.8 percent in the same period a year ago. "The lower gross margin is a by-product of our strong FRS sales, which mainly have been driven by heavy demand for entry-level models as more and more consumers discover that these two-way radios fit well with their mobile lifestyles," said Bazet.

Looking ahead, Bazet expects company revenue and earnings to grow at a double-digit rate. "Currently, we are the strong No. 2 player in domestic FRS sales, and we are aiming to narrow the gap with the No. 1 position. We also continue to see a tremendous amount of international potential for FRS-related products, and we are vigorously pursuing those with the greatest potential," he said.