Chicago — Improved sales of navigation products helped Cobra Electronics enjoy a 31.2 percent increase in sales during the first quarter, rising to $25.3 million, from $19.3 million.
The company reduced its operating loss to $1.6 million in the three months, ended March 31, compared with a loss of $2.1 million in the year-ago period.
Cobra recorded a net loss of $1.1 million in the first three months, compared with net earnings of $5.7 million in the same period in 2005. Adjusted net loss in the first quarter of 2005, absent certain non-operating gains, was $1.4 million.
Cobra’s gross margin declined to 19.8 percent in the first three months, from 21.7 in the prior year’s first quarter. The decline was attributed by Cobra to charges related to the obsolescence of certain intellectual property owned by the company as it acquired new software to support future mobile navigation products.
First quarter gross margin also was affected by the delay in the launch of Cobra’s lithium ion 2-way radios, which are expected to be a profitable addition to the Cobra product lineup, said the company.
Expenses in the first quarter increased to $6.6 million, from a year-on-year $6.3 million. The move upward was driven primarily by the increase in sales as compared with the first quarter of last year and the associated variable selling expenses.
Looking at the first quarter’s sales picture, Jim Bazet, president/CEO, said, “Last year, sales of mobile navigation products were hurt by high return rates and the costs of promotional programs due to unfulfilled holiday expectations of our customers. This year, our retail customers continued to purchase products in the first quarter, reflecting strong sell-through of our mobile navigation products to the consumer.
“Our results for the first quarter also reflect continued strong performance in radar detection, as our newest line of 12-band radar detectors began shipping to customers. Additionally, 2-way radio sales for the first quarter exceeded those of last year in spite of production delays on our newest lithium ion battery powered radios that have since been resolved,” said Bazet.