Chicago — Enjoying improved sales in nearly all of its product lines — particularly two-way radio, radar detection and citizen’s band radio — Cobra Electronics pushed up overall second-quarter sales by 33 percent, hitting $33.7 million, up from $25.2 million in the year-ago period.
Cobra’s second-quarter revenue also benefited from sales of mobile navigation products, which were not available in the second quarter of 2004. The company also experienced a “substantial” increase in international sales, driven in part by the approval in the third quarter of last year of higher-powered two-way radios in Canada.
Net income in the second quarter, ended June 30, increased 53.3 percent at the global manufacturer of mobile communications and navigation products, reaching $723,000, compared with $471,000 year-on-year. The “strong performance” was driven by the net sales increase, as well as a lower effective tax rate, said Cobra.
Gross margin in the second quarter hit 25.6 percent, down from 27.1 percent in the same three months the prior year, while expenses declined as a percent of sales, to 23 percent in the period, down from 24 percent year-on-year.
Discussing the decline in gross margin during the second quarter, Jim Bazet, president/CEO, said, “The increase in demand for Cobra’s two-way radios, radar detection and citizen band radios was driven by opportunities with new customers, as well as increased demand from current customers. We elected to meet this increase by flying product into the United States, rather than risking an out-of-stock position for those accounts.
“Additionally, Cobra has continued to support the efforts of our customers to reduce excess inventories of older mobile navigation products to ensure that shelf space is available for the new products shipping in September, and these programs have adversely impacted gross margins,” said Bazet.
For the six months, Cobra sales moved up to $53 million from a year-earlier $47.9 million. In the six months, Cobra moved into the black, posting net income of $6.4 million, compared with a net loss in the same period last year of $93,000.
