ZAGG posts profitable fourth quarter
ZAGG, Inc., the South Salt Lake-maker of mobile phone accessories including the InvisibleShield scratch-proof plastic covering, announced it increased its net sales for the fourth quarter by 30 percent.
The company also said it boosted net sales 48 percent to $264.4 million for all of 2012, according to a release Tuesday of its financial results for the fourth quarter ending 2012 and for the entire year.
"This quarter we successfully refinanced our debt, substantially lowering our interest expense for 2013 and beyond,'' Brandon O'Brien, ZAGG's chief financial officer, said in a statement. ``We will be using some of our cash from operations to pay down debt as well as to purchase our stock opportunistically in the open market."
Net income attributable to stockholders for the fourth quarter of 2012 was $11.9 million or $0.37 per share as compared to $11.1 million or $0.35 per share in the fourth quarter of 2011.
Net sales for the fourth quarter of 2012 increased to $87.5 million. Of the company's total revenue, 82 percent came from indirect channels, 13 percent through ZAGG.com and iFrogz.com (ZAGG's sister company that sells value-based mobile accessories), and 5 percent from the company's mall cart and kiosk programs.
The company announced last December that interim CEO, Randy Hales, would become ZAGG's permanent chief executive after its former CEO and co-founder, Robert G. Pedersen II, resigned.
Pedersen stepped down shortly after he sold 515,000 shares of the company's stock to meet an Aug. 14 margin call. In practice, an investor would receive a margin call from a broker if one or more of the securities the investor had bought with borrowed money decreased in value past a certain point.
It was not clear if the company forced out Pedersen, but Pedersen insisted the decision was mutual and that he left ZAGG to spend more time with his family and to focus on another company, HzO, which is developing a waterproof seal for electronic devices.
Pedersen also acknowledged that ZAGG should move forward with a different CEO in light of its share price dropping 25 percent after guidance for the year failed to meet analysts' expectations.
In addition to the InvisibleShield, ZAGG also produces headphones for mobile electronics as well as protective cases and portable keyboards for tablets such as the iPad.
"In addition to appointing a new CEO, ZAGG added three new independent board members this year. Early in 2012, the company established corporate objectives and a product management discipline and, as a result, ZAGG has significantly increased the breadth and depth of our product offering," Hales said in a statement.
ZAGG's stock rose 34 cents per share to $7.82 in after-hours trading Tuesday.
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