ZAGG Inc (Nasdaq: ZAGG) (“we,” “us,” “our,” “ZAGG,” or the
“Company”), a leading global mobile lifestyle company, today
announced financial results for the second quarter ended
June 30, 2020.
Second Quarter 2020 Review (Comparisons versus Second
Quarter 2019)
- Net sales of $77.1 million compared to $106.8 million
- Gross profit margin of 30% compared to 35%
- Net loss of $(3.3) million compared to $(5.3) million
- Diluted loss per share of $(0.11) compared to $(0.18)
- Adjusted EBITDA of $0.1 million compared to $2.4 million
- Cash provided by operating activities of $2.7 million compared
to cash used in operating activities of $(1.6) million
Year-to-Date 2020 Review (Comparisons versus
Year-to-Date 2019)
- Net sales of $168.1 million compared to $185.5 million
- Gross profit margin of 3% compared to 33%. Excluding the $44.8
million non-cash write-down of inventory in March 2020, gross
profit margin was 29%
- Net loss, inclusive of a $44.8 million non-cash March 2020
inventory write-down, $18.6 million non-cash impairment on
goodwill and $3.7 million non-cash loss on disposal of
intangible assets and equipment was $(78.9) million compared to
$(19.8) million
- Diluted loss per share of $(2.65) compared to of $(0.68)
- Adjusted EBITDA of $(7.4) million compared to $(6.6)
million
- Cash provided by operating activities of $8.5 million
compared to cash used in operating activities of
$(13.7) million
Chris Ahern, chief executive officer, commented, “Amidst
unprecedented market conditions, we successfully executed our
initial COVID-19 response plan aimed at mitigating the impact on
profitability from lower sales and preserving liquidity. Through
numerous costs saving actions, we were able to weather the pressure
on our top line from the temporary store closures across our
wholesale channel and deliver approximately break-even Adjusted
EBITDA. As the second quarter progressed and stores started to
reopen in many regions of the country and the world, we started to
experience an uptick in demand for our products at many of our
retail partners. Importantly, our e-commerce channel sales
increased throughout the quarter as more consumers shifted their
purchasing online.”
“While the current environment continues to be volatile and the
overall impact from COVID-19 on the global economy and our industry
remains unclear at this point, I am confident that we have taken
the right steps to emerge from the pandemic as a stronger company.
This includes our decision to discontinue certain lower margin
brands and product categories, and simplify other core lines of
business. As a more nimble company going forward, ZAGG can better
serve its key retail partners and core consumers, and generate
increased value for its shareholders.”
Second Quarter 2020 Results (Comparisons versus Second
Quarter 2019)(Amounts in millions, except per share
amounts)
|
For the Three Months Ended |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
Net sales |
$ |
77.1 |
|
|
|
$ |
106.8 |
|
|
Gross
profit |
$ |
23.3 |
|
|
|
$ |
37.8 |
|
|
Gross profit
margin |
30 |
|
% |
|
35 |
|
% |
Net loss |
$ |
(3.3 |
) |
|
|
$ |
(5.3 |
) |
|
Diluted loss per
share |
$ |
(0.11 |
) |
|
|
$ |
(0.18 |
) |
|
Adjusted
EBITDA |
$ |
0.1 |
|
|
|
$ |
2.4 |
|
|
Net sales decreased 28% to $77.1 million, compared to
$106.8 million. The decrease in net sales was primarily
attributable to retail store closures and related demand reductions
due to the global COVID-19 pandemic. This decrease was partially
offset by an increase in direct-to-consumer sales.
Gross profit decreased from $37.8 million (35% of net
sales) to $23.3 million (30% of net sales). The decrease in
gross profit margin percentage was primarily attributable to (1)
increased duty rates for products sourced from China, (2) increased
freight rates, and (3) the sale of excess inventory at margins
lower than our historical average.
Operating expenses decreased 33% to $29.6 million (38% of
net sales) compared to $44.0 million (41% of net sales). The
decrease in operating expenses was primarily attributable to cost
reduction initiatives in response to COVID-19, including (1) a
decrease in salaries and related expenses from the furlough of
certain employees, elimination of bonuses in the second quarter of
2020, and reductions in salary of executives and senior management,
(2) reduced in-channel marketing spend, and (3) the elimination of
global discretionary spend.
Year-to-Date 2020 Results (Comparisons versus
Year-to-Date 2019)(Amounts in millions, except per share
amounts)
|
For the Six Months Ended |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
Net sales |
$ |
168.1 |
|
|
|
$ |
185.5 |
|
|
Gross
profit |
$ |
4.4 |
|
|
|
$ |
61.6 |
|
|
Gross profit
margin |
3 |
|
% |
|
33 |
|
% |
Gross profit
(excluding March 2020 inventory write-down) |
$ |
49.2 |
|
|
|
$ |
61.6 |
|
|
Gross profit margin
(excluding March 2020 inventory write-down) |
29 |
|
% |
|
33 |
|
% |
Net loss |
$ |
(78.9 |
) |
|
|
$ |
(19.8 |
) |
|
Diluted loss per
share |
$ |
(2.65 |
) |
|
|
$ |
(0.68 |
) |
|
Adjusted
EBITDA |
$ |
(7.4 |
) |
|
|
$ |
(6.6 |
) |
|
Net sales decreased 9% to $168.1 million, compared to $185.5
million. The decrease in net sales was primarily attributable to
retail store closures and related demand reductions due to the
global COVID-19 pandemic. This decrease was partially offset by (1)
improved first quarter screen protection, HALO product, and mophie
wireless sales and (2) an increase in second quarter
direct-to-consumer sales linked to retail store closures.
Gross profit was $4.4 million (3% of net sales) compared to
$61.6 million (33% of net sales). The decrease in gross profit
margin percentage was primarily attributable to (1) the March 2020
inventory write-downs of $44.8 million primarily linked to the
discontinuation of certain brands and product lines resulting from
our March 2020 strategic review of long-term profitability of all
brands and product lines and the recoverability of inventory
on-hand, combined with decreased demand due to the effects of
COVID-19, (2) increased duty rates for products sourced from China,
(3) increased freight rates, and (4) the sale of excess inventory
at margins lower than our historical average. Excluding the impact
from the inventory write-downs, gross profit margin was 29% for the
six months ended June 30, 2020, compared to 33% for the six
months ended June 30, 2019.
Operating expenses increased 9% to $92.8 million (55% of
net sales) compared to $84.9 million (46% of net sales). The
increase in operating expenses was primarily attributable to (1) an
$18.6 million impairment charge to goodwill resulting from the
carrying value of our net assets exceeding our market
capitalization, (2) a $2.5 million charge from the write-off of
product tooling linked to discontinued brands and product lines,
(3) a $1.1 million write-off recorded for intangible assets
resulting from discontinued brands and product lines, and (4)
$0.5 million incurred in connection with the lay-off of
certain employees in March 2020. These increases were partially
offset by cost reduction initiatives in response to COVID-19,
including (1) a decrease in salaries and related expenses from the
furlough of certain employees, elimination of bonuses in the second
quarter of 2020, and reductions in salary of executives and senior
management, (2) reduced in-channel marketing spend, and (3) the
elimination of global discretionary spend.
Balance Sheet Highlights (as of June 30, 2020,
December 31, 2019, and June 30, 2019)
|
June 30, 2020 |
|
December 31, 2019 |
|
June 30, 2019 |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
17.3 |
|
$ |
17.8 |
|
$ |
12.9 |
Accounts receivable, net of
allowances |
$ |
63.1 |
|
$ |
142.8 |
|
$ |
102.6 |
Inventories |
$ |
91.3 |
|
$ |
144.9 |
|
$ |
110.6 |
Line of credit |
$ |
92.0 |
|
$ |
107.1 |
|
$ |
95.4 |
CARES Act - Paycheck Protection Program loan |
$ |
9.4 |
|
$ |
— |
|
$ |
— |
Total debt outstanding |
$ |
101.5 |
|
$ |
107.1 |
|
$ |
95.4 |
Net debt (Total debt, including the $9.4M CARES Act loan, less
cash) |
$ |
84.2 |
|
$ |
89.3 |
|
$ |
82.5 |
QTD Days sales outstanding (DSOs) |
74 |
|
69 |
|
87 |
2020 Business Outlook
As a result of ongoing disruption and uncertainty related to the
global COVID-19 pandemic, ZAGG previously withdrew its full-year
2020 outlook. The Company is not providing an update at this
time.
Conference Call
A conference call will be held today, August 4, 2020, at
5:00 p.m. Eastern Standard Time to review these results. Interested
parties may access the call via the Internet on the Company's
website at investors.zagg.com (the URLs are included in this
exhibit as inactive textual references and information contained
on, or accessible through, our websites is not a part of, and is
not incorporated by reference into, this report).
About Non-U.S. GAAP Financial Information
This press release includes Adjusted EBITDA and gross profit
(and corresponding gross profit margin) excluding March 2020
inventory write-downs. Readers are cautioned that (1) Adjusted
EBITDA (earnings before stock-based compensation expense,
depreciation and amortization, other expense (income), net,
transaction costs, BRAVEN employee retention bonus, former CFO
retention bonus, inventory step-up amount in connection with the
acquisition of HALO, severance expense, March 2020 inventory
write-down, impairment of goodwill, loss on disposal of intangible
assets and equipment (loss of discontinued brands, product lines,
and related product tooling), and income tax benefit) and (2) gross
profit (and corresponding gross profit margin) excluding March 2020
inventory write-downs are not financial measures prepared in
accordance with accounting principles generally accepted in the
United States of America (“U.S. GAAP”). In addition, this financial
information should not be construed as an alternative to any other
measure of performance determined in accordance with U.S. GAAP, or
as an indicator of operating performance, liquidity or cash flows
generated by operating, investing and financing activities, as
there may be significant factors or trends that it fails to
address. As such, it should be read only in conjunction with our
consolidated financial statements prepared in accordance with U.S.
GAAP. We present Adjusted EBITDA and gross profit (and
corresponding gross profit margin) excluding March 2020 inventory
write-downs because we believe that these measures are helpful to
some investors as a measure of performance and to normalize the
impact of acquisitions. We caution readers that non-U.S. GAAP
financial information, by its nature, departs from traditional
accounting conventions. Accordingly, its use can make it difficult
to compare current results with results from other reporting
periods and with the financial results of other companies. We have
provided a reconciliation of Adjusted EBITDA and gross profit (and
corresponding gross profit margin) excluding March 2020 inventory
write-downs to the most directly comparable U.S. GAAP measures in
the supplemental financial information attached to this press
release.
Cautionary Note Regarding Forward-Looking
Statements
This press release contains (and oral communications made by us
may contain) “forward-looking statements” within the meaning of the
safe harbor provisions of the U.S. Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be
identified by words such as “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “predict,” “project,” “target,”
“future,” “seek,” “likely,” “strategy,” “may,” “should,” “will” and
similar references to future periods. Examples of forward-looking
statements include, among others, statements we make regarding our
outlook for the Company and statements that estimate or project
future results of operations or the performance of the Company.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following:
- the impacts of certain environmental and health
risks, including the recent outbreak of the coronavirus (COVID-19)
and its potential effects on the Company's operations, sourcing
from China, and future demand for the Company's products for an
uncertain duration of time;
- the ability to design, produce, and distribute the creative
product solutions required to retain existing customers and to
attract new customers;
- building and maintaining marketing and distribution functions
sufficient to gain meaningful international market share for our
products;
- the ability to respond quickly with appropriate products after
the adoption and introduction of new mobile devices by major
manufacturers like Apple®, Samsung®, and Google®;
- changes or delays in announced launch schedules for (or recalls
or withdrawals of) new mobile devices by major manufacturers like
Apple, Samsung, and Google;
- the ability to successfully integrate new operations or
acquisitions;
- the impacts of inconsistent quality or reliability of new
product offerings;
- the impacts of lower profit margins in certain new and existing
product categories, including certain mophie products;
- the impacts of changes in economic conditions, including on
customer demand;
- managing inventory in light of constantly shifting consumer
demand;
- the failure of information systems or technology solutions or
the failure to secure information system data, failure to comply
with privacy laws, security breaches, or the effect on the Company
from cyber-attacks, terrorist incidents or the threat of terrorist
incidents;
- changes in U.S. and international trade policy and tariffs,
including the effect of increases in U.S.-China tariffs on selected
materials used in the manufacture of products sold by the Company
which are sourced from China;
- adoption of or changes in accounting policies, principles, or
estimates; and
- changes in the law, economic and financial conditions,
including the effect of enactment of U.S. tax reform or other tax
law changes.
Any forward-looking statement made by us in this press release
speaks only as of the date on which such statement is made. New
factors emerge from time to time and it is not possible for
management to predict all such factors, nor can it assess the
impact of any such factor on the business or the extent to which
any factor, or combination of factors, may cause results to differ
materially from those contained in any forward-looking statement.
Readers should also review the risks and uncertainties listed in
our most recent Annual Report on Form 10-K and other reports we
file with the U.S. Securities and Exchange Commission, including
(but not limited to) Item 1A - “Risk Factors” in the Form 10-K and
Management's Discussion and Analysis of Financial Condition and
Results of Operations and the risks described therein from time to
time. We undertake no obligation to publicly update any
forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise. The forward-looking statements
contained in this press release are intended to qualify for the
safe harbor provisions of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended.
About ZAGG Inc
ZAGG Inc (NASDAQ:ZAGG) is a global leader in accessories and
technologies that empower mobile lifestyles. The Company has an
award-winning product portfolio that includes screen protection,
mobile keyboards, power management solutions, social tech, and
personal audio sold under the ZAGG®, mophie®, InvisibleShield®,
IFROGZ®, Gear4®, and HALO® brands. ZAGG has operations in the
United States, Ireland, and China. ZAGG products are available
worldwide, and can be found at leading retailers including Best
Buy, Verizon, AT&T, Sprint, T-Mobile, Walmart, Target, and
Amazon.com. For more information, please visit the Company's
website at www.ZAGG.com and follow us on Facebook, Twitter, and
Instagram.
CONTACT:
Investor Relations:ICR Inc.Brendon
Frey203-682-8216brendon.frey@icrinc.com
Company:ZAGG IncJeff DuBois801-506-7336jeff.dubois@ZAGG.com
ZAGG INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands, except par value
amounts)(Unaudited)
|
|
June 30, 2020 |
|
December 31, 2019 |
|
|
|
|
|
ASSETS |
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
$ |
17,314 |
|
|
$ |
17,801 |
|
|
Accounts receivable, net of allowances of $2,000 and $1,143 |
63,090 |
|
|
142,804 |
|
|
Income tax receivable |
5,666 |
|
|
— |
|
|
Inventories |
91,328 |
|
|
144,944 |
|
|
Prepaid expenses and other current assets |
4,900 |
|
|
6,124 |
|
Total
current assets |
182,298 |
|
|
311,673 |
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of $12,865 and
$14,159 |
15,926 |
|
|
18,019 |
|
Intangible assets,
net of accumulated amortization of $101,810 and $95,632 |
55,061 |
|
|
63,110 |
|
Deferred income
tax assets, net |
23,704 |
|
|
22,657 |
|
Operating lease
right of use assets |
10,456 |
|
|
9,636 |
|
Goodwill |
24,920 |
|
|
43,569 |
|
Other assets |
428 |
|
|
567 |
|
Total
assets |
$ |
312,793 |
|
|
$ |
469,231 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
$ |
44,945 |
|
|
$ |
87,303 |
|
|
Income tax payable |
— |
|
|
5,266 |
|
|
Sales returns liability |
25,660 |
|
|
43,853 |
|
|
Accrued wages and wage related expenses |
5,254 |
|
|
6,328 |
|
|
Accrued liabilities |
7,087 |
|
|
15,164 |
|
|
Current portion of operating lease liabilities |
2,774 |
|
|
2,099 |
|
Total
current liabilities |
85,720 |
|
|
160,013 |
|
|
|
|
|
|
Line of
credit |
92,040 |
|
|
107,140 |
|
Operating lease
liabilities |
10,631 |
|
|
10,599 |
|
Other long-term
liabilities |
9,444 |
|
|
— |
|
Total
liabilities |
197,835 |
|
|
277,752 |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value; 100,000 shares authorized; 36,884
and 36,610 shares issued |
37 |
|
|
37 |
|
|
Treasury stock, 7,055 and 7,055 common shares at cost |
(50,455 |
) |
|
(50,455 |
) |
|
Additional paid-in capital |
118,862 |
|
|
116,533 |
|
|
Accumulated other comprehensive loss |
(1,234 |
) |
|
(1,631 |
) |
|
Retained earnings |
47,748 |
|
|
126,995 |
|
Total
stockholders’ equity |
114,958 |
|
|
191,479 |
|
Total
liabilities and stockholders’ equity |
$ |
312,793 |
|
|
$ |
469,231 |
|
ZAGG INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS(Amounts in thousands, except per share
amounts)(Unaudited)
|
|
For the Three Months Ended |
|
For the Six Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
Net
sales |
$ |
77,117 |
|
|
$ |
106,796 |
|
|
$ |
168,098 |
|
|
$ |
185,546 |
|
Cost of
sales |
53,805 |
|
|
69,037 |
|
|
163,728 |
|
|
123,965 |
|
Gross
profit |
23,312 |
|
|
37,759 |
|
|
4,370 |
|
|
61,581 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Advertising and marketing |
2,419 |
|
|
4,514 |
|
|
6,845 |
|
|
9,099 |
|
|
Selling, general and administrative |
23,743 |
|
|
34,483 |
|
|
56,336 |
|
|
66,069 |
|
|
Transaction costs |
51 |
|
|
374 |
|
|
396 |
|
|
621 |
|
|
Impairment of goodwill |
— |
|
|
— |
|
|
18,649 |
|
|
— |
|
|
Loss on disposal of intangible assets and equipment |
— |
|
|
8 |
|
|
3,683 |
|
|
6 |
|
|
Amortization of intangible assets |
3,357 |
|
|
4,599 |
|
|
6,901 |
|
|
9,065 |
|
Total
operating expenses |
29,570 |
|
|
43,978 |
|
|
92,810 |
|
|
84,860 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
(6,258 |
) |
|
(6,219 |
) |
|
(88,440 |
) |
|
(23,279 |
) |
|
|
|
|
|
|
|
|
|
Other
(expense) income: |
|
|
|
|
|
|
|
|
Interest expense |
(956 |
) |
|
(1,103 |
) |
|
(2,490 |
) |
|
(2,113 |
) |
|
Other income |
217 |
|
|
1,192 |
|
|
219 |
|
|
676 |
|
Total
other (expense) income |
(739 |
) |
|
89 |
|
|
(2,271 |
) |
|
(1,437 |
) |
|
|
|
|
|
|
|
|
|
Loss
before provision for income taxes |
(6,997 |
) |
|
(6,130 |
) |
|
(90,711 |
) |
|
(24,716 |
) |
|
|
|
|
|
|
|
|
|
Income tax
benefit |
3,664 |
|
|
794 |
|
|
11,823 |
|
|
4,956 |
|
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(3,333 |
) |
|
$ |
(5,336 |
) |
|
$ |
(78,888 |
) |
|
$ |
(19,760 |
) |
|
|
|
|
|
|
|
|
|
Loss per
share attributable to stockholders: |
|
|
|
|
|
|
|
|
Basic loss per share |
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(2.65 |
) |
|
$ |
(0.68 |
) |
|
Diluted loss per share |
$ |
(0.11 |
) |
|
$ |
(0.18 |
) |
|
$ |
(2.65 |
) |
|
$ |
(0.68 |
) |
ZAGG INC AND
SUBSIDIARIESRECONCILIATION OF NON-U.S. GAAP
FINANCIAL INFORMATION TO U.S. GAAP(Amounts in
thousands)(Unaudited)
UNAUDITED
SUPPLEMENTAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
adjusted EBITDA, adjusted gross profit and adjusted gross profit
margin are not financial measures prepared in accordance with
accounting principles generally accepted in the United States of
America (“U.S. GAAP”). In addition, they should not be construed as
an alternative to any other measures of performance determined in
accordance with U.S. GAAP, or as an indicator of our operating
performance, liquidity, or cash flows generated by operating,
investing, and financing activities as there may be significant
factors or trends that they fail to address. We present this
financial information because we believe that these measures are
helpful to some investors as a measure of our operations. We
caution investors that non-U.S. GAAP financial information, by its
nature, departs from traditional accounting conventions;
accordingly, its use can make it difficult to compare our results
with our results from other reporting periods and with the results
of other companies. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA RECONCILIATION |
Three Months Ended |
|
Six Months Ended |
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
Net loss
in accordance with U.S. GAAP |
$ |
(3,333 |
) |
|
$ |
(5,336 |
) |
|
$ |
(78,888 |
) |
|
$ |
(19,760 |
) |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
a. |
Stock-based compensation
expense |
1,310 |
|
|
1,475 |
|
|
2,604 |
|
|
2,660 |
|
b. |
Depreciation and
amortization |
4,969 |
|
|
6,199 |
|
|
10,345 |
|
|
12,256 |
|
c. |
Other expense (income),
net |
739 |
|
|
(89 |
) |
|
2,271 |
|
|
1,437 |
|
d. |
Transaction costs |
51 |
|
|
374 |
|
|
396 |
|
|
621 |
|
e. |
BRAVEN employee retention
bonus |
— |
|
|
46 |
|
|
— |
|
|
93 |
|
f. |
Former CFO retention
bonus |
— |
|
|
— |
|
|
— |
|
|
110 |
|
g. |
Inventory step-up amount in
connection with acquisition of HALO |
— |
|
|
142 |
|
|
— |
|
|
573 |
|
h. |
Severance expense |
— |
|
|
407 |
|
|
528 |
|
|
407 |
|
i. |
March 2020 inventory
write-down |
— |
|
|
— |
|
|
44,833 |
|
|
— |
|
j. |
Impairment of goodwill |
— |
|
|
— |
|
|
18,649 |
|
|
— |
|
k. |
Loss on disposal of intangible
assets and equipment |
— |
|
|
— |
|
|
3,683 |
|
|
— |
|
l. |
Income tax benefit |
(3,664 |
) |
|
(794 |
) |
|
(11,823 |
) |
|
(4,956 |
) |
Total
adjustments |
3,405 |
|
|
7,760 |
|
|
71,486 |
|
|
13,201 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
72 |
|
|
$ |
2,424 |
|
|
$ |
(7,402 |
) |
|
$ |
(6,559 |
) |
ZAGG INC AND
SUBSIDIARIESRECONCILIATION OF NON-U.S. GAAP
FINANCIAL INFORMATION TO U.S. GAAP(Amounts in thousands,
except per share amounts)(Unaudited)
GROSS PROFIT RECONCILIATION |
Three Months Ended |
|
Six Months Ended |
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
|
|
|
|
|
|
|
Gross profit in accordance with U.S. GAAP |
$ |
23,312 |
|
|
$ |
37,759 |
|
|
$ |
4,370 |
|
|
$ |
61,581 |
|
|
|
|
|
|
|
|
|
|
Adjustment: |
|
|
|
|
|
|
|
|
March 2020 inventory
write-down |
— |
|
|
— |
|
|
44,833 |
|
|
— |
|
Adjusted
gross profit |
$ |
23,312 |
|
|
$ |
37,759 |
|
|
$ |
49,203 |
|
|
$ |
61,581 |
|
|
|
|
|
|
|
|
|
|
Adjusted
gross profit margin |
30 |
% |
|
35 |
% |
|
29 |
% |
|
33 |
% |
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