Cobra Electronics Corporation (Chicago, IL, U.S.), a manufacturer of mobile communications products, has announced results for its fourth-quarter ended Dec. 31, 2003 and for the full year.
For the quarter, Cobra reported that net income increased 50 percent to U.S. $1.5 million, or $0.23 per diluted share, compared to net income of $1 million, or $0.15 per diluted share, in the fourth quarter of 2002.
The company reported net sales of $41.3 million, down 3 percent from $42.6 million for the prior year's quarter. Gross margin for the fourth quarter decreased to 25.9 percent from 27.9 percent in the fourth quarter of 2002. Selling, general and administrative expenses decreased 21.1 percent to $8 million from $10.2 million in the fourth quarter of 2002.
Jim Bazet, Cobra's President and CEO, attributes the decline in gross margins to continued pricing pressures in the two-way radio market, as well as efforts to sell through certain slower moving items during the holiday season, a time when he says the most favorable pricing is available.
With respect to the fourth-quarter drop in sales, Mr. Bazet indicated that a decrease in two-way radio sales was the major contributor as a decline in average selling price per unit exceeded the modest growth in unit volume.
Mr. Bazet added that fourth-quarter sales include expanded placement of Cobra's first two handheld GPS models.
For the year, Cobra reported a 7-percent increase in net income to $1.8 million, or $0.28 per diluted share, from $1.7 million, or $0.26 per diluted share, in 2002. Net sales for the year were $114.8 million, down from $135.8 million in the prior year. Gross margin for the year improved to 26.7 percent from 25.2 percent in 2002. Selling, general and administrative expenses declined to $27.5 million from $31.1 million in the prior year.
According to the earnings report, Cobra maintained a strong balance sheet position during the fourth quarter. The company had no interest-bearing debt as of Dec. 31, 2003, the same position as 1 year earlier, and $4.7 million in cash, as compared to $2.8 million 1 year earlier.
Inventory decreased to $20.7 million from $21.0 million the prior year. Accounts receivable at the end of the year decreased to $22.4 million from $24.8 million as a result of lower sales and increased collections activity. Net book value per share on Dec. 31, 2003 increased to $8.99 from $8.70 one year ago.
Cobra also noted that it has amended its loan agreement to extend it through Jan. 31, 2006, reduce the credit facility from $55 million to $45 million and reduce the interest rate on outstanding balances and letters of credit by 25 basis points.
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