Q2 2008 Highlights:
-- Cash and investments increase by approximately $1 million
during Q2 2008, with no long-term debt
-- Net loss of ($0.00) per share in Q2 2008 compared to net loss
of ($0.15) in Q2 2007
-- Net income excluding non-cash equity compensation and divested
businesses was $0.01 per share in Q2 2008 compared to net loss
of ($0.01) per share in Q2 2007
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--July 23, 2008--iGo, Inc.
(Nasdaq:IGOI), a leading provider of innovative portable power and
computing solutions, today reported financial results for the second
quarter ended June 30, 2008. Total revenue was $18.6 million in the
second quarter of 2008, compared with revenue of $19.5 million in the
second quarter of 2007.
Excluding revenues related to business lines divested during and
subsequent to the end of the first quarter of 2007 (handheld and
expansion/docking), total revenues were $16.8 million in the second
quarter of 2008, compared to $17.6 million in the same quarter of the
prior year. According to Generally Accepted Accounting Principles in
the United States (U.S. GAAP), iGo must consolidate the operating
results of Mission Technology Group, the acquirer of the Company's
expansion/docking business, into its financial results until such time
as the Company's financial interest in the performance of Mission
Technology Group no longer meets the criteria for consolidation.
Net loss was $66,000, or ($0.00) per share, in the second quarter
of 2008, compared with a net loss of $4.8 million, or ($0.15) per
share, in the same quarter of the prior year.
Excluding non-cash compensation expense and the operating results
of the divested businesses, net income was $173,000, or $0.01 per
share, in the second quarter of 2008, compared to a net loss of
$326,000, or ($0.01) per share, in the second quarter of 2007. The net
loss for the second quarter of 2007 also excludes charges recorded for
obsolete inventory and restructuring expense. A detailed
reconciliation of GAAP to non-GAAP financial results, including the
impact of the charges for obsolete inventory and restructuring expense
recorded in the second quarter of 2007, is provided in the financial
tables at the end of this release.
Michael D. Heil, President and Chief Executive Officer of iGo,
commented, "We had another quarter of positive cash generation and
built our cash and investments balance to more than $27 million.
Revenue from sales of power products, excluding the OEM channel that
we no longer sell into, increased approximately 18% over the prior
year. This revenue growth is being driven by solid sales trends in the
retail channel, particularly in the high-power products area."
Second Quarter Product Area Highlights
-- Unit sales of universal power products for high-power mobile
electronic (ME) devices, such as portable computers, were
approximately 322,000 units in the second quarter of 2008.
-- Unit sales of universal power adapters for low-power ME
devices, such as mobile phones, PDAs, MP3 players and digital
cameras, were approximately 759,000 units in the second
quarter of 2008.
-- Revenue from the sale of power products for high-power ME
devices was $11.5 million in the second quarter of 2008, an
increase of 4.3% from $11.0 million in the same period of the
prior year. An increase in sales through the retail channel
offset a decline in sales through the OEM channel.
-- Revenue from the sale of power products for low-power ME
devices was $5.2 million in the second quarter of 2008, a
decrease of 7.0% from $5.6 million in the same period of the
prior year.
-- Revenue from the sale of all power products was $16.7 million
in the second quarter of 2008, compared with $16.6 million in
the same period of the prior year. Power product revenue
included $2.5 million from sales to OEM customers in the
second quarter of 2007, compared to $43,000 in the second
quarter of 2008. Excluding sales to OEM customers, power
product revenue increased 17.9% in the second quarter of 2008,
compared to the same quarter of 2007.
Financial Highlights
Gross margin was 29.1% in the second quarter of 2008, compared to
10.9% in the second quarter of 2007. Excluding the operations of the
divested businesses and charges for excess and obsolete inventory,
gross margin was 27.2% in the second quarter of 2008, compared to
32.3% in the second quarter of 2007. The decline in gross margin is
primarily attributable to increasing pricing pressure in the
high-power retail channel.
Total operating expenses in the second quarter of 2008 were $5.8
million, compared with $8.9 million in the second quarter of 2007.
Excluding non-cash equity compensation expense, the operations of the
divested businesses and severance charges, operating expenses were
$4.7 million in the second quarter of 2008, or 28.0% of revenue
(excluding revenue from divested businesses), compared to $6.4 million
in the second quarter of 2007, or 36.4% of revenue (excluding revenue
from divested businesses). The decline in operating expenses as a
percentage of revenue reflects the impact of the lower cost structure
following the restructuring actions taken during 2007.
Excluding assets of the divested businesses, the Company's balance
sheet remained strong with $27.5 million in cash, cash equivalents,
and short-term investments at June 30, 2008. The Company continued to
have no long-term debt and had a book value per share of $1.19 based
on 31.9 million common shares issued and outstanding at June 30, 2008.
Outlook
The Company has elected not to provide U.S. GAAP-based financial
guidance for the third quarter of 2008 because Mission Technology
Group does not prepare financial forecasts. However, Mission
Technology Group's revenue and operating results for the third quarter
of 2008 are not expected to be more or less significant to the
Company's consolidated financial results than they were for the second
quarter of 2008.
On a non-GAAP basis, which excludes revenue from divested
businesses, the Company believes that revenue will range from $17
million to $18 million in the third quarter of 2008. The Company also
believes that net income, excluding the operating results of divested
businesses and non-cash equity compensation, will be approximately
breakeven.
"We expect the positive sales trends in the retail channel to
continue into the third quarter," said Mr. Heil. "Our stable revenue
base should enable the Company to be at or near profitability as we
continue to invest in initiatives that can generate higher levels of
growth in the future."
Non-GAAP Financial Measures
Although the Company consolidates the operating results of Mission
Technology Group, the acquirer of its docking/expansion business, for
accounting purposes under U.S. GAAP, the Company believes that the
discussion of operating results excluding the handheld and
expansion/docking lines of business and non-cash equity compensation
allows management and investors to evaluate and compare the Company's
operating performance on a more meaningful and consistent manner. In
addition, management uses these measures internally for evaluation of
the performance of the business, including the allocation of
resources. These non-GAAP financial measures should be considered in
addition to, not as a substitute for, or superior to, measures of
financial performance in accordance with GAAP.
About iGo, Inc.
iGo, Inc., based in Scottsdale, Arizona, is a developer of
universal power adapters for portable computers and mobile electronic
devices (e.g., mobile phones, PDAs, digital cameras, etc.) and creator
of the patented iGo(R) intelligent tip technology. iGo offers a full
line of AC, DC and combination AC/DC power adapters for portable
computers and low-power mobile electronic devices. All of these
adapters leverage iGo's intelligent tip technology, which enables one
power adapter to power/charge hundreds of brands and thousands of
models of mobile electronic devices through the use of interchangeable
tips.
iGo's products are available at www.iGo.com as well as through
leading resellers and retailers. For additional information call
480-596-0061, or visit www.igo.com.
iGo is a registered trademark of iGo, Inc. All other trademarks or
registered trademarks are the property of their respective owners.
This press release contains "forward-looking statements" within
the meaning of Section 21E of the Securities Exchange Act of 1934. The
words "believe," "expect," "anticipate," "should," and other similar
statements of expectations identify forward-looking statements.
Forward-looking statements in this press release include expectations
regarding the Company's financial performance in the third quarter of
2008; the expectation that Mission Technology Group's revenue and
operating results for the third quarter of 2008 will not be more or
less significant to the Company's consolidated financial results than
they were for the second quarter of 2008; the expectation of continued
positive sales trends in the retail channel and the expectation that
the company will remain profitable. These forward-looking statements
are based largely on management's expectations and involve known and
unknown risks, uncertainties and other factors, which may cause the
Company's actual results, performance or achievements, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by these
forward-looking statements. Risks that could cause results to differ
materially from those expressed in these forward-looking statements
include, among others, the loss of, and failure to replace, any
significant customers; the inability of the Company's new sales and
marketing strategy to generate broader consumer awareness, increased
adoption rates, or impact sell-through rates at the retail and
wireless carrier level; the timing and success of product development
efforts and new product introductions, including internal development
projects as well as those being pursued with strategic partners; the
timing and success of product developments, introductions and pricing
of competitors; the timing of substantial customer orders; the
availability of qualified personnel; the availability and performance
of suppliers and subcontractors; the ability to expand and protect the
Company's proprietary rights and intellectual property; the successful
resolution of unanticipated and pending litigation matters; market
demand and industry and general economic or business conditions; and
other factors to which this press release refers. Additionally, other
factors that could cause actual results to differ materially from
those set forth in, contemplated by, or underlying these
forward-looking statements are included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2007 under the heading
"Risk Factors." In light of these risks and uncertainties, the
forward-looking statements contained in this press release may not
prove to be accurate. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, or any facts, events,
or circumstances after the date hereof that may bear upon
forward-looking statements. Additionally, the Company does not
undertake any responsibility to update you on the occurrence of
unanticipated events which may cause actual results to differ from
those expressed or implied by these forward-looking statements.
iGo, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(000's except per share data)
(unaudited)
Three months
ended Six months ended
June 30, June 30,
----------------- -----------------
2008 2007 2008 2007
-------- -------- -------- --------
Net revenue $18,553 $19,508 $37,492 $38,371
Gross profit 5,404 2,119 10,982 7,525
Selling, engineering and
administrative expenses 5,787 8,886 12,693 16,906
-------- -------- -------- --------
Loss from operations (383) (6,767) (1,711) (9,381)
Interest income (expense), net 210 289 478 556
Gain on disposal of assets and
other income, net 107 1,837 261 2,141
Litigation settlement income - - 672 -
-------- -------- -------- --------
Loss before minority interest (66) (4,641) (300) (6,684)
Minority interest - (127) - (127)
-------- -------- -------- --------
Net loss $ (66) $(4,768) $ (300) $(6,811)
======== ======== ======== ========
Net loss per share -- basic and
diluted $ (0.00) $ (0.15) $ (0.01) $ (0.22)
Weighted avg common shares
outstanding -- basic and diluted 31,772 31,574 31,676 31,657
iGo, Inc. and Subsidiaries
Selected Other Data
(unaudited)
Reconciliation of non-GAAP Financial Measure - Operating results by
product line to net income (loss) before non-cash equity
compensation, excess and obsolete inventory expense, severance
expense, and gain on sale of patent portfolio, net of loss on
disposal of related assets by product line:
Three months ended
June 30, 2008
Power,
Keyboards Expansion
& &
Corporate Handheld Total
---------- --------- --------
Net revenue $16,825 $ 1,728 $18,553
Gross profit 4,580 824 5,404
Selling, engineering and administrative
expenses 5,112 675 5,787
---------- --------- --------
Income (loss) from operations (532) 149 (383)
Interest income (expense), net 202 8 210
Other income (expense), net 110 (3) 107
Litigation settlement income - - -
---------- --------- --------
Income (loss) before minority interest (220) 154 (66)
Minority interest - - -
---------- --------- --------
Net income (loss) (220) 154 (66)
Non-cash equity compensation 393 - 393
Excess and obsolete inventory expense - - -
Severance expense - - -
Gain on sale of patent portfolio, net
of loss on disposal of related license
assets - - -
---------- --------- --------
Net income (loss) as adjusted $ 173 $ 154 $ 327
========== ========= ========
Net income (loss) per share as adjusted $ 0.01 $ 0.00 $ 0.01
Weighted avg common shares outstanding
-- basic: 31,772 31,772 31,772
Three months ended
June 30, 2007
Power,
Keyboards Expansion
& &
Corporate Handheld Total
---------- --------- --------
Net revenue $17,606 $ 1,902 $19,508
Gross profit 1,282 837 2,119
Selling, engineering and administrative
expenses 8,021 865 8,886
---------- --------- --------
Income (loss) from operations (6,739) (28) (6,767)
Interest income (expense), net 287 2 289
Other income (expense), net 106 1,731 1,837
Litigation settlement income - - -
---------- --------- --------
Income (loss) before minority interest (6,346) 1,705 (4,641)
Minority interest - (127) (127)
---------- --------- --------
Net income (loss) (6,346) 1,578 (4,768)
Non-cash equity compensation 1,005 - 1,005
Excess and obsolete inventory expense 4,401 - 4,401
Severance expense 614 - 614
Gain on sale of patent portfolio, net of
loss on disposal of related license
assets - (1,585) (1,585)
---------- --------- --------
Net income (loss) as adjusted $ (326) $ (7) $ (333)
========== ========= ========
Net income (loss) per share as adjusted $ (0.01) $ (0.00) $ (0.01)
Weighted avg common shares outstanding
-- basic: 31,574 31,574 31,574
iGo, Inc. and Subsidiaries
Selected Other Data Continued
(unaudited)
Reconciliation of non-GAAP Financial Measure - Gross profit by product
line to gross profit before excess and obsolete inventory expense by
product line:
Three months ended Three months ended
June 30, 2008 June 30, 2007
Power, Power,
Keyboards Expansion Keyboards Expansion
& & & &
Corporate Handheld Total Corporate Handheld Total
---------- --------- ------ ---------- --------- ------
Gross profit $4,580 $824 $5,404 $1,282 $837 $2,119
Excess and
obsolete
inventory
expense - - - 4,401 - 4,401
--------- -------- ------ --------- -------- ------
Gross profit
as adjusted $4,580 $824 $5,404 $5,683 $837 $6,520
========= ======== ====== ========= ======== ======
Reconciliation of non-GAAP Financial Measure - Selling, engineering
and administrative expenses by product line to selling, engineering
and administrative expenses before non-cash equity compensation and
severance expense by product line:
Three months ended
June 30, 2008
Power,
Keyboards Expansion
& &
Corporate Handheld Total
---------- --------- -------
Selling, engineering and administrative
expenses $5,112 $675 $5,787
Non-cash equity compensation (393) - (393)
Severance expense - - -
--------- --------- -------
Selling, engineering and administrative
expenses as adjusted $4,719 $675 $5,394
========= ========= =======
Three months ended
June 30, 2007
Power,
Keyboards Expansion
& &
Corporate Handheld Total
---------- --------- --------
Selling, engineering and administrative
expenses $ 8,021 $865 $ 8,886
Non-cash equity compensation (1,005) - (1,005)
Severance expense (614) - (614)
---------- --------- --------
Selling, engineering and administrative
expenses as adjusted $ 6,402 $865 $ 7,267
========= ========= ========
This information is being provided because management believes these
are key metrics to the investment community and assist in the
understanding and analysis of operating performance. Operating
results by product line and corresponding net income (loss) before
non-cash equity compensation, excess and obsolete inventory expense,
severance expense, and gain on sale of patent portfolio, net of loss
on disposal of related license assets; gross profit by product line
and corresponding gross profit before excess and obsolete inventory
expense; and selling, engineering and administrative expenses by
product line and corresponding selling, engineering and
administrative expenses before non-cash equity compensation and
severance expense should be considered in addition to, not as a
substitute for, or superior to, measures of financial performance in
accordance with GAAP.
iGo, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(000's)
(unaudited)
June December
30, 31,
2008 2007
------- --------
ASSETS
Cash and cash equivalents $21,461 $15,908
Short-term investments 6,129 9,026
Accounts receivable, net 14,015 16,924
Inventories 4,678 7,406
Prepaid expenses and other current assets 248 445
------- --------
Total current assets 46,531 49,709
Long-term investments 570 -
Other assets, net 3,486 4,441
------- --------
Total assets $50,587 $54,150
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $12,177 $16,311
Minority interest 384 384
------- --------
Total liabilities 12,561 16,695
Total stockholders' equity 38,026 37,455
------- --------
Total liabilities and
stockholders' equity $50,587 $54,150
======= ========
iGo, Inc. and Subsidiaries
Selected Other Data
(unaudited)
Reconciliation of non-GAAP Financial Measure - Balance sheet excluding
accounts of Mission Technology Group.
June 30, 2008
-----------------------------------------
Mission
iGo Tech Eliminations Consolidated
------- ------- ------------ ------------
ASSETS
Cash and cash equivalents $20,761 $ 700 $ - $21,461
Short-term investments 6,129 - - 6,129
Accounts receivable, net 13,805 345 (135) 14,015
Inventories 3,948 962 (232) 4,678
Prepaid expenses and other
current assets 190 58 - 248
------- ------ ----------- ------------
Total current assets 44,833 2,065 (367) 46,531
Long-term investments 570 - - 570
Other assets, net 4,333 1,484 (2,331) 3,486
------- ------ ----------- ------------
Total assets $49,736 $3,549 $(2,698) $50,587
======= ====== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $11,714 $ 598 $ (135) $12,177
Minority interest 384 2,655 (2,655) 384
------- ------ ----------- ------------
Total liabilities 12,098 3,253 (2,790) 12,561
Total stockholders' equity 37,638 296 92 38,026
------- ------ ----------- ------------
Total liabilities and
stockholders' equity $49,736 $3,549 $(2,698) $50,587
======= ====== =========== ============
Reconciliation of non-GAAP Financial Measure - Cash, cash equivalents
and investments excluding accounts of Mission Technology Group.
Cash and cash equivalents $20,761 $ 700 $ - $21,461
Short-term investments 6,129 - - 6,129
Long-term investments 570 - - 570
------- ------ ----------- ------------
Total cash, cash
equivalents, short-
term investments $27,460 $ 700 $ - $28,160
======= ====== =========== ============
This information is being provided because management believes these
are key metrics to the investment community and assist in the
understanding and analysis of financial position. Balance sheet
excluding the accounts of Mission Technology Group and related
eliminations and cash, cash equivalents, and investments excluding
the accounts of Mission Technology Group should be considered in
addition to, not as a substitute for, or superior to, measures of
financial position in accordance with GAAP.
CONTACT: Financial Relations Board
Tony Rossi, 213-486-6545
trossi@frbir.com
SOURCE: iGo, Inc.
