ZAGG, Inc. (ZAGG) Misses Q4 EPS by 7c, Revenues Miss; Offers FY20 EPS Guidance Below Consensus

ZAGG, Inc. (NASDAQ: ZAGG) reported Q4 EPS of $0.94, $0.07 worse than the analyst estimate of $1.01. Revenue for the quarter came in at $189.9 million versus the consensus estimate of $207.29 million.

Fourth Quarter 2019 Review (Comparisons versus Fourth Quarter 2018)

• Net sales of $189.9 million, an increase of 14% compared to $166.5 million
• Gross profit of 36% compared to 35%
• Net income of $25.0 million compared to $14.3 million
• Diluted earnings per share of $0.85 compared to $0.52
• Adjusted EBITDA of $30.5 million compared to $28.1 million

Chris Ahern, Chief Executive Officer, commented, “While we delivered a record quarter in terms of net sales, our overall performance was below our expectations and represented a difficult finish to a challenging year. Over the past 18 months we have strengthened ZAGG’s position as a leader in the mobile lifestyle category through acquisitions and organic product innovation. With InvisibleShield®, mophie®, Gear4®, HALO®, ZAGG®, IFROGZ®, and BRAVEN®, we have created a powerful portfolio of brands that address key consumer needs including protection, power, audio, and productivity. We have also enhanced our strong retail relationships and extensive global distribution network that we are leveraging to further expand our overall presence. In 2019, we made important progress integrating our recent acquisitions and investing in these businesses to drive growth. Unfortunately, a number of factors negatively impacted the performance of our business, including declining smartphone unit sales, higher tariffs, a more difficult than expected holiday season, and additional operating costs from acquired brands. Despite the recent setbacks, we are confident of the Company’s strategic direction. Looking forward, our focus is on continuing to drive innovation in product categories that address consumer pain points, executing strategies aimed at increasing market share, including capitalizing on the rollout of 5G wireless technology, and improving profitability through optimization of our operating expense structure and improved inventory management. We are confident that we can deliver improved top and bottom-line results in 2020 and over the long-term.”

For the full year of 2020, the Company expects:

• Flat net sales compared to 2019
• Gross profit margin as a percentage of net sales in the mid 30's range
• Adjusted EBITDA of approximately $48 million
• Diluted earnings per share of approximately $0.50

For earnings history and earnings-related data on ZAGG, Inc. (ZAGG) click here.

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