Cobra sales up Profit Off on GPS Write-Off
Cobra Electronics announced a sales increase of 9% for the second quarter - $39.6Mil vs. $33.7Mil year ago, but reported a net loss of $2.7 million due to write-offs of GPS assets. Their older generation products weren’t selling so well, and they wrote off both the inventory and the intellectual assets associated with it. They go on to talk about the positive reception that their recent GPS products have gotten and the high expectations for their newer NavOne 2500 product.
"The loss incurred by Cobra in the second quarter is a disappointment to management," said Jim Bazet, Cobra's President and Chief Executive Officer. "However, we are comfortable that these losses do not reflect on our future prospects and we are confident in our ability to secure a meaningful share of the mobile navigation and recreational marine electronics markets and maintain profitable leadership positions in two-way radios, radar detection and citizens band radios. The decline in retail prices for handheld GPS and mobile navigation products in the most recent quarter, along with the pending introduction of the NavOne 2500, which features a new technology platform, caused us to recognize that the intellectual property that formed the basis for our first entries into handheld GPS and mobile navigation was obsolete and that the remaining inventory of product based on that intellectual property had lost considerable value. These write downs will allow us to put the past firmly behind us and future financial results will not be burdened by the costs of these previous efforts."
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Posted by Scott Martin at July 28, 2006 9:42 AM