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Delaware
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20-2559624
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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910 West Legacy Center Drive, Suite 500, Midvale, Utah
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84047
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(Address of principal executive offices)
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(Zip Code)
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Common Stock, $.001 par value
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The NASDAQ Stock Market LLC
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(Title of Class)
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(Name of exchange on which registered)
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¨
Large Accelerated Filer
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x
Accelerated Filer
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¨
Non-accelerated Filer (do not check if a smaller reporting company)
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¨
Smaller Reporting Company
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¨
Emerging Growth Company
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Page
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ITEM 1.
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BUSINESS
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Corporate Objectives
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Core Values
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The Preferred Brand
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Integrity
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Creative Product Solutions
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Ownership
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Targeted Global Distribution
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Care for People
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Operational Excellence
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Passion
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Continuous Improvement
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Performance
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Sense of Urgency
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•
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Screen Protection
– Our screen protection product line is comprised of InvisibleShield glass products (approximately
85%
of
2017
screen protection sales or
40%
of net sales), InvisibleShield film products (approximately
13%
of
2017
screen protection sales or
6%
of net sales), and ISOD film blanks (approximately
2%
of
2017
screen protection sales or
1%
of net sales). Our InvisibleShield glass products are sourced from factories in Asia with protective glass expertise, each of which uses a number of
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•
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Battery Cases and Power Management
– Our battery case and power management product lines consist of power products that are designed to provide on-the-go power for tablets, smartphones, MP3 players, cameras, and virtually all other electronic mobile devices. Our power products are sourced from factories in Asia with battery expertise, each of which uses a number of sub-suppliers for raw materials and other components.
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•
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Keyboards
– Our keyboard product line consists of (1) device specific keyboards designed to fit individual tablets produced by original equipment manufacturers and (2) keyboards that are designed to be device agnostic and can be used on virtually any mobile device. Our keyboard products are sourced from factories in Asia with keyboard expertise, each of which uses a number of sub-suppliers for raw materials and other components.
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•
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Audio
– Our audio product line consists of earbuds and headphones that are designed to be compatible with virtually all electronic mobile devices. Our audio products are sourced from factories in Asia with audio expertise, each of which uses a number of sub-suppliers for raw materials and other components.
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ITEM 1A.
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RISK FACTORS
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•
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requiring us to dedicate a substantial portion of our cash flow from operations to make payments on our debt, thereby reducing funds available for operations, future growth opportunities and other purposes;
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•
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limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
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•
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making it more difficult for us to satisfy our debt obligations, as any failure to comply with such obligations, including financial and other restrictive covenants, could result in an event of default under the Credit and Security Agreement, which could lead to, among other things, an acceleration of our indebtedness or foreclosure of the collateral, which could have a material adverse effect on our business or financial condition;
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•
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limiting our ability to borrow additional funds, or to sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes; and
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•
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increasing our vulnerability to general adverse economic and industry conditions, including changes in interest rates.
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•
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the overall performance of the economy and discretionary consumer spending,
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•
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competition within key markets,
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•
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continued customer acceptance of our products,
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•
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customer acceptance of newly developed products, and
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•
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the demand for other products and services.
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•
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our supplier relationships will continue as presently in effect,
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•
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our suppliers will not become competitors,
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•
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our suppliers will be able to obtain the components necessary to produce high-quality, technologically-advanced products for us,
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•
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we will be able to obtain adequate alternatives to our supply sources should they be interrupted,
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•
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if obtained, alternatively sourced products of satisfactory quality would be delivered on a timely basis, competitively priced, comparably featured or acceptable to our customers, and
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•
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our suppliers will have sufficient financial resources to fulfill their obligations.
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2017
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2016
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2015
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|||
Superior
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30
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%
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27
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%
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17
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%
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Best Buy
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9
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%
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11
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%
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20
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%
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GENCO
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8
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%
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11
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%
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11
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%
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2017
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2016
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||
Superior
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31
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%
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32
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%
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Best Buy
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18
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%
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22
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%
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GENCO
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7
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%
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10
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%
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•
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expand our systems effectively or efficiently or in a timely manner;
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•
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allocate our human resources optimally;
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•
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meet our capital needs;
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•
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identify and hire qualified employees or retain valued employees; or
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•
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incorporate effectively the components of any business or product line that we may acquire in our effort to achieve growth.
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•
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changes in foreign currency exchange rates;
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•
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exchange controls;
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•
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changes in regulatory requirements;
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•
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changes in a specific country's or region's political or economic conditions;
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•
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tariffs, other trade protection measures and import or export licensing requirements;
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•
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potentially negative consequences from changes in tax laws or application of such tax laws;
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•
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difficulty in staffing and managing widespread operations;
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•
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changing labor regulations;
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•
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requirements relating to withholding taxes on remittances and other payments by subsidiaries;
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•
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different regimes controlling the protection of our IP;
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•
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restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions; and
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•
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restrictions on our ability to repatriate dividends from our subsidiaries.
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•
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fluctuations in our results of operations or the operations of our competitors or customers;
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•
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the aggregate amount of our outstanding debt and perceptions about our ability to make debt service payments;
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•
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failure of our results of operations and sales revenues to meet the expectations of stock market analysts and investors;
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•
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perceived reductions in demand or expectations regarding future demand by our customers;
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•
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changes in stock market analyst recommendations regarding us, our competitors or our customers;
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•
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the timing and announcements of product innovations, new products or financial results by us or our competitors;
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•
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the performance of mophie post acquisition;
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•
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changes in ZAGG directors or executives;
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•
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increases in the number of shares of our common stock outstanding; and
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•
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changes in our industry.
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•
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demands on management related to the significant increase in the size of our business;
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•
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diversion of management's attention from the management of daily operations;
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•
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difficulties in the assimilation of different corporate cultures and business practices;
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•
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difficulties in conforming the acquired company's accounting policies to ours;
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•
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retaining the loyalty and business of the customers of acquired businesses;
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•
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retaining employees that may be vital to the integration of acquired businesses or to the future prospects of the combined businesses;
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•
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difficulties and unanticipated expenses related to the integration of departments, information technology systems, including accounting systems, technologies, books and records, and procedures, and maintaining uniform standards, such as internal accounting controls, procedures, and policies;
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•
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costs and expenses associated with any undisclosed or potential liabilities;
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•
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the use of more cash or other financial resources on integration and implementation activities than we expect; and
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•
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our ability to avoid labor disruptions in connection with any integration, particularly in connection with any headcount reduction.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 3.
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LEGAL PROCEEDINGS
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ITEM 4.
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MINE SAFETY DISCLOSURES
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For the Year Ended December 31, 2017
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High
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Low
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||||
First Quarter
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$
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7.55
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$
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5.90
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Second Quarter
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$
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9.15
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$
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6.55
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Third Quarter
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$
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16.15
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$
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8.30
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Fourth Quarter
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$
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23.70
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$
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14.10
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For the Year Ended December 31, 2016
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High
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Low
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||||
First Quarter
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$
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10.83
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$
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8.29
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Second Quarter
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$
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9.23
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$
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4.71
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Third Quarter
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$
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8.10
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$
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4.89
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Fourth Quarter
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$
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8.22
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$
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5.15
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•
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we would not be able to pay our debts as they become due in the usual course of business;
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•
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we would be engaged in a business for which our remaining assets would be unreasonably small in relation to the business; or
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•
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our net assets would be less than the amount determined to be our capital.
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Plan Category
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Number of securities to be issued
upon exercise of outstanding
options and vesting of restricted
stock
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Weighted-average exercise price
of outstanding options
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Number of securities remaining
available for future issuances
under equity compensation
plans (excluding securities
reflected in first column)
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||||
Equity compensation plans approved by security holders
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1,034
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$
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8.29
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8,737
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Equity compensation plans not approved by security holders
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|
—
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|
—
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—
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Total
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1,034
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|
|
$
|
8.29
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|
|
8,737
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1)
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The ten companies included in the Company's customized peer group (the “Peer Group” in the chart below) are: Callaway Golf Co, Columbia Sportswear Co, Deckers Outdoor Corp, Fossil Group Inc., Garmin Ltd, Harman International Industries Inc., Logitech International Sa, Plantronics Inc., Sodastream International Ltd and Vuzix Corp.
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12/12
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12/13
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12/14
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12/15
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12/16
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12/17
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||||||
ZAGG Inc
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100.00
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59.10
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92.26
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|
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148.64
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|
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96.47
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250.68
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Russell 2000
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100.00
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138.82
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145.62
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139.19
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168.85
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193.58
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Russell Microcap
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100.00
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145.62
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150.93
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143.15
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172.30
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194.99
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2015 Peer Group
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100.00
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134.95
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142.00
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104.31
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135.37
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168.16
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ITEM 6.
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SELECTED FINANCIAL DATA (in thousands, except per share amounts)
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|
Years December 31,
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||||||||||||||||||
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2017
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2016
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2015
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2014
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2013
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||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
|
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||||||||||
Net sales
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$
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519,495
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$
|
401,857
|
|
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$
|
269,311
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|
|
$
|
261,585
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|
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$
|
219,356
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Income (loss) from operations
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44,735
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|
|
(21,360
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)
|
|
25,864
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|
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16,983
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|
|
10,946
|
|
|||||
Net income (loss) attributable to stockholders
|
15,100
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(15,587
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)
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15,587
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|
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10,461
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4,790
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|||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
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|
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|
||||||||||
Basic
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$
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0.54
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|
|
$
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(0.56
|
)
|
|
$
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0.54
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|
|
$
|
0.35
|
|
|
$
|
0.16
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|
Diluted
|
0.53
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(0.56
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)
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|
0.54
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|
|
0.34
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|
|
0.15
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|
|||||
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
27,996
|
|
|
28,006
|
|
|
28,773
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|
|
30,247
|
|
|
30,900
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|
|||||
Diluted
|
28,407
|
|
|
28,006
|
|
|
29,089
|
|
|
30,610
|
|
|
31,459
|
|
|||||
|
|
|
|
|
|
|
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|
||||||||||
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
320,591
|
|
|
$
|
310,729
|
|
|
$
|
179,541
|
|
|
$
|
201,279
|
|
|
$
|
175,470
|
|
Current assets
|
227,802
|
|
|
174,436
|
|
|
131,701
|
|
|
147,023
|
|
|
116,481
|
|
|||||
Current liabilities
|
184,592
|
|
|
183,844
|
|
|
49,024
|
|
|
74,206
|
|
|
33,096
|
|
|||||
Total equity
|
135,999
|
|
|
117,262
|
|
|
130,517
|
|
|
127,073
|
|
|
124,831
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
For the Years Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Net sales
|
$
|
519,495
|
|
|
100.0
|
%
|
|
$
|
401,857
|
|
|
100.0
|
%
|
|
$
|
269,311
|
|
|
100.0
|
%
|
Cost of sales
|
350,497
|
|
|
67.5
|
|
|
274,255
|
|
|
68.2
|
|
|
167,627
|
|
|
62.2
|
|
|||
Gross profit
|
168,998
|
|
|
32.5
|
|
|
127,602
|
|
|
31.8
|
|
|
101,684
|
|
|
37.8
|
|
|||
Advertising and marketing
|
11,101
|
|
|
2.1
|
|
|
12,440
|
|
|
3.1
|
|
|
10,436
|
|
|
3.9
|
|
|||
Selling, general and administrative
|
105,398
|
|
|
20.3
|
|
|
96,229
|
|
|
23.9
|
|
|
56,752
|
|
|
21.1
|
|
|||
(Gain) loss on disputed mophie purchase price
|
(6,967
|
)
|
|
(1.3
|
)
|
|
24,317
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|||
Transaction costs
|
725
|
|
|
0.1
|
|
|
2,591
|
|
|
0.6
|
|
|
179
|
|
|
0.1
|
|
|||
Impairment of intangible asset
|
1,959
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Amortization of long-lived intangibles
|
12,047
|
|
|
2.3
|
|
|
13,385
|
|
|
3.3
|
|
|
8,453
|
|
|
3.1
|
|
|||
Total operating expenses
|
124,263
|
|
|
23.9
|
|
|
148,962
|
|
|
37.1
|
|
|
75,820
|
|
|
28.2
|
|
|||
Income (loss) from operations
|
44,735
|
|
|
8.6
|
|
|
(21,360
|
)
|
|
(5.3
|
)
|
|
25,864
|
|
|
9.6
|
|
|||
Interest expense
|
(2,081
|
)
|
|
(0.4
|
)
|
|
(1,851
|
)
|
|
(0.5
|
)
|
|
(97
|
)
|
|
—
|
|
|||
Other income (expense)
|
698
|
|
|
0.1
|
|
|
(348
|
)
|
|
(0.1
|
)
|
|
(69
|
)
|
|
—
|
|
|||
Total other expense
|
(1,383
|
)
|
|
(0.3
|
)
|
|
(2,199
|
)
|
|
(0.5
|
)
|
|
(166
|
)
|
|
(0.1
|
)
|
|||
Income (loss) before provision for income taxes
|
43,352
|
|
|
8.3
|
|
|
(23,559
|
)
|
|
(5.9
|
)
|
|
25,698
|
|
|
9.5
|
|
|||
Income tax benefit (provision)
|
(28,252
|
)
|
|
(5.4
|
)
|
|
7,972
|
|
|
2.0
|
|
|
(10,111
|
)
|
|
(3.8
|
)
|
|||
Net income (loss)
|
$
|
15,100
|
|
|
2.9
|
|
|
$
|
(15,587
|
)
|
|
(3.9
|
)
|
|
$
|
15,587
|
|
|
5.8
|
|
|
2017
|
|
2016
|
||
Screen protection
|
48
|
%
|
|
54
|
%
|
Power management
|
26
|
%
|
|
15
|
%
|
Power cases
|
15
|
%
|
|
15
|
%
|
Audio
|
5
|
%
|
|
6
|
%
|
Keyboards
|
5
|
%
|
|
9
|
%
|
Other
|
1
|
%
|
|
1
|
%
|
|
2017
|
|
2016
|
||
Indirect
|
89
|
%
|
|
87
|
%
|
Website
|
8
|
%
|
|
9
|
%
|
Franchise
|
3
|
%
|
|
4
|
%
|
|
2017
|
|
2016
|
||
United States
|
84
|
%
|
|
88
|
%
|
Europe
|
9
|
%
|
|
7
|
%
|
Other
|
7
|
%
|
|
5
|
%
|
|
2016
|
|
2015
|
||
Screen protection
|
54
|
%
|
|
67
|
%
|
Power management
|
15
|
%
|
|
3
|
%
|
Power cases
|
15
|
%
|
|
—
|
%
|
Keyboards
|
9
|
%
|
|
19
|
%
|
Audio
|
6
|
%
|
|
9
|
%
|
Other
|
1
|
%
|
|
2
|
%
|
|
2016
|
|
2015
|
||
Indirect
|
87
|
%
|
|
89
|
%
|
Website
|
9
|
%
|
|
5
|
%
|
Franchise
|
4
|
%
|
|
6
|
%
|
|
2016
|
|
2015
|
||
United States
|
88
|
%
|
|
91
|
%
|
Europe
|
7
|
%
|
|
8
|
%
|
Other
|
5
|
%
|
|
1
|
%
|
•
|
Maximum Leverage Ratio: Defined as the ratio of total funded indebtedness to Consolidated EBITDA (as defined in the Credit and Security Agreement), which cannot be more than
3.50
on a trailing four quarter basis.
|
•
|
Minimum Fixed Charge Coverage: Defined as the ratio of Consolidated EBITDA (as defined in the Credit and Security Agreement) minus taxes, capital distributions and unfunded capital expenditures divided by the sum of interest payments, principal payments, and capital lease payments; the minimum allowed under the Credit and Security Agreement is
1.10
on a trailing-four quarter basis.
|
•
|
Increased the Maximum Revolving Amount, as defined in the Credit Agreement, from
$85,000
to:
|
◦
|
$135,000
from July 17, 2017 to December 31, 2017;
|
◦
|
$110,000
from January 1, 2018 to May 31, 2018; and
|
◦
|
$100,000
from June 1, 2018, forward.
|
•
|
Expanded Permitted Foreign Subsidiary Loans, Guaranties and Investments, as defined in the Credit Agreement, to include:
|
◦
|
A
$2,000
loan dated April 5, 2017, from the Company to ZAGG International Distribution Limited; and
|
◦
|
Any other loan or investment by the company or any domestic subsidiary of the Company in or to, or guaranty of indebtedness of, any foreign subsidiary of the Company for the period July 17, 2017, to March 31, 2018, in an aggregate amount not to exceed
$8,000
.
|
•
|
Increased the Letter of Credit Commitment, as defined in the Credit Agreement, from
$7,500
to an aggregate amount of
$40,000
.
|
•
|
Increased the Borrowing Base, as defined the Credit Agreement, on a seasonal basis between August 1, 2017, and September 30, 2017, by
$15,000
, which seasonal increase to the Borrowing Base was subsequently extended by the Lenders to October 31, 2017.
|
|
|
Payments due by period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less Than 1 Year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than 5 years
|
||||||||||
Credit and security agreement
|
|
$
|
37,538
|
|
|
$
|
14,063
|
|
|
$
|
23,475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
|
|
9,311
|
|
|
2,107
|
|
|
3,133
|
|
|
2,960
|
|
|
1,111
|
|
|||||
Total
|
|
$
|
46,849
|
|
|
$
|
16,170
|
|
|
$
|
26,608
|
|
|
$
|
2,960
|
|
|
$
|
1,111
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our consolidated financial statements.
|
•
|
The Company’s control environment was ineffective because we failed to establish appropriate authorities and responsibilities in alignment with the objectives of internal control over financial reporting to certain employees; and
|
•
|
The Company’s risk assessment process was ineffective because we failed to consider changes in the business operations and their impact on financial reporting and internal controls.
|
•
|
Consequently, we failed to design and implement effective control activities related to (1) the tracking and accounting for customer product returns; and (2) accounting for accounts receivable related to sales returns with a significant customer, as of
December 31, 2017
.
|
•
|
Enhance our control environment by establishing appropriate authorities and responsibilities in alignment with the objectives of internal control over financial reporting;
|
•
|
Implement a cross functional risk assessment process to identify and assess changes in the business that could significantly impact internal control over financial reporting;
|
•
|
Design and implement control activities over the customer returns process;
|
•
|
Design and implement control activities over the management of accounts receivable transactions due to the growth of the Company; and
|
•
|
Evaluate whether control activities can be automated to replace manual processes.
|
/s/ KPMG LLP
|
Salt Lake City, Utah
|
March 14, 2018
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
CONTENTS
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
EX-101.INS
|
|
XBRL Instance Document
|
|
|
|
EX-101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
EX-101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
EX-101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
EX-101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase
|
|
|
|
EX-101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Management compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(b) of this report.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
ZAGG INC
|
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ CHRIS AHERN
|
|
|
Chris Ahern
CEO & Director
(Principal Executive Officer)
|
Dated: March 14, 2018
|
By:
|
/s/ CHRIS AHERN
|
|
|
Chris Ahern
CEO & Director
(Principal Executive Officer)
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ BRADLEY J. HOLIDAY
|
|
|
Bradley J. Holiday
Chief Financial Officer
(Principal Accounting and Financial Officer)
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ CHERYL LARABEE
|
|
|
Cheryl Larabee
Chairperson
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ DAN MAURER
|
|
|
Dan Maurer
Director
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ TODD HEINER
|
|
|
Todd Heiner
Director
|
|
|
|
Dated: March 14, 2018
|
By:
|
/s/ SCOTT STUBBS
|
|
|
Scott Stubbs
Director
|
CONTENTS
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ KPMG LLP
|
Salt Lake City, Utah
|
March 14, 2018
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
24,989
|
|
|
$
|
11,604
|
|
Accounts receivable, net of allowances of $734 and $824
|
123,220
|
|
|
83,835
|
|
||
Inventories
|
75,046
|
|
|
72,769
|
|
||
Prepaid expenses and other current assets
|
4,547
|
|
|
3,414
|
|
||
Income tax receivable
|
—
|
|
|
2,814
|
|
||
Total current assets
|
227,802
|
|
|
174,436
|
|
||
|
|
|
|
||||
Property and equipment, net of accumulated depreciation of $12,540 and $18,371
|
13,444
|
|
|
17,755
|
|
||
Goodwill
|
12,272
|
|
|
12,272
|
|
||
Intangible assets, net of accumulated amortization of $66,639 and $55,298
|
39,244
|
|
|
53,362
|
|
||
Deferred income tax assets
|
24,403
|
|
|
50,363
|
|
||
Other assets
|
3,426
|
|
|
2,541
|
|
||
Total assets
|
$
|
320,591
|
|
|
$
|
310,729
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
96,472
|
|
|
$
|
85,022
|
|
Income tax payable
|
2,052
|
|
|
—
|
|
||
Accrued liabilities
|
10,515
|
|
|
22,216
|
|
||
Sales returns liability
|
32,189
|
|
|
28,373
|
|
||
Accrued wages and wage related expenses
|
5,652
|
|
|
6,169
|
|
||
Deferred revenue
|
315
|
|
|
273
|
|
||
Line of credit
|
23,475
|
|
|
31,307
|
|
||
Current portion of long-term debt, net of deferred loan costs of $141 and $65
|
13,922
|
|
|
10,484
|
|
||
Total current liabilities
|
184,592
|
|
|
183,844
|
|
||
|
|
|
|
||||
Non-current portion of long-term debt, net of deferred loan costs of $0 and $141
|
—
|
|
|
9,623
|
|
||
Total liabilities
|
184,592
|
|
|
193,467
|
|
||
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock, $0.001 par value; 100,000 shares authorized; 34,104 and 33,840 shares issued
|
34
|
|
|
34
|
|
||
Additional paid-in capital
|
96,145
|
|
|
92,782
|
|
||
Accumulated other comprehensive loss
|
(348
|
)
|
|
(2,114
|
)
|
||
Treasury stock, 6,065 and 5,831 common shares at cost
|
(37,637
|
)
|
|
(36,145
|
)
|
||
Retained earnings
|
77,805
|
|
|
62,705
|
|
||
|
|
|
|
||||
Total stockholders' equity
|
135,999
|
|
|
117,262
|
|
||
Total liabilities and stockholders' equity
|
$
|
320,591
|
|
|
$
|
310,729
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net sales
|
$
|
519,495
|
|
|
$
|
401,857
|
|
|
$
|
269,311
|
|
Cost of sales
|
350,497
|
|
|
274,255
|
|
|
167,627
|
|
|||
Gross profit
|
168,998
|
|
|
127,602
|
|
|
101,684
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Advertising and marketing
|
11,101
|
|
|
12,440
|
|
|
10,436
|
|
|||
Selling, general and administrative
|
105,398
|
|
|
96,229
|
|
|
56,752
|
|
|||
(Gain) loss on disputed mophie purchase price
|
(6,967
|
)
|
|
24,317
|
|
|
—
|
|
|||
Transaction costs
|
725
|
|
|
2,591
|
|
|
179
|
|
|||
Impairment of intangible asset
|
1,959
|
|
|
—
|
|
|
—
|
|
|||
Amortization of long-lived intangibles
|
12,047
|
|
|
13,385
|
|
|
8,453
|
|
|||
Total operating expenses
|
124,263
|
|
|
148,962
|
|
|
75,820
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) from operations
|
44,735
|
|
|
(21,360
|
)
|
|
25,864
|
|
|||
|
|
|
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(2,081
|
)
|
|
(1,851
|
)
|
|
(97
|
)
|
|||
Other income (expense)
|
698
|
|
|
(348
|
)
|
|
(69
|
)
|
|||
Total other expense
|
(1,383
|
)
|
|
(2,199
|
)
|
|
(166
|
)
|
|||
|
|
|
|
|
|
||||||
Income (loss) before provision for income taxes
|
43,352
|
|
|
(23,559
|
)
|
|
25,698
|
|
|||
|
|
|
|
|
|
||||||
Income tax (provision) benefit
|
(28,252
|
)
|
|
7,972
|
|
|
(10,111
|
)
|
|||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
15,100
|
|
|
$
|
(15,587
|
)
|
|
$
|
15,587
|
|
|
|
|
|
|
|
||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
0.54
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.54
|
|
Diluted earnings (loss) per share
|
$
|
0.53
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.54
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
15,100
|
|
|
(15,587
|
)
|
|
15,587
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive gain (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation gain (loss)
|
1,766
|
|
|
(517
|
)
|
|
(702
|
)
|
|||
|
|
|
|
|
|
||||||
Total other comprehensive income (loss)
|
1,766
|
|
|
(517
|
)
|
|
(702
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
$
|
16,866
|
|
|
$
|
(16,104
|
)
|
|
$
|
14,885
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Note
Receivable Collateralized By Stock |
|
Treasury
Stock |
|
Retained
Earnings |
|
Total
Stockholders' Equity |
|||||||||||||||
Balances, December 31, 2014
|
32,686
|
|
|
$
|
33
|
|
|
$
|
85,154
|
|
|
$
|
(895
|
)
|
|
$
|
(348
|
)
|
|
$
|
(19,576
|
)
|
|
$
|
62,705
|
|
|
$
|
127,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,587
|
|
|
15,587
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(702
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(702
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Purchase of 2,030 shares of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,930
|
)
|
|
—
|
|
|
(14,930
|
)
|
|||||||
Foreclosure of 80 shares of stock collateralizing note receivable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
348
|
|
|
(688
|
)
|
|
—
|
|
|
(340
|
)
|
|||||||
Option exercises
|
118
|
|
|
—
|
|
|
168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|||||||
Warrant exercises
|
45
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||||
Restricted stock release
|
349
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Consideration for acquisition of patent
|
21
|
|
|
—
|
|
|
198
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,893
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,893
|
|
|||||||
Payment of withholding taxes on restricted stock units
|
—
|
|
|
—
|
|
|
(724
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(724
|
)
|
|||||||
Excess tax benefit (shortfall) related to share-based payments
|
—
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|||||||
Balances, December 31, 2015
|
33,219
|
|
|
$
|
33
|
|
|
$
|
88,983
|
|
|
$
|
(1,597
|
)
|
|
$
|
—
|
|
|
$
|
(35,194
|
)
|
|
$
|
78,292
|
|
|
$
|
130,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,587
|
)
|
|
(15,587
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(517
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(517
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Purchase of 152 shares of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(951
|
)
|
|
—
|
|
|
(951
|
)
|
|||||||
Option exercises
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Warrant exercises
|
7
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||||
Restricted stock release
|
589
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Employee stock purchase plan release
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,830
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,830
|
|
|||||||
Payment of withholding taxes on restricted stock units
|
—
|
|
|
—
|
|
|
(630
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(630
|
)
|
|||||||
Excess tax benefit (shortfall) related to share-based payments
|
—
|
|
|
—
|
|
|
545
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
545
|
|
|||||||
Balances, December 31, 2016
|
33,840
|
|
|
$
|
34
|
|
|
$
|
92,782
|
|
|
$
|
(2,114
|
)
|
|
$
|
—
|
|
|
$
|
(36,145
|
)
|
|
$
|
62,705
|
|
|
$
|
117,262
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,100
|
|
|
15,100
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,766
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,766
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Purchase of 234 shares of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
(1,492
|
)
|
|||||||
Restricted stock release
|
262
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee stock purchase plan release
|
2
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
3,602
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,602
|
|
|||||||
Payment of withholding taxes on restricted stock units
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|||||||
Balances, December 31, 2017
|
34,104
|
|
|
$
|
34
|
|
|
$
|
96,145
|
|
|
$
|
(348
|
)
|
|
$
|
—
|
|
|
$
|
(37,637
|
)
|
|
$
|
77,805
|
|
|
$
|
135,999
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
15,100
|
|
|
$
|
(15,587
|
)
|
|
$
|
15,587
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Stock-based compensation
|
3,602
|
|
|
3,830
|
|
|
3,893
|
|
|||
Excess tax costs (benefits) related to share-based payments
|
—
|
|
|
(641
|
)
|
|
256
|
|
|||
Depreciation and amortization
|
21,889
|
|
|
22,271
|
|
|
12,933
|
|
|||
Loss on disposal of property and equipment
|
34
|
|
|
—
|
|
|
—
|
|
|||
Reduction in reserve on note receivable upon foreclosure recovery
|
—
|
|
|
—
|
|
|
(639
|
)
|
|||
Deferred income taxes
|
14,168
|
|
|
(7,972
|
)
|
|
(1,162
|
)
|
|||
Revaluation of deferred income taxes from U.S. tax reform
|
11,806
|
|
|
—
|
|
|
—
|
|
|||
Amortization of deferred loan costs
|
263
|
|
|
202
|
|
|
60
|
|
|||
Impairment of intangible asset
|
1,959
|
|
|
—
|
|
|
—
|
|
|||
(Gain) loss on disputed mophie purchase price
|
(6,967
|
)
|
|
24,317
|
|
|
—
|
|
|||
Changes in operating assets and liabilities (net of amounts acquired):
|
|
|
|
|
|
|
|
|
|||
Accounts receivable, net
|
(38,093
|
)
|
|
(11,587
|
)
|
|
18,383
|
|
|||
Inventories
|
(906
|
)
|
|
(2,198
|
)
|
|
2,064
|
|
|||
Prepaid expenses and other current assets
|
(1,113
|
)
|
|
422
|
|
|
(651
|
)
|
|||
Other assets
|
(928
|
)
|
|
(330
|
)
|
|
551
|
|
|||
Accounts payable
|
10,677
|
|
|
14,094
|
|
|
(14,635
|
)
|
|||
Income taxes receivable (payable)
|
4,866
|
|
|
9,994
|
|
|
(7,366
|
)
|
|||
Accrued liabilities
|
(4,505
|
)
|
|
2,836
|
|
|
(3,410
|
)
|
|||
Accrued wages and wage related expenses
|
(517
|
)
|
|
1,819
|
|
|
(356
|
)
|
|||
Deferred revenue
|
42
|
|
|
246
|
|
|
(162
|
)
|
|||
Sales returns liability
|
3,719
|
|
|
(9,037
|
)
|
|
(814
|
)
|
|||
Other
|
(1,022
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net cash provided by operating activities
|
34,074
|
|
|
32,679
|
|
|
24,532
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
||||
Purchase of property and equipment (net of business acquired)
|
(5,766
|
)
|
|
(8,633
|
)
|
|
(4,910
|
)
|
|||
Proceeds from disposal of equipment
|
29
|
|
|
—
|
|
|
—
|
|
|||
Purchase of mophie, net of cash acquired
|
—
|
|
|
(74,743
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net cash used in investing activities
|
(5,737
|
)
|
|
(83,376
|
)
|
|
(4,910
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Payment of debt issuance costs
|
(157
|
)
|
|
(1,144
|
)
|
|
—
|
|
|||
Proceeds from revolving credit facility
|
434,826
|
|
|
336,391
|
|
|
9,871
|
|
|||
Payments on revolving credit facility
|
(442,659
|
)
|
|
(305,084
|
)
|
|
(9,871
|
)
|
|||
Proceeds from term loan facility
|
—
|
|
|
25,000
|
|
|
—
|
|
|||
Payments on term loan facility
|
(6,250
|
)
|
|
(4,688
|
)
|
|
—
|
|
Purchase of treasury stock
|
(1,492
|
)
|
|
(951
|
)
|
|
(14,930
|
)
|
|||
Payment of withholdings tax on restricted stock units
|
(268
|
)
|
|
(630
|
)
|
|
(724
|
)
|
|||
Proceeds from exercise of warrants and options
|
29
|
|
|
54
|
|
|
207
|
|
|||
Excess tax costs (benefits) related to share-based payments
|
—
|
|
|
641
|
|
|
(256
|
)
|
|||
|
|
|
|
|
|
||||||
Net cash provided by (used in) financing activities
|
(15,971
|
)
|
|
49,589
|
|
|
(15,703
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
1,019
|
|
|
(290
|
)
|
|
(378
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
13,385
|
|
|
(1,398
|
)
|
|
3,541
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at beginning of the period
|
11,604
|
|
|
13,002
|
|
|
9,461
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at end of the period
|
$
|
24,989
|
|
|
$
|
11,604
|
|
|
$
|
13,002
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
|
|
|
|||
Cash paid during the period for interest
|
$
|
1,776
|
|
|
$
|
1,497
|
|
|
$
|
46
|
|
Cash paid (refunded) during the period for taxes, net
|
$
|
(2,174
|
)
|
|
$
|
(9,521
|
)
|
|
$
|
18,710
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
824
|
|
|
$
|
568
|
|
|
$
|
1,910
|
|
Additions charged to expense
|
339
|
|
|
599
|
|
|
243
|
|
|||
Assumed in acquisition of mophie
|
—
|
|
|
91
|
|
|
—
|
|
|||
Write-offs charged against the allowance
|
(444
|
)
|
|
(430
|
)
|
|
(1,585
|
)
|
|||
Foreign currency translation gain (loss)
|
15
|
|
|
(4
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
734
|
|
|
$
|
824
|
|
|
$
|
568
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
28,373
|
|
|
$
|
7,849
|
|
|
$
|
8,674
|
|
Additions charged to sales
|
90,018
|
|
|
92,868
|
|
|
43,320
|
|
|||
Assumed in acquisition of mophie
|
—
|
|
|
29,584
|
|
|
—
|
|
|||
Sales returns & warranty claims charged against reserve
|
(86,299
|
)
|
|
(101,928
|
)
|
|
(44,145
|
)
|
|||
Foreign currency translation loss
|
97
|
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
$
|
32,189
|
|
|
$
|
28,373
|
|
|
$
|
7,849
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net (loss) income
|
$
|
15,100
|
|
|
$
|
(15,587
|
)
|
|
$
|
15,587
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
27,996
|
|
|
28,006
|
|
|
28,773
|
|
|||
Dilutive effect of stock options, restricted stock, and warrants
|
411
|
|
|
—
|
|
|
316
|
|
|||
Diluted
|
28,407
|
|
|
28,006
|
|
|
29,089
|
|
|||
Earnings (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.54
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.54
|
|
Dilutive
|
$
|
0.53
|
|
|
$
|
(0.56
|
)
|
|
$
|
0.54
|
|
|
2017
|
|
2016
|
||||
Finished goods
|
$
|
74,734
|
|
|
$
|
72,490
|
|
Raw materials
|
312
|
|
|
279
|
|
||
Total inventories
|
$
|
75,046
|
|
|
$
|
72,769
|
|
|
Useful Lives
|
2017
|
|
2016
|
||||
Computer equipment and software
|
2 to 5 years
|
$
|
2,163
|
|
|
$
|
3,634
|
|
Equipment and molds
|
2 to 10 years
|
12,395
|
|
|
16,609
|
|
||
Furniture and fixtures
|
1 to 7 years
|
1,824
|
|
|
3,409
|
|
||
Automobiles
|
5 years
|
126
|
|
|
230
|
|
||
Building and improvements
|
40 years
|
3,332
|
|
|
2,270
|
|
||
Land
|
|
325
|
|
|
325
|
|
||
Leasehold improvements
|
1 to 5 years
|
5,819
|
|
|
9,649
|
|
||
|
|
25,984
|
|
|
36,126
|
|
||
Less accumulated depreciation and amortization
|
|
(12,540
|
)
|
|
(18,371
|
)
|
||
|
|
|
|
|
||||
Property and equipment, net
|
|
$
|
13,444
|
|
|
$
|
17,755
|
|
Balance at December 31, 2015
|
$
|
—
|
|
Increase due to acquisitions
|
12,272
|
|
|
Balance at December 31, 2016
|
$
|
12,272
|
|
|
December 31, 2017
|
||||||||||||||||
|
Gross Carrying Amount
|
|
Impairments
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Amortization Period
|
||||||||
Customer relationships
|
$
|
49,700
|
|
|
$
|
—
|
|
|
$
|
(40,441
|
)
|
|
$
|
9,259
|
|
|
7.5 years
|
Tradenames
|
31,269
|
|
|
—
|
|
|
(13,415
|
)
|
|
17,854
|
|
|
9.8 years
|
||||
Patents and technology
|
21,228
|
|
|
(2,777
|
)
|
|
(7,470
|
)
|
|
10,981
|
|
|
8.8 years
|
||||
Non-compete agreements
|
5,896
|
|
|
—
|
|
|
(4,759
|
)
|
|
1,137
|
|
|
4.9 years
|
||||
Other
|
567
|
|
|
—
|
|
|
(554
|
)
|
|
13
|
|
|
2.4 years
|
||||
Total amortizable assets
|
$
|
108,660
|
|
|
$
|
(2,777
|
)
|
|
$
|
(66,639
|
)
|
|
$
|
39,244
|
|
|
8.2 years
|
|
December 31, 2016
|
||||||||||||||||
|
Gross Carrying Amount
|
|
Acquisitions
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Amortization Period
|
||||||||
Customer relationships
|
$
|
41,500
|
|
|
$
|
8,200
|
|
|
$
|
(35,088
|
)
|
|
$
|
14,612
|
|
|
7.5 years
|
Tradenames
|
12,921
|
|
|
18,348
|
|
|
(9,763
|
)
|
|
21,506
|
|
|
9.8 years
|
||||
Patents and technology
|
6,003
|
|
|
15,225
|
|
|
(5,501
|
)
|
|
15,727
|
|
|
8.8 years
|
||||
Non-compete agreements
|
4,100
|
|
|
1,796
|
|
|
(4,399
|
)
|
|
1,497
|
|
|
4.9 years
|
||||
Other
|
324
|
|
|
243
|
|
|
(547
|
)
|
|
20
|
|
|
2.4 years
|
||||
Total amortizable assets
|
$
|
64,848
|
|
|
$
|
43,812
|
|
|
$
|
(55,298
|
)
|
|
$
|
53,362
|
|
|
8.2 years
|
2018
|
$
|
11,171
|
|
2019
|
9,122
|
|
|
2020
|
6,454
|
|
|
2021
|
3,876
|
|
|
2022
|
2,766
|
|
|
Thereafter
|
5,855
|
|
|
Total
|
$
|
39,244
|
|
•
|
Federal and state tax refunds due to the Company related to 2012 and 2013 tax years;
|
•
|
Customs and duties refunds for pre-closing overpayments of customs and duties amounts to governmental agencies; and
|
•
|
Proceeds from the sale of real property located in Kalamazoo, Michigan.
|
|
Preliminary Allocation
March 3,
2016
|
|
Adjustments to
Working Capital and
Fair
Value
|
|
Final Allocation
March 3,
2016
|
||||||
Cash consideration
|
$
|
100,000
|
|
|
$
|
—
|
|
|
$
|
100,000
|
|
Negative working capital at Acquisition Date
|
(23,478
|
)
|
|
—
|
|
|
(23,478
|
)
|
|||
Additional negative working capital deficit
|
—
|
|
|
(26,317
|
)
|
|
(26,317
|
)
|
|||
Contingent payments
|
11,283
|
|
|
856
|
|
|
12,139
|
|
|||
Total purchase price
|
$
|
87,805
|
|
|
$
|
(25,461
|
)
|
|
$
|
62,344
|
|
Cash and cash equivalents
|
$
|
1,779
|
|
Trade receivables (gross contractual receivables of $12,914)
|
12,823
|
|
|
Inventories
|
24,911
|
|
|
Prepaid expenses and other assets
|
1,073
|
|
|
Income tax receivable
|
11,814
|
|
|
Deferred tax assets
|
16,168
|
|
|
Property and equipment
|
10,191
|
|
|
Land held for sale
|
325
|
|
|
Amortizable identifiable intangible assets
|
43,812
|
|
|
Goodwill
|
12,272
|
|
|
Accounts payable
|
(37,359
|
)
|
|
Income tax payable
|
(196
|
)
|
|
Accrued liabilities
|
(5,163
|
)
|
|
Deferred revenue
|
(9
|
)
|
|
Sales returns liability
|
(29,584
|
)
|
|
Other noncurrent liabilities
|
(513
|
)
|
|
Total
|
$
|
62,344
|
|
|
Preliminary Purchase
Price Allocation
March 3,
2016
|
|
Adjustments to
Working Capital and
Fair
Value
|
|
Final Purchase
Price Allocation
March 3,
2016
|
||||||
Cash and cash equivalents
|
$
|
1,779
|
|
|
$
|
—
|
|
|
$
|
1,779
|
|
Trade receivables
|
13,483
|
|
|
(660
|
)
|
|
12,823
|
|
|||
Inventories
|
32,335
|
|
|
(10,010
|
)
|
|
22,325
|
|
|||
Inventory step-up
|
6,937
|
|
|
(4,351
|
)
|
|
2,586
|
|
|||
Prepaid expenses
|
485
|
|
|
215
|
|
|
700
|
|
|||
Other assets
|
200
|
|
|
173
|
|
|
373
|
|
|||
Income tax receivable
|
10,958
|
|
|
856
|
|
|
11,814
|
|
|||
Deferred tax assets
|
24,925
|
|
|
(8,757
|
)
|
|
16,168
|
|
|||
Property and equipment
|
10,191
|
|
|
—
|
|
|
10,191
|
|
|||
Land held for sale
|
325
|
|
|
—
|
|
|
325
|
|
|||
Amortizable identifiable intangible assets
|
45,463
|
|
|
(1,651
|
)
|
|
43,812
|
|
|||
Goodwill
|
14,092
|
|
|
(1,820
|
)
|
|
12,272
|
|
|||
Accounts payable
|
(34,228
|
)
|
|
(3,131
|
)
|
|
(37,359
|
)
|
|||
Income tax payable
|
(196
|
)
|
|
—
|
|
|
(196
|
)
|
|||
Accrued liabilities
|
(5,185
|
)
|
|
22
|
|
|
(5,163
|
)
|
|||
Deferred revenue
|
(800
|
)
|
|
791
|
|
|
(9
|
)
|
|||
Sales returns liability
|
(14,468
|
)
|
|
(15,116
|
)
|
|
(29,584
|
)
|
|||
Deferred tax liabilities
|
(17,978
|
)
|
|
17,978
|
|
|
—
|
|
|||
Other noncurrent liabilities
|
(513
|
)
|
|
—
|
|
|
(513
|
)
|
|||
Total
|
$
|
87,805
|
|
|
$
|
(25,461
|
)
|
|
$
|
62,344
|
|
|
Intangible asset class
|
Weighted-average amortization period
|
||
|
|
|
||
Tradenames
|
$
|
18,348
|
|
10.0 years
|
Patents and technology
|
15,225
|
|
7.5 years
|
|
Customer relationships
|
8,200
|
|
5.0 years
|
|
Non-compete agreements
|
1,796
|
|
5.0 years
|
|
Backlog
|
243
|
|
0.3 years
|
|
Total
|
$
|
43,812
|
|
|
|
12 Months Ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
||||
Net sales
|
$
|
419,183
|
|
|
$
|
455,165
|
|
Net loss
|
$
|
(17,487
|
)
|
|
$
|
(5,393
|
)
|
Basic loss per share
|
$
|
(0.62
|
)
|
|
$
|
(0.19
|
)
|
Diluted loss per share
|
$
|
(0.62
|
)
|
|
$
|
(0.19
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
US operations
|
$
|
37,850
|
|
|
$
|
(22,220
|
)
|
|
$
|
26,852
|
|
Foreign operations
|
5,502
|
|
|
(1,339
|
)
|
|
(1,154
|
)
|
|||
Total
|
$
|
43,352
|
|
|
$
|
(23,559
|
)
|
|
$
|
25,698
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current benefit (provision):
|
|
|
|
|
|
||||||
Federal
|
$
|
(779
|
)
|
|
$
|
(89
|
)
|
|
$
|
(9,429
|
)
|
State
|
(532
|
)
|
|
138
|
|
|
(1,783
|
)
|
|||
Foreign
|
(786
|
)
|
|
(31
|
)
|
|
(61
|
)
|
|||
Total current
|
(2,097
|
)
|
|
18
|
|
|
(11,273
|
)
|
|||
Deferred benefit (provision):
|
|
|
|
|
|
||||||
Federal
|
(25,919
|
)
|
|
7,612
|
|
|
973
|
|
|||
State
|
(345
|
)
|
|
342
|
|
|
189
|
|
|||
Foreign
|
109
|
|
|
—
|
|
|
—
|
|
|||
Total deferred
|
(26,155
|
)
|
|
7,954
|
|
|
1,162
|
|
|||
Total benefit (provision)
|
$
|
(28,252
|
)
|
|
$
|
7,972
|
|
|
$
|
(10,111
|
)
|
|
2017
|
|
2016
|
|
2015
|
|||
Tax at statutory rate (35%)
|
(15,173
|
)
|
|
8,246
|
|
|
(8,994
|
)
|
State tax, net of federal tax benefit
|
(1,217
|
)
|
|
1,041
|
|
|
(1,089
|
)
|
Non-deductible expense and other
|
(830
|
)
|
|
333
|
|
|
116
|
|
Restricted stock units
|
(831
|
)
|
|
—
|
|
|
—
|
|
Foreign tax rate differential
|
1,248
|
|
|
(491
|
)
|
|
(464
|
)
|
Domestic production activities deduction
|
—
|
|
|
—
|
|
|
459
|
|
Mandatory repatriation of foreign earnings
|
(547
|
)
|
|
—
|
|
|
—
|
|
Return to provision adjustment
|
(212
|
)
|
|
(36
|
)
|
|
126
|
|
Reserve related to unrecognized tax benefits
|
107
|
|
|
(452
|
)
|
|
(264
|
)
|
Interest and penalties
|
(1
|
)
|
|
(14
|
)
|
|
(1
|
)
|
Effect of federal rate change
|
(11,806
|
)
|
|
—
|
|
|
—
|
|
Effect of state rate changes, net of federal tax benefit
|
1,010
|
|
|
(655
|
)
|
|
—
|
|
|
(28,252
|
)
|
|
7,972
|
|
|
(10,111
|
)
|
•
|
For the
year ended
December 31, 2017
, the Company accrued a reasonable estimate of
$547
of tax expense for the Tax Act’s one-time transition tax on the foreign subsidiaries’ accumulated, unremitted earnings. This amount includes the projected effect of foreign tax credits as well as projected state tax effects.
|
•
|
For the
year ended
December 31, 2017
, the Company accrued
$11,806
in provisional tax expense related to the net change in deferred tax assets stemming from the Tax Act’s reduction of the U.S. federal tax rate from
35%
to
21%
.
|
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Allowance for doubtful accounts
|
$
|
146
|
|
|
$
|
286
|
|
Property and equipment
|
396
|
|
|
—
|
|
||
Deferred revenue
|
11
|
|
|
27
|
|
||
Inventories
|
7,265
|
|
|
12,724
|
|
||
Stock-based compensation
|
790
|
|
|
1,857
|
|
||
Sales returns accrual
|
4,343
|
|
|
7,788
|
|
||
Acquisition costs, net of amortization
|
116
|
|
|
191
|
|
||
Intangible assets
|
2,230
|
|
|
77
|
|
||
Goodwill
|
1,009
|
|
|
1,663
|
|
||
HzO investment
|
1,007
|
|
|
1,483
|
|
||
Capital loss carry-over
|
184
|
|
|
271
|
|
||
Reserve on note receivable
|
—
|
|
|
328
|
|
||
Net operating loss carryforward
|
3,338
|
|
|
21,313
|
|
||
Federal and state credit carryforwards
|
3,440
|
|
|
2,816
|
|
||
Other liabilities
|
1,586
|
|
|
1,619
|
|
||
Total gross deferred tax assets
|
25,861
|
|
|
52,443
|
|
||
Valuation allowance
|
(1,458
|
)
|
|
(1,753
|
)
|
||
Total deferred tax assets
|
$
|
24,403
|
|
|
$
|
50,690
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment
|
$
|
—
|
|
|
$
|
323
|
|
Other
|
—
|
|
|
4
|
|
||
Total gross deferred tax liabilities
|
—
|
|
|
327
|
|
||
Net deferred tax assets
|
$
|
24,403
|
|
|
$
|
50,363
|
|
|
2017
|
|
2016
|
||||
Unrecognized tax benefits, as of January 1
|
$
|
2,230
|
|
|
$
|
1,265
|
|
Unrecognized tax benefits assumed in acquisition
|
—
|
|
|
513
|
|
||
Gross increases (decreases) – tax positions in current period
|
444
|
|
|
479
|
|
||
Gross increases (decreases) – prior year tax positions
|
58
|
|
|
—
|
|
||
Gross increases (decreases) – lapse of statute
|
(454
|
)
|
|
(27
|
)
|
||
Total benefit
|
$
|
2,278
|
|
|
$
|
2,230
|
|
•
|
Maximum Leverage Ratio
: Defined as the ratio of total funded indebtedness to Consolidated EBITDA (as defined in the Credit and Security Agreement), which cannot be more than
3.50
on a trailing four quarter basis.
|
•
|
Minimum Fixed Charge Coverage Ratio
: Defined as the ratio of Consolidated EBITDA (as defined in the Credit and Security Agreement) minus taxes, capital distributions and unfunded capital expenditures divided by the sum of interest payments, principal payments, and capital lease payments; the minimum allowed under the Credit and Security Agreement is
1.10
on a trailing four quarter basis.
|
•
|
Increased the Maximum Revolving Amount, as defined in the Credit Agreement, from
$85,000
to:
|
◦
|
$135,000
from July 17, 2017 to December 31, 2017;
|
◦
|
$110,000
from January 1, 2018 to May 31, 2018; and
|
◦
|
$100,000
from June 1, 2018, forward.
|
•
|
Expanded Permitted Foreign Subsidiary Loans, Guaranties and Investments, as defined in the Credit Agreement, to include:
|
◦
|
A
$2,000
loan dated April 5, 2017, from the Company to ZAGG International Distribution Limited; and
|
◦
|
Any other loan or investment by the company or any domestic subsidiary of the Company in or to, or guaranty of indebtedness of, any foreign subsidiary of the Company for the period July 17, 2017, to March 31, 2018, in an aggregate amount not to exceed
$8,000
.
|
•
|
Increased the Letter of Credit Commitment, as defined in the Credit Agreement, from
$7,500
to an aggregate amount of
$40,000
.
|
•
|
Increased the Borrowing Base, as defined the Credit Agreement, on a seasonal basis between August 1, 2017, and September 30, 2017, by
$15,000
, which seasonal increase to the Borrowing Base was subsequently extended by the Lenders to October 31, 2017.
|
|
Line of Credit
|
|
Term Loan
|
|
Total
|
||||||
2018
|
$
|
—
|
|
|
$
|
14,063
|
|
|
$
|
14,063
|
|
2019
|
—
|
|
|
—
|
|
|
—
|
|
|||
2020
|
23,475
|
|
|
—
|
|
|
23,475
|
|
|||
Total
|
$
|
23,475
|
|
|
$
|
14,063
|
|
|
$
|
37,538
|
|
|
Restricted Stock (In thousands)
|
|
Weighted-Average
Grant Date
Fair Value
(Per share)
|
|||
Outstanding at December 31, 2016
|
766
|
|
|
$
|
7.89
|
|
Granted
|
604
|
|
|
8.26
|
|
|
Vested
|
(270
|
)
|
|
7.13
|
|
|
Forfeited
|
(66
|
)
|
|
7.98
|
|
|
Outstanding at December 31, 2017
|
1,034
|
|
|
$
|
8.29
|
|
2018
|
$
|
2,107
|
|
2019
|
1,594
|
|
|
2020
|
1,539
|
|
|
2021
|
1,465
|
|
|
2022
|
1,495
|
|
|
Thereafter
|
1,111
|
|
|
Total
|
$
|
9,311
|
|
|
2017
|
|
2016
|
||
Superior
|
31
|
%
|
|
32
|
%
|
Best Buy
|
18
|
%
|
|
22
|
%
|
GENCO
|
7
|
%
|
|
10
|
%
|
•
|
Screen Protection
– Our screen product line is comprised of sales of InvisibleShield glass products, InvisibleShield film products, and ISOD film blanks. InvisibleShield glass products are sourced from factories in Asia with protective glass expertise, each of which uses a number of sub-suppliers for raw materials and other components. Our InvisibleShield film and ISOD products are sourced through our third-party logistics partner, who purchases the raw film inventory from a single supplier (as discussed above).
|
•
|
Battery Cases and Power Management
– Our battery case and power management product lines consists of power products that are designed to provide on-the-go power for tablets, smartphones, laptops, cameras, and virtually all other electronic mobile devices. Our power products are sourced from factories in Asia with battery expertise, each of which uses a number of sub-suppliers for raw materials and other components.
|
•
|
Keyboards
– Our keyboard product line consists of (1) device specific keyboards designed to fit individual tablets produced by original equipment manufacturers and (2) keyboards that are designed to be device agnostic and can be used on virtually any mobile device. Our keyboard products are sourced from factories in Asia with keyboard expertise, each of which uses a number of sub-suppliers for raw materials and other components.
|
•
|
Audio
– Our audio product line consists of earbuds and headphones that are designed to be compatible with virtually all electronic mobile devices. Our audio products are sourced from factories in Asia with audio expertise, each of which uses a number of sub-suppliers for raw materials and other components.
|
|
2017
|
|
2016
|
|
2015
|
|||
Superior
|
30
|
%
|
|
27
|
%
|
|
17
|
%
|
Best Buy
|
9
|
%
|
|
11
|
%
|
|
20
|
%
|
GENCO
|
8
|
%
|
|
11
|
%
|
|
11
|
%
|
|
2017
|
|
2016
|
|
2015
|
|||
United States
|
84
|
%
|
|
88
|
%
|
|
91
|
%
|
Europe
|
9
|
%
|
|
7
|
%
|
|
8
|
%
|
Other
|
7
|
%
|
|
5
|
%
|
|
1
|
%
|
|
For the Year Ended December 31, 2017
|
||||||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
Year
|
||||||||||
Net sales
|
$
|
92,946
|
|
|
$
|
115,227
|
|
|
$
|
134,398
|
|
|
$
|
176,924
|
|
|
$
|
519,495
|
|
Income (loss) from operations
|
(6,649
|
)
|
|
5,497
|
|
|
15,935
|
|
|
29,952
|
|
|
44,735
|
|
|||||
Net income (loss)
|
(6,138
|
)
|
|
3,403
|
|
|
9,776
|
|
|
8,059
|
|
|
15,100
|
|
|||||
Earnings (loss) per share: (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.22
|
)
|
|
$
|
0.12
|
|
|
$
|
0.35
|
|
|
$
|
0.29
|
|
|
$
|
0.54
|
|
Diluted
|
(0.22
|
)
|
|
0.12
|
|
|
0.34
|
|
|
0.28
|
|
|
0.53
|
|
|||||
Weighted average common shares:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
28,059
|
|
|
27,963
|
|
|
27,969
|
|
|
27,969
|
|
|
27,996
|
|
|||||
Diluted
|
28,059
|
|
|
28,213
|
|
|
28,381
|
|
|
28,781
|
|
|
28,407
|
|
|
For the Year Ended December 31, 2016
|
||||||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
|
Year
|
||||||||||
Net sales
|
$
|
62,432
|
|
|
$
|
99,833
|
|
|
$
|
124,662
|
|
|
$
|
114,930
|
|
|
$
|
401,857
|
|
Loss from operations
|
(3,703
|
)
|
|
(1,352
|
)
|
|
(12,710
|
)
|
|
(3,595
|
)
|
|
(21,360
|
)
|
|||||
Net loss
|
(3,290
|
)
|
|
(1,046
|
)
|
|
(7,105
|
)
|
|
(4,146
|
)
|
|
(15,587
|
)
|
|||||
Loss per share: (1)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.12
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.56
|
)
|
Diluted
|
(0.12
|
)
|
|
(0.04
|
)
|
|
(0.25
|
)
|
|
(0.15
|
)
|
|
(0.56
|
)
|
|||||
Weighted average common shares:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
27,710
|
|
|
28,126
|
|
|
28,125
|
|
|
28,061
|
|
|
28,006
|
|
|||||
Diluted
|
27,710
|
|
|
28,126
|
|
|
28,125
|
|
|
28,061
|
|
|
28,006
|
|
(1)
|
The earnings per share calculations for each of the quarters were based upon the weighted average number of shares outstanding during each period, and the sum of the quarters may not be equal to the full year earnings per common share amounts.
|
Subsidiary Name
|
|
Ownership
|
|
Jurisdiction
|
ZAGG Intellectual Property Holding Company, Inc.
|
|
100%
|
|
United States
|
ZAGG International Distribution Unlimited Company
|
|
100%
|
|
Ireland
|
ZAGG Retail, Inc.
|
|
100%
|
|
United States
|
Patriot Corporation
|
|
100%
|
|
Ireland
|
iFrogz Inc.
|
|
100%
|
|
United States
|
HzO, Inc.
|
|
8.55%
|
|
United States
|
mophie inc.
|
|
100%
|
|
United States
|
mophie LLC
|
|
100%
|
|
United States
|
Zagg (Shenzhen) Technology Development Co., Ltd.
|
|
100%
|
|
China
|
mophie Netherlands Cooperatie U.A.
|
|
100%
|
|
Netherlands
|
mophie Limited
|
|
100%
|
|
Hong Kong
|
ZAGG Netherlands BV
|
|
100%
|
|
Netherlands
|
ZAGG Hong Kong Limited
|
|
100%
|
|
Hong Kong
|
ZAGG Mobile Accessories Pty Ltd.
|
|
100%
|
|
Australia
|
ZAGG Japan G.K.
|
|
100%
|
|
Japan
|
ZAGG Singapore Pte. Ltd.
|
|
100%
|
|
Singapore
|
ZAGG Trading (Shenzhen) Co. Ltd.
|
|
100%
|
|
China
|
1.
|
I have reviewed this Annual Report on Form 10-K of ZAGG Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report.
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
Dated: March 14, 2018
|
/s/ CHRIS AHERN
|
|
Chris Ahern
|
|
Chief Executive Officer & Director
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of ZAGG Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report.
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
Dated: March 14, 2018
|
/s/ BRADLEY J. HOLIDAY
|
|
Bradley J. Holiday
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: March 14, 2018
|
/s/ CHRIS AHERN
|
|
Chris Ahern
|
|
Chief Executive Officer & Director
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: March 14, 2018
|
/s/ BRADLEY J. HOLIDAY
|
|
Bradley J. Holiday
|
|
Chief Financial Officer
|