Zagg Inc. (Nasdaq: ZAGG) shares climbed 6.6% to $15.70, on Monday after the maker of cellphones and accessories related to Apple Inc. (Nasdaq: AAPL) products hiked its 2011 revenue forecast and came out with second-quarter figures. Volume for the stock surpassed 5.4 million shares, compared to a daily average of 2.2 million.
A news release out August 15, declared that revenue for the second quarter was $38.8 million, a 158% increase from $15.1 million in the second quarter of 2010 and a 44% sequential increase as compared to $27.0 million in the first quarter of 2011. These results include nine days of iFrogz revenue of $2.4 million, having been acquired during the quarter on June 21, 2011. Revenue by channel was 72% indirect and 22% from the ZAGG.com website.
Gross profit for the second quarter was $17.8 million, versus $7.5 million in Q2 2010 and $13.6 million from the previous quarter, which translates into gross margin for the quarter of 46%, versus 50% for Q2 2010 and 51% in the previous quarter. Gross margin for the quarter was in line with ZAGG’s guidance, but down year over year due to the required write up of iFrogz inventory, a product mix shift for iFrogz, additional shipping charges to meet higher than expected demand for iFrogz product, and an increase in obsolescence charges for ZAGG inventory.
The same release quoted CEO Robert Pedersen as saying, “ZAGG’s operational performance in the quarter was extremely strong. During the second quarter we saw revenue growth due to our expanding retail channel, and the increase in product we are putting into the channel. The market for smartphones and tablets continues to rapidly expand, and we are well positioned as a leading accessories provider, especially since our acquisition of iFrogz, which broadens our product offering, expands our distribution to new channels and brings the youth demographic into our mix.
“We are excited about the roll out of iFrogz product on our website, as well as the expansion of our tablet keyboard offerings with the ZAGGfolio™ and the new ZAGGkeys™ SOLO™. We feel that these additions will have an immediate impact to our online sales.”
The Company is raising its 2011 guidance for revenues to $160 million – $170 million, from a previous range of $105 million – $110 million, to reflect an improved outlook for the sale of its products as a result of expanding distribution and increased product offerings, and the acquisition of iFrogz.