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About Zagg Inc

ZAGG makes items to protect, power, and improve mobile products. It generates more than half its revenue from smart phone and tablet screen protectors and cases, marketed primarily under the InvisibleShield name. The company's other products include power stations and wireless chargers; earbuds, headphones, and speakers; and keyboards and other accessories. ZAGG sells its products primarily through big-box retailers, electronics stores, and other indirect channels; it also operates e-commerce websites and works with third-party franchisees. The US is the company's largest market.

Operations

Zagg's operations are divided into four product segments. The largest, accounting for about 55% of total sales, is Protection, which includes smart phone and tablet screen protectors and cases under the InvisibleShield brand name. The company is one of the leading providers of mobile protection products in the US. The segment also includes the Gear4 brand of smartphone cases that are #1 in the UK.

Its Power Management segment accounts for about a third of sales and includes power stations, power cases, and wireless chargers; mophie and HALO are the leading brands in this segment. 

The Audio (earbuds, headphones, speakers) and Productivity (keyboards, accessories) segments each contribute about 5% of Zagg's sales. Top brands include IFROGS and BRAVEN for headphones and speakers and ZAGG for keyboards and other mobile accessories.

Geographic Reach

Utah-based ZAGG generates about 85% of sales in the US; Europe accounts for about 10%.

It has office space in the US (California, Florida, Michigan, and Utah), as well as in England, Ireland, and China.

Sales and Marketing

Zagg's markets its products to consumers of electronic and hand-held devices through retail partners and distributors (nearly 90% of sales), as well as directly through websites (nearly 10%) and via franchisees (less than 5%). Items for Apple iPhones and iPads and Samsung Galaxy smartphones and tablets are its biggest sellers, but it is diversifying to suit other manufacturers as their market shares increases.

The company relies heavily on a handful of customers with the top three accounting for nearly 40% of total revenue -- wireless products supplier Superior Communications (nearly 25%), retailer Best Buy (about 10%), and distributor GENCO (about 5%).

Financial Performance

Amid the proliferation of mobile devices, Zagg has seen strong revenue over the past five years. Sales have more than doubled since 2014. Net income has been a little more sporadic, falling into the red in 2016 before bouncing back the past two years.

In 2018 the company reported revenue of $538.2 million, up 4% from the prior year. Growth in screen protection, spurred on by the launch of a new iPhone, and wireless charging boosted the results. 

Net income was $39.2 million that year, more than double the 2017 figure, as a result of revenue growth and a lower income tax provision. 

Cash at the end of 2018 was $15.8 million, a decrease of $9.2 million from the prior year. Cash from operations contributed $25.9 million to the coffers, while investing activities used $40 million, mainly for the purchase of Gear4. Financing activities added another $5.6 million from proceeds from revolving credit.

 

Strategy

Zagg has been aided in its growth by the increasing number of mobile devices in the world. There seems to be a smart phone or tablet in every hand, and all those devices need protection and power. To keep its momentum going, the company is focused on expanding its product offerings and entering new domestic and global markets. 

It has introduced a plethora of new products in 2018 and 2019, including screen protectors with EyeSafe technology that filters out harmful light, clear cases that allow for the quick swapping of designs, battery cases providing advanced impact protection, and backlit, laptop-style keyboards for iPad models. The company has also added new product lines via acquisition.

Zagg made a big move in the UK market with the late 2018 purchase of that country's leading smartphone case brand, Gear4.

Mergers and Acquisitions

In early 2019 Zagg paid $43 million in cash and stock for HALO, which makes mobile accessories such as wireless chargers and portable power products. The deal expands Zagg's IP portfolio and establishes a relationship with home shopping and e-commerce leader QVC.

The prior year the company purchased UK's top smartphone case brand Gear4 (for about $40 million) and Bluetooth audio products maker BRAVEN.

Zagg Inc

910 W LEGACY CENTER WAY STE 500
Midvale, UT 84047-5845
Phone: 1 (801) 263-0699

Stats

Employer Type: Publicly Owned
Stock Symbol: ZAGG
Stock Exchange: , NASDAQ
CEO: Randall L. Hales
Chairman: Cheryl A. Larabee
President: Brian Stech
Employees (This Location): 88
Employees (All Locations): 618

Major Office Locations

Midvale, UT

Other Locations

Salt Lake City, UT