ZAGG Reports Second Quarter 2009 Earnings
SALT LAKE CITY--ZAGG Inc. (OTCBB: ZAGG - News), a leading producer of mobile electronics
accessories including the popular invisibleSHIELD™ and ZAGGaudio™
brands, announces successful results for the second quarter of Fiscal
Year 2009, ended June 30, 2009. ZAGG highlighted a 236% increase in
revenues when compared to second quarter 2008 and also reported positive
fully diluted earnings per share of $0.05 for the second quarter 2009.
For the six months ended June 30, 2009, ZAGG had a 210% increase in
revenues when compared to the six months ended June 30, 2008 and also
reported positive fully diluted earnings per share of $0.10 for the same
period.
“We are thrilled with these results, as the second quarter is
historically our slowest, so to execute another record-breaking quarter
is very exciting,” said Robert G. Pedersen II, President and CEO of
ZAGG. “We continue to see dramatic growth in domestic and international
markets. We are currently expanding our SKU count with Best Buy and the
launch of another big box retailer to be announced on the conference
call. Our mall kiosks are experiencing record growth in inquiries from
potential owners, and from new cart openings; we currently have 67
operating locations across the country, and 78 signed agreements. ZAGG
will be introducing a new product line on this call, as well as a switch
in paradigm in offering new product categories over the coming months. I
am confident that the invisibleSHIELD and new product launches
throughout the rest of this year will keep our company on a high growth
trajectory for years to come.” The Company will host an investor conference call Thursday, August 13,
2009 at 11:00 AM EDT to answer questions regarding the results from
their Form 10-Q for the three and six months ended June 30, 2009. To
participate in the call please dial (877) 407-0782. Interested parties
may also listen via the Internet at the event website and on the Company website at: www.ZAGG.com.
The call will be available for replay for 30 days by dialing (877)
660-6853 and entering account number 286 and call ID number 329368. Financial Results Net sales for the quarter ended June 30, 2009 were $9,214,971, an
increase of 236% compared to net sales of $2,739,176 for the quarter
ended June 30, 2008. Net sales for the six months ended June 30, 2009
were $17,290,146, an increase of 210% compared to net sales of
$5,584,597 for the six months ended June 30, 2008. Gross profit for the quarter ended June 30, 2009 was $5,515,454, or 60%
of sales, compared to $2,026,962, or 74% of sales, in the quarter ended
June 30, 2008. Gross profit for the six months ended June 30, 2009 was
$10,708,398, or 62% of sales, compared to $4,094,591, or 73% of sales
for the six months ended June 30, 2008. We reported net income of
$1,194,264 or $0.05 per share for the quarter ended June 30, 2009,
compared to net income of $174,703 or $0.01 per share for the quarter
ended June 30, 2008. We reported net income of $2,222,504 or $0.10 per
share for the six months ended June 30, 2009, compared to net income of
$60,532 or $0.00 per share for the six months ended June 30, 2008. For more information about ZAGG, please visit the
investor relations page on www.ZAGG.com. This calendar of events may
be subject to change without notice. About ZAGG Inc.: ZAGG Inc. designs, manufactures, and distributes protective clear
coverings and accessories for consumer electronic and hand-held devices,
worldwide under the brand names invisibleSHIELD™ and ZAGGaudio™. ZAGG
has also introduced beta testing of AppSpace.com, an online destination
for the fast-growing mobile app market, combined with the networking
power of social media. The invisibleSHIELD is a protective, high-tech
patented film covering, designed for iPods, laptops, cell phones,
digital cameras, PDAs, watch faces, GPS systems, gaming devices, and
other items. The patent-pending invisibleSHIELD application of clear
protective film covering a device is the first scratch protection
solution of its kind on the market, and has sold millions of units.
Currently, ZAGG offers over 3,000 precision pre-cut designs with a
lifetime replacement warranty through online channels, big box retailers
like Best Buy, resellers, college bookstores, Mac stores and mall
kiosks. The company continues to increase its product lines to offer
additional electronic accessories and services to its tech-savvy
customer base. For more product or investor information please visit the
company’s web site at www.ZAGG.com. Safe Harbor Statement: This release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended and such
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
"Forward-looking statements" describe future expectations, plans,
results, or strategies and are generally preceded by words such as
"may," "future," "plan" or "planned," "will" or "should," "expected,"
"anticipates," "draft," "eventually" or "projected." You are cautioned
that such statements are subject to a multitude of risks and
uncertainties that could cause future circumstances, events, or results
to differ materially from those projected in the forward-looking
statements, including the risks that actual results may differ
materially from those projected in the forward-looking statements as a
result of various factors, and other risks identified in filings made by
the company with the Securities and Exchange Commission.
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ZAGG INCORPORATED AND SUBSIDIARY
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(Unaudited)
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June 30,
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December 31,
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2009
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2008
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ASSETS
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Current assets
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Cash
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$
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3,334,158
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$
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1,065,652
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Accounts receivable, net
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5,088,329
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3,593,887
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Inventories
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4,179,258
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1,913,297
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Prepaid expenses and other current assets
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1,270,241
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676,077
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Notes receivable
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513,000
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513,000
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Deferred income tax assets
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-
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81,663
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Total current assets
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14,384,986
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7,843,576
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Property and equipment, net
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689,069
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549,370
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Deferred income tax assets
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-
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4,937
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Deposits and other assets
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9,688
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9,688
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Intangible assets, net
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78,017
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47,344
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Total assets
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$
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15,161,760
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$
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8,454,915
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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Notes payable
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$
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10,199
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$
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20,223
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Accounts payable
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2,317,626
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1,626,390
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Accrued liabilities
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137,396
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212,754
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Accrued wages and wage related expenses
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129,784
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121,112
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Deferred revenue
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214,052
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366,590
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Deferred income tax liability
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1,243,165
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-
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Sales returns liability
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544,563
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291,119
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Total current liabilities
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4,596,785
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2,638,188
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Total liabilities
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4,596,785
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2,638,188
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Stockholders' equity
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Common stock, $0.001 par value; 50,000,000 shares authorized;
21,141,112 and 19,163,995 shares issued and outstanding,
respectively
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21,142
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19,165
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Warrants to purchase common stock
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425,666
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739,338
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Additional paid-in capital
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6,743,220
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3,808,280
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Cumulative translation adjustment
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(203,781
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)
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(106,630
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)
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Retained earnings
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3,578,728
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1,356,574
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Total stockholders' equity
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10,564,975
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5,816,727
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Total liabilities and stockholders' equity
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$
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15,161,760
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$
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8,454,915
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ZAGG INCORPORATED AND SUBSIDIARY
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
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Three Months Ended
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Three Months Ended
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Six Months Ended
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Six Months Ended
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June 30, 2009
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June 30, 2008
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June 30, 2009
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June 30, 2008
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Net sales
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$
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9,214,971
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$
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2,739,176
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$
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17,290,146
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$
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5,584,597
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Cost of sales
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3,699,517
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712,214
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6,581,748
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1,490,006
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Gross profit
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5,515,454
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2,026,962
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10,708,398
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4,094,591
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Operating expenses:
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Advertising and marketing
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1,393,194
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484,728
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2,846,248
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1,274,792
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Selling, general and administrative
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2,259,150
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1,343,778
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4,395,148
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2,849,199
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Total operating expenses
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3,652,344
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1,828,506
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7,241,396
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4,123,991
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Income (loss) from operations
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1,863,110
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198,456
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3,467,002
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(29,400
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)
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Other income (expense):
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Interest expense
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(178
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)
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(972
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)
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(2,620
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)
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(2,674
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)
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Interest and other income
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50,226
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81,149
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92,274
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129,536
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Total other income
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50,048
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80,177
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89,654
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126,862
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Income before provision for income taxes
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1,913,158
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278,633
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3,556,656
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97,462
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Income tax provision
|
|
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(718,894
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)
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(103,930
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)
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(1,334,152
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)
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(36,930
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)
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Net income
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$
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1,194,264
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$
|
174,703
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$
|
2,222,504
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$
|
60,532
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Basic net income per common share
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$
|
0.06
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$
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0.01
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$
|
0.11
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$
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0.00
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Diluted net income per common share
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$
|
0.05
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$
|
0.01
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$
|
0.10
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$
|
0.00
|
|
|
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|
|
|
|
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Weighted average number of shares outstanding - basic
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|
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20,062,839
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|
|
|
18,884,105
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|
|
|
20,391,870
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|
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18,884,050
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|
|
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Weighted average number of shares outstanding - diluted
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|
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22,614,394
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|
|
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18,936,055
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|
|
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22,383,552
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|
|
|
18,976,547
|
|
|