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Section 1: 8-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 1, 2018

ZAGG INC

(Exact name of registrant as specified in charter)

Delaware
001-34528
20-2559624
(State or other jurisdiction of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)

910 West Legacy Center Drive, Suite 500
Midvale, Utah 84047
(Address of principal executive offices)

Registrant’s telephone number, including area code: (801) 263-0699

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02
 
Results of Operations and Financial Condition.
On March 7, 2018, ZAGG Inc (the “Company”) issued a press release announcing the results of operations for the year ended December 31, 2017, and made publicly available certain supplemental financial information, including commentary on results of operations from Bradley J. Holiday, Chief Financial Officer (“CFO”). The supplemental financial information - financial tables is furnished with this report as Exhibit 99.1, the press release is furnished with this report as Exhibit 99.2, and the supplemental financial information - CFO commentary is furnished with this report as Exhibit 99.3.
The Company will also hold its earnings conference call on March 7, 2018. The conference call will be available to interested parties through a live audio Internet broadcast accessible at investors.zagg.com under the events tab. A podcast of the conference call will be archived at investors.zagg.com for one year.
Item 5.02
 
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangement of Certain Officers.
Departure of President, Chief Executive Officer and Director
On March 1, 2018, the Company's Board of Directors (the "Board") accepted the resignation of Randall L. Hales as President, Chief Executive Officer ("CEO"), and as a member of the Board. Mr. Hales’ resignation from the Board did not involve any disagreement with management or the Board related to the Company’s operations, policies or practices. Mr. Hales will continue to serve as an advisor to the Company through December 2018 to ensure a smooth transition for the new CEO.
Appointment of Chief Executive Officer; Employment Agreement
On March 7, 2018, the Board appointed Chris Ahern to serve as the Company's new CEO. Prior to his appointment, Mr. Ahern was serving as President of the mophie business unit and ZAGG International.
Mr. Ahern, age 42, was appointed President of ZAGG International in June 2014 and was appointed President of mophie in January 2017. Prior to joining the Company in 2014, Mr. Ahern served as the Sales Operations Director for Dell Products in Europe, Middle East and Africa supporting a $4.0 billion indirect business. Under Mr. Ahern’s leadership, his teams effectively grew revenue in various international markets, enhanced internal reporting and inventory management systems, and developed operational processes to align regional distribution, effectively growing revenue and improving operational efficiencies. Mr. Ahern holds a B.S. in Business Administration from Dublin City University.

Mr. Ahern has no family relationships with any of the Company’s directors or any other executive officer.

Mr. Ahern has had no transactions with a related person during the last fiscal year nor during the interim period hereof required to be disclosed pursuant to Item 404(a) of Regulation S-K.

In connection with his appointment as CEO, Mr. Ahern entered into an employment agreement effective March 7, 2018 (the "Ahern Agreement") specifying certain terms of his employment with the Company. Pursuant to the Ahern Agreement, Mr. Ahern will earn an annual base salary of $500,000 and will be eligible to receive a cash bonus of up to $500,000 based on the achievement of certain functional team goals, cost reduction targets, and strategic initiatives. For 2019 and each year thereafter, the Compensation Committee will determine the amount of the potential cash bonus Mr. Ahern will be eligible to receive.
Mr. Ahern will also be granted a restricted stock unit award equal to the share equivalent of $500,000 on the date of grant; this award is earned based on the achievement of net sales and Adjusted EBITDA targets established by the Compensation Committee for fiscal 2018 and will vest one-third on each of the first, second, and third anniversaries of the date earned. For 2019 and each year thereafter, the Compensation Committee will determine the amount of the target annual incentive restricted stock unit award Mr. Ahern will be eligible to receive.
In addition, in connection with his appointment as CEO, Mr. Ahern will receive a one-time restricted stock unit award equal to the share equivalent of $700,000 on the date of grant, which vests one-third on each of the first, second and third anniversaries of the grant date based on continued employment; provided that up to $400,000 of the restricted stock unit award can be taken in cash by Mr. Ahern at any time following the grant date.
Mr. Ahern also entered into the Company’s customary Confidentiality, Noncompete and Inventions Agreement effective March 7, 2018, in which he agreed, among other things, not to compete with the Company anywhere in the world the Company does business during the term of his employment and for twelve months thereafter.
Under the terms of a Change of Control Addendum to his previous employment agreement dated January 5, 2017, if Mr. Ahern is subject to a termination without cause or terminates his employment for good reason (as defined in the Ahern Agreement) at any time within 12 months after a change of control in the Company, then he will be entitled to receive severance payments equal to the sum of his base salary plus the current annual targeted bonus, less applicable withholding, for 12 months after the date of separation. In addition, the vesting and exercisability of outstanding incentive awards held by Mr. Ahern (or of any property received in exchange for such awards in a change of control) will automatically accelerate. During the severance period of 12 months, the Company will also pay the premiums to continue Mr. Ahern’s group health insurance coverage under COBRA if he is eligible for COBRA and has elected continuation coverage under applicable rules. However, the Company’s COBRA obligations shall immediately cease to the extent Mr. Ahern becomes eligible for substantially equivalent health insurance coverage from a subsequent employer.
Copies of the Ahern Agreement and the related compensation addendum to the Ahern Agreement are filed with this report as Exhibits 10.1 and 10.2, respectively.
Appointment of President; Employment Agreement
On March 7, 2018 the Board of Directors appointed Brian Stech, age 42, to serve as the Company's new President. Prior to his appointment, Mr. Stech was serving as Company's Chief Commercial Officer ("CCO"), with responsibility for leading the strategy and execution of the Company’s product, brand and distribution initiatives. Mr. Stech became our Executive Vice President of Sales in 2014, and was promoted to Executive Vice President of Sales and Marketing in 2014. After the acquisition of mophie in 2016, Mr. Stech became President of the ZAGG business unit. Mr. Stech was appointed as the Company’s CCO in June 2017. Prior to joining the Company in 2014, Mr. Stech served as president of SteelSeries, an award-winning gaming accessories company that was recognized by Entrepreneur Magazine as one of the “Top 100 Brilliant Companies to Watch” in 2009. Mr. Stech grew revenue twentyfold from 2008 to 2013 while guiding the company to a leading market share position in North America. Prior to his tenure at SteelSeries, Mr. Stech led global marketing and channel development for Motorola’s smartphone business unit. Mr. Stech has also served in leadership roles at Mobility Electronics (iGo, Inc.) and Ralston Purina Company. Mr. Stech holds a B.S. in Business from Indiana University.
Mr. Stech has no family relationships with any of the Company’s directors or any other executive officer.
Mr. Stech has had no transactions with a related person during the last fiscal year nor during the interim period hereof required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with his appointment as President, Mr. Stech entered into an employment agreement effective March 7, 2018 (the "Stech Agreement") specifying certain terms of his employment with the Company. Pursuant to the Stech Agreement, Mr. Stech will earn an annual base salary of $400,000 and will be eligible to receive a cash bonus of up to $200,000 based on the achievement of certain functional team goals, cost reduction targets, and strategic initiatives. For 2019 and each year thereafter, the Compensation Committee will determine the amount of the potential cash bonus Mr. Stech will be eligible to receive.

Mr. Stech will also be granted a restricted stock unit award equal to the share equivalent of $280,000 on the date of grant; this award is earned based on the achievement of net sales and Adjusted EBITDA targets established by the Compensation Committee for fiscal 2018 and will vest one-third on each of the first, second and third anniversaries of the date earned. For 2019 and each year thereafter, the Compensation Committee will determine the amount of the target annual incentive restricted stock unit award Mr. Stech will be eligible to receive.

In addition, in connection with his appointment as President, Mr. Stech will receive a one-time restricted stock unit award equal to the share equivalent of $500,000 on the date of grant, which vests one-third on each of the first, second and third anniversaries of the grant date based on continued employment.

Under the terms of a Change of Control Addendum to the Stech Agreement dated March 7, 2018, if Mr. Stech is subject to a termination without cause or terminates his employment for good reason (as defined in the Stech Agreement) at any time within 12 months after a change of control in the Company, then he will be entitled to receive severance payments equal to the sum of his base salary plus the current annual targeted bonus, less applicable withholding, for 12 months after the date of separation. In addition, the vesting and exercisability of outstanding incentive awards held by Mr. Stech (or of any property received in exchange for such awards in a change of control) will automatically accelerate. During the severance period of 12 months, the Company will also pay the premiums to continue Mr. Stech’s group health insurance coverage under COBRA if he is eligible for COBRA and has elected continuation coverage under applicable rules. However, the Company’s COBRA obligations shall immediately cease to the extent Mr. Stech becomes eligible for substantially equivalent health insurance coverage from a subsequent employer.
 

Copies of the Stech Agreement and the related compensation addendum to the Stech Agreement are filed with this report as Exhibits 10.3 and 10.4, respectively.
Item 7.01
 
Regulation FD Disclosure.
Members of Company management will use the information in the presentation attached hereto as Exhibit 99.4 in meetings with institutional investors and analysts beginning March 9, 2018. The attached presentation will also be posted on the Company’s website (investors.zagg.com).
Please refer to page 2 of Exhibit 99.4 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto, as well as the use of non-GAAP financial measures included therein.
Item 8.01
 
Other Events.
Press release regarding change in Directors and Officers
On March 7, 2018, the Company issued a press release relating to the above-listed changes in its directors and officers. A copy of the press release is furnished as Exhibit 99.5 hereto.
Item 9.01
 
Financial Statements and Exhibits.
 
 
 
(d) Exhibits.
 
 
     The following are filed as Exhibits to this Current Report on Form 8-K:
 
 
 
Exhibit No.
 
Description
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The information contained in Items 2.02, 7.01, 8.01 and 9.01 of this Current Report on Form 8-K, including Exhibits 99.1, 99.2, 99.3, 99.4, and 99.5 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ZAGG Inc
By: /s/ BRADLEY J. HOLIDAY
Bradley J. Holiday
Chief Financial Officer

Date: March 7, 2018



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Section 2: EX-10.1 (EXHIBIT 10.1)

Exhibit

392496307_zaggq42017leadershipt_image1.gif
March 7, 2018
Mr. Chris Ahern
4 Pistoria Ln
Ladera Ranch, CA 92694

Re: Employment Agreement
Dear Chris:
This letter agreement (“Agreement”) sets forth the terms of your employment with ZAGG Inc, a Delaware corporation (“ZAGG” or the “Company”), effective as of March 7, 2018 (the “Effective Date”). Excluding the Change of Control Addendum between you and the Company dated January 5, 2017, this Agreement amends and restates in its entirety any prior employment understanding or agreement between you and the Company or any other entity which is controlled by the Company (each an “Affiliate”).
1.    Position and Duties. You shall continue to be employed by the Company as the CEO of ZAGG. In such position, you have the duties and authority consistent with the duties and authority of a CEO of a public company in the mobile accessories industry of a size comparable to ZAGG. In addition, you may be asked from time to time to serve as a manager, director or officer of one or more of the Company’s Affiliates, without further compensation. Your employment with the Company shall be on the terms and conditions set forth in this Agreement, and you agree to devote your full business time, judgment, energy and skill exclusively to the advancement of the business interests of the Company and its Affiliates and to fully discharge your duties and responsibilities for them. You shall report directly to the Company’s Board of Directors. Your principal place of employment will be at the Company’s headquarters in or around Midvale, Utah.
2.    Term of Employment. Your employment at the Company commenced as of the date of your hire (the “Hiring Date”). Your employment has remained and shall remain “at-will” and either you or the Company may terminate your employment at any time, with or without cause, subject to the provisions of Paragraphs 4, 5 and 6 below.
3.    Compensation. The Compensation Addendum attached hereto as Exhibit A describes certain components of your compensation for the 2018 fiscal year. Annually thereafter during the term of your employment you will be provided with a new Compensation Addendum which will set forth the elements of your compensation for the applicable fiscal year as approved by the Compensation Committee of the Board of Directors of the Company. After you receive and sign or otherwise agree to, including by continuing your employment with the Company, the compensation terms set forth in such subsequent versions of the Compensation Addendum, such terms shall be deemed incorporated herein by reference. You will be compensated for your services to the Company and its Affiliates, subject to your full performance of your obligations hereunder, as described in the applicable Compensation Addendum, as follows:
(a)    Base Salary: Your annual base salary (“Base Salary”) is set forth in the Compensation Addendum and is prorated for any partial calendar year.
(b)    Target Performance Cash Potential (STI): Your Target Performance Cash Potential is described in the Compensation Addendum. Each calendar year, the Compensation Committee will determine whether to provide an annual Target Performance Cash Potential, the metrics which must be achieved to receive the Target Performance Cash Potential and the amounts to be paid in connection with the achievement or partial achievement of any Target Performance Cash Potential. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, (i) the earned portion of the Target Performance Cash Potential will be paid no more than 90 days after the close of the fiscal year, (ii) the Company reserves the right to amend, change, or cancel any Target Performance Cash Potential arrangement in its sole discretion and (iii) you must be employed through the date the Target Performance Cash Potential is paid in order to be eligible to receive it.
(c)    Target Performance Equity Potential (LTI): Your Target Performance Equity Potential is described in the Compensation Addendum. Each calendar year, the Compensation Committee will determine whether to provide an annual Target Performance Equity Potential, the metrics which must be achieved for you to receive the Target Performance Equity Potential and the equity amount you will receive in connection with the achievement or partial achievement of any Target Performance Equity Potential. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, (i) the earned portion and/or vesting of any Target Performance Equity Potential for the fiscal year will be determined no more than 90 days after the close of that fiscal year, (ii) the Company reserves the right to amend, change, or cancel any Target Performance Cash Potential arrangement in its sole discretion and (iii) you must be employed through the date such Target Performance Equity Potential vests in order to be eligible to receive it.
(d)    Other Compensation: Other types of cash or equity compensation (e.g., time-based stock grants) may, in the discretion of the Compensation Committee, be described in the Compensation Addendum. The metrics associated with earning the other compensation described in the Compensation Addendum, or greater or lesser amounts if any, shall be set forth in the applicable Compensation Addendum. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, you must be employed through the date such other compensation vests in order to be eligible to receive it.
(e)    Benefits: You will have the right, on the same basis as other similarly-situated employees of the Company, to participate in and to receive benefits under any applicable medical, disability or other group insurance plans, as well as under the Company’s business expense reimbursement and other employee benefit plans or policies, except to the extent that such plans are duplicative of benefits otherwise provided for in this Agreement. Your participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law, including without limitation, applicable tax rules. You will accrue paid vacation in accordance with the Company’s vacation policy. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.
(f)    Withholding: All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.
4.    Voluntary Termination. In the event that you voluntarily resign from your employment with the Company or any of its Affiliates without Good Reason (as defined in Paragraph 5) or in the event that your employment terminates as a result of your death or Disability (as defined in Paragraph 6(c)), you will be entitled to no compensation or benefits from the Company other than those earned and vested under Paragraph 3 through the date of your termination. You agree that if you voluntarily terminate your employment with the Company without Good Reason, you will provide the Company with reasonable written notice of your resignation. The Company may, in its sole discretion, elect to waive all or any part of such notice period and accept your resignation at an earlier date.
5.    Resignation for Good Reason. During the twelve (12) month period after the Effective Date, you may terminate your employment for Good Reason within thirty (30) days of the event constituting Good Reason by delivering to the Company a notice specifying that you are terminating your employment for Good Reason, setting forth in reasonable detail the facts and circumstances you claim give you Good Reason, and giving the Company thirty (30) days to cure the circumstances you claim give you Good Reason. If you deliver such a notice and the Company fails to cure the circumstances you claim give you Good Reason within thirty (30) days resulting in a Separation (as defined in Paragraph 6(c)) then the Company shall pay you the same Severance Pay (as defined below) and premiums to continue your group health insurance coverage under COBRA you would have received if your employment had been terminated without cause pursuant Paragraph 6(b) of this Agreement, plus reasonable expenses incurred by the end of the second calendar year following the year in which your termination of employment occurred to move your family back to Ireland, provided however, that you must sign a general release of known and unknown claims in a form satisfactory to the Company in order to receive such severance. For purposes of this Agreement, “Good Reason” shall mean any of the following events if effected by the Company without your consent within twelve (12) months after the Effective Date: (i) a change in your position with the Company which materially diminishes your duties, responsibilities, or authority; (ii) a material diminution of your Base Salary; (iii) following your relocation to Utah, a subsequent relocation of your principal place of employment by more than forty (40) miles; (iv) a material breach of this Agreement by the Company which remains uncured after reasonable notice and an opportunity to cure; or (v) the Company’s failure to secure the written assumption of its material obligations under this Agreement from any successor to the Company.
6.    Other Termination. Your employment may be terminated under the circumstances set forth below.
(a)    Termination for Cause: If your employment is terminated by the Company for cause as defined below, you shall be entitled to no compensation or benefits from the Company other than those earned and vested under Paragraph 3 through the date of your termination for cause. For purposes of this Agreement, a termination “for cause” occurs if you are terminated for any of the following reasons: (i) theft, dishonesty or falsification of any employment or Company records; (ii) improper disclosure of the Company’s confidential or proprietary information resulting in damage to the Company; (iii) any action or inaction by you which has a material detrimental effect on the Company’s reputation or business; (iv) your failure or inability to perform any assigned duties after written notice from the Company to you of, and a reasonable opportunity to cure, such failure or inability; (v) your conviction (including any plea of guilty or no contest) of a felony, or of any other criminal act if that act impairs your ability to perform your duties under this Agreement or (vi) your failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested your cooperation. For purposes of this paragraph only, “Company” shall mean ZAGG and its Affiliates.
(b)    Termination Without Cause: As indicated above, your employment by the Company is “at will.” If a Separation occurs because your employment is terminated by the Company without cause (and not as a result of your death or Disability), and if you sign a general release of known and unknown claims in form satisfactory to the Company, you will receive severance payments (“Severance Pay”) as described below. If your employment is terminated without cause you will receive Severance Pay in an amount equal to twelve (12) months of your Base Salary in effect on the date of Separation paid in accordance with the Company’s normal payroll schedule after the date of your Separation. The Company will deliver the form of release to you within thirty (30) days after your Separation. You must execute and return the release within the period set forth in the prescribed form. The Severance Pay will commence on the first payroll period at least sixty (60) days after your termination of employment if you timely return the signed release. During the applicable severance period, the Company will also pay the premiums to continue your group health insurance coverage under COBRA if you are eligible for COBRA and have elected continuation coverage under the applicable rules. However, the Company’s COBRA payment obligations shall immediately cease to the extent you become eligible for group health benefits from a subsequent employer.
(c)    Definition of Separation. For purposes of this Agreement, “Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). For purposes of this Agreement, “Disability” means (i) your inability, by reason of physical or mental illness or other cause, to perform your duties hereunder on a full‑time basis for a period of 90 days in any one year period, or (ii) in the discretion of the Board, as such term is defined in any disability insurance policy in effect at the Company during the time in question.
(d)    Commencement of Payments. For purposes of Section 409A of the Code, each salary continuation payment under Paragraph 5 or 6(b) above is hereby designated as a separate payment. If the Company determines that you are a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time of your Separation, then (i) the salary continuation payments under Paragraph 5 or 6(b) above, to the extent that they are subject to Section 409A of the Code, will commence during the seventh month after your Separation and (ii) the installments that otherwise would have been paid during the first six months after your Separation will be paid in a lump sum when the salary continuation payments commence.
7.    Confidential and Proprietary Information. As a condition of your continued employment, you must sign the current version of the ZAGG Confidentiality, Non-Competition and Inventions Agreement, a copy of which is attached to this Agreement, governing non-competition, employee confidentiality, and assignment of inventions agreement.
8.    Severability. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
9.    Assignment. In view of the personal nature of the services to be performed under this Agreement by you, you cannot assign or transfer any of your obligations under this Agreement.
10.    Entire Agreement. This Agreement and the agreements referred to above constitute the entire agreement between you and the Company regarding the terms and conditions of your employment, and they supersede all prior negotiations, representations or agreements between you and the Company regarding your employment, whether written or oral.
11.    Modification. This Agreement may only be modified or amended by a supplemental written agreement signed by you and an authorized representative of the Company.
12.    Governing Law. This Agreement, and all matters relating hereto, including any matter or dispute arising out of the Agreement, shall be interpreted, governed, and enforced according to the laws of the State of Utah, without regard to conflict of laws principals.
13.     Dispute Resolution. All disputes and controversies arising out of or in connection with this Agreement, or your employment with the Company shall be resolved exclusively by the state and federal courts located in Salt Lake County in the State of Utah, and each party hereto agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which such party may raise now, or hereafter have, to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party agrees that, to the fullest extent permitted by applicable law, a final judgment in any such suit, action, or proceeding brought in such a court shall be conclusive and binding upon such party, and may be enforced in any court of the jurisdiction in which such party is or may be subject by a suit upon such judgment.
14.    Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR EMPLOYEE’S EMPLOYMENT BY THE COMPANY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
15.    Attorneys’ Fees. The prevailing party in any arbitration, court action or other adjudicative proceeding arising out of or relating to this Agreement or Employee’s employment with the Company shall be reimbursed by the party who does not prevail for the prevailing party’s reasonable attorneys’, accountants’, and experts’ fees and for the costs of such proceeding(s). The provisions set forth in this Paragraph shall survive the merger of these provisions into any judgment.
16.    Paragraph Headings. The paragraph headings of this Agreement are inserted only for convenience and in no way define, limit, or describe the scope or intent of this Agreement nor affect its terms and provisions.
17.    Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and no provision of this Agreement shall be construed against either party as the drafter thereof. This Agreement is intended to be written, administered, interpreted, and construed in a manner such that no payment or benefits provided under the Agreement become subject to (i) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code, or (ii) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, "Section 409A Penalties"), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties.
18.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.
19.     Indemnification. Concurrent with the execution and delivery of this Agreement, Employee and the Company will enter into an Indemnity Agreement
20.    Entire Agreement. This Agreement is intended to be the final, complete, and exclusive statement of the terms of the parties’ agreement regarding the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein. To the extent that the terms of any prior agreement between the parties are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.
21.    EMPLOYEE ACKNOWLEDGEMENT. YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT AND HAVE OBTAINED AND CONSIDERED THE ADVICE OF SUCH LEGAL COUNSEL TO THE EXTENT YOU DEEM NECESSARY OR APPROPRIATE. YOU HAVE READ AND UNDERSTAND THE AGREEMENT, ARE FULLY AWARE OF ITS LEGAL EFFECT, AND HAVE ENTERED INTO IT FREELY BASED ON YOUR OWN JUDGMENT AND NOT BASED ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
Please sign and date this letter on the spaces provided below to acknowledge your acceptance of the terms of this Agreement.
ZAGG INC.
By: /S/CHERYL A. LARABEE
Cheryl A. Larabee
Title: Chairman of the Board

Accepted and agreed this 7th day of March, 2018:
EMPLOYEE:
/S/CHRIS AHERN
Chris Ahern


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Section 3: EX-10.2 (EXHIBIT 10.2)

Exhibit

392496307_capturea01.jpg

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Section 4: EX-10.3 (EXHIBIT 10.3)

Exhibit


392496307_zaggq42017leadershipt_image1.gif
March 7, 2018
Mr. Brian Stech
910 W. Legacy Center Way, Suite 500
Midvale, Utah 84047
Re: Employment Agreement
Dear Brian:
This letter agreement (“Agreement”) sets forth the terms of your employment with ZAGG Inc, a Delaware corporation (“ZAGG” or the “Company”), effective as of March 7, 2018 (the “Effective Date”). This Agreement amends and restates in its entirety any prior employment understanding or agreement between you and the Company or any other entity which is controlled by the Company (each an “Affiliate”).
1.    Position and Duties. You shall continue to be employed by the Company, but hereafter in the role of President of ZAGG. In such position, you have the duties and authority consistent with the duties and authority of a President of a public company in the mobile accessories industry of a size comparable to ZAGG. In addition, you may be asked from time to time to serve as a manager, director or officer of one or more of the Company’s Affiliates, without further compensation. Your employment with the Company shall be on the terms and conditions set forth in this Agreement, and you agree to devote your full business time, judgment, energy and skill exclusively to the advancement of the business interests of the Company and its Affiliates and to fully discharge your duties and responsibilities for them; provided, that you may serve on an outside board with the approval of the Company’s Chief Executive Officer. You shall report directly to the Company’s Chief Executive Officer. Your principal place of employment will be at the Company’s headquarters in or around Midvale, Utah.
2.    Term of Employment. Your employment at the Company commenced as of the date of your hire. Your employment has remained and shall remain “at-will” and either you or the Company may terminate your employment at any time, with or without cause, subject to the provisions of Paragraphs 4, 5 and 6 below.
3.    Compensation. The Compensation Addendum attached hereto as Exhibit A describes certain components of your compensation for the 2018 fiscal year. Annually thereafter during the term of your employment you will be provided with a new Compensation Addendum which will set forth the elements of your compensation for the applicable fiscal year as approved by the Compensation Committee of the Board of Directors of the Company. After you receive and sign or otherwise agree to, including by continuing your employment with the Company, the compensation terms set forth in such subsequent versions of the Compensation Addendum, such terms shall be deemed incorporated herein by reference. You will be compensated for your services to the Company and its Affiliates, subject to your full performance of your obligations hereunder, as described in the applicable Compensation Addendum, as follows:
(a)    Base Salary: Your annual base salary (“Base Salary”) is set forth in the Compensation Addendum and is prorated for any partial calendar year.
(b)    Target Performance Cash Potential (STI): Your Target Performance Cash Potential is described in the Compensation Addendum. Each calendar year, the Compensation Committee will determine whether to provide an annual Target Performance Cash Potential, the metrics which must be achieved to receive the Target Performance Cash Potential and the amounts to be paid in connection with the achievement or partial achievement of any Target Performance Cash Potential. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, (i) the earned portion of the Target Performance Cash Potential will be paid no more than 90 days after the close of the fiscal year, (ii) the Company reserves the right to amend, change, or cancel any Target Performance Cash Potential arrangement in its sole discretion and (iii) you must be employed through the date the Target Performance Cash Potential is paid in order to be eligible to receive it.
(c)    Target Performance Equity Potential (LTI): Your Target Performance Equity Potential is described in the Compensation Addendum. Each calendar year, the Compensation Committee will determine whether to provide an annual Target Performance Equity Potential, the metrics which must be achieved for you to receive the Target Performance Equity Potential and the equity amount you will receive in connection with the achievement or partial achievement of any Target Performance Equity Potential. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, (i) the earned portion and/or vesting of any Target Performance Equity Potential for the fiscal year will be determined no more than 90 days after the close of that fiscal year, (ii) the Company reserves the right to amend, change, or cancel any Target Performance Cash Potential arrangement in its sole discretion and (iii) you must be employed through the date such Target Performance Equity Potential vests in order to be eligible to receive it.
(d)    Other Compensation: Other types of cash or equity compensation (e.g., time-based stock grants) may, in the discretion of the Compensation Committee, be described in the Compensation Addendum. The metrics associated with earning the other compensation described in the Compensation Addendum, or greater or lesser amounts if any, shall be set forth in the applicable Compensation Addendum. Unless otherwise expressly set forth in the Compensation Addendum for any applicable fiscal year, you must be employed through the date such other compensation vests in order to be eligible to receive it.
(e)    Benefits: You will have the right, on the same basis as other similarly-situated employees of the Company, to participate in and to receive benefits under any applicable medical, disability or other group insurance plans, as well as under the Company’s business expense reimbursement and other employee benefit plans or policies, except to the extent that such plans are duplicative of benefits otherwise provided for in this Agreement. Your participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law, including without limitation, applicable tax rules. You will accrue paid vacation in accordance with the Company’s vacation policy. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.
(f)    Withholding: All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.
4.    Voluntary Termination. In the event that you voluntarily resign from your employment with the Company or any of its Affiliates without Good Reason (as defined in Paragraph 5) or in the event that your employment terminates as a result of your death or Disability (as defined in Paragraph 6(c)), you will be entitled to no compensation or benefits from the Company other than those earned and vested under Paragraph 3 through the date of your termination. You agree that if you voluntarily terminate your employment with the Company without Good Reason, you will provide the Company with reasonable written notice of your resignation. The Company may, in its sole discretion, elect to waive all or any part of such notice period and accept your resignation at an earlier date.
5.    Resignation for Good Reason. During the twelve (12) month period after the Effective Date, you may terminate your employment for Good Reason within thirty (30) days of the event constituting Good Reason by delivering to the Company a notice specifying that you are terminating your employment for Good Reason, setting forth in reasonable detail the facts and circumstances you claim give you Good Reason, and giving the Company thirty (30) days to cure the circumstances you claim give you Good Reason. If you deliver such a notice and the Company fails to cure the circumstances you claim give you Good Reason within thirty (30) days resulting in a Separation (as defined in Paragraph 6(c)) then the Company shall pay you the same Severance Pay (as defined below) and premiums to continue your group health insurance coverage under COBRA you would have received if your employment had been terminated without cause pursuant Paragraph 6(b) of this Agreement, provided however, that you must sign a general release of known and unknown claims in a form satisfactory to the Company in order to receive such severance. For purposes of this Agreement, “Good Reason” shall mean any of the following events if effected by the Company without your consent within twelve (12) months after the Effective Date: (i) a change in your position with the Company which materially diminishes your duties, responsibilities, or authority; (ii) a material diminution of your Base Salary; (iii) a relocation of your principal place of employment by more than forty (40) miles; (iv) a material breach of this Agreement by the Company which remains uncured after reasonable notice and an opportunity to cure; or (v) the Company’s failure to secure the written assumption of its material obligations under this Agreement from any successor to the Company.
6.    Other Termination. Your employment may be terminated under the circumstances set forth below.
(a)    Termination for Cause: If your employment is terminated by the Company for cause as defined below, you shall be entitled to no compensation or benefits from the Company other than those earned and vested under Paragraph 3 through the date of your termination for cause. For purposes of this Agreement, a termination “for cause” occurs if you are terminated for any of the following reasons: (i) theft, dishonesty or falsification of any employment or Company records; (ii) improper disclosure of the Company’s confidential or proprietary information resulting in damage to the Company; (iii) any action or inaction by you which has a material detrimental effect on the Company’s reputation or business; (iv) your failure or inability to perform any assigned duties after written notice from the Company to you of, and a reasonable opportunity to cure, such failure or inability; (v) your conviction (including any plea of guilty or no contest) of a felony, or of any other criminal act if that act impairs your ability to perform your duties under this Agreement or (vi) your failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested your cooperation. For purposes of this paragraph only, “Company” shall mean ZAGG and its Affiliates.
(b)    Termination Without Cause: As indicated above, your employment by the Company is “at will.” If a Separation occurs because your employment is terminated by the Company without cause (and not as a result of your death or Disability), and if you sign a general release of known and unknown claims in form satisfactory to the Company, you will receive severance payments (“Severance Pay”) as described below. If your employment is terminated without cause you will receive Severance Pay in an amount equal to twelve (12) months of your Base Salary in effect on the date of Separation paid in accordance with the Company’s normal payroll schedule after the date of your Separation. The Company will deliver the form of release to you within thirty (30) days after your Separation. You must execute and return the release within the period set forth in the prescribed form. The Severance Pay will commence on the first payroll period at least sixty (60) days after your termination of employment if you timely return the signed release. During the applicable severance period, the Company will also pay the premiums to continue your group health insurance coverage under COBRA if you are eligible for COBRA and have elected continuation coverage under the applicable rules. However, the Company’s COBRA payment obligations shall immediately cease to the extent you become eligible for group health benefits from a subsequent employer.
(c)    Definition of Separation. For purposes of this Agreement, “Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). For purposes of this Agreement, “Disability” means (i) your inability, by reason of physical or mental illness or other cause, to perform your duties hereunder on a full‑time basis for a period of 90 days in any one year period, or (ii) in the discretion of the Board, as such term is defined in any disability insurance policy in effect at the Company during the time in question.
(d)    Commencement of Payments. For purposes of Section 409A of the Code, each salary continuation payment under Paragraph 5 or 6(b) above is hereby designated as a separate payment. If the Company determines that you are a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time of your Separation, then (i) the salary continuation payments under Paragraph 5 or 6(b) above, to the extent that they are subject to Section 409A of the Code, will commence during the seventh month after your Separation and (ii) the installments that otherwise would have been paid during the first six months after your Separation will be paid in a lump sum when the salary continuation payments commence.
7.    Confidential and Proprietary Information. As a condition of your continued employment, you must sign the current version of the ZAGG Confidentiality, Non-Competition and Inventions Agreement, a copy of which is attached to this Agreement, governing non-competition, employee confidentiality, and assignment of inventions agreement.
8.    Severability. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected.
9.    Assignment. In view of the personal nature of the services to be performed under this Agreement by you, you cannot assign or transfer any of your obligations under this Agreement.
10.    Entire Agreement. This Agreement and the agreements referred to above constitute the entire agreement between you and the Company regarding the terms and conditions of your employment, and they supersede all prior negotiations, representations or agreements between you and the Company regarding your employment, whether written or oral.
11.    Modification. This Agreement may only be modified or amended by a supplemental written agreement signed by you and an authorized representative of the Company.
12.    Governing Law. This Agreement, and all matters relating hereto, including any matter or dispute arising out of the Agreement, shall be interpreted, governed, and enforced according to the laws of the State of Utah, without regard to conflict of laws principals.
13.     Dispute Resolution. All disputes and controversies arising out of or in connection with this Agreement, or your employment with the Company shall be resolved exclusively by the state and federal courts located in Salt Lake County in the State of Utah, and each party hereto agrees to submit to the jurisdiction of said courts and agrees that venue shall lie exclusively with such courts. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which such party may raise now, or hereafter have, to the laying of the venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party agrees that, to the fullest extent permitted by applicable law, a final judgment in any such suit, action, or proceeding brought in such a court shall be conclusive and binding upon such party, and may be enforced in any court of the jurisdiction in which such party is or may be subject by a suit upon such judgment.
14.    Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, EACH PARTY HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR EMPLOYEE’S EMPLOYMENT BY THE COMPANY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH PARTY HEREBY AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
15.    Attorneys’ Fees. The prevailing party in any arbitration, court action or other adjudicative proceeding arising out of or relating to this Agreement or Employee’s employment with the Company shall be reimbursed by the party who does not prevail for the prevailing party’s reasonable attorneys’, accountants’, and experts’ fees and for the costs of such proceeding(s). The provisions set forth in this Paragraph shall survive the merger of these provisions into any judgment.
16.    Paragraph Headings. The paragraph headings of this Agreement are inserted only for convenience and in no way define, limit, or describe the scope or intent of this Agreement nor affect its terms and provisions.
17.    Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement and no provision of this Agreement shall be construed against either party as the drafter thereof. This Agreement is intended to be written, administered, interpreted, and construed in a manner such that no payment or benefits provided under the Agreement become subject to (i) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code, or (ii) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (collectively, "Section 409A Penalties"), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties.
18.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.
19.     Indemnification. Concurrent with the execution and delivery of this Agreement, you and the Company will enter into an Indemnity Agreement.
20.    Entire Agreement. This Agreement is intended to be the final, complete, and exclusive statement of the terms of the parties’ agreement regarding the subject matter hereof and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein. To the extent that the terms of any prior agreement between the parties are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.
21.    EMPLOYEE ACKNOWLEDGEMENT. YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT AND HAVE OBTAINED AND CONSIDERED THE ADVICE OF SUCH LEGAL COUNSEL TO THE EXTENT YOU DEEM NECESSARY OR APPROPRIATE. YOU HAVE READ AND UNDERSTAND THE AGREEMENT, ARE FULLY AWARE OF ITS LEGAL EFFECT, AND HAVE ENTERED INTO IT FREELY BASED ON YOUR OWN JUDGMENT AND NOT BASED ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.
Please sign and date this letter on the spaces provided below to acknowledge your acceptance of the terms of this Agreement.
ZAGG INC
By: /S/CHRIS AHERN
Chris Ahern
Title: Chief Executive Officer

Accepted and agreed this 7th day of March, 2018:
EMPLOYEE:
/S/BRIAN STECH
Brian Stech



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Section 5: EX-10.4 (EXHIBIT 10.4)

Exhibit

392496307_capture2a02.jpg

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Section 6: EX-99.1 (EXHIBIT 99.1)

Exhibit


ZAGG INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per par value)
(Unaudited)
 
2017
 
2016
ASSETS
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
24,989

 
$
11,604

Accounts receivable, net of allowances of $734 and $824 in 2017 and 2016, respectively
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 in 2017 and 2016, respectively
13,444

 
17,755

Goodwill
12,272

 
12,272

Intangible assets, net of accumulated amortization of $66,639 and $55,298 in 2017 and 2016, respectively
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 in 2017 and 2016, respectively
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 in 2017 and 2016, respectively

 
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 in 2017 and 2016, respectively
34

 
34

Additional paid-in capital
96,145

 
92,782

Accumulated other comprehensive income (loss)
(348
)
 
(2,114
)
Treasury stock, 6,065 and 5,831 common shares at cost in 2017 and 2016, respectively
(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







ZAGG INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
 
For the Three Months Ended December 31,
 
For the Years Ended December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net sales
$
176,924

 
$
114,929

 
$
519,495

 
$
401,857

Cost of sales
120,748

 
85,075

 
350,497

 
274,255

Gross profit
56,176

 
29,854

 
168,998

 
127,602

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Advertising and marketing
3,399

 
3,862

 
11,101

 
12,440

Selling, general and administrative
26,671

 
25,986

 
105,398

 
96,229

(Gain) loss on disputed mophie purchase price
(6,967
)
 

 
(6,967
)
 
24,317

Transaction costs
114

 
124

 
725

 
2,591

Impairment of intangible asset

 

 
1,959

 

Amortization of definite-lived intangibles
3,007

 
3,476

 
12,047

 
13,385

Total operating expenses
26,224

 
33,448

 
124,263

 
148,962

 
 
 
 
 
 
 
 
Income (loss) from operations
29,952

 
(3,594
)
 
44,735

 
(21,360
)
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Interest expense
(555
)
 
(484
)
 
(2,081
)
 
(1,851
)
Other income (expense)
633

 
(76
)
 
698

 
(348
)
Total other expense
78

 
(560
)
 
(1,383
)
 
(2,199
)
 
 
 
 
 
 
 
 
Income (loss) before provision for income taxes
30,030

 
(4,154
)
 
43,352

 
(23,559
)
 
 
 
 
 
 
 
 
Income tax (provision) benefit
(21,971
)
 
9

 
(28,252
)
 
7,972

 
 
 
 
 
 
 
 
Net income (loss)
$
8,059

 
$
(4,145
)
 
$
15,100

 
$
(15,587
)
 
 
 
 
 
 
 
 
Earnings (loss) per share attributable to stockholders:
 
 
 
 
 
 
 
Basic earnings (loss) per share
$
0.29

 
$
(0.15
)
 
$
0.54

 
$
(0.56
)
Diluted earnings (loss) per share
$
0.28

 
$
(0.15
)
 
$
0.53

 
$
(0.56
)






ZAGG INC AND SUBSIDIARIES
RECONCILIATION OF NON- U.S. GAAP FINANCIAL INFORMATION TO U.S. GAAP
(in thousands)
(Unaudited)

 
Unaudited Supplemental Data
 
 
 
 
 
 
 
 
 
 
 
 
 
The following information is not a financial measure under generally accepted accounting principals (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as a measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.
 
 
 
 
 
 
 
 
For the Three Months Ended December 31,
 
For the Years Ended December 31,
 
Adjusted EBITDA Reconciliation
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) in accordance with GAAP
$
8,059

 
$
(4,145
)
 
$
15,100

 
$
(15,587
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
a.
Stock based compensation expense
1,067

 
151

 
3,602

 
3,830

 
 
b.
Depreciation and amortization
5,382

 
5,787

 
21,888

 
22,270

 
 
c.
Impairment of intangible asset

 

 
1,959

 

 
 
d.
Other (income) expense
(76
)
 
560

 
1,383

 
2,199

 
 
e.
mophie transaction expenses
(611
)
 
124

 

 
2,591

 
 
f.
mophie fair value inventory write-up related to acquisition

 

 

 
2,586

 
 
g.
mophie restructuring charges

 
959

 
437

 
2,160

 
 
h.
mophie employee retention bonus

 
341

 
346

 
841

 
 
i.
Loss on disputed mophie purchase price (2016 only)

 

 

 
24,317

 
 
j.
Provision for income taxes
21,971

 
(9
)
 
28,252

 
(7,972
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
35,792

 
3,768

 
72,967

 
37,235



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Section 7: EX-99.2 (EXHIBIT 99.2)

Exhibit

March 7, 2018

ZAGG Reports Record 2017 Fourth Quarter and Full Year Results

SALT LAKE CITY, March 7, 2018 (GLOBE NEWSWIRE) – ZAGG Inc (Nasdaq: ZAGG), a leading global mobile lifestyle company, today announced financial results for the fourth quarter and twelve months ended December 31, 2017.

Fourth Quarter Highlights (Comparisons versus Fourth Quarter 2016)
Net sales of $176.9 million, a 54% increase compared to $114.9 million
Gross margin of 32% compared to 26%
Pre-tax income of $30.0 million compared to a pre-tax loss of $(4.2) million
Adjusted EBITDA of $35.8 million compared to $3.8 million

2017 Full Year Highlights (Comparisons versus Full Year 2016)
Net sales of $519.5 million, a 29% increase compared to $401.9 million
Gross margin of 33% compared to 32%
Pre-tax income of $43.4 million compared to a pre-tax loss of $(23.6) million
Adjusted EBITDA of $73.0 million, a 96% increase compared to $37.2 million

2018 Full Year Outlook
Net sales in the range of $550 million to $570 million
Adjusted EBITDA in the range of $77 million to $80 million

“We delivered record financial results in 2017 highlighted by a very strong fourth quarter,” commented Randy Hales, President and Chief Executive Officer. “The sales momentum we generated earlier in the year continued to accelerate during the holiday season fueled by global demand for our existing products as well as new introductions from both the InvisibleShield and mophie brands. The combination of robust top-line growth and greater operating efficiencies throughout our organization led to a dramatic increase in profitability. We begin 2018 with leading market share positions in screen protection, power cases, and external power along with a rapidly growing presence in wireless charging. I am confident that ZAGG is well situated financially, strategically and operationally to capitalize on the many opportunities ahead of us while creating greater value for shareholders.”

Fourth Quarter Results
 
For the Three Months Ended
(in millions, except per share amounts)
December 31, 2017
 
December 31, 2016
Net Sales
$176.9
 
$114.9
Gross Margin
$56.2
 
$29.9
Gross Margin %
32%
 
26%
Net Income (Loss)
$8.1
 
$(4.1)
Earnings (Loss) per Share
$0.28
 
$(0.15)
Adjusted EBITDA
$35.8
 
$3.8
Adjusted EBITDA %
20%
 
3%
(See chart below for summary of tax reform impact on 2017 net income and earnings per share)


Net sales increased 54% to $176.9 million compared to $114.9 million due primarily to (1) the increase in sales of our power management products, particularly accessories supporting the wireless charging ecosystem, and (2) increased sales of screen protection products in key wireless and retail accounts, particularly in international markets. During the fourth quarter of 2016, the Company launched the juice pack power cases for the iPhone 7 and 7+, however, there was no similar juice pack load-in during the fourth quarter of 2017 resulting in a decline in overall power case sales quarter over quarter.

Gross profit increased to $56.2 million (32% of net sales), compared to $29.9 million (26% of net sales). The increase in gross profit margin was primarily due to improvements in margins of mophie branded product, partially offset by an increase in freight costs.

Operating expense decreased 22% to $26.2 million (15% of net sales) compared to $33.4 million (29% of net sales). The decrease in operating expense was primarily attributable to a $7.0 million gain recorded during the period associated with the settlement of litigation related to the disputed mophie purchase price.

Net income was $8.1 million compared to net loss of $(4.1) million. Diluted earnings per share was $0.28 (on 28.8 million shares) compared to diluted loss per share of $(0.15) (on 28.1 million shares). Excluding the impact of recent tax reform, fourth quarter 2017 net income was $20.5 million and earnings per share was $0.71. (Please see the table accompanying this release that outlines the tax reform impact on net income and earnings per share)

Adjusted EBITDA was $35.8 million compared to $3.8 million.

2017 Full Year Results
 
For the Years Ended
(in millions, except per share amounts)
December 31, 2017
 
December 31, 2016
Net Sales
$519.5
 
$401.9
Gross Margin
$169.0
 
$127.6
Gross Margin %
33%
 
32%
Net Income (Loss)
$15.1
 
$(15.6)
Earnings (Loss) per Share
$0.53
 
$(0.56)
Adjusted EBITDA
$73.0
 
$37.2
Adjusted EBITDA %
14%
 
9%
(See chart below for summary of tax reform impact on 2017 net income and earnings per share)

Net sales increased 29% to $519.5 million, compared to $401.9 million due primarily to (1) the increase in sales of our power management products, particularly accessories supporting the wireless charging ecosystem, (2) increased sales of screen protection products in key wireless and retail accounts, particularly in international markets, and (3) the inclusion of 12 months of mophie sales during 2017 versus only 10 months in 2016. Prior to the acquisition in 2016, mophie recorded sales of $17.3 million, which if added to the full year 2016 sales total of $401.9 million, the Company would still have realized an increase in sales compared to 2016 of $100.3 million or 24%.

Gross profit increased to $169.0 million (33% of net sales), compared to $127.6 million (32% of net sales). The increase in gross profit margin was primarily due to improvements in margins of mophie branded product and a $2.6 million charge incurred during 2016 related to the impact of the fair value write-up of mophie inventory that did not recur in 2017. This increase was partially offset by an increase in freight costs and a shift in the product mix whereby 2017 screen protection sales were a smaller percentage of overall sales compared to the prior year (although overall screen protection sales increased by $33.6 million or 16%).

Operating expense decreased to $124.3 million (24% of net sales) compared to $149.0 million (37% of net sales). The decrease in operating expenses was primarily attributable to (1) a $24.3 million loss related to the disputed mophie purchase price in 2016 that did not recur in 2017, (2) a $7.0 million gain recorded in 2017 associated with the settlement of litigation related to the disputed mophie purchase price, (3) synergies from cost reduction initiatives, (4) lower transaction-related costs, (5) a reduction in advertising and marketing spend, and (6) an overall reduction in amortization expense. These decreases were partially offset by the following increases: (1) the inclusion of 12 months of mophie-related expenses for 2017 compared with 10 months in 2016, (2) the $2.0 million impairment of an intangible asset in 2017, and (3) an increase in operating expense related to the launch of certain wireless charging accessories.

Net income increased to $15.1 million compared to net loss of $(15.6) million. Diluted earnings per share was $0.53 (on 28.4 million shares) compared to diluted loss per share of $(0.56) (on 28.0 million shares). Excluding the impact of recent tax reform, 2017 net income was $27.5 million and earnings per share was $0.97. Please see the table accompanying this release that outlines the tax reform impact on net income and earnings per share.

Adjusted EBITDA was $73.0 million compared to $37.2 million.

2018 Business Outlook
For the full year 2018, the Company currently expects:

Net sales of $550 million to $570 million
Gross profit margin as a percentage of net sales in the low to mid 30’s range
Adjusted EBITDA of $77 million to $80 million
Diluted earnings per share of $1.30 to $1.50
Annual effective tax rate of approximately 27%

Impact of 2017 Tax Reform Bill
During the fourth quarter of 2017, the United States Government passed the Tax Cuts and Jobs Act (the “Act”), which enacted significant changes to the United States’ federal tax code, including a reduction in the federal income tax rate for corporations from 35% to 21%. As of December 31, 2017, Management recorded a primarily non-cash charge of $12.4 million to income tax expense primarily to reflect (1) the re-measurement of deferred tax assets utilizing the lower federal income tax rate and (2) the tax on mandatory deemed repatriation of foreign earnings.

The impact of this $12.4 million charge on the income tax rate, net income, and earnings per share for the three and twelve months ended December 31, 2017, is illustrated in the table below (amounts in millions, except per share data):

(in millions, except per share amounts)
Three Months Ended December 31, 2017
 
Twelve Months Ended December 31, 2017
Income before provision for income taxes
$30.0
 
$43.4
Tax provision before impact of tax reform
$(9.5)
 
$(15.9)
Net income before impact of tax reform
$20.5
 
$27.5
Diluted earnings per share before impact of tax reform
$0.71
 
$0.97
Effective income tax rate before impact of tax reform
32%
 
37%
 
 
 
 
Tax provision attributable to tax reform
$(12.4)
 
$(12.4)
Net income
$8.1
 
$15.1
Diluted earnings per share
$0.28
 
$0.53
Effective income tax rate
73%
 
65%

Conference Call
A conference call will be held today, March 7, 2018 at 5:00 p.m. EST to review these results. Interested parties may access via the Internet on the Company's website at: investors.zagg.com.

About Non-GAAP Financial Information
Readers are cautioned that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, other income (expense), mophie transaction expenses, mophie fair value inventory write-up related to acquisition, mophie restructuring charges, mophie employee retention bonus, loss on disputed mophie purchase price (2016 only), and impairment of intangible asset) is not a financial measure under US generally accepted accounting principles (GAAP). In addition, this financial information should not be construed as an alternative to any other measure of performance determined in accordance with GAAP, or as an indicator of operating performance, liquidity or cash flows generated by operating, investing and financing activities, is as there may be significant factors or trends that it fails to address. We present Adjusted EBITDA because we believe that it is helpful to some investors as a measure of performance. We caution readers that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Accordingly, its use can make it difficult to compare current results with results from other reporting periods and with the financial results of other companies.

Cautionary Note Regarding Forward-Looking Statements
This press release contains (and oral communications made by us may contain) ”forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," "project," "target," “future,” “seek,” “likely,” “strategy,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our outlook for the Company and statements that estimate or project future results of operations or the performance of the Company.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) the ability to design, produce, and distribute the creative product solutions required to retain existing customers and to attract new customers; (b) building and maintaining marketing and distribution functions sufficient to gain meaningful international market share for our products; (c) the ability to respond quickly with appropriate products after the adoption and introduction of new mobile devices by major manufacturers like Apple, Samsung, and Google; (d) changes or delays in announced launch schedules for (or recalls or withdrawals of) new mobile devices by major manufacturers like Apple, Samsung, and Google; (e) the ability to successfully integrate new operations or acquisitions, (f) the impact of inconsistent quality or reliability of new product offerings; (g) the impact of lower profit margins in certain new and existing product categories, including certain mophie products; (h) the impacts of changes in economic conditions, including on customer demand; (i) managing inventory in light of constantly shifting consumer demand; (j) the failure of information systems or technology solutions or the failure to secure information system data, failure to comply with privacy laws, security breaches, or the effect on the company from cyber-attacks, terrorist incidents, or the threat of terrorist incidents; and (k) adoption of or changes in accounting policies, principles, or estimates. Any forward-looking statement made by us in this press release speaks only as of the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Readers should also review the risks and uncertainties listed in our most recent Annual Report on Form 10-K and other reports we file with the U.S. Securities and Exchange Commission, including (but not limited to) Item 1A - "Risk Factors" in the Form 10-K and Management's Discussion and Analysis of Financial Condition and Results of Operations and the risks described therein from time to time. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

About ZAGG Inc
ZAGG Inc (NASDAQ:ZAGG) is a global leader in accessories and technologies that empower mobile lifestyles. The Company has an award-winning product portfolio that includes screen protection, mobile keyboards, power management solutions, social tech, and personal audio sold under the ZAGG®, mophie®, InvisibleShield®, and IFROGZ® brands. ZAGG has operations in the United States, Ireland, and China. ZAGG products are available worldwide, and can be found at leading retailers including Best Buy, Verizon, AT&T, Sprint, Walmart, Target, Walgreens and Amazon.com. For more information, please visit the company’s websites at www.zagg.com and www.mophie.com and follow us on Facebook, Twitter and Instagram.
# # #

CONTACT:

Investor Relations:
ICR Inc.Brendon Frey
203-682-8216
brendon.frey@icrinc.com

Company:
ZAGG Inc
Jeff DuBois
801-506-7336
jeff.dubois@ZAGG.com

Media:
The Brand Amp
Katie Kotarak
949-438-1078
katie@thebrandamp.com


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Section 8: EX-99.3 (EXHIBIT 99.3)

Exhibit
392496307_zagg4q2017cfocommenta.gif


Supplemental Financial Information - CFO Commentary
March 7, 2018

Document reference information
The commentary in this document can be referenced in the financial information found in the earnings release issued earlier today. The release can be found at investors.ZAGG.com, or in the Form 8-K furnished to the Securities and Exchange Commission website at sec.gov. The URLs included here are inactive textual references.

2017 Summary Results
(2017 reflects a full year contribution from mophie, though 2016 only reflects approximately 10 months of contribution from mophie as the acquisition occurred on March 3, 2016. In millions, except per share amounts.)

Full Year and Fourth Quarter Results
 
Three Months Ended
 
Year Ended
 
Q417
 
Q416
 
2017
 
2016
Net Sales
$176.9
 
$114.9
 
$519.5
 
$401.9
Gross Margin
$56.2
 
$29.9
 
$169.0
 
$127.6
Gross Margin %
32%
 
26%
 
33%
 
32%
Net Income (Loss)
$8.1
 
$(4.1)
 
$15.1
 
$(15.6)
Diluted EPS (Loss)
$0.28
 
$(0.15)
 
$0.53
 
$(0.56)
Adjusted EBITDA
$35.8
 
$3.8
 
$73.0
 
$37.2
Adjusted EBITDA %
20%
 
3%
 
14%
 
9%

Net Sales by Category
 
Three Months Ended
 
Year Ended
 
Q417
 
Q416
 
2017
 
2016
Screen Protection
$69.8
39%
 
$60.9
53%
 
$247.6
48%
 
$213.9
54%
Power Management
$73.6
42%
 
$18.0
16%
 
$134.3
26%
 
$60.5
15%
Power Cases
$15.5
9%
 
$18.5
16%
 
$75.6
15%
 
$61.7
15%
Audio
$8.0
5%
 
$5.3
4%
 
$29.5
5%
 
$24.3
6%
Keyboards
$7.8
4%
 
$11.2
10%
 
$27.5
5%
 
$36.8
9%
Other
$2.2
1%
 
$1.0
1%
 
$5.0
1%
 
$4.7
1%

Net Sales by Region
 
Three Months Ended
 
Year Ended
 
Q417
 
Q416
 
2017
 
2016
Domestic
$144.6
82%
 
$99.7
87%
 
$437.3
84%
 
$353.6
88%
International
$32.3
18%
 
$15.2
13%
 
$82.2
16%
 
$48.3
12%






Net Sales by Channel
 
Three Months Ended
 
Year Ended
 
Q417
 
Q416
 
2017
 
2016
Indirect
$159.5
90%
 
$98.7
86%
 
$463.4
89%
 
$350.7
87%
Website
$12.1
7%
 
$11.5
10%
 
$39.6
8%
 
$34.2
9%
Franchise
$5.3
3%
 
$4.7
4%
 
$16.5
3%
 
$17.0
4%


2017 Fourth Quarter Results Discussion
(All comparisons are 2017 consolidated versus 2016 consolidated, unless otherwise noted)

Net sales

392496307_q4netsales.jpg

Net sales increased 54% to $176.9 million compared to $114.9 million due primarily to (1) the increase in sales of our power management products, particularly accessories supporting the wireless charging ecosystem, and (2) increased sales of screen protection products in key wireless and retail accounts, particularly in international markets. During the fourth quarter of 2016, the Company launched the juice pack power cases for the iPhone 7 and 7+, however, there was no similar juice pack load-in during the fourth quarter of 2017 resulting in a decline in overall power case sales quarter over quarter.

Gross Profit/Margin (% of Net Sales)
Gross profit increased to $56.2 million (32%), compared to $29.9 million (26%). The increase in gross profit margin was primarily due to improvements in margins of mophie branded product, partially offset by an increase in freight costs.

Operating Expense/Margin (% of Net Sales)
Operating expense decreased 22% to $26.2 million (15%) compared to $33.4 million (29%). The decrease in operating expense was primarily attributable to a $7.0 million gain recorded during the period associated with the settlement of litigation related to the disputed mophie purchase price.

Net Income (Loss)
Net income was $8.1 million compared to net loss of $(4.1) million. Diluted earnings per share was $0.28 (on 28.8 million shares) compared to diluted loss per share of $(0.15) (on 28.1 million shares).

Adjusted EBITDA
Adjusted EBITDA improved to $35.8 million compared to $3.8 million.


2017 Full Year Results
(All comparisons are 2017 consolidated versus 2016, unless otherwise noted.)

Net Sales
392496307_annualnetsalesa03.jpg
Net sales increased 29% to $519.5 million, compared to $401.9 million due primarily to (1) the increase in sales of our power management products, particularly accessories supporting the wireless charging ecosystem, (2) increased sales of screen protection products in key wireless and retail accounts, particularly in international markets, and (3) the inclusion of 12 months of mophie sales during 2017 versus only 10 months in 2016. Prior to the acquisition in 2016, mophie recorded sales of $17.3 million, which if added to the full year 2016 sales total of $401.9 million, the Company would still have realized an increase in sales compared to 2016 of $100.3 million or 24%.

Gross Profit/Margin (% of Net Sales)
Gross profit increased to $169.0 million (33%), compared to $127.6 million (32%). The increase in gross profit margin was primarily due to improvements in margins of mophie branded product and a $2.6 million charge incurred during 2016 related to the impact of the fair value write-up of mophie inventory that did not recur in 2017. This increase was partially offset by an increase in freight costs and a shift in the product mix whereby 2017 screen protection sales were a smaller percentage of overall sales compared to the prior year (although overall screen protection sales increased by $33.6 million or 16%).

Operating Expense/Margin (% of Net Sales)
Operating expense decreased to $124.3 million (24%) compared to $149.0 million (37%). The decrease in operating expenses was primarily attributable to (1) a $24.3 million loss related to the disputed mophie purchase price in 2016 that did not recur in 2017, (2) a $7.0 million gain recorded in 2017 related to the settlement of litigation associated with the disputed mophie purchase price, (3) synergies from cost reduction initiatives, (4) lower transaction-related costs, (5) a reduction in advertising and marketing spend, and (6) an overall reduction in amortization expense. These decreases were partially offset by the following increases in operating expense: (1) the inclusion of 12 months of mophie-related expenses for 2017 compared with 10 months in 2016, (2) the $2.0 million impairment of an intangible asset in 2017, and (3) an increase in operating expense related to the launch of certain wireless charging accessories.

Net Income (Loss)
Net income increased to $15.1 million compared to net loss of $(15.6) million. Diluted earnings per share was $0.53 (on 28.4 million shares) compared to diluted loss per share of $(0.56) (on 28.0 million shares)

Adjusted EBITDA
Adjusted EBITDA increased 96% to $73.0 million compared to $37.2 million.

Impact of 2017 Tax Reform Bill
During the fourth quarter of 2017, the United States Government passed the Tax Cuts and Jobs Act (the “Act”), which enacted significant changes to the United States’ federal tax code, including a reduction in the federal income tax rate for corporations from 35% to 21%. As of December 31, 2017, Management recorded a primarily non-cash charge of $12.4 million to income tax expense primarily to reflect (1) the re-measurement of deferred tax assets utilizing the lower federal income tax rate and (2) the tax on mandatory deemed repatriation of foreign earnings.

The impact of this $12.4 million charge on the income tax rate, net income, and earnings per share for the three and twelve months ended December 31, 2017, is illustrated in the table below:

(in millions, except per share amounts)
Three Months Ended December 31, 2017
 
Twelve Months Ended December 31, 2017
Income before provision for income taxes
$30.0
 
$43.4
Tax provision before impact of tax reform
$(9.5)
 
$(15.9)
Net income before impact of tax reform
$20.5
 
$27.5
Diluted earnings per share before impact of tax reform
$0.71
 
$0.97
Effective income tax rate before impact of tax reform
32%
 
37%
 
 
 
 
Tax provision attributable to tax reform
$(12.4)
 
$(12.4)
Net income
$8.1
 
$15.1
Diluted earnings per share
$0.28
 
$0.53
Effective income tax rate
73%
 
65%


Balance Sheet Highlights (as of December 31, 2017)

(In millions, excluding DSOs and Inventory turns)
December 31, 2017
 
December 31, 2016
Cash and Cash Equivalents
$25.0
 
$11.6
Account Receivables
$123.2
 
$83.8
Inventory
$75.0
 
$72.8
Total Debt
$37.4
 
$51.4
Line of Credit
$23.5
 
$31.3
Term Loan
$13.9
 
$20.1
Net Debt (Total Debt less Cash)
$12.4
 
$39.8
DSOs
64
 
67
Inventory Turns*
6.9x
 
5.8x
*
Inventory turns defined as trailing 12-month sales divided by period-end inventory. In the 2016 calculation, the Company included $17.3 million in mophie pre-acquisition sales (from January 1, 2016 – March 3, 2016) so that the calculation is a comparable with 2017.

Debt
The Company has effectively managed its outstanding debt balance. At December 31, 2017, the net debt balance (total debt less cash) decreased to $12.4 million from $39.8 million at December 31, 2016.

392496307_netdebta01.jpg

Market Share Information
Screen Protection
The Company continues to see strong and consistent growth in cellphone screen protection market share. From the first quarter of 2014 to the fourth quarter of 2017, InvisibleShield cellphone screen protection quarterly dollar market share has increased from 29% to a record 56%.
392496307_cellphonescreenprotectionqua.jpg

Battery Cases & Power Management
Since the fourth quarter of 2016, mophie branded battery cases and portable power packs have experienced significant growth in dollar market share due to a combination of (1) new and innovative product launches and (2) an unconstrained mophie supply chain. Quarterly battery case dollar market share increased from 44% to a record 64% from October 2016 to December 2017.
392496307_batterycase01.jpg

Quarterly portable power dollar market share increased from 19% to 27% from October 2016 to December 2017.

392496307_portablepower.jpg

2018 Business Outlook
The Company provided annual guidance for 2018 as follows:
Net sales of $550 million - $570 million
Gross profit margin as a percentage of net sales in the low to mid 30’s range
Adjusted EBITDA of $77 million - $80 million
Diluted earnings per share of $1.30 - $1.50
Annual effective tax rate of approximately 27%

392496307_annualnetsalesactual.jpg
*
Represents the midpoint of guidance of $550 million to $570 million

Non-GAAP Financial Disclosure
ZAGG regularly discloses Adjusted EBITDA, a non-GAAP metric, in its financial releases. Readers should refer to the non-GAAP financial disclosures at the end of this document for information on the limitations of non-GAAP financial measures. An explanation of ZAGG's use of this non-GAAP financial measure and the reconciliation between GAAP and non-GAAP measures required by SEC Regulation G is included in ZAGG's press release today, which can be found at investors.ZAGG.com.

Readers are cautioned that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, other income (expense), mophie transaction expenses, mophie fair value inventory write-up related to acquisition, mophie restructuring charges, mophie employee retention bonus, loss on disputed mophie purchase price (2016 only), and impairment of intangible asset) is not a financial measure under US generally accepted accounting principles (GAAP). In addition, this financial information should not be construed as an alternative to any other measure of performance determined in accordance with GAAP, or as an indicator of operating performance, liquidity or cash flows generated by operating, investing and financing activities, is as there may be significant factors or trends that it fails to address. We present Adjusted EBITDA because we believe that it is helpful to some investors as a measure of performance. We caution readers that non-GAAP financial information, by its nature, departs from traditional accounting conventions. Accordingly, its use can make it difficult to compare current results with results from other reporting periods and with the financial results of other companies.

Cautionary Note Regarding Forward-Looking Statements
This press release contains (and oral communications made by us may contain) ”forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," "project," "target," “future,” “seek,” “likely,” “strategy,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our outlook for the Company and statements that estimate or project future results of operations or the performance of the Company.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) the ability to design, produce, and distribute the creative product solutions required to retain existing customers and to attract new customers; (b) building and maintaining marketing and distribution functions sufficient to gain meaningful international market share for ours products; (c) the ability to respond quickly with appropriate products after the adoption and introduction of new mobile devices by major manufacturers like Apple, Samsung, and Google; (d) changes or delays in announced launch schedules for (or recalls or withdrawals of) new mobile devices by major manufacturers like Apple, Samsung, and Google; (e) the ability to successfully integrate new operations or acquisitions, (f) the impact of inconsistent quality or reliability of new product offerings; (g) the impact of lower profit margins in certain new and existing product categories, including certain mophie products; (h) the impacts of changes in economic conditions, including on customer demand; (i) managing inventory in light of constantly shifting consumer demand; (j) the failure of information systems or technology solutions or the failure to secure information system data, failure to comply with privacy laws, security breaches, or the effect on the company from cyber-attacks, terrorist incidents, or the threat of terrorist incidents; and (k) adoption of or changes in accounting policies, principles, or estimates. Any forward-looking statement made by us in this press release speaks only as of the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Readers should also review the risks and uncertainties listed in our most recent Annual Report on Form 10-K and other reports we file with the U.S. Securities and Exchange Commission, including (but not limited to) Item 1A - "Risk Factors" in the Form 10-K and Management's Discussion and Analysis of Financial Condition and Results of Operations and the risks described therein from time to time. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.


1

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Section 9: EX-99.4 (EXHIBIT 99.4)

a201703078kex994
0 Investor Presentation March 2018


 
1 Cautionary note regarding forward-looking statements Forward-Looking Statements This presentation of ZAGG Inc (“ZAGG,” the “Company,” “we” or “us”) contains (and oral communications made by us may contain) “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "predict," "project," "target," “future,” “seek,” “likely,” “strategy,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding our guidance for the Company and statements that estimate or project future results of operations or the performance of the Company. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (a) the ability to design, produce, and distribute the creative product solutions required to retain existing customers and to attract new customers; (b) building and maintaining marketing and distribution functions sufficient to gain meaningful international market share for our products; (c) the ability to respond quickly with appropriate products after the adoption and introduction of new mobile devices by major manufacturers like Apple, Samsung, and Google; (d) changes or delays in announced launch schedules for (or recalls or withdrawals of) new mobile devices by major manufacturers like Apple, Samsung, and Google; (e) the ability to successfully integrate new operations or acquisitions, (f) the impact of inconsistent quality or reliability of new product offerings; (g) the impact of lower profit margins in certain new and existing product categories, including certain mophie products; (h) the impacts of changes in economic conditions, including on customer demand; (i) managing inventory in light of constantly shifting consumer demand; (j) the failure of information systems or technology solutions or the failure to secure information system data, failure to comply with privacy laws, security breaches, or the effect on the company from cyber- attacks, terrorist incidents, or the threat of terrorist incidents; (k) adoption of or changes in accounting policies, principles, or estimates; and (l) changes in tax laws and regulations. Any forward-looking statement made by us in this presentation speaks only as of the date of this presentation. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of any such factor on the business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Readers should also review the risks and uncertainties listed in our most recent Annual Report on Form 10-K and other reports we file with the U.S. Securities and Exchange Commission, including (but not limited to) Item 1A - "Risk Factors" in the Form 10-K and Management's Discussion and Analysis of Financial Condition and Results of Operations and the risks described therein from time to time. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. The forward-looking statements contained in this presentation are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This presentation also contains estimates and other statistical data made by independent parties and by ZAGG relating to market share, growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of our future performance and the future performance of the markets in which we compete are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results or outcomes to differ materially from those expressed in the estimates made by the independent parties and by ZAGG. Non-GAAP Financial Measures This presentation also includes certain non-GAAP financial measures, Adjusted EBITDA and Adjusted EBITDA Margin. Readers are cautioned that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, stock- based compensation expense, other income (expense), mophie transaction expenses, mophie fair value inventory write-up related to acquisition, mophie restructuring charges, mophie employee retention bonus, loss on disputed mophie purchase price (2016 only), and impairment of intangible asset) and Adjusted EBITDA Margin (Adjusted EBITDA stated as a percentage of revenue) are not financial measures under US generally accepted accounting principles (“GAAP”). In addition, this financial information should not be construed as an alternative to any other measure of performance determined in accordance with GAAP, or as an indicator of operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. As such, it should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. We present Adjusted EBITDA and Adjusted EBITDA Margin because we believe that they are helpful to some investors as measures of performance. We caution readers that non- GAAP financial information, by its nature, departs from traditional accounting conventions. Accordingly, its use can make it difficult to compare current results with results from other reporting periods and with the financial results of other companies. We have provided a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP measures, which is available in the appendix.


 
2 Corporate objectives & values


 
3 $- $100 $200 $300 $400 $500 $600 Screen Protection Power Cases Power Management Keyboards, Cases, and Other Audio A history of continuous innovation Industry innovation 201620092008 20152012 2017 ZAGG innovation 2010 First Apple iPad is released 2007 InvisibleShield launched First Apple iPhone is released 20142011 First Samsung Galaxy smartphone released ZAGG releases first tablet keyboard ZAGG acquires iFrogz and enters audio category Samsung launches Galaxy Note tablet series ZAGG launches InvisibleShield On Demand and InvisibleShield Glass Apple launches first phablet – with the iPhone 6 and 6+ launch 2013 iFROGZ wireless earbuds released Samsung releases GS8 with curved glass display and wireless charging InvisibleShield introduces curved glass solution ZAGG acquires mophie and launches wireless charging ecosystem Apple releases iPhone 8, 8+ and X with wireless charging Apple optimized charge pad launched


 
4 Power Management Product portfolio aligns with consumer needs 48% 15% 5% 5% Power Cases Audio Cases/ Other Screen Protection Keyboards 1% 2017 $519M net sales Mobile audio lifestyle Connectivity & productivity Investment protection Extended power  Handset costs continue to rise  Protecting trade-in value of device  Brittleness vs. scratch resistance screens  1.5 billion smartphones sold in 2017  Mobile traffic outpacing desktop traffic  Increasing frequency of working remotely  Tablets being used for more than just consumption – content creation  Larger screens and thinner devices are gaining popularity  Apps and increased phone usage drain battery at an alarming rate  “Our One Wish? Longer Battery Life” – Wall Street Journal  People are consuming increasing amounts of content – wireless options allow for more flexibility  Mobile music listening has increased weekly headphone usage from 3 hours in 1980 to over 20 hours in 2016 26%


 
5 Global leadership in mobile lifestyle #1 market share (56%) Screen protection #1 market share (64%) Battery cases #2 market share (24%) Folio keyboards Source: The NPD Group / Retail Tracking Service for the last three months ended December 31, 2017 except for folio keybards, which is for the three months ended September 30, 2017; NPD data refers only to U.S. retail sales Note: Screen protection, battery cases, external power and folio keyboard market share based on dollar share. Leader in emerging wireless charging category #1 market share (27%) External power Key player in value position Audio


 
6 Our brands empower mobile lifestyles We challenge the traditional office environment and champion productivity for the modern age. We liberate mobile users from the limitations of mobile devices by providing more time to rock, talk, surf, save, and send. Approachable, authentic, and affordable, we believe in quality tech for all that’s thoughtfully focused on features people really need. Power for allLive fearlessly We provide peace of mind by empowering consumers to fearlessly enjoy their mobile devices and never experience the shame of a shattered screen. Tech for all Life unleashed


 
7 Preferred partner across channels Wireless carriers 44% Major retail 40% E- commerce 8% Strategic retail 8% Category management expertise Speed to market Operational execution Strong retail sell-through High margin categories World class customer service Deep strategic partnerships✓ ✓ ✓ ✓ ✓ Channel Select customers % of sales1 ZAGG International customers ✓ ✓ = ~11% of sales1 1 % of sales figures from 2017 year-end results Why our partners love us


 
8 Continue global distribution expansion Significant Americas door growth with additional penetration opportunities 25,065 32,161 42,202 45,634 64,496 2013 2014 2015 2016 2017 Americas Door Count 13.5% 17.4% 22.8% 24.7% 34.8% 2013 2014 2015 2016 2017 Americas % Total Door Penetration


 
9 Operational excellence 9% 14% 2016 2017 Adjusted EBITDA margin (%)  StageGate – new product development process  S&OP – Sales and Operations Planning process  Planning Edge and other tools in place globally  Weekly sales forecast and input to supply chain  Annual cost savings initiatives impacting operating expense and cost of goods sold  Inventory turns improved from 5.1x (March 2016) to 6.9x (December 2017)  mophie in-channel inventory improved from 52 weeks (March 2016) to 8 weeks (December 2017) Commentary


 
10 Strong relationship with key OEMs  During the Apple iPhone 8 / iPhone X unveil, Apple announced mophie wireless charging collaboration  During the Google Pixel 2 launch event, Google announced InvisibleShield screen protection collaboration Close partnerships with key OEMsProducts designed for all the top mobile devices1 1 Logos shown are not inclusive of all brands ✓ Longstanding partnership with diverse set of key OEMS ✓ Nimble across form factors ✓ Ability to adapt to rapidly changing technology landscape


 
11 34% 42% 51% 54% 20% 30% 40% 50% 60% 2014 2015 2016 2017 Dollar Market Share Continued screen protection momentum InvisibleShield market share gains of ~20 points driven by: Product innovation and higher ASPs Expanded distribution at wireless retailers Increased brand awareness Desirable, high-margin product for retailers Increased device costs driving higher attach rate and higher average sales prices (360 degree protection) The NPD Group, Inc., U.S. Retail Tracking Service, Cell Phone Screen Protection for the last twelve months ended January 2014 – December 2017; NPD data refers only to U.S. retail sales GG4 11/14 GG5 08/16 Timing of Gorilla Glass launches (originally launched in 2010)


 
12 Continued growth of power category Mobile devices have become a key part of our day-to-day life, but battery life continues to be a challenge ✓ Daily usage of mobile devices increases every year Mobile device usage by our on-the-go society necessitates people staying connected night and day✓ Processing power of mobile devices enables faster and more efficient creation and consumption of data, but drains battery life like never before✓ Proliferation and use of mobile apps, and related power consumption leads mobile device users to constantly be on the look-out for a place to plug-in✓ mophie power cases, mobile power, and wireless chargers ensure that you will never run out of power Power Cases Mobile Power Wireless Charging • Leadership position in wireless charging category • Charge Force wireless charging ecosystem launched in 2016 • Wireless charger launched in 2017 to optimize charging of iPhone 8, 8+, and X • #1 market share position at 64% • Dollar market share growth from 44% in Q4 2016 to 64% at Q4 2017 (+20 percentage points) Source: The NPD Group / Retail Tracking Service for the last three months ended December 31, 2017; NPD data refers only to U.S. retail sales; based on dollar market share • #1 market share position at 27% • Dollar market share growth from 19% in Q4 2016 to 27% at Q4 2017 (+8 percentage points)


 
Financial overview


 
14 2018 projected growth 2018 guidance (amounts in millions, except per share data and percentages) ▪ Net sales in a range of $550 - $570 ▪ Gross profit as a percentage of net sales in the low to mid 30’s range ▪ Adjusted EBITDA of $77 - $80 ▪ Diluted earnings per share of $1.30 - $1.50 ▪ Annual effective tax rate of approximately 27%


 
15 Compelling sales growth Net sales ($mm) $269 $402 $519 $560 2015 2016¹ 2017 2018E +8% +29% +49% 1 The Company acquired mophie on March 3, 2016 2 Midpoint of 2018 net sales guidance 2


 
16 Strong profitability $42.2 $37.2 $73.0 $78.5 2015 2016 2017 2018E Adjusted EBITDA1 ($mm) Adjusted EBITDA margin % 16% 14%9% 1 Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation expense, other income (expense), mophie transaction costs, mophie fair value inventory write-up related to acquisition, mophie restructuring charges, mophie employee retention bonus, and the loss on disputed mophie purchase price (2016) 2 mophie Adjusted EBITDA of ($16mm); ZAGG Adjusted EBITDA of $53mm 3 Midpoint of 2018 Adjusted EBITDA guidance +97% +8% (12%) 2 3 14%


 
17 Strong earnings per share Diluted earnings per share 1 ZAGG acquired mophie on March 3, 2016. 2 2017 diluted earnings per share includes the impact of the 2017 tax reform bill, which reduced earnings by approximately $12.0 million during 2017. Absent the impact of the tax reform bill, 2017 diluted earnings per share would have been $0.97. 3 Midpoint of 2018 diluted earning per share guidance 1 3 $0.54 $(0.56) $0.53 $1.40 2015 2016 2017 2018E 2


 
18 Long-term growth Long-term growth engine ▪ Continued international expansion ▪ Organically grow existing product categories in the domestic market ▪ Direct to consumer ▪ M&A activity in existing or new product categories Historical acquisition success $350+ $300+ $500+ Purchase price / acquisition date Net sales1 (cumulative, $mm) Keyboard IP acquisition $2.5mm (2011) $100mm (2011) $100mm (2016) 1 Expected cumulative sales for the year-ended December 31, 2018, assuming midpoint of net sales guidance


 
19 Appendix


 
20 Non-GAAP reconciliation (amounts in thousands) Years Ended Actual Actual Actual Guidance1 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 Net income in accordance with GAAP $ 15,587 $ (15,587) $ 15,171 $ 40,200 Adjustments: a. Stock based compensation expense 3,893 3,830 3,602 3,667 b. Depreciation and amortization 12,923 22,270 21,888 18,358 c. Other (income) expense 166 2,199 1,383 1,375 d. Impairment of intangible asset - - 1,959 - e. mophie transaction costs 179 2,591 - - f. mophie fair value of inventory write-up - 2,586 - - g. mophie restructuring charges - 2,160 437 - h. mophie employee retention bonus - 841 346 - i. Loss on disputed mophie purchase price (2016) - 24,317 - - j. Recovery of reserves on note receivable (639) - - - k. Income tax expense (benefit) 10,111 (7,972) 28,605 14,900 Adjusted EBITDA $ 42,220 $ 37,235 $ 73,391 $ 78,500 Net sales in accordance with GAAP $ 269,311 $ 401,857 $ 519,495 $ 560,000 Adjusted EBITDA margin (Net sales/Adjusted EBITDA) 16% 9% 14% 14% 1 Midpoint of 2018 guidance


 
21 The NPD Group, Inc. references References to the market shares information on slide #5 from The NPD Group Retail Tracking Services cited below: 1. The NPD Group Inc., U.S. Retail Tracking Service, Cell Phone Screen Protection, based on dollar sales, October 2017 – December 2017. 2. The NPD Group Inc., U.S. Retail Tracking Service, Cell Phone Device Protection, Charging Case, based on dollar sales, October 2017 – December 2017. 3. The NPD Group Inc., U.S. Retail Tracking Service, Mobile Power, Charge Type: Portable Power Packs, based on dollar sales, October 2017 – December 2017. 4. The NPD Group Inc., U.S. Retail Tracking Service, Tablet and e-readers – Cases, Keyboard Included, based on dollar sales, October 2017 – September 2017. References to the market shares information on slide #11 from The NPD Group Retail Tracking Services cited below: 1. The NPD Group Inc., U.S. Retail Tracking Service, Cell Phone Screen Protection, based on dollar sales, January 2014 – December 2017. References to the market shares information on slide #12 from The NPD Group Retail Tracking Services cited below: 1. The NPD Group Inc., U.S. Retail Tracking Service, Cell Phone Device Protection, Charging Case, based on dollar sales, October 2017 – December 2017. 2. The NPD Group Inc., U.S. Retail Tracking Service, Mobile Power, Charge Type: Portable Power Packs, based on dollar sales, October 2017 – December 2017.


 
22 Investor Presentation March 2018


 
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Section 10: EX-99.5 (EXHIBIT 99.5)

Exhibit


ZAGG Announces Executive Leadership Transition
Chris Ahern to Succeed Randy Hales as Chief Executive Officer

SALT LAKE CITY, March 7, 2018 (GLOBE NEWSWIRE) -- ZAGG Inc (Nasdaq: ZAGG), a leading global mobile lifestyle company, announced today that Randy Hales will retire as ZAGG’s President and CEO after serving in the role for the past six years. In addition, Hales has resigned from the Board of Directors on which he has served since October 2010. The Board of Directors has appointed Chris Ahern, who has been serving as head of the mophie brand and international businesses, to succeed Hales as CEO of ZAGG Inc effective immediately. Ahern will also assume Hales’ seat on the Board of Directors. Hales will continue to serve as an advisor to the company through December 2018 to ensure a smooth transition.
“A key activity of the Board and executive team has been building executive bench strength to ensure orderly leadership transitions at all times,” said Cheryl Larabee, chairperson of ZAGG’s Board of Directors. “After considering several qualified candidates within the Company, the Board unanimously selected Chris to succeed Randy as CEO. I am pleased to announce Chris’ promotion and I’m very confident this changeover will go seamlessly.”
Hales said, “I’ve enjoyed my time at ZAGG and I’m very pleased with the tremendous progress the entire team has made in embracing our four corporate objectives to drive sales, profitability, and shareholder value. The executive team that is in place, along with the strong business momentum, positions the company for a strong future and makes this an appropriate time for me to step down and pass the leadership role over to Chris.”
Chris Ahern has been president of the ZAGG International Business unit since June 2014, and assumed the additional role as president of mophie in 2017 to lead the brand’s turnaround effort. Chris brings over 20 years of international experience in sales leadership, sales operations, and supply chain management. Previous to ZAGG, Chris served as Sales Operations Director for Dell Products in Europe, Middle East, and Africa supporting a $4 billion indirect business.
“I want to thank Randy for his strong leadership and mentoring since I joined ZAGG four years ago,” said Ahern. “I, along with the entire leadership team, will continue to focus on successfully executing our four key objectives centered on product, brand, distribution and operational excellence. We will continue to leverage ZAGG’s strong leadership in the mobile lifestyle category to drive future growth opportunities. I look forward to continue working closely with this great team and our Board of Directors.”
The company also announced that Brian Stech has been promoted to President of ZAGG. Prior to this appointment, Stech served as the Company’s Chief Commercial Officer, with responsibility for leading the strategy and execution of the Company’s brand and distribution initiatives since June 2017, having previously served as Executive Vice President of Sales and Marketing since 2014. Stech brings 20 years of experience in global sales, marketing, product, and general management roles. Stech has a proven track record of delivering rapid and consistent growth for companies in the consumer electronics, mobile, and consumer packaged goods industries including SteelSeries, Motorola, Mobility Electronics, and Ralston Purina.
Larabee added, “We would like to thank Randy for his focus, passion, and dedication in elevating ZAGG to its market leading position, and for his leadership creating a culture that will drive long term growth and value for our shareholders. Succession planning has been a key board initiative, as demonstrated by the seamless transition of leadership to Chris and Brian. We look forward to the next chapter for ZAGG under their strong leadership.”

About ZAGG Inc:

ZAGG Inc (NASDAQ:ZAGG) is a global leader in accessories and technologies that empower mobile lifestyles. The Company has an award-winning product portfolio that includes screen protection, power management solutions, mobile keyboards, social tech, and personal audio sold under the InvisibleShield®, mophie®, ZAGG®, and IFROGZ® brands. ZAGG Inc has operations in the United States, Ireland, and China. For more information, please visit the company’s websites at www.zagg.com and www.mophie.com

Contact:
Investor Relations:
ICR, Inc.
Brendon Frey
203-682-8216
brendon.frey@icrinc.com

Company:
Jeff Dubois
801-506-7336
jeff.dubois@ZAGG.com


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