-- A shortfall of approximately $2.0 million in the intelligent cradle business, primarily due to significantly lower than expected sales to the pharmaceutical field trials industry; and -- A shortfall of approximately $1.2 million in sales of universal power adapters for portable computers to Targus resulting from Targus' transition to a new management team, whose revised strategy includes better management of returned product and an effort to reduce inventory held in their supply chain pipeline.
Mobility believes that sales to Targus will trend lower in the fourth quarter as Targus makes progress on its inventory management goals before likely returning to historical ordering patterns in early 2007. While we are disappointed with the shortfall in the connectivity and high-power areas, we had another solid quarter with our low-power products, said Charles Mollo, CEO of Mobility Electronics. Our low-power programs with Best Buy, T-Mobile UK, and Cingular in the United States are proceeding well and we remain optimistic that these accounts will roll out our products to more of their retail stores in 2007.
We also continue to see consistent retail sell-through rates with our high-power products. End-user demand remains strong for these products and we continue to expect solid long-term growth in this area. Mobility Electronics also provided an update on the status of two programs.
Mobility's program to supply combination AC/DC power adapters for portable computers to Dell Inc. is expected to continue through the fourth quarter of 2006, but the current program will likely terminate shortly after year end. The Company expects that sales to Dell will trend lower towards the end of the fourth quarter as the program winds down.
Mobility is pursuing a number of options for continuing to support the Dell computer product offering in the future through both direct programs with Dell and alternative channels of distribution. Mobility also announced that it does not expect to generate material, if any, revenues going forward through its relationship with Energizer Holdings, Inc. New management at Energizer has chosen to focus on alternative strategies for the battery-powered adapter market rather than the previously planned program with Mobility, said Mr.
Mollo. As a result, we no longer expect to pursue this market in collaboration with Energizer. We continue to be excited about the potential for this market and we are making good progress with the roll-out of the iGo(R) powerXtender(TM), our battery-powered universal adapter.
We believe the iGo powerXtender offers superior convenience and flexibility due to the interchangeable tip technology that allows it to be utilized on virtually all mobile electronic devices on the market. As we continue to directly develop relationships in the wireless carrier, wireless distributor, and retail and mass merchandiser markets, we believe that our family of battery-powered universal adapter products will be a significant part of those programs and will help us capture a meaningful share of this new product category. Although we are disappointed that our current relationships with Dell and Energizer aren't likely to contribute meaningful, if any, revenue in 2007, we will continue to pursue the markets served by these two customers with a variety of approaches.
We continue to believe that the low-power area represents the Company's largest market opportunity, and our continued progress in penetrating retail and wireless carrier accounts should help us deliver solid growth in revenue and earnings in 2007 and beyond, said Mr. Mollo. Mobility Electronics, Inc.
, based in Scottsdale, Arizona, is a developer of universal power adapters for portable computers and mobile electronic devices (e.g., mobile phones, PDAs, digital cameras, etc.
) and creator of the patented intelligent tip technology. Mobility Electronics' iGo brand offers a full line of AC, DC and combination AC/DC power adapters for portable computers and mobile electronic devices. All of these adapters leverage the Company's intelligent tip technology, which enables one power adapter to power/charge hundreds of brands and thousands of models of mobile electronic devices through the use of interchangeable tips.
The Company also offers hardware products for handheld devices, expansion and docking products for servers, desktop and portable computers, keyboards and other accessories for the mobile electronic device market. Mobility Electronics' products are available at www.iGo.
com as well as through leading resellers, retailers and OEM partners. For additional information call 480-596-0061, or visit www.mobilityelectronics.
com. Mobility Electronics, iGo and ..
.improving your mobile experience are registered trademarks and powerXtender is a trademark of Mobility Electronics, Inc. All other trademarks or registered trademarks are the property of their respective owners.
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including expectations relating to third quarter 2006 financial results; the belief that sales to Targus will trend lower in the fourth quarter before likely returning to historical ordering patterns in early 2007; future growth expectations in sales of low-power products and the anticipated timing for the roll out of these products in Best Buy, T-Mobile UK, and Cingular retail stores in 2007; expected solid long-term growth in sales of high-power products; expected trend towards lower sales to Dell toward the end of the fourth quarter and opportunities to continue to support the Dell computer product offering in the future either directly with Dell or through alternative channels of distribution; the expectation that the Company will not generate material, if any, sales through Energizer in the future; anticipated sales of the iGo powerXtender and the belief that this product, and other battery-powered universal adapters will be a significant part of the programs offered by expected new customers in the wireless carrier, wireless distributor, and retail and mass merchandiser market;, and overall anticipated future growth in revenue and earnings in 2007 and beyond. These forward-looking statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. In particular, factors that could cause actual results to differ materially from those in the forward-looking statements include the sell through rates and market acceptance of the Company's current and future-developed power adapter products, including the iGo powerXtender; delays or cessation of shipments of the Company's products to customers; the loss of current customer and the inability to retain new customers for the Company's product offering; the timing and success of new product introductions; the development and introduction of new products by the Company and its competitors; the performance of suppliers and subcontractors; industry and general economic or business conditions; and other factors detailed in our filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date made and are not guarantees of future performance. We undertake no obligation to publicly update or revise any forward-looking statements.
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