10-K

Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $.33¹/₃ per share; traded on The NASDAQ Stock Market

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ¨ NO x

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Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The NASDAQ Stock Market on June 30, 2013, was $20,162,269.

The number of shares of Registrant’s Common Stock outstanding as of March 7, 2014 was 6,602,980.

Portions of the Registrant’s Definitive Proxy Statement relating to the Annual Meeting of Shareholders, scheduled to be held on May 13, 2014, are incorporated by reference into Part III of this Report.

Cobra Electronics Corporation (the “Company”), incorporated in Delaware in 1961, is traded on The NASDAQ Stock Market under the symbol “COBR”. The Company is a leading designer and marketer of two-way mobile communications and mobile navigation products in the United States, Canada and Europe, holding the number one or strong number two position in each of its longstanding product lines and targeting a similar position for marine VHF radios, photo-enforcement detection and mobile navigation for professional drivers. Cobra^® is a leading brand in Citizens Band radios, radar detectors, speed camera detection, truck navigation and two-way radios. Performance Products Limited (“PPL”), a wholly-owned subsidiary based in the UK, designs and markets mobile navigation, photo-enforcement and detection products primarily under the Snooper^® brand in the UK and elsewhere in Europe. The Company’s AURA^® database of photo-enforcement locations and road hazards covers the United States, Canada and most of Europe. The Company has a track record of over 50 years of innovation and the development of award-winning products and is an industry leader in developing technology applications that serve consumers’ needs in the following product lines:

Management believes that the Company’s future success depends upon its ability to predict and respond in a timely and effective manner to changes in the markets it serves. Technology, product performance, reliability, price, availability and service are the main competitive factors. The Company’s sales are dependent upon timely introduction of new products, which incorporate new features desired by consumers, at competitive prices.

Innovation remains the hallmark of the Company’s success, as demonstrated by just a few of its recent product introductions and other recent developments. The Company expects to continue attracting new customers with innovative product extensions and new product categories. The Cobra iRadar^® ATOM^TM was named a silver winner for the 2013 Best in Biz Awards and a finalist in the Mobile Apps category for CTIA’s Emerging Technology (E-Tech) Award for 2013 and the SPX 7800BT, a radar/laser/camera detector, was named an International CES Innovations 2014 Design and Engineering Award Honoree.

The iRadar ATOM smart detection system for iOS and Android devices features class-leading 360 degree detection as well as audio and visual alerts for speed cameras, red light cameras, caution areas, dangerous intersection and live police locations. The iRadar ATOM, the world’s smallest radar detector, offers more than double the detection range and performance compared to previous iRadar models and has a 35 percent smaller footprint.

The SPX 7800BT offers IntelliShield^® quad-level false signal rejection, pin-point radar frequency, automute/IntelliMute^®/ IntelliMute Pro, super-charged LaserEye^® 360 laser detection, 5-level graphical signal strength meter, voice alert, car battery voltage display, low car battery warning and super-bright full color OLED graphics display. The SPX 7800BT also features user-selectable color themes and access to the Cobra iRadar Community, the world’s largest and most active detection community in the world, for live speed trap data via smartphones.

In 2013, the Company launched a new website, the new Cobra.com, featuring a sleek, modern and comprehensive product category layout with improved shopping and easy-to-navigate interfaces to provide an improved shopping experience. This new website leverages the Company’s omni-channel sales and marketing initiatives with today’s consumer preference for a dynamic omni-channel shopping experience.

Demand for consumer electronics products tends to be seasonal and varies according to channel of distribution. Historically, sales in the last half of the year are significantly greater than in the first half, reflecting increasing purchases by retailers and distributors for various promotional activities that begin mainly in the third quarter and culminate with the holiday selling season.

One of the Company’s fundamental strengths is its product sourcing ability. Substantially all of the Company’s products are manufactured to its specifications and engineering designs by a number of suppliers, based in China, Hong Kong, Taiwan and South Korea. The Company utilizes multiple manufacturers for its products whenever practical, however certain products are dependent on a single manufacturer. The Company maintains control over the design and production quality of its products through its wholly owned subsidiary in Hong Kong, which seeks out new suppliers, monitors technological changes, performs source inspection of key suppliers, provides selected engineering services, logistical services and expedites shipments from suppliers.

Over a period of years, the Company has developed a network of suppliers for its products. To maintain flexibility in product sourcing, all of the Company’s contracts with its suppliers can be terminated by the Company “at will”. While it is the Company’s goal to maintain strong relationships with its current suppliers, management believes that, if necessary, alternate suppliers could be found. The extent to which a change in a supplier would have an adverse effect on the Company’s business depends upon the timing of the change, the product or products that the supplier produces for the Company and the volume of that production. The Company also maintains insurance coverage that would, under certain limited circumstances, reimburse the Company for lost profits resulting from a supplier’s inability to fulfill its commitments to the Company. The Company historically has negotiated substantially all of its purchases in U.S. dollars and uses forward contracts on occasion to purchase dollars at a fixed exchange rate to the British pound sterling and the euro.

Research and product development expenditures, as well as non-capitalized engineering costs, are expensed as incurred and amounted to $2.2 million in 2013, $2.0 million in 2012 and $1.6 million in 2011.

Patents and other intellectual property can be important marketing, merchandising and competitive tools across a broad range of products, but particularly for the Company’s newer products such as the Cobra iRadar, AURA and Bluetooth products. Whenever the Company develops a unique design or technology, patents are applied for to preserve exclusivity. In 2013, the Company was awarded a patent in the U.S. covering its Bluetooth-enabled marine radio technology. The Company also holds patents covering the wireless communication and connectivity between cellular telephones and Citizens Band radios and between cellular telephones and marine communication devices.

The Company’s two-way radios, detectors, Citizens Band radios, accessories, GPS receivers, marine electronic products and mobile navigation devices are marketed globally under the Cobra brand name. The Cobra trademark is registered in the United States, most European countries, China, as well as other jurisdictions. The Company believes the Cobra trademark, which is indefinitely renewable, is a significant factor to the successful marketing of its products.

Personal navigation devices, GPS locators and other products designed and marketed by PPL are marketed in the United Kingdom and Europe under the Snooper brand name. The Snooper trademark is registered in the United Kingdom and Europe and is a significant factor to the successful marketing of PPL products in the United Kingdom and Europe.

Major competitors in the Cobra business segment are Motorola, Midland and Uniden (two-way radios); Whistler and Escort/Beltronics (detection); Uniden and Midland (Citizens Band radios); Icom, Uniden and Standard Radio (marine electronic products); and Garmin and Rand McNally (mobile navigation for professional drivers).

Competitors in the PPL segment include Garmin, Tom Tom and Navman for personal navigation devices, and Coyote and Road Angel for GPS products.

The Company’s main competitive factors are technology, product performance, reliability, price, availability and timely introduction of new products and service.

As of December 31, 2013, the Company employed 112 persons in the United States and 40 persons in its international operations. None of the Company’s employees are a member of a union.

The consolidated entity consists of Cobra Electronics Corporation and its subsidiaries in Hong Kong, Ireland and the United Kingdom. The Company segregates and reports its operating results into the Cobra Consumer Electronics (“Cobra”) business segment, which sells under the Cobra brand name, and the Performance Products Limited (“PPL”) business segment, which sells under the Snooper brand name. The Cobra segment is comprised of Cobra Electronics Corporation, Cobra Electronics (HK) Limited (“CHK”) and Cobra Electronics Europe Limited (“CEEL”).

Long–lived assets located outside of the United States totaled $5.7 million and $5.9 million at December 31, 2013 and 2012, respectively. International sales, primarily in Canada and Europe (including those of PPL), were $33.9 million, $34.6 million and $33.8 million in 2013, 2012 and 2011, respectively. For additional financial information about business segment and geographic areas, see Note 3 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

In the United States, Cobra competes primarily with various manufacturers and distributors of consumer electronics products, principally on the basis of technology, product performance, product features and consumer

value, and expects the market for its products to remain highly competitive. Cobra’s products are distributed through a strong, well-established network of nearly 300 retailers and distributors in more than 80 countries, located primarily in the United States, representing nearly 55,000 storefronts where Cobra products can be purchased. Approximately half of the Company’s sales are made directly to retailers, such as general merchandisers, mass marketers, consumer electronics specialty stores, warehouse clubs, television home-shopping and internet retailers, direct-response merchandisers, home centers, specialty stores and a major travel center. Most of the remaining sales are through two-step wholesale distributors that carry Cobra products to fill orders for travel centers, small department stores and appliance dealers, independent wireless agents and for export. Cobra’s primary sales force is composed of independent sales representatives, directed by Cobra national accounts managers, who work on a straight commission basis. In both Canada and Europe, as well as elsewhere throughout the world, the Company utilizes distributors, which sell primarily to retailers. Cobra’s return policies and payment terms are similar to those of other companies serving the consumer electronics market. Cobra products generally must be shipped within a short time after an order is received and, as a result, order backlog is not significant.

As a percentage of consolidated net sales, sales to DAS Companies, Inc. (“DAS”) were 7.8 percent for 2013, 12.9 percent for 2012 and 14.6 percent for 2011 and sales to Wal-Mart Stores, Inc. (“Wal-Mart”) were 11.0 percent for 2013, 9.7 percent for 2012 and 11.4 percent for 2011.

Cobra is the number one brand in the domestic market for integrated radar/laser detectors and commands a leading market share by offering innovative products with the most advanced features and technologies, including full color OLED displays, touchscreens, car battery voltage meter, safety camera, Voice Alert^TM technology, LaserEye 360 degree detection, Safety Alert^® and Strobe Alert^® technologies and the AURA Camera and Driving Hazard Database that warns drivers of fixed speed and red light cameras, known speed traps and dangerous intersections across the United States and Canada. In addition, Cobra’s integrated radar/laser detectors incorporate technologies that reduce false alerts in densely populated urban areas (Quad-Level IntelliShield False Signal Filtering technology), including a relative-speed-sensing auto mute system (IntelliMute technology).

The Cobra iRadar Detection System, introduced in October 2010, was the first detection system to combine radar, laser, and speed and red light camera detection technology with iPhone^® and Android^TM smartphones using Bluetooth wireless technology and has received CES Innovation Awards in 2012 and 2013. The system uses various smart detector units paired via Bluetooth to an intuitive smartphone app. Together they detect police radar/laser signals and notify users in real-time of upcoming caution areas, excessive vehicle speed, live police and photo enforcement areas. The app also allows the driver to control the iRadar detector’s settings and access to the AURA redlight and speed camera database. Location-based crowd sourcing database capabilities that store location-based signals from the Cobra iRadar Community, offered as an enhancement in the latter part of 2011, allow sharing of information with other users. Further enhancements allow the Cobra iRadar Community to report and warn other users of police, caution areas and photo-enforcement areas in real-time; when iRadar detects a safety alert or caution, it automatically shares the information with other iRadar Community users nearby. In the second quarter of 2013, the iRadar ATOM smart detection system for iOS and Android devices was introduced. The iRadar ATOM features class-leading 360 degree detection as well as audio and visual alerts for speed cameras, red light cameras, caution areas, dangerous intersection and live police locations. The iRadar ATOM provides double the detection range and a 35 percent smaller footprint when compared to the previous iRadar models. Additionally, the iRadar ATOM was named a finalist in the Mobile Apps category for CTIA’s Emerging Technology (E-Tech) Award for 2013. In the fourth quarter of 2013, the Cobra iRadar App Version 4.0 for iOS devices moved the iRadar community members into a new era of convenience, ease-of-use and enhanced mapping. The iRadar S-Series detector for iOS devices provides the world’s first under-the-hood detector to utilize Bluetooth connection to a smart phone. The S-Series detector is installed in the engine compartment of the vehicle and does not require the running of wires into the cab. Instead the unit is connected by Bluetooth technology to a smartphone.

The 2013 Detection line-up included the SPX Mini Series consisting of the 6700, 7700 and 7800BT. The SPX detectors feature the smallest in-class unit size and utilize the ultra-low noise signal amplifiers once only affordable to the military. The ultra-compact and powerful SPX detectors deliver twice the detection range and performance of prior models. The SPX 7700 and 7800BT also feature super bright color OLED graphic display and user-selected color themes. Additionally, the SPX 7800BT features live speed trap data from the Cobra iRadar community and the AURA speed camera and red light camera notifications.

Cobra began marketing a database of photo-enforcement locations as a feature of its high-end radar detectors in 2008. Based on consumer response, Cobra rolled out the AURA database, the only verified photo-enforcement database in the United States and Canada, in January 2009. AURA provides the capability to offer a unique feature to the Company’s top-selling line of radar detectors and its mobile navigation products for the professional driver.

Cobra continued to extend its focus on the professional driver by introducing two new models in 2012, the 8000 PRO HD and the 6000 PRO HD. The 8000 PRO HD is a 7-inch screen GPS navigation system while the 6000 PRO HD is a 5-inch screen GPS navigation system, both aimed at meeting the needs of the professional driver. Both models have a thin, lightweight and bright high-definition touch screen display, truck-optimized route guidance, live and predictive traffic congestion information, free lifetime map updates and lifetime access to Cobra’s AURA national database of speed/red light cameras, dangerous intersections and known speed trap locations. Other key features for both models include: Junction View with Lane Assist, providing drivers with 3D images of upcoming highway junctions as well as lane guidance and enhanced turn-by-turn directions; multi-point routing, which provides optimal routing for multiple destinations to reduce fuel cost; more than 33,000 trucker-friendly points-of-interest, based on data provided by ProMiles^® and TruckDown^TM state mileage log to track miles within a state for IFTA reporting; and hours-of-service timers for drivers to track their on-duty, off-duty and driving time for regulatory compliance.

The 8500 PRO HD Navigation System, introduced in the later part of 2013, is Cobra’s most advanced GPS navigation device for professional drivers with a completely redesigned, intuitive user interface and software with an enhanced map and graphics. Added features include exclusive live diesel fuel prices, live weather from Velocity Weather^®, Google Search via Wi-Fi, Junction View with Lane Assist, state mileage log, trip cost calculator and hours-of-service timers, along with lifetime access to Cobra’s AURA database of speed/red light cameras, known speed trap locations and nearby dangerous intersections. With an ultra-bright, 7-inch touch screen display, this model offers the sharpest display on the market.

In 2013, Cobra introduced Cobra HomeBase^TMwhich allows drivers to download the AURA and software updates and allows drivers to back up their personal data, including address book and state mileage logs, on their Cobra navigation device. HomeBase is compatible with both Windows and Mac computers.

Dash Cam products, the CDR 810 and CDR 830, were introduced in the later part of 2013. The Cobra series of Drive HD Dash Cams record everything drivers see in full 1080P HD video to deliver peace of mind, security and even some entertainment. The HD Dash Cams are the perfect solution to continuously record a driver’s surroundings and keep the driver and the vehicle safe and secure. An embedded G-Sensor automatically saves clips when an impact has been detected, with the high end model including GPS to simulcast the driver’s precise location on a Google™ Map along with video. Drive HD Cams also take 12 megapixel still shots and all images and videos can be viewed on a television or computer. The CDR 810 has a 2-inch screen and CDR 830 has a 2.7-inch screen which includes GPS to simulcast a driver’s location on a Google map along with video.

Cobra is the leading brand in the domestic Citizens Band radio market. Most of this market is for mobile Citizens Band radios purchased primarily by professional truck drivers. The remaining part of the domestic market is for hand-held Citizens Band radios used for outdoor enthusiasts, sport and recreational activities. Cobra has a history of being the technology leader in this market, and Cobra Citizens Band radios feature NOAA all hazard alert radio, patented SoundTracker^® noise reduction, NightWatch^® illumination, and patented Bluetooth wireless technology.

In 2012, the 25 LX and 29 LX BT were introduced. The 25 LX is a compact special edition unit based on the 25 LTD classic platform and features a 4-color LCD display. The 29 LX BT based on the 29 LX has been engineered to comply with the new hands-free cell phone usage legislation and includes an array of features to meet these requirements, including: Bluetooth wireless connectivity that allows professional drivers to connect the 29 LX BT to their mobile phone for in-and out-bound hands-free mobile calling; one-touch Bluetooth operation that allows for the initiation and termination of mobile calls with the push of a button; Caller ID with voice to provide a voice announcement of incoming callers, along with Caller ID display; and text-to-speech conversion that supports listening to incoming email messages and responding to emails by simply talking. The 29 LX CAMO launched in the third quarter of 2013 features the Realtree Xtra camouflage pattern, NOAA weather, four-color LCD display, antenna condition, battery voltage, and customizable day and night settings. The Company launched its first Citizens Band radio made specifically for the European market in 2009. The Company added the 29 LX EU in 2012 and the 75 LX EU model was added to the line in 2013. The 75 LX EU is a multi-standard CB radio with remote hand control and “hide-away” black box. Ideal for easy and discreet installation in the vehicle, the black box can easily be stored under the car seat, in the footwell or with an optional extension cable it can be installed in the boot. It has a multi-feature LCD display, microphone, speaker, and all the control buttons are integrated into the stylish hand-held unit. The hand-held unit is connected to a coiled cable with a connector to the radio using a standard 8-pin microphone plug.

The Company’s line of power inverters permit users to power devices requiring 120-volt AC power in a mobile environment, such as computers, iPhones, smartphones, video games and appliances, using the 12-volt outlet or direct to the battery in a vehicle. Cobra’s broad range of products extends from the low power CPI 130 which can power smartphones and computers to the CPI 2575 which can power microwave ovens, small refrigerators and other small appliances while on the road. All inverter models offered include a USB output port and provide Pentagon Protection^®, which includes reverse polarity, low voltage alarm, low voltage shutdown, over voltage protection, and temperature protection.

Cobra two-way radios feature the smallest high-powered lithium ion battery powered radios, VibrAlert^® silent vibrating alert, Rewind-Say-Again^® digital voice recorder and smaller environmentally friendly packaging to differentiate from competitors. Although this market has matured and small continued category sales declines are anticipated, the Company expects to maintain a leading market position with innovative products and features.

For 2013, the 100 series was redesigned and a completely new 300 and 500 series were introduced. The 100 Series offers the most economical two-way radio on the market featuring Roger Beep, power saver security, a 16-mile range, weather alert, power saver circuitry and call alerts. The 300 series was designed for outdoor use and features a 23-mile range, NOAA weather and emergency radio, dedicated WX button, voice activated transmission (“VOX”) for hands-free use and customizable tones to distinguish between incoming callers. The 500 series feature waterproof models with a 28-mile range, NOAA weather and emergency radio, VibrAlert suitable for noisy or all-quiet environments, VOX hands-free voice-activated transmission, Roger Beep tone, illuminated LCD display, LED flashlight and rubberized grips.

Cobra Marine’s line of products include VHF fixed-mount and handheld radios. An innovator in marine electronics, Cobra Marine^® developed the first Bluetooth waterproof handset, the first and patented radio feature to make and receive cellular phone calls by integrating Bluetooth wireless technology, the Rewind-Say-Again feature (which allows for the play back of up to the last 20 seconds of audio) and the first combination VHF/GMRS radio. In 2010, two floating handheld VHF radios were introduced with a bright orange core, making these floating radios highly visible to facilitate retrieval by the boater. The MR HH330 features a 6-watt VHF with NOAA weather channels. The MR HH475 features a 6-watt VHF, NOAA weather channels and Bluetooth technology that allows for the answering of cell phones. In the second quarter of 2013, the Company partnered with a Midwest independent manufacturer representative to handle Cobra’s OEM marketing for its marine electronics. In 2013, the HH 350 FLT and HH 500 FLT BT were introduced. The HH 350 features six watts of power for long range communication, access to NOAA weather and emergency alerts, and comes in an ultra–compact design that floats if dropped overboard. The HH 500 has Bluetooth wireless and Rewind-Say-Again in addition to the HH 350 features.

Cobra recognized the explosion of smartphones and mobile applications and their importance to consumers to better manage their daily activities and introduced Cobra iRadar (discussed previously) in 2010. Cobra iRadar received three awards in 2010 from the Specialty Equipment Market Association (“SEMA”) and received a design and innovation award from the Consumer Electronics Show (“CES”) and a Mac/Life innovation award in 2011.

The Company expanded its growing line of wireless solutions with the introduction of the Cobra JoyRide^TM, which received a 2012 CES Innovation Award and was named the “Best Safety Product” in the Techlicious 2012 Best of CTIA Awards Program. Cobra JoyRide was demonstrated in the Android stand at Mobile World Congress 2012 in Barcelona, Spain. The Cobra JoyRide is a charger for Android phones that allows a driver to easily customize the way his or her smartphone behaves when entering and exiting the vehicle by automatically reconfiguring the phone for in-car usage. The companion Android app communicates with the JoyRide Charger, opening up a host of possibilities for personalizing and streamlining in-car smartphone usage so that, with a push of the button on the 12V charger, phone calls can be initiated, voice commands can be launched, information can be shared about road hazards, music can be played and paused and even GPS navigation apps or other favorite in-car applications can be launched. The Cobra JoyRide application can also save the vehicle’s GPS position on the Android phone, which makes finding where the vehicle was parked easy.

The Cobra AirWave 360™ launched in 2013 allows users to wirelessly connect Bluetooth-enabled devices to older generation stereos and speakers. Cobra has utilized Bluetooth^® wireless technology to enhance lifestyle products with the Cobra AirWave Series. The models – Cobra AirWave 360, AirWave Box and AirWave Mini are all enhanced with Bluetooth technology and designed to be a hands-free portable speaker and speakerphone. The Cobra AirWave 360 is a portable 8-inch Bluetooth surround sound speaker that features Siri^®/S Voice™ enablement and gesture control for enhanced 360-degree sound quality with up to 20 hours of music playback. The Cobra AirWave Box utilizes a rugged, floating-waterproof design (JIS7) for immersion in water and features a rechargeable battery and soft-touch rubber wrap for extra guarded protection, while the Cobra AirWave Mini features a weatherproof resistant exterior (JIS4). Both the AirWave Box and AirWave Mini, which are scheduled for release in the first quarter of 2014, have up to ten hours of music playback and up to 120 hours of standby time.

The Company plans to launch the CPP, solar/portable product, series in the first quarter of 2014. The CPP 100 and CPP 300 integrate solar panels and will allow users to charge their mobile devices multiple times. Both models feature a 6000 mAh Li-ion battery that can be charged by a solar panel and USB port. The CPP 100 includes a 2.1

amp outlet and a LED battery status indicator. The CPP 300 includes a LCD battery status indicator, a micro USB output and dual USB outlets. Additionally, early in the second quarter of 2014, the Company plans to launch a portable power pack, the CPP 7500 JumPack^TM, that will jump start a vehicle or power up iPhones and accessories. The Cobra JumPack features a 7500 mAh Li-Cobalt battery with a battery status indicator and provides the reliability and convenience to charge multiple devices and is ideal for travel and multipurpose uses.

Products marketed by PPL include personal navigation devices, marketed under the trade name of Snooper Truckmate and Snooper Ventura, and GPS-enabled speed camera location detectors, marketed under the trade names of Snooper My Speed and Snooper 3 Zero, among others. PPL also markets under the AURA brand, a global database of speed camera locations and other driving hazards, such as high-accident zones, for driver safety.

Sales are primarily in the UK and Europe. Sales are made through a network of approximately 1,500 retailers and distributors and PPL’s website. Principal products marketed by PPL include:

Snooper portable satellite navigation systems include street level mapping from a global supplier of digital maps and Snooper’s market leading speed camera detector technology. Portable satellite navigation systems from Snooper are award winning, utilizing Traffic Message Channel (“TMC”) traffic information technology, Bluetooth hands free connectivity and multi-routing technology. The Snooper satellite navigation system provides dedicated routing within the UK and Europe for trucks, buses, motor homes and other large vehicles. Information available includes low bridges, weight restrictions and width limitations. Entering specific vehicle information enables the device to select the most appropriate route. Snooper Truckmate is a truck satellite navigation system for commercial drivers that uses the truck size and dimensions to plot routes to avoid height restrictions and narrow roads. Snooper Ventura is a satellite navigation system with unique routing technology for caravans, campers and motorhomes. Snooper Syrius is a car satellite navigation system that provides up-to-date street navigation and turn-by-turn directions for UK and Irish roads.

The AVN S9000 Truckmate/AVN S9000 Ventura features a large 6.2-inch full color LCD screen and is designed to fit into a double DIN slot in the center console of most vehicles. Also, in addition to the standard Truckmate and Ventura features, this unit includes a DVD/CD player, radio tuner, MP3 and MP4 capability plus iPod connectivity and the unit can be combined with a reversing camera for added safety. The SDB8500 Truckmate/SDB8500 Ventura features a 7-inch screen version of the S5000 Truckmate and S5000 Ventura products which include TMC traffic information technology, Bluetooth connectivity and a DAB digital radio, which enables voice commands to be played through a vehicle’s in-built speakers for clearer directions. The S5450 Ventura and S6450 Ventura units are designed specifically for caravan and motor-home use. Versions of those units that were created exclusively for the Caravan Club of Great Britain feature unique data only available to members of the Caravan Club and include additional POI information. The S2500 Syrius Pro features enhanced functions of the existing Truckmate range such as Junction View and Lane Guidance and My Speed road speed limit information along with free TMC traffic information.

In 2013, the product line was enhanced with the introduction of new Truckstop software which gives truck specific live content designed to help drivers make informed decisions regarding their routing and overnight stop requirements.

PPL markets speed camera locator devices, including the Snooper Sapphire and the Snooper Pantera, which use GPS location technology and the AURA database to alert drivers to upcoming speed camera and hazard locations.

In the fourth quarter of 2012, the Cobra iRadar from Snooper was launched. This unit is the world’s first and largest community-based radar, laser and speed camera detection system. It enables the user to share and receive alerts in real time from other iRadar and AURA live users. The unit consists of a remote detector mounted in the engine bay of a vehicle which links Bluetooth technology with the iRadar App installed on an iPhone or Android smartphone. The Snooper iRadar App uses the smartphone’s built in GPS receiver to locate its position and alert the user to the presence of fixed speed traps and high risk zones. Also in the fourth quarter of 2012, the Snooper Lynx Lite GT was introduced. This unit features a large 2.7-inch full color TFT LCD display with visual and voice alerts and is the latest and most advanced GPS speed camera locator on the market. In the second quarter of 2013, the Snooper DVR-1 vehicle drive recorder was launched. The unit continually monitors the road ahead using a combination of GPS technology, motion sensors and a miniature high precision video camera to ensure that any incident will be recorded and can be reviewed later on a computer.

The Shotsaver golf range finder product line includes the entry level S210, the S320 and the S430. The S320 and S430 include the “Tour Pro” software and feature improved graphics and functionality when compared to the S210. These golf range finder units offer a complete range of golf course management tools with access to over 5,500 golf courses in the UK and Western Europe and include distance calculations. The S340 Shotsaver golf range finder will replace the S320 and the S430 in 2014 and will reduce the number of SKUs.

The laser range finder product line, which instantly calculates the distance to any visible object, includes the S400 and SLR500. The SLR500 was introduced in the first quarter of 2013 and builds on the success of the S400 with additional features such as an increase in the range to calculate the distance to the flag up to 350 yards and the distance to larger hazards up to 800 yards.

The A2800 and A3500 Adventurer units, both outdoor GPS portable navigation systems, with complete coverage of the UK using Ordnance Survey^® Landranger^® 1:50,000 scale maps, were launched in 2010. The units feature OLED screens to give much better screen definition, and both can also be purchased with Snooper’s in-car satellite navigation, featuring turn-by-turn navigation and AURA speed camera detection technology. A new version of these units featuring a new platform is scheduled for launch in 2014.

In the third quarter of 2013, the Snooper Air 22 HD LED 12 volt mobile television was launched. This is a portable TV, specifically built for touring, which includes Freeview HD digital TV along with a built-in satellite TV decoder aimed at the caravan and motorhome market in the UK and Europe.

PPL markets a proprietary AURA database that provides drivers with advance notice of upcoming speed camera and hazard locations. The database provides a competitive advantage because unlike database capabilities of competitors, the AURA database is updated daily and makes information available to its subscribers 24 hours a day, 7 days a week, thereby making new speed camera locations readily available to customers.

PPL currently markets a range of other products including the E-Bike, a compact, lightweight folding electric bike, the WPT250M, a tracking device that uses GPS, GPRS and GSM technology to monitor the location of any boat, vehicle, pet or individual with an accuracy of 2.5 meters, and the Snooper Lynx iPhone application that

allows the user to share and receive the positions of mobile speed traps with other users. Additionally, the Snooper Lynx iPhone displays current speed and the speed limit of the road being traveled, provides alerts for all types of fixed and mobile speed traps, features automatic wireless downloads of the AURA database and can be used as a stand-alone laser detector.

The new E-Bike Strada was launched in the second quarter of 2013. The Strada is a stylish, foldaway electric bike incorporating a unique concealed in-frame rechargeable battery.

The Company’s website address is “www.cobra.com”. The Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through our website, as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (the “SEC”). We include our website address in this annual report on Form 10-K for informational purposes only and do not intend our website or the information contained in or connected to it to be a part of this report.

As of the date of this filing, the executive officers of the Company are as follows:

This section identifies certain risks and uncertainties that the Company faces. If the Company is unable to appropriately address these and other circumstances that could have a negative effect on its business, the Company’s business, financial condition and results of operation could be materially and adversely affected, which could also cause the price of the Company’s stock to decline. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Forward-looking Statements.”

The Company’s business, financial condition and results of operation could be adversely affected by the inability to enhance existing products or introduce new products to meet consumer preferences, including timely introductions of new consumer technologies.

Management believes that the Company’s future success depends upon its ability to predict and respond in a timely and effective manner to changes in the markets it serves. Consequently, the Company strives to introduce distinctive new products that anticipate changing consumer demands and capitalize upon emerging technologies. If the Company fails to introduce or suffers delays in introducing new products, misinterprets consumer preferences or fails to respond to changes in the marketplace, consumer demand for our products could decrease and our brand image could suffer. In addition, competitors may introduce new designs or technologies, undermining our products’ desirability. If any of the foregoing occurs, our business, financial condition and results of operations could be materially harmed.

Failure to maintain relationships with key customers and failure by key customers to purchase expected quantities of our products could have an adverse effect on our business.

Cobra products are distributed through a network of nearly 300 retailers and distributors in the United States and nearly 40 distributors in Europe and elsewhere around the world. PPL products are sold through a network of 1,500 retailers and distributors in Europe. The Company’s success is dependent upon the ability to retain an existing base of customers to sell the Company’s products. Loss of these customers means loss of product placement and, consequently, a possible reduction in sales volume.

Certain of the Company’s customers account for a large portion of the Company’s net sales. For instance, in 2013 sales to Wal-Mart were 11.0 percent of net sales and sales to DAS were 7.8 percent of net sales. We anticipate that Wal-Mart and DAS will continue to account for a significant portion of our net sales in the foreseeable future. Customers are not obligated by any firm, long-term purchase commitments for our products. As a result, customers may cancel purchase commitments or reduce or delay orders on relatively short notice. The loss of sales to, or a material delay in orders from, our key customers could materially harm our business, financial condition and results of operations.

In addition, certain of our distributors market competitors’ products. The loss, termination or failure of one or more of the distributors to effectively promote our products could affect the Company’s ability to bring its products to market and could reduce sales. Changes in the financial or business condition of these distributors and retailers could also affect the level of their purchases of our products which could materially harm our business, financial condition and results of operations.

If the Company is unable to obtain sufficient amounts of high quality products on a timely basis, customer needs may not be met and reduced sales may result.

Substantially all of our products are manufactured by third party manufacturers located outside of the United States, primarily in China, the Philippines, and South Korea. The ability to meet customers’ needs depends on the ability to maintain an uninterrupted supply of products from multiple third party manufacturers. The Company utilizes multiple manufacturers for its products whenever practical, however certain products are dependent on a single manufacturer. If any of our principal third party manufacturers experience production problems, lack of capacity or transportation disruptions, the business, financial condition and results of operations of the Company

could be adversely affected. Additionally, certain of our third party manufacturers serve other customers, a number of which have greater production requirements than we do. As a result, third party manufacturers could determine to prioritize production capacity for other customers or reduce or eliminate services for us on short notice. The extent to which changes in third party manufacturers would have an adverse effect on the Company’s business depends upon the timing of the changes, the product or products that the third party manufacturers produce and the volume of production.

Dependence on third party manufacturers for products subjects the Company to the risk of supplier failure and customer dissatisfaction with the quality or performance of such products. Quality or performance failures by third party manufacturers or changes in their financial or business condition, which affects their production, could disrupt our ability to supply quality products to customers and thereby materially harm our business, financial condition and results of operations.

Shortages of components and materials may disrupt the supply of products resulting in reduced or delayed sales.

The inability of third party manufacturers to obtain sufficient quantities of components and other materials used in our products could disrupt the supply of products or increase costs. Materials and components for some products may not be available in sufficient quantities to satisfy sales requirements as a result of supply shortages. Supply interruptions relating to products could result in lost sales opportunities which may harm our business, financial condition and results of operations.

The impact of higher commodity prices and increased labor costs overseas may reduce the profitability of our business.

Substantially all of our products are manufactured by third party manufacturers in China, the Philippines, and South Korea. Labor costs, particularly in China, are rising along with the costs of certain components used in our products due to higher labor costs and increases in the value of various currencies relative to the U.S. dollar. To the extent we are not able to increase the prices of our products to offset these increased labor and component costs, our profitability and cash flow may be adversely affected.

The Company competes with a large number of companies in the consumer electronics business, and if we are unable to compete effectively, our business, financial condition and results of operations may be materially affected.

The Company encounters strong competition from a number of companies in the consumer electronics business. Some of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial resources than we do. Competition is based principally on the introduction of new products and pricing. Competitors may have greater resources and operating and financial flexibility to introduce new products and withstand changes in pricing. To compete for sales, the Company may have to lower its prices or increase its investment in development of new technologies, which could reduce gross margin and adversely affect our business, financial condition and results of operations. There is no assurance that the Company will continue to compete effectively against existing and new competitors that may enter our markets.

A downturn in global economic and market conditions could negatively impact our business, financial condition and results of operations.

The consumer electronics products sold by the Company are generally discretionary purchases for consumers. Consumer spending is affected by many factors, including consumer confidence levels, interest rates, tax rates, employment levels and prospects and other general economic conditions. The recent economic slowdown and recession in the United States and worldwide economies decreased the demand for products and adversely affected sales, which could happen again if a similar downturn in global economic and market conditions occurs. Since economic and market conditions vary within the Company’s business segments, the Company’s future

performance by business segment will accordingly vary. In addition, deteriorating or weak economic conditions, or the forecast or perception of the same, may trigger changes in inventory levels at our retail customers, including a reduction in product offerings and out of stock situations, which may adversely affect our results of operations.

In addition, the cash surrender value of life insurance policies owned by the Company for the purpose of recovering the costs of deferred compensation programs for several current and former officers of the Company is affected by the market value of the underlying investments. Adverse market conditions may result in a decline in the cash surrender value of these life insurance policies, which would result in a non-cash expense that reduces our net income and would also reduce the collateral base available for our secured credit facility to the extent that such insurance policies are pledged as collateral.

International markets expose us to political and economic risks in foreign countries, as well as to risks relating to currency values and import/export policies.

Substantially all of our products are manufactured to our specifications and engineering designs by suppliers located primarily in China, the Philippines and South Korea. In addition, international sales, primarily in Canada and Europe (principally, the Netherlands, Russia, Sweden, Turkey, the Ukraine and the United Kingdom), represent a significant portion of our total sales. International activities pose risks not faced by companies that limit themselves to the United States market. These risks include:

Our revenues and purchases are predominately in U.S. dollars; however, a portion of our revenue is collectible in other currencies, principally euros and British pound sterling. The Company historically has negotiated substantially all of its purchases in U.S. dollars and occasionally uses forward contracts to purchase dollars at a fixed exchange rate to the British pound sterling or a fixed exchange rate to the euro. The Company considers opportunities to make purchases in other currencies to the extent that doing so would be advantageous in light of currency fluctuations involving the U.S. dollar and other currencies. As sales expand in international markets, customers may increasingly make payments in currencies other than U.S. dollars, which could have a considerable effect on margins. The Company occasionally hedges foreign currency fluctuations; however, it may not be able to fully hedge against the risks of such fluctuations and future exchange rate fluctuations could materially affect our operating results.

Our inability to indefinitely reinvest the unremitted earnings of our Irish subsidiary (CEEL) could materially adversely affect our results of operations and liquidity.

Our Irish subsidiary (CEEL) generates earnings that are not subject to United States income taxes so long as they are permanently invested in the Company’s operations outside the United States. Accounting principles stipulate

that unremitted earnings that are not permanently invested would become subject to deferred income taxes under United States tax law. We consider the following matters, among others, in evaluating our plans for indefinite reinvestment of CEEL’s earnings: (i) the forecasts, budgets and financial requirements of both Cobra and our other foreign subsidiaries, both for the long term and for the short term; (ii) the tax consequences of any decision to reinvest earnings of CEEL, including any changes in United States tax law relating to the treatment of these unremitted earnings; and (iii) any U.S. and foreign government programs or regulations relating to the repatriation of these unremitted earnings. If CEEL’s unremitted earnings are no longer permanently reinvested, we would need to make provision for deferred income taxes on these unremitted earnings, which could materially adversely affect our results of operations. Furthermore, if we initiate actions to repatriate these unremitted earnings and precipitate payments of U.S. income taxes, such payments could materially adversely affect our liquidity.

The Company is subject to various governmental regulations that could adversely affect its business.

The Company’s operations are subject to various federal, state and local regulatory requirements, including those relating to environmental, health and safety matters. The Company could become subject to liabilities as a result of a failure to comply with applicable laws and could incur substantial costs to comply with existing or new, more stringent regulations. In addition, the use of the Company’s products is also governed by a variety of federal, state and local regulations, including the regulations of the Federal Communications Commission, and changes in such regulations may affect demand for our products.

The Company’s business is subject to foreign governmental regulations in the countries in which it operates. From time to time, such governments may consider proposed legislation relating to the regulation of products that we sell. The loss of sales as a result of any such regulations and any similar legislation could materially harm our business, financial condition and results of operations.

Mobile navigation devices and other GPS-enabled products marketed in the United States depend upon a network of satellites maintained by the United States Department of Defense. If these satellites become inoperable or the policies of the United States regarding civilian use of the GPS system change, there would be a material effect on our business.

The global positioning system capabilities of our products marketed in the United States function through a network of satellites launched, operated and maintained by the United States Department of Defense. Should the satellites or underlying support systems become inoperable or if the United States government were to choose to degrade the quality of signals available to civilians, GPS products will not function as designed and there would likely be an adverse effect on demand for these products. Additionally, the Department of Defense does not currently charge users for access to the signals used by these devices and any move to do so could affect the economics of our business.

If we are unable to enforce or defend our rights with respect to intellectual property, our business may be adversely affected.

The Cobra trademark is a key factor in the marketing of our products. Trademark protection with respect to the Cobra trademark in the United States could be subject to challenge in some product areas. In addition, the Company may not be able to obtain trademark protection for the Cobra trademark in each country in which it sells products. If we are unable to use the Cobra trademark with respect to some products or in some markets, our results of operations could be adversely affected.

The Snooper trademark is a well-known trademark in the United Kingdom and Europe and contributes to the success of PPL. If we are unable to use the Snooper trademark in the United Kingdom or in other areas where PPL is expanding its business, our results of operations could be adversely affected.

The Company maintains patents for certain of its products and licenses patents for use in certain of its products, particularly radar detection and navigation products. If the patents are challenged, or third parties claim that products infringe upon the intellectual property rights of others, the Company may incur significant costs to

defend its intellectual property rights and may not ultimately be successful. If any of our products are determined to have infringed upon the intellectual property rights of others, the Company may face substantial damages as well as injunctive relief which could effectively block our ability to market these products in the United States and abroad. Such a judgment could materially harm our business, financial condition and results of operations.

We may be required to record impairment charges for intangible assets in future periods.

The carrying value of intangible assets totaled $7.4 million at December 31, 2013. We test for impairment whenever evidence of impairment exists. Impairment charges, which will reduce net income and may have material adverse effect on financial results, will be recorded when warranted by our financial performance or market conditions.

Our profitability and financial condition depend on our ability to collect on amounts due from customers.

We have significant accounts receivable due from customers. It is not uncommon for a customer to suspend payments of amounts due if the customer experiences operational difficulties. A customer experiencing severe operational difficulties may file for bankruptcy. In these cases, we may be unable to collect on that customer’s outstanding accounts receivable balance. The failure of our customers to pay amounts due could negatively affect our business, financial condition and results of operations.

Our secured credit facility contains restrictive covenants and our failure to comply with those restrictions could result in a default, which could have a material adverse effect on our business, financial condition and results of operations.

We are party to a Credit Agreement dated July 16, 2010 (the “Credit Agreement”) among the Company, BMO Harris Bank N.A., as administrative agent, and the lenders party thereto from time to time. The Credit Agreement provides for a $35.0 million secured credit facility, which is our principal source of available liquidity, other than cash generated by operations. As of December 31, 2013, we had $20.7 million of outstanding indebtedness under our credit facility. The Credit Agreement contains customary covenants, including but not limited to financial covenants requiring the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of 1.10 to 1.00 for the periods set forth in the Credit Agreement and annual capital expenditures cannot exceed $4.0 million. The Credit Agreement contains a number of significant restrictions that limit our ability to, among other things, do the following:

A breach of the covenants contained in the Credit Agreement could result in any outstanding indebtedness under the credit facility becoming immediately due and payable and in our inability to borrow additional funds under the credit facility, either of which could adversely affect our business, financial condition and results of operations.

Our inability to secure credit that we may require in the future may negatively impact liquidity.

In the current credit environment it is increasingly difficult for businesses to secure financing. If we require additional financing in the future, we may be unable to secure financing or may only be able to secure financing on terms which could have a material adverse effect on our business, financial condition and results of operations.

Economic conditions may limit the access to credit needed by our customers and suppliers.

Our business may be adversely impacted by the availability of credit and consumer spending rates. The recent deterioration of national and global economic conditions and its impact on the credit environment could

materially adversely impact our business, financial condition and results of operations. The financial stability of our customers or suppliers could also be compromised, which could result in additional bad debts for the Company or non-performance by suppliers. In addition, uncertainty about current global economic conditions and the higher costs or unavailability of credit may cause consumers of our products to postpone spending in response to tighter credit, negative financial news and/or declines in income or asset values. In some cases our customers or suppliers may be unable to stay in business. This could have a material adverse impact on the demand for our products and on our business, financial condition and operating results.

Sales of our products are subject to seasonal variations and, as a result, our quarterly operating results may fluctuate and may not be a reliable indicator of our future performance.

Historically, our sales in the last half of the year are significantly greater than in the first half reflecting purchases by retailers and distributors for the various promotional activities that begin in the third quarter and culminate with the holiday selling season.

Consequently, our results of operations during any particular quarter should not be relied upon as an indication of our results for a full year or any other quarter. In addition, if investors inaccurately estimate our results of operations in one or more future quarters and our operating results fall below expectations, our stock price may decline.

The price of our common stock may be subject to sudden decreases due to the inherent volatility of operating and competitive factors.

The market price of the Company’s common stock may be highly volatile and subject to wide fluctuations in response to various factors. We have experienced extreme price and volume fluctuations with respect to the Company’s common stock. The market price of our common stock is dependent upon many different factors, including:

These factors may adversely affect the trading price of our common stock, regardless of our actual operating performance, and could prevent our stockholders from selling their common stock at or above the price at which they purchased it. In addition, the stock markets from time to time experience extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of companies. In the past, some stockholders have brought securities class action lawsuits against companies following periods of volatility in the market price of their securities. We may in the future be the target of similar litigation. Securities litigation, regardless of whether we are ultimately successful, could result in substantial costs and divert management’s attention and resources.

The loss of key members of our management and technical team may adversely affect our business.

The Company’s success depends on the performance of key management, sales, technical and other critical personnel and our ability to continue to attract, motivate and retain management and highly qualified key personnel. Failure to do so could disrupt our operations, adversely affect customer relationships and impair our ability to successfully implement and complete Company initiatives. The loss of the services of any key

management or technical personnel could make it more difficult to successfully pursue our business goals. In addition, the Company may not be as successful as its competitors at recruiting, assimilating and retaining key personnel.

Our performance depends on favorable relations with our employees and our ability to attract and retain them. Any deterioration of those relations, increase in labor costs or inability to attract and retain employees could adversely affect our business, financial condition and results of operations.

Any significant deterioration in employee relations, increases in labor costs or shortages of labor at any facility could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2013, none of our employees were covered by collective bargaining agreements. A slowdown or work stoppage at one facility that lasts for a significant period of time could cause lost sales and increased costs and could adversely affect the Company’s ability to meet customers’ needs.

Business could be adversely affected by a disruption to our Chicago, Illinois and Runcorn, UK facilities.

Our Chicago, Illinois facility accounts for 81 percent of the total space utilized by the Company and 92 percent of the space utilized by the Cobra segment. The Runcorn, UK facility accounts for 12 percent of the total space utilized by the Company and 100 percent of the space utilized by the PPL segment. Any disruption to our operations at either of these facilities could adversely impact our performance and impair our ability to deliver products and services to customers on a timely basis. Operations at the Chicago, Illinois and Runcorn, UK facilities could be disrupted in the event of:

Any such disruption could damage the Company’s reputation and cause customers to cease purchasing products from the Company. The Company could be subject to claims or litigation with respect to these losses. The Company’s property and business interruption insurance may not adequately compensate us for all of the losses that we may incur as a result of any such disruption.

Damage to or disruptions in the operations of our computer infrastructure and software systems could harm our business, financial condition and results of operations.

The unavailability of any of our information management systems for any significant period of time could have a material adverse effect on our operations. In particular, our ability to deliver products to our customers when needed, collect receivables and manage inventory levels successfully largely depends on the efficient operation of our computer hardware and software systems. Our information management systems are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to computer viruses, security breaches, energy blackouts, natural disasters, terrorism, war and telecommunication failures. There also may be system or network disruptions if new or upgraded business management systems are defective or are not installed properly. Any system failure or security breach could negatively impact our business and results of operations. In addition, we may incur additional costs to remedy the damages caused by these system failures or security breaches.

Our internal controls over financial reporting may not be considered effective, which could result in possible regulatory sanctions and a decline in our stock price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to furnish annually a report on our internal controls over financial reporting. The internal control report must contain an assessment by our management of the effectiveness of our internal controls over financial reporting (including the disclosure of any material weakness).

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. In order for management to evaluate our internal controls, the Company must regularly review and document its internal control processes and procedures and test such controls. Ultimately, the Company could conclude that our internal control over financial reporting may not be effective if, among other things:

Due to the number of controls to be examined, the complexity of the project, and the subjectivity involved in determining the effectiveness of controls, we cannot be certain that, in the future, all of our controls will be considered effective by management.

If, as required by the Sarbanes-Oxley Act, the Company is unable to assert that its internal control over financial reporting is effective, the Company could be subject to regulatory sanctions or lose investor confidence in the accuracy and completeness of the financial reports, either of which could have an adverse effect on the market price for the Company’s common stock.

Acquisitions and strategic investments may divert our resources and management attention; results may fall short of expectations.

From time to time, we evaluate potential acquisitions and investments in technologies and product lines that may strategically fit our business objectives. If we are unable to successfully integrate and develop acquired businesses, we could fail to achieve anticipated synergies and cost savings, including expected increases in revenues and operating results, any of which could materially and adversely affect our financial results. Acquisitions in particular involve numerous risks, including difficulties in the integration and assimilation of the operations, technologies, products and personnel of an acquired business, diversion of management’s attention from other business concerns, increased expenses associated with the acquisition, and potential loss of key employees or customers of any acquired business. We cannot assure you that our acquisitions will be successful and will not adversely affect our business, results of operations and financial condition.

Climate change could have a material adverse effect on the Company’s business.

Global warming could result in a significant reduction in demand for certain of the Company’s products, such as radar detectors and Citizens Band radios, as surface transportation is constrained by flooding of coastal areas making roads and highways impassable.

The Company’s inability to identify the origin of conflict minerals in its products could have a material adverse effect on the Company’s business.

Most of the Company’s product lines include tantalum, tungsten, tin and other materials which are considered to be “conflict minerals” under the SEC’s recently-adopted rules. Those rules require public reporting companies to provide disclosure regarding the use of conflict minerals sourced from the Democratic Republic of the Congo (“DRC”) and adjoining countries in the manufacture of products. We are currently working with our vendors to determine the sourcing of all product components and will endeavor, to the extent practical, to avoid the utilization of conflict minerals sourced from the DRC and adjoining countries in our products. Until we complete our sourcing review with all of our vendors, we cannot provide complete assurances regarding the country of origin for the components used in our products. If we cannot guarantee that all products exclude conflict minerals sourced from the DRC, certain of our customers may discontinue, or materially reduce, purchases of the Company’s products, which could result in a material adverse effect on our results of operations and financial condition.

The Company’s office and warehouse facilities in the United States, Hong Kong and Europe are as follows:

The Company is subject to various unresolved legal actions and proceedings, which arise in the normal course of its business. None of these actions is expected to have a material adverse effect on the Company’s financial condition and results of operations.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock trades on The NASDAQ Stock Market under the symbol COBR. As of March 7, 2014, the Company had approximately 450 shareholders of record and approximately 750 shareholders for whom securities firms acted as nominees. The Company’s common stock is the only class of equity securities outstanding.

The Company’s credit facility permits the Company to pay cash dividends subject to the limitations set forth therein.

Refer to Item 12 of Part III of this Annual Report for information with respect to compensation plans under which equity securities of the Company are authorized for issuance.

The following Performance Graph compares the yearly percentage change in the Company’s cumulative total shareholder return on the Company’s Common Stock for the five-year period December 31, 2008 to December 31, 2013, with the percentage change in the cumulative total return for the Russell 2000 Index and a peer group of companies selected by the Company.

The peer group consists of Emerson Radio Corporation, Koss Corporation and Voxx International (formerly Audiovox) Corporation. In selecting companies for the peer group, the Company focused on publicly traded companies that design and market electronics products, which have characteristics similar to that of the Company’s in terms of one or more of the following: type of product, end market, distribution channels, sourcing or sales volume. The returns of each of the companies in the peer group have been weighted according to their respective stock market capitalizations at the beginning of each period for which a return is indicated.

The following table sets forth the Company’s selected financial data for each of the past five years. Read this information together with the consolidated financial statements and notes to those statements included in Item 8 of this Annual Report on Form 10-K and the information set forth under the caption Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this Annual Report on Form 10-K.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis should be read in conjunction with the Company’s audited Consolidated Financial Statements and Notes thereto included elsewhere in this Form 10-K, and any forward-looking statements contained herein or elsewhere in this Form 10-K involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those presented under Risk Factors in Item 1A in this Form 10-K and elsewhere herein.

The Company had a net loss of $1.1 million, or $.17 per share, for the year ending December 31, 2013 compared to net earnings of $3.2 million, or $.48 per share, for the year ending December 31, 2012.

The following summarizes the changes in the net earnings reported for 2013 as compared to 2012:

Operating results for 2013 decreased from the prior year, mainly due to lower sales and lower gross margins. The following table reconciles net earnings (loss) to EBITDA and EBITDA As Defined for the years ended December 31, 2013 and 2012:

EBITDA represents earnings before interest, taxes, depreciation and amortization. EBITDA As Defined represents EBITDA adjusted to conform with the EBITDA measurement for compliance with the financial covenants of the Company’s lenders. The Company believes EBITDA is a useful performance indicator and is frequently used by management, securities analysts and investors to judge operating performance between time periods and among other companies. The Company uses EBITDA As Defined to assess operating performance and ensure compliance with financial covenants.

EBITDA and EBITDA As Defined are Non-GAAP performance indicators that should be used in conjunction with U. S. Generally Accepted Accounting Principles (“GAAP”) performance measurements such as net sales, operating profit and net income to evaluate the Company’s operating performance. EBITDA and EBITDA As Defined are not alternatives to net income or cash flow from operations determined in accordance with GAAP. Furthermore, EBITDA and EBITDA As Defined may not be comparable to the calculation of similarly titled measures reported by other companies.

The following table contains sales and pre-tax income after eliminating intercompany accounts by business segment for the years ended December 31, 2013 and 2012.

Cobra net sales in 2013 decreased $7.7 million, or 7.3 percent, to $97.3 million compared to $105.0 million in 2012. Domestic sales were down 9.3 percent from the prior year primarily due to lower sales of Truck Navigation, Citizens Band radios, inverters and detectors, which fell a combined 17.2 percent, but were partially offset by higher sales of two-way radio and marine products and the introduction of Dash Cam products in the third quarter of 2013. The increase in two-way radio sales reflected an additional SKU at a major retailer and increased sales to several major vendors. Higher sales of marine product were mainly due to two new models for 2013 and an improved boaters’ market. Lower sales of Citizens Band radios, inverters and detectors reflected the lower store traffic experienced by travel centers and retailers. Truck Navigation sales were adversely affected by the lower store traffic and sell-through at the travel centers, as well as increased competition. Furthermore, Citizens Band radio and Truck Navigation sales for 2013 were down from last year due to the initial load-in of sales for the new 2012 models. International sales increased 1.4 percent, mainly due to the new Citizens Band radio, detector and marine radio products sold in Europe and South America.

Gross profit in 2013 decreased by $3.7 million, or 12.7 percent, to $25.6 million and gross margin declined to 26.4 percent in 2013 from 28.0 percent in 2012. The margin decline was mainly due to an unfavorable product mix which represented lower sales of Citizens Band radio and Truck Navigation products. In addition, increased competition for both the Truck Navigation products sold domestically and the detection products sold in Eastern Europe resulted in some lower selling prices and margins for those products.

Selling, general and administrative expense for 2013 increased $870,000, or 3.3 percent, to $27.2 million. As a percentage of net sales, selling, general and administrative expense was 28.0 percent for 2013 compared to 25.1 percent for 2012. Consistent with lower sales, variable selling expenses, mainly market development funds for customer advertising and sales promotions, declined $356,000 or 7.4 percent in 2013. Fixed selling expenses decreased $177,000, or 2.4 percent, compared to 2012 due to lower trade show and travel expenses as the Company continued its efforts to control discretionary expenses. General and administrative expenses for 2013 increased $1.4 million, or 9.9 percent, from 2012 mainly due to the expenses associated with the Fleming patent litigation. Excluding the increase in expenses for the Fleming patent litigation, there was a decrease in general administrative expenses which reflected a decrease in the management incentive expense for 2013 and the Company’s expense reduction efforts.

Interest expense decreased to $778,000 for 2013 as compared to $1.0 million for 2012. The decrease in interest expense was mainly due to the lower average interest rate on the Company’s borrowings in 2013 as compared to 2012.

Other income for 2013 amounted to $1.4 million compared to other income of $1.0 million in 2012. The increase from 2012 was due to an $862,000 increase in the CSV gain that was partially offset by an unfavorable foreign exchange variance of $368,000 and a decrease in vendor royalty income of $146,000. The results for 2012 included a $320,000 exchange gain on CEEL’s repayment of its long-term loan to Cobra U.S.

As a result of the above, Cobra segment pre-tax earnings decreased $4.0 million to a loss of $1.0 million for 2013 compared to pre-tax earnings of $3.0 million for 2012.

PPL net sales for 2013 approximated the 2012 results and totaled $13.9 million. Excluding foreign exchange, net sales in 2013 increased 1.0 percent from the prior year as the increased sales of Satellite Navigation and GPS products were partially offset by a decrease in download revenues.

Gross profit for 2013 decreased $514,000 and totaled $4.7 million. Gross margin was 33.4 percent for 2013 and was 37.0 percent for 2012. The decrease in gross margin for 2013 was primarily due to unfavorable product mix, promotions for Satellite Navigation and golf products, and lower download revenues which have a 100% margin.

Selling, general and administrative expenses for 2013 decreased $118,000, or 2.4 percent, to $4.8 million and, as a percentage of net sales, were 34.2 percent in 2013 and 35.0 percent in 2012. The decrease from 2012 was due primarily to lower promotional and travel spending.

Other expense for 2013 was $72,000 compared to other income of $28,000 in 2012, mainly due to a foreign exchange loss in 2013 compared to a foreign exchange gain in 2012.

As a result of the above, the PPL segment had a pre-tax loss of $188,000 in 2013 compared to a pre-tax income of $308,000 in 2012.

For the year ended December 31, 2013, the Company reported a $57,000 tax benefit compared to tax expense of $108,000 for the year ended December 31, 2012. The $57,000 tax benefit was comprised of a $9,000 expense in the U.S., mainly state taxes, a $180,000 expense in Ireland and a $246,000 tax benefit in the UK. The Irish tax expense reflected the pre-tax earnings reported for the current year. The UK tax benefit was due to return to provision adjustments for the 2012 tax return, the prospective rate reduction to 20 percent for deferred taxes, and book to tax timing differences for fixed assets and intangible assets. The $108,000 tax expense reported for 2012 was comprised of an $86,000 expense in the U.S., a $338,000 expense in Ireland and a $316,000 tax benefit in the UK.

The Company deems the unremitted earnings of its Irish subsidiary (CEEL) to be permanently invested and thus not subject to United States income taxes. Accounting principles stipulate that unremitted earnings that are not permanently invested would become subject to deferred income taxes under United States tax law.

The Company reviews the need for a valuation allowance in each tax jurisdiction on a quarterly basis, analyzing all negative and positive evidence. The U.S. operations were in a loss position for the year ended December 31, 2013 and in a cumulative loss position for the thirty-six month period ended December 31, 2013. Accordingly, based on the current year and cumulative loss in the U.S. and other relevant information, the Company concluded it did not meet the more likely than not criteria to justify the reversal of the valuation allowance at December 31, 2013. The valuation allowance for the U.S. operations totaled $10.3 million at December 31, 2013. The Company will continue to monitor the need for a valuation allowance throughout 2014, pursuant to the guidance of U.S. accounting principles. Should the Company demonstrate a favorable and sustainable earnings trend for its historic and projected results for its U.S. operations, a reduction in the valuation allowance and a corresponding income tax benefit may result.

The following table contains sales and pre-tax income (loss) after eliminating intercompany accounts by business segment for the years ended December 31, 2012 and 2011.

Cobra net sales in 2012 decreased $2.9 million, or 2.6 percent, to $105.0 million compared to $107.8 million in 2011. The decrease was attributable to a 4.6 percent decline in domestic net sales, mainly driven by lower net sales of Citizens Band radios, Truck Navigation products and GMRS two-way radios, which fell a combined 10.6 percent, but were partially offset by sales growth in other categories, including Detection and Phone products. Lower Citizens Band radio net sales were due to several factors, including sluggish sales at travel centers as discretionary spending by professional drivers fell due to higher fuel prices and a softening in truck tonnage shipments, the leveling of the demand for the popular 29 LX, introduced in early 2011, and a large sale of a new limited edition model in the prior year’s period that was not repeated in the current year’s period. The effect of these was partially offset by the introduction of two new models, the 25 LX and the 29 LX BT, which feature Bluetooth^® wireless technology connectivity for hands-free operation to comply with hands-free legislation. Net sales of Truck Navigation products were lower principally because of declines in overall average selling prices resulting from increased competition, more spending for customer programs to help accelerate sales and a large return of unsold units of two older models in the third quarter of 2012, the sell through of which slowed considerably in the market-place due to sluggish sales at travel centers and the impact of the introduction of two new models, the 6000 PRO HD and the 8000 PRO HD, in the second quarter of 2012. GMRS two-way radio net sales were lower because placement at a major retailer declined by one model from 2011. Domestic Detection net sales increased as a result of the new iRadar and Vedetta models, while Phone products net sales increased as a result of the new Cobra Tag Universal and new Bluetooth headsets for the professional driver. Partially offsetting some of the domestic net sales decline was an increase in European net sales, up 14.3 percent, resulting from higher sales into Western and Eastern Europe of radar detectors and marine radios.

Gross profit in 2012 decreased by $1.5 million, or 5.0 percent, to $29.4 million, while gross margin declined to 28.0 percent in 2012 from 28.7 percent in 2011. The decline was mainly due to a decrease in domestic Trucker Navigation gross margin because of the negative effect of increased competition on overall average selling prices and higher spending for customer pricing programs to help accelerate sales noted above, as well as unfavorable product mix due to the sale of more 5-inch screen models, which have an overall lower gross margin than 7-inch screen models. This decrease was offset in part by improved gross margins for domestic Citizens Band radios and GMRS two-way radios, driven by new products, as well as the favorable effect of an increase in world-wide net sales of Detection, which has a higher gross margin.

Selling, general and administrative expense in 2012 was $26.4 million, the same as last year, as a decline in variable selling expenses was offset by an increase in fixed expenses. As a percentage of net sales, selling, general and administrative expense was 25.1 percent for 2012 compared to 24.5 percent for 2011. Variable selling expenses declined $808,000 in 2012 due to a more favorable customer mix and a shift in funds provided by Cobra to customers for programs such as advertising (the costs of which are reflected in variable selling expense) to customer programs that management has determined to be more effective in helping to drive sell through (the costs of which are reflected as a reduction of revenue). Fixed expenses increased $759,000 compared to 2011 primarily

because of higher engineering and marketing expenses, up a combined $997,000, mainly for the development and support of new products, as well as increased legal fees, principally relating to trademark work and patent litigation matters. Partially offsetting these higher expenses were declines in management incentive and profit sharing expense totaling $618,000, due to lower consolidated operating income, and lower bad debt expense totaling $533,000, due to the insolvency of a large customer in 2011.

Interest expense decreased to $1.0 million for 2012 compared to $1.1 million for 2011 and was mainly due to lower average bank debt outstanding for the current year and a decline in the interest rate in the Credit Agreement that was amended at the beginning of December 2012.

Other income for 2012 amounted to $1.0 million, compared to other expense of $264,000 in 2011, a favorable swing of $1.3 million. Other income in the current year was due to $535,000 of CSV gains (compared to $152,000 of CSV losses in the prior year) and a $320,000 exchange gain on CEEL’s repayment of its long-term loan to Cobra U.S.

As a result of the above, Cobra segment pre-tax earnings decreased $172,000 to $3.0 million for 2012 compared to pre-tax earnings of $3.1 million for 2011.

PPL net sales decreased $1.5 million, or 9.7 percent, to $14.0 million in 2012 compared to 2011. The decrease resulted mainly from a decline in satellite navigation sales, which fell 12.9 percent, most of which occurred in the fourth quarter of 2012 because of significantly lower export sales to Western Europe, principally driven by the weak economy and increased competition from two large competitors. Also contributing to the sales decrease was a decline in Outdoor Leisure product sales, primarily due to lower sales of golf GPS range-finder units, because of the weak Western European economy and one of the wettest UK summers on record, which reduced demand for these products. Partially offsetting these declines were higher sales of AVN units and download fees.

Gross profit was $5.2 million for both 2012 and 2011, resulting in gross margins of 37.0 percent and 33.6 percent, respectively. The increase in gross margin in 2012 was primarily due to higher download fees, which have a 100 percent gross margin, and lower amortization expense attributable to certain fully amortized acquisition related intangible assets.

Selling, general and administrative expenses decreased $68,000, or 1.4 percent, to $4.9 million from $5.0 million in 2011 and, as a percentage of net sales, were 35.0 percent in 2012 and 32.1 percent in 2011. The decrease was due primarily to lower management incentive expense and a decrease in advertising and promotional expenses because of the lower net sales, offset in part by an additional headcount to support product development.

Other income for 2012 was $28,000 compared to other expense of $123,000 in 2011, principally because of foreign exchange gains in 2012 compared to foreign exchange losses in 2011.

As a result of the above, the PPL segment had pre-tax earnings of $308,000 in 2012 compared to a pre-tax income of $114,000 in 2011.

For the year ended December 31, 2012, the Company reported $108,000 of tax expense compared to tax expense of $169,000 for the year ended December 31, 2011. The $108,000 of tax expense was comprised of a $86,000 expense in the U.S., a $338,000 expense in Ireland and a $316,000 tax benefit in the UK. The U.S. tax expense was mainly for state income taxes, as the utilization of net operating loss (“NOL”) carry forwards are delayed in certain states. The Irish tax expense reflected the pre-tax earnings reported for the current year. The UK tax benefit was due to return to provision adjustments for the 2011 tax return, the prospective rate reduction to 23 percent for deferred taxes, and book to tax timing differences for fixed assets and intangible assets. The $169,000 tax benefit reported for 2011 was comprised of a $201,000 expense in the U.S., a $360,000 expense in Ireland and a $392,000 tax benefit in the UK.

The Company reviews the need for a valuation allowance in each tax jurisdiction on a quarterly basis, analyzing all negative and positive evidence. The U.S. operations were in a small cumulative income position for the thirty-six month period ending December 31, 2012, which, while objective positive evidence, is not conclusive and must be further evaluated by considering any other positive or negative objective evidence, such as the trend in earnings, as well as any positive or negative subjective evidence existing at December 31, 2012. After this evaluation, the Company concluded that the net weight of evidence was negative, and therefore the Company did not meet the more likely than not criteria for concluding that the valuation allowance for its U.S. operations, which totaled $8.7 million at December 31, 2012 (compared to $9.0 million at December 31, 2011), was no longer required in part or total. The Company will continue to monitor the need for a valuation allowance throughout 2013, pursuant to the guidance of U.S. accounting principles.

The Company’s amended Credit Agreement provides for a $35.0 million revolving credit facility expiring in July 2016. Refer to Note 6 Financing Arrangements to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information.

The Credit Agreement was amended on August 8, 2013 to exclude the Fleming litigation and settlement expense from the covenant calculations and to increase the applicable margin used to determine the interest rate for borrowings under the agreement. On November 11, 2013 the Credit Agreement was amended to waive the non-compliance with the fixed charge covenant ratio for the third quarter of 2013, increase the applicable margin under the Credit Agreement and add a $100,000 interest reserve. The Company did not meet the required minimum fixed charge coverage ratio of 1.10 to 1.0 for the fourth quarter of 2013. On March 6, 2014, the Credit Agreement was amended to waive the non-compliance with the fixed charge coverage ratio for the fourth quarter of 2013, to replace the interest reserve with a $1.5 million availability block which applies to the borrowing base under the Credit Agreement and to add a 2 percent pricing fee on a portion of the amount of borrowings outstanding under the Credit Agreement. Absent a waiver from lenders, a failure to comply with the covenants in the Credit Agreement could result in any outstanding indebtedness under the Credit Agreement becoming immediately due and payable and the inability to borrow additional funds under the Credit Agreement.

On March 11, 2014, the Company received commitment letters, which are subject to definitive documentation, from BMO Harris Bank N.A., as administrative agent, and First Midwest Bank for a new $35 million senior secured revolving credit facility, subject to borrowing base limitations, which replaces the existing Credit Agreement. The proposed credit facility provides a minimum covenant based on a twelve-month trailing EBITDA As Defined for the first, second and third quarters of 2014 and a fixed charge coverage ratio of 1.10 to 1.00 for the fourth quarter of 2014 and thereafter, in addition to a lower applicable margin.

Working capital requirements are seasonal, with demand for working capital being higher later in the year as customers begin purchasing for the holiday selling season. The Company believes that cash generated from operations and from borrowings under its Credit Agreement will be sufficient in 2014 to fund its working capital needs. At December 31, 2013, the Company had interest-bearing debt outstanding of $20.7 million and availability was approximately $8.4 million under the revolving credit line based on the borrowing base formula. Additionally, the Company’s Credit Agreement permits an “overadvance” of up to $1.0 million dollars for sixty consecutive days.

Net cash flows provided by operating activities for the year ended December 31, 2013 totaled $3.5 million compared to the $1.5 million of net cash provided by operating activities in 2012. Significant net cash inflows from operations and non-cash add-backs included a net loss of $1.1 million, depreciation and amortization totaling $3.1 million, a decrease in accounts receivables totaling $1.7 million and a decrease in inventory of $2.5 million. These cash inflows were partially offset by an increase in other assets of $1.0 million and a decrease in payables of $654,000.

Approximately $2.2 million of the depreciation and amortization related to the Cobra segment in 2013, including $732,000 of intangible asset amortization, $1.1 million of fixed asset depreciation, and $424,000 of prepaid asset amortization, mainly for packaging and outside design. For the PPL segment, depreciation and amortization amounted to $898,000 in 2013, including $670,000 of amortization for intangibles and other assets, which resulted from the allocation of the purchase price, and $228,000 of fixed asset depreciation. The decrease in accounts receivables was due to lower sales in the fourth quarter of 2013 compared to 2012. The decrease in inventory was mainly attributable to a reduction of in-transit inventory and management’s decision to reduce inventory levels. The increase in other assets reflects vendor prepayments and prepaid taxes and the decrease in payables reflects lower income taxes and a minimal management incentive accrual for 2013.

Cash used in investing activities totaled $2.7 million in 2013. Capital expenditures, mainly tooling, building improvements and office equipment, totaled $1.4 million, life insurance premiums totaled $282,000 and increases in intangible assets, primarily trademarks, patents and software development for new products, totaled $1.0 million.

Net cash provided by financing activities in 2013 totaled $347,000 mainly due to additional bank borrowings.

The payments for the Company’s contractual commitments at December 31, 2013 were as follows:

The Company’s significant accounting policies are discussed in the notes to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. The application of certain of these policies requires significant judgments or a historical based estimation process that can affect the results of operations and financial position of the Company as well as the related footnote disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable. If actual amounts ultimately differ from previous estimates, the revisions are included in the Company’s results of operations for the period in which the actual amounts become known.

Critical accounting policies generally consist of those that are reflective of significant judgments and uncertainties and could potentially result in materially different results under different assumptions. The accounting policies and estimates that may have a significant impact upon the operating results, financial position and footnote disclosures of the Company are as follows:

Revenue Recognition. Revenue from the sale of goods is recognized at the time of shipment, except for revenue from sales of products to certain customers whose contractual terms specify FOB destination. Revenue from sales of products to these customers is recognized at the estimated time of receipt by the customer when title and risk of loss would pass to the customer. Obligations for sales returns and allowances and product warranties are recognized at the time of sale on an accrual basis as described in the policies for Sales Returns Reserve. The Company bundles AURA database subscriptions with certain detection and navigation products and also bundles map updates with certain navigation products. Those bundled products are sold to customers in transactions accounted for as multiple element arrangements. The revenue associated with the sale of the AURA database and map updates is deferred and recognized into income over the applicable subscription period, while the revenue associated with the detection and navigation products is recognized at the date of delivery in accordance with shipping terms.

Sales Returns Reserve. The Company has a policy that allows its customers to return product that was returned to them by their customers. The reserve reflects the sales, cost of sales and gross profit impact of expected returns and related stock adjustments, as well as reduction in accounts receivable and increases in inventory for the amount of expected returns. The amount of the reserve is determined by multiplying the sales and cost of sales by product category for the current quarter by historical return rates adjusted for any known changes in key variables affecting these return rates. Thus, judgments must be made regarding whether current return rates will approximate anticipated return rates. This reserve will vary based on the changes in sales, gross margin and historical, as well as anticipated, return rates from quarter to quarter.

Warranty Reserve. The Company provides a warranty for its products and also allows its customers to return product that has been returned by their customers. Consequently, the Company maintains a warranty reserve, which reflects historical return rates by product category multiplied by the most recent six months of unit sales and the unit standard cost of each model. The Company uses the most recent six months of unit sales in its estimate, as historical experience indicates that most returns will occur within six months of the Company’s original sale date. Therefore, judgments must be made based on historical return rates and how the returned product will be disposed of, by either liquidation or return to vendors for credit on new purchases. The amount of the reserve reflects the estimated quantity of future returns and the expected return costs. The expected return cost is based on the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve may vary based upon the level of sales and changes in historical return rates from quarter to quarter as well as estimated costs of disposal, either liquidation prices or the credit given by vendors.

Liquidation Reserve. The Company maintains a liquidation reserve representing the write-down of a returned product to its net realizable value. Returned inventory is either sold to various liquidators or returned to vendors for partial credit against similar, new models; this decision depends upon the estimated future demand for the models. Judgments are made as to whether various models are to be liquidated or returned to the vendor, taking into consideration the liquidation prices expected to be received and the amount of vendor

credit. The amount of the reserve reflects the quantity of returned products on-hand and the expected return costs. The expected return cost is the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve can fluctuate significantly from quarter to quarter depending upon quantities of returned inventory on hand and the estimated liquidation price or vendor credit per unit.

Net Realizable Value Reserve. The Company maintains a net realizable value reserve to write-down below cost, as necessary, certain inventory not previously sold to customers where it is determined that net realizable value is less than cost. Thus, judgments must be made about which slow-moving, excess or non-current models are to be included in the reserve and the estimated net realizable value of such model (i.e., the per unit price that it is estimated can be received in the marketplace if the model was sold). This reserve will vary depending upon the specific models selected, the estimated net realizable value for each model and quantities of each model that are determined will be sold below cost from quarter to quarter.

Advertising and Sales Promotion Accrual. The advertising and sales promotion accrual reflects amounts provided to retailers and distributors for advertising and sales promotions. Customer programs, generally agreed to at the beginning of each year, are mainly variable programs dependent on sales and may be revised during the course of the year, based upon a customer’s projected sales and other factors, such as new, or changes to existing, promotional programs. Accruals are made monthly for each customer by multiplying the customer’s estimated program accrual percentage by the customer’s actual sales. Therefore, this accrual will vary quarter to quarter depending on a given quarter’s sales and the sales mix of customers. In addition, should a customer significantly exceed or fall short of its planned program sales, negotiate changes to the term of the existing programs or add new ones, adjustments may need to be made to the customer’s estimated program accrual percentage due to certain minimum and/or maximum sales thresholds in such customer’s programs. Periodic adjustments may also be necessary for unused customer funds. Customer programs are accounted for as either a reduction of revenue or an operating expense.

Deferred Compensation. Obligations under the deferred compensation plans which are non-qualified defined benefit plans and annual deferred compensation expense are determined by a number of assumptions. Key assumptions in the determination of obligations under the deferred compensation plans and annual deferred compensation expense include the discount rate and anticipated compensation for each individual covered by the plans, which in part is dependent upon the anticipated future profitability of the Company. The discount rate in 2013 and 2012 for the defined benefit plans was 7.0 percent. The compensation increase assumptions are based on historical experience and anticipated future performance. The Company maintains life insurance policies for certain current and former executives to provide funding for future obligations.

Software Related to Products to be Sold. The Company purchases and/or incurs costs in connection with the development of software to be used in products that the Company intends to sell. Coding and related costs incurred after technological feasibility of the software has been established and a working model of the product developed are capitalized and deferred as intangible assets. Capitalized costs are charged to earnings based on the ratio of actual product sales during the reporting period to expected product sales over the estimated product life cycle or on a straight-line basis, whichever is greater. Software related intangible assets are reviewed at each balance sheet date for possible impairment. If such review indicates that the carrying amount of these assets may not be recoverable, the carrying amount is reduced to the estimated fair value.

Intangible Assets. The Company evaluates intangible assets for impairment on an annual basis or if impairment indicators exist. If impairment indicators exist for an amortizable intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset. If the projection of undiscounted future cash flows is in excess of the carrying value of the intangible assets, no impairment charge is recorded. If the projection of undiscounted cash flows is less than the carrying value of the intangible asset, an impairment charge is recorded to reduce the intangible asset to its fair value.

Income Taxes. Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the enacted tax laws for each applicable tax jurisdiction. The deferred income tax provisions and benefits are based on changes to the assets

or liabilities from year to year and the effect of enacted tax rate changes. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax planning and strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the more likely than not criteria. Due to operating results, management concluded the full realization of the deferred tax assets within a reasonable time horizon did not satisfy the more likely than not realization criteria and the Company established a full deferred tax valuation allowance for its U.S. operation. The valuation allowance is a non-cash charge that does not preclude the Company from fully realizing the net deferred tax assets in the future. At December 31, 2013 the deferred tax valuation allowance totaled $10.3 million.

The financial statement benefit of a tax position is recognized only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Amounts held by foreign subsidiaries are generally subject to U.S. income taxation when repatriated to the United States. The Company asserted that the unremitted earnings of its Irish subsidiary (CEEL) were permanently invested.

The above listing is not intended to be a comprehensive list of all of the Company’s accounting policies. In most cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States. Refer to Note 1 to the Company’s consolidated financial statements included under Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference, for more information with respect to the Company’s significant accounting policies.

Please refer to Note 2 in the consolidated financial statements, included under Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference, for further information on the Company’s new accounting standards.

This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995 found at Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the SEC, press releases, or otherwise. Statements contained in this report that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act. Forward-looking statements may include, but are not limited to, projections of revenue, income or loss and capital expenditures, statements regarding future operations, anticipated financing needs, compliance with financial covenants in loan agreements, liquidity, plans for acquisitions or sales of assets or businesses, plans relating to products or services, assessments of materiality, expansion into international markets, growth trends in the consumer electronics business, technological and market developments in the consumer electronics business, the availability of new consumer electronics products and predictions of future events, as well as assumptions relating to these statements. In addition, when used in this report, the words “anticipates,” “believes,” “should,” “estimates,” “expects,” “intends,” “plans” and variations thereof and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Consequently, future events and actual results could differ materially from those set forth in, contemplated by or underlying the forward-looking statements contained in this report or

in other Company filings, press releases, or otherwise. Factors that could contribute to or cause such differences include, but are not limited to, unanticipated developments in any one or more of the following areas:

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date set forth on the signature page hereto. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

Market risks related to changes in foreign currency exchange risks and interest rates are inherent to the Company’s operations. Changes to these factors could cause fluctuations in the Company’s net earnings, cash flows and the fair values of financial instruments subject to market risks. The Company identifies these risks and when appropriate mitigates the financial impact with hedging and interest rate swaps.

Debt incurred under a revolving loan agreement with a balance of $20.7 million as of December 31, 2013 is priced at an interest rate that floats with the market. Therefore, the fair value of this debt is not significantly affected by changes in the interest rate market. A 50 basis point movement in the floating debt rate would result in approximately a $104,000 increase or decrease in interest expense and cash flows.

The Company’s suppliers are located in China, the Philippines and South Korea. The Company historically has negotiated substantially all of its purchases in U.S. dollars and occasionally uses forward contracts to purchase dollars at a fixed exchange rate to the British pound sterling or a fixed exchange rate to the euro. The Company considers opportunities to make purchases in other currencies to the extent that doing so would be advantageous in light of currency fluctuations involving the U.S. dollar and other currencies.

In 2013, approximately 30.5 percent of the Company’s sales were outside the United States, principally in Europe and Canada, compared to 29.1 percent in 2012. Future fluctuations in foreign exchange rates could materially affect operating results. The Company minimizes the foreign currency exchange rate risk outside the United States by conducting nearly all of its transactions in U.S. dollars, except for some billings of its European business, which are conducted in euros and the billings of PPL which are primarily in British pound sterling. The Company does

not use derivative financial or commodity instruments for trading or speculative purposes, however, forward contracts are used occasionally for hedging a portion of the Company’s British pound and euro denominated transactions. The Company did not have any open foreign exchange contracts at December 31, 2013. Please refer to Notes 7 and 8 in the consolidated financial statements, included under Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference, for further information on the Company’s financial instruments and derivatives.

Financial statements are included in this Annual Report on Form 10-K, as indicated in the index on page 67.

We have audited the accompanying consolidated balance sheets of Cobra Electronics Corporation (a Delaware corporation) and Subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cobra Electronics Corporation and Subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

Business — Cobra designs and markets consumer electronics products, which it sells primarily under the Cobra brand name principally in the United States, Canada and Europe. The Company, through its Performance Products Limited (“PPL”) subsidiary, sells products under the Snooper trade name, principally in the United Kingdom, as well as elsewhere in Europe. A majority of the Company’s products are purchased from overseas suppliers based in China, Hong Kong, Taiwan and South Korea. The consumer electronics market is characterized by rapidly changing technology and certain products may have limited life cycles. Management believes that it maintains strong relationships with its current suppliers and that, if necessary, other suppliers could be found. The extent to which a change in a supplier would have an adverse effect on the Company’s business depends on the timing of the change, the product or products that the supplier produces for the Company and the volume of that production. The Company also maintains insurance coverage that would, in certain limited circumstances, reimburse the Company for lost profits resulting from a supplier’s inability to fulfill its commitments to the Company.

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its subsidiaries. The consolidated entities are collectively referred to as the “Company”. All intercompany balances and transactions have been eliminated in consolidation.

Translation of Foreign Currency — Assets and liabilities of consolidated foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at year-end. Revenues and expenses are translated at average exchange rates prevailing during the year. Gains or losses on foreign currency transactions and the related tax effects are reflected in net earnings. The resulting translation adjustments are included in stockholders’ equity as a component of accumulated comprehensive loss.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period that are largely based on the current business conditions, including economic climate, revenue growth, sales returns rates, net realizable value of returned products and changes in certain working capital amounts. The Company believes its estimates and assumptions are reasonable. However, actual results and the timing of the recognition of such amounts could differ from those estimates.

Revenue Recognition — Revenue from the sale of goods is recognized at the time of shipment, except for revenue from sales of products to certain customers whose contractual terms specify FOB destination. Revenue from sales of products to these customers is recognized at the estimated time of receipt by the customer when title and risk of loss would pass to the customer. Obligations for sales returns and allowances and product warranties are recognized at the time of sale on an accrual basis as described in the policies for Sales Returns Reserve and Warranty Reserve. The Company bundles AURA database subscriptions with certain detection and navigation products and also bundles map updates with certain navigation products. Those bundled products are sold to customers in transactions accounted for as multiple element arrangements. The revenue associated with the sale of the AURA database and map updates is deferred and recognized into income over the applicable subscription period, while the revenue associated with the detection and navigation products is recognized at the date of delivery in accordance with shipping terms.

Sales Returns Reserve — The Company allows its customers to return product that was returned to them by their customers. The reserve reflects the sales, cost of sales and gross profit impact of expected returns and related stock adjustments, as well as reduction in accounts receivable and increases in inventory for the amount of expected

returns. The amount of the reserve is determined by multiplying the sales and cost of sales by product category for the current quarter by historical return rates adjusted for any known changes in key variables affecting these return rates. Thus, judgments must be made regarding whether current return rates will approximate anticipated return rates. This reserve will vary based on the changes in sales, gross margin and historical, as well as anticipated, return rates from quarter to quarter.

Warranty Reserve — The Company provides a warranty for its products and also allows its customers to return product that has been returned by their customers. Consequently, the Company maintains a warranty reserve, which reflects historical return rates by product category multiplied by the most recent six months of unit sales and the unit standard cost of each model. The Company uses the most recent six months of unit sales in its estimate, as historical experience indicates that most returns will occur within six months of the Company’s original sale date. Therefore, judgments must be made based on historical return rates and how the returned product will be disposed of, by either liquidation or return to vendors for credit on new purchases. The amount of the reserve reflects the estimated quantity of future returns and the expected return costs. The expected return cost is based on the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve may vary based upon the level of sales and changes in historical return rates from quarter to quarter as well as estimated costs of disposal, either liquidation prices or the credit given by vendors.

Liquidation Reserve — The Company maintains a liquidation reserve representing the write-down of a returned product to its net realizable value. Returned inventory is either sold to various liquidators or returned to vendors for partial credit against similar, new models; this decision depends upon the estimated future demand for the models. Judgments are made as to whether various models are to be liquidated or returned to the vendor, taking into consideration the liquidation prices expected to be received and the amount of vendor credit. The amount of the reserve reflects the quantity of returned products on-hand and the expected return costs. The expected return cost is the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve can fluctuate significantly from quarter to quarter depending upon quantities of returned inventory on hand and the estimated liquidation price or vendor credit per unit.

Shipping & Handling — Shipping and handling costs are included in cost of goods sold, and the amounts invoiced to customers relating to shipping and handling are included in net sales.

Sales Tax — Sales tax is reported on a net basis in the consolidated financial statements.

Advertising and Sales Promotion Expenses — These costs reflect amounts provided to retailers and distributors for advertising and sales promotions and are expensed as incurred. Customer programs, generally agreed to at the beginning of each year, are mainly variable programs dependent on sales and special promotional events. These customer programs may be revised during the course of the year, based upon a customer’s projected sales and other factors, such as new, or changes to existing, promotional programs. Customer programs are accounted for as either a reduction of revenue or an operating expense. Advertising and sales promotion expenses were as follows for the years ended December 31, 2013, 2012 and 2011:

Research, Engineering and Product Development Expenditures — Research and product development expenditures, as well as the non-capitalized engineering costs, are expensed as incurred and were as follows for the years ended December 31, 2013, 2012 and 2011:

Stock Based Compensation — The Company estimates the fair value of the stock option on the grant date using the Black-Scholes-Merton option pricing model and assumptions for expected price volatility, option term, risk-free interest rate and dividend yield and forfeitures. Expected price volatilities are based on historical volatilities of the Company’s stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of the stock based compensation is recognized on a straight-line basis over the requisite service period.

Income Taxes — Deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. The deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which it operates, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax planning and strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the more likely than not realization criteria. Amounts held by foreign subsidiaries are generally subject to U.S. income taxation when repatriated to the United States. The Company deems the unremitted earnings of its Irish subsidiary (CEEL) were permanently invested and thus not subject to United States taxes.

The Company recognizes the effect of income tax positions only when those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Interest related to unrecognized tax benefits and penalties is recorded in income tax expense.

Comprehensive Income (Loss) — Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the years ended December 31, 2013, 2012 and 2011, other comprehensive income (loss) includes the foreign currency translation adjustment and the net of tax impact of an interest rate swap when applicable.

Accounts Receivable — The majority of the Company’s accounts receivables are due from retailers and two-step distributors. Credit is extended based on an evaluation of a customer’s financial condition, including, at times the availability of credit insurance, and, generally, collateral is not required. Accounts receivable are due within various time periods specified in the terms applicable to the specific customer and are stated at amounts due from customers net of an allowance for doubtful accounts.

The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, availability of credit insurance and the condition of the general economy and the industry as a whole. The Company writes off accounts receivable against the allowance for doubtful accounts when they are judged to be uncollectible, and payments subsequently received on such receivables are credited to bad debt expense.

Inventories — Inventories are recorded at the lower of cost or market, on a first-in, first-out basis.

Concentration of Credit Risk — The Company has evaluated its concentration of credit risk as it applies both to customers and to the institutions with which it places cash investments.

The Company believes that its concentration of credit risk as it applies to customers is low due to its broad customer base in all regions of the United States, as well as other areas in North America, Western Europe and

Eastern Europe. Customer concentration exists when a customer accounts for more than 10 percent of sales. Net sales by the Cobra Segment to DAS as a percentage of consolidated net sales were 7.8 percent in 2013, 12.9 percent in 2012 and 14.6 percent in 2011. Net sales by the Cobra Segment to Wal-Mart as a percentage of consolidated net sales were 11.0 percent in 2013, 9.7 percent in 2012 and 11.4 percent in 2011. The Company will selectively use credit insurance for certain accounts in light of management’s judgment of credit risk and the expense to acquire such insurance.

The Company places temporary cash investments with institutions of high credit quality. The Company performs periodic evaluations of these institutions for relative credit standing and has not experienced any losses as a result of this concentration. Consequently, no significant concentration of credit risk is considered to exist. The total cash deposits, cash deposits in foreign banks and cash deposits in excess of government insurance were as follows at December 31, 2013 and 2012:

Depreciation — Depreciation of buildings, tooling and equipment is computed using the straight-line method over the estimated useful lives. Building improvements are depreciated using the straight-line method over the lesser of the useful life or the lease term. The estimated useful lives by category follow:

Depreciation expense for buildings, tooling and equipment for the years ended December 31, 2013, 2012 and 2011 follows:

Long-Lived Assets — Long-lived assets are reviewed for possible impairment whenever events indicate that the carrying amount of such assets may not be recoverable. If such a review indicates impairment, the carrying amount of such assets is reduced to an estimated fair value.

Intangible Assets — The Company evaluates intangible assets for impairment on an annual basis or if impairment indicators exist. If impairment indicators exist for an amortizable intangible asset, the undiscounted future cash flows associated with the expected service potential of the asset are compared to the carrying value of the asset. If the projection of undiscounted future cash flows is in excess of the carrying value of the intangible assets, no impairment charge is recorded. If the projection of undiscounted cash flows is less than the carrying value of the intangible asset, an impairment charge is recorded to reduce the intangible asset to its fair value. Economic conditions in 2013, 2012 and 2011 did not trigger an impairment review, and accordingly, the Company did not record any impairment charges for those years.

Amortization of intangible assets is computed using the straight-line method over the following weighted average useful lives:

Amortization expense relating to intangible assets subject to amortization for the years ended December 31, 2013, 2012 and 2011 follows:

Software Related to Products Sold — The Company purchases and/or incurs costs in connection with the development of software to be used in products that the Company intends to sell. Coding and related costs incurred after technological feasibility of the software has been established and a working model of the product developed are capitalized and deferred as intangible assets. Capitalized costs are charged to earnings based on the ratio of actual product sales during the reporting period to expected product sales over the estimated product life cycle or straight-line, whichever is greater. Software related intangible assets are reviewed at each balance sheet date for possible impairment. If such review indicates that the carrying amount of these assets may not be recoverable, the carrying amount is reduced to the estimated fair value.

The capitalized internal labor costs for years ended December 31, 2013, 2012 and 2011 follow:

ERP System Costs — The Company capitalizes certain costs associated with ERP software developed or obtained for internal use. The Company’s policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use ERP software. Capitalized costs are classified as intangible assets. Costs associated with preliminary project activities and training is expensed as incurred. Capitalized costs related to ERP software developed or obtained for internal use are amortized over a seven year period on a straight-line basis when the relevant ERP software is placed in service.

Deferred Income — Prepaid subscriptions to the AURA database as well as AURA database subscriptions and lifetime map updates bundled with certain detection and navigation products are classified as deferred income. The deferred subscription revenue is recognized over the applicable subscription period. The current deferred income is classified as other accrued liabilities and the long-term deferred income is classified as other long-term liabilities on the balance sheet. A summary of the current and non-current portion of deferred subscription revenue at December 31, 2013 and 2012 follows:

Treasury Stock — Shares of the Company’s capital stock that were acquired and not retired were valued at cost and presented on the balance sheet as a deduction from equity.

In September 2013, the Department of Treasury and Internal Revenue Service issued the final tangible property regulations on the capitalization of costs incurred for acquisitions, maintenance and improvements. The final regulations are effective for taxable years beginning on or after January 1, 2014. Early adoption is permissible for taxable years beginning on or after January 1, 2012. The Company is evaluating the effects of final regulations on its operating results and financial position.

The Company operates in two business segments (1) Cobra Consumer Electronics (“Cobra”) and (2) Performance Products Limited (“PPL”). The Cobra segment is comprised of Cobra Electronics Corporation, Cobra Hong Kong Limited (“CHK”) and Cobra Electronics Europe Limited (“CEEL”). Each segment has a separate sales department and maintains separate distribution channels which provide segment-exclusive product lines to its customers. The results for the PPL segment for the year ending December 31, 2013 exclude intersegment sales of $37,000 and intersegment operating profit of $3,000. There were no intersegment sales for the years ending December 31, 2012 and 2011.

The tabular presentation below sets forth certain financial information regarding the Company’s net sales and long-lived assets by geographic area for the years ended December 31, 2013, 2012 and 2011.

The tabular presentation below summarizes the financial information by business segment for the years ended December 31, 2013, 2012 and 2011.

The Company bundles the sale of its PPL Trucker Navigation and other selected PPL navigation products with ongoing access to its AURA speed camera database in order to allow those customers who so chose, to update their databases for both navigation low bridge height data (perceived as critical to some professional drivers) and speed camera locations. However, in order to receive these updates to these fully functional products, customers must first register on PPL’s website. The Company deferred the revenue associated with the ongoing service period, which was considered a separate unit of accounting. Revenues deferred from this arrangement were calculated using the relative selling price method based on Vendor Specific Objective Evidence (“VSOE”) and recognized over the applicable subscription period, generally two years. A summary of PPL’s deferred revenue at December 31, 2013 and 2012 follows:

In addition, the Company’s domestic business sells products bundled with access to the AURA database and mobile navigation products bundled with map updates. Revenues deferred from these arrangements were calculated using the relative fair market value method and recognized over the applicable subscription period, generally two years. A summary of deferred revenue for Cobra U.S. at December 31, 2013 and 2012 follows:

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company reviews the need for a valuation allowance in each tax jurisdiction on a quarterly basis, analyzing all negative and positive evidence. The U.S. operations were in a loss position for the year ended December 31, 2013 and in a cumulative loss position for the thirty-six month period ended December 31, 2013. Accordingly, based on the current year and cumulative loss in the U.S. and other relevant information, the Company concluded it did not meet the more likely than not criteria to justify the reversal of the valuation allowance at December 31, 2013. The valuation allowance for the U.S. operations totaled $10.3 million at December 31, 2013 and had a net increase of $1.6 million from the prior year end mainly due to current year activity. The valuation allowance decreased $240,000 in 2012 and increased $535,000 in 2011.

The Company will continue to monitor the need for a valuation allowance throughout 2014, pursuant to the guidance of U.S. accounting principles. Should the Company demonstrate a favorable and sustainable earnings trend for its historic and projected results for its U.S. operations, a reduction in the valuation allowance and a corresponding income tax benefit may result.

The state tax NOL carry forward totaled $686,000 at December 31, 2013 and will expire in the years 2021 – 2033. The Company’s AMT credit carry forward, which does not expire and is available to offset against future income tax payments, totaled $2.5 million at December 31, 2013. The gross R&D credits which totaled $941,000 at December 31, 2013 will expire in 2033.

The provision (benefit) for income taxes for the years ended December 31, 2013, 2012 and 2011 consists of:

A summary of the pre-tax earnings for the years ended December 31, 2013, 2012 and 2011 by major taxing jurisdiction follows:

The statutory federal income tax rate (34 percent) for the years ended December 31, 2013, 2012 and 2011 reconciled to the effective income tax rate follows:

Deferred tax assets and liabilities by type at December 31, 2013 and 2012 follows:

A reconciliation of the beginning and ending balance of the unrecognized tax benefit follows (in thousands):

The balance of unrecognized tax benefits at December 31, 2013 includes potential benefits of $96,000 that, if recognized, would affect the effective tax rate. The total amount of unrecognized tax benefits is not expected to significantly change in the next twelve months.

The income tax expense (benefit) includes the applicable penalties and interest. For the twelve months ending December 31, 2013, 2012 and 2011 the expense (income) related to uncertain tax positions follows:

The Company files federal, state and foreign income tax returns. The federal tax returns for the 2010 – 2013 tax years remain open to examination by the Internal Revenue Service. State tax returns for the 2009 – 2013 tax years remain open to examination by certain tax jurisdictions. The major foreign jurisdictions where the Company files tax returns are Ireland and the United Kingdom. The 2011 through 2013 tax years are open to examination in those foreign jurisdictions.

The Company is party to a Credit Agreement dated July 16, 2010 (the “Credit Agreement”) among the Company, BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto from time to time (the “Lenders”). The Credit Agreement provides for a $35.0 million secured credit facility expiring on July 16, 2016. The Credit Agreement was amended on August 8, 2013 to exclude the Fleming litigation and settlement expense from the covenant calculations and to increase the applicable margin used to determine the interest rate for borrowings under the agreement. On November 11, 2013, the Credit Agreement was amended to waive the non-compliance with the fixed charge covenant ratio for the third quarter of 2013, increase the applicable margin under the Credit Agreement and add a $100,000 interest reserve. Pursuant to the terms of its Credit Agreement, the Company is required to make mandatory prepayments on the amounts outstanding thereunder in the event that the Company receives proceeds under certain circumstances or in connection with other specified events. Financing and legal costs totaling $170,000 for the 2013 amendments were capitalized and will be amortized over the loan term.

The Company did not meet the required minimum fixed charge coverage ratio of 1.10 to 1.0 for the fourth quarter of 2013. On March 6, 2014, the Credit Agreement was amended to waive the non-compliance with the fixed charge coverage ratio for the fourth quarter of 2013, to replace the interest reserve with a $1.5 million availability block which applies to the borrowing base under the Credit Agreement and to add a 2 percent pricing fee on a portion of the amount of borrowings outstanding under the Credit Agreement. Absent a waiver from lenders, a failure to comply with the covenants in the Credit Agreement could result in any outstanding indebtedness under the Credit Agreement becoming immediately due and payable and the inability to borrow additional funds under the Credit Agreement.

Borrowings under the Credit Agreement bear interest at either the base rate or the LIBOR lending rate (each as defined in the Credit Agreement), as applicable, plus the applicable margin set forth in the Credit Agreement. The Company will also pay certain fees and expenses, including a (i) commitment fee on the unused portion of the Lenders’ aggregate revolving commitment and (ii) a letter of credit fee equal to the product of the applicable margin set forth in the Credit Agreement times the face amount of the standby letters of credit and the commercial letters of credit outstanding at such time. The Credit Agreement contains customary covenants, including but not limited to financial covenants requiring the Company to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) for the periods set forth in the Credit Agreement. The applicable fees and covenants for the Credit Agreement follow:

As a condition to the extension of the loan and the issuance of the letters of credit under the Credit Agreement, the Company has granted a security interest to the Administrative Agent, for the benefit of the Lenders, in substantially all the assets of the Company except (i) life insurance policies not collaterally assigned to the Lenders, (ii) any equipment subject to liens permitted under the Credit Agreement if such equipment is also subject to an agreement prohibiting the pledge of such equipment to the Lenders, (iii) deposit accounts used exclusively by the Company for payroll and employee retiree benefit purposes and (iv) the Company’s interest in the outstanding voting equity securities of any of its directly-owned foreign subsidiaries to the extent such interests exceed 65 percent of the outstanding voting equity securities of such foreign subsidiary.

The Company’s interest bearing debt outstanding under the revolving credit facility and credit availability under the revolving credit facility at December 31, 2013 and 2012 follows:

The borrowing base formula to determine credit availability includes the following:

The borrowing base is also subject to certain limitations and reserves established at the Lender’s discretion. If necessary, the Credit Agreement permits an “overadvance” of up to $1 million for sixty consecutive days.

The weighted average interest rate for the twelve months ending December 31, 2013 and 2012 (which includes the amortization charges associated with the terminated interest rate swap, refer to Note 8, Derivatives for additional information) is summarized in the following table:

Maximum borrowings outstanding at any month end and average daily borrowings outstanding during the twelve months ending December 31, 2013 and 2012 follows:

Aggregate principal repayments of debt excluding payments on capital lease obligations over the next five years following December 31, 2013 follow:

The year-end interest rate for the revolving loan at prime and LIBOR at December 31, 2013 and 2012 follows:

The Company’s financial instruments include cash, accounts receivable, accounts payable, short-term debt and letters of credit. The carrying values of cash, accounts receivable and accounts payable approximate their fair value because of the short-term maturity of these instruments. The carrying amounts of the Company’s bank borrowings under its Credit Agreement approximate fair value because the interest rates are reset periodically to reflect current market rates. The letters of credit approximate fair value due to the short-term nature of the instrument. The contract value/fair value of the letters of credit at December 31, 2013 and 2012 follows:

The Company’s hedging activity is limited to foreign currency purchases and an interest rate swap, when applicable. The Company engages in foreign currency hedging to minimize the risk that the eventual settlement of foreign currency transactions would be adversely affected by changes in exchange rates. The Company did not have any open foreign exchange contracts at December 31, 2013 and 2012. Accordingly, hedging activities did not impact the results of operations or financial condition during the twelve-month periods ending December 31, 2013 and 2012.

The Company occasionally hedges foreign exchange exposures by entering into various short-term forward foreign exchange contracts. The instruments are carried at fair value in its Consolidated Balance Sheets as a component of current liabilities. Changes in the fair value of foreign exchange forward contracts that meet the applicable hedging criteria are recorded as a component of other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affected earnings. Changes in the fair value of foreign exchange forward contracts that do not meet the applicable hedging criteria are recorded currently in income as cost of sales.

The Company transacts business globally with various manufacturing and distribution facilities. The Company may reduce its exposure to fluctuations in foreign exchange rates by creating offsetting positions through derivative financial instruments. The Company currently does not use derivative financial instruments for trading or speculative purposes. The Company regularly monitors foreign exchange exposures and ensures hedge contract amounts do not exceed the amounts of the underlying exposures.

The Company maintained an interest rate swap, which was terminated on July 16, 2010, to fix the interest rate for the term of the revolving credit facility and term loan under a previous Credit Agreement, thereby protecting the Company from future interest rate increases. The interest rate swap represented a cash flow hedge and was recorded at fair value and classified as a non-current liability. Changes in the recorded fair value of the interest rate swap were recorded to Accumulated Other Comprehensive Loss. The termination cost of the interest rate swap will be amortized into interest expense through March 31, 2014. The interest amortization for the Company’s terminated interest rate swaps reclassified from Accumulated Other Comprehensive Loss into Interest Expense during the twelve months ending December 31, 2013 and 2012 follows:

The Company leases facilities and equipment under non-cancelable leases with remaining terms of one year or more, expiring at various dates through the year 2020. The terms of the agreements provide that the Company will pay certain operating expenses. The capital lease provides the Company with the option to purchase the related asset at the end of the respective initial lease terms. The gross amount and accumulated amortization for assets subject to the capital lease at December 31, 2013 was $130,000 and $83,000, respectively.

Total minimum rental amounts committed in future years as of December 31, 2013 follows:

Rental expense for the twelve months ending December 31, 2013, 2012 and 2011 follows:

Preferred stock is issuable at any time in one or more series, each of which may have such voting powers, designations, preferences, relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issue of such stock adopted by the Board of Directors. The Company has designated 120,000 of the 1,000,000 authorized shares of preferred stock as Series A Junior Participating preferred stock. No preferred stock has been issued.

Basic earnings per share excludes any dilution and is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock resulted in the issuance of common stock. If the common stock equivalents have an anti-dilutive effect, they are excluded from the computation of diluted earnings per share. The earnings per share for the twelve months ended December 31, 2013, 2012 and 2011 follows:

The diluted earnings per share calculations include the incremental shares of common stock issuable upon the exercise of stock options that have a market price in excess of the exercise price. When the exercise price of an option exceeds its market price, the incremental shares are excluded from the diluted earnings per share calculation. A summary of the options outstanding, the options includable and excludable from the diluted earnings per share calculations and the incremental shares included in the diluted earnings per share calculation for the twelve months ended December 31, 2013, 2012 and 2011 follows:

The Company has equity based compensation plans from which stock based compensation awards can be granted to eligible employees, officers or directors. The 2002 plan was replaced by the 2010 Equity Incentive Plan, which is an equity compensation plan that consolidated all of the Company’s option and equity programs under a single plan. A summary of the stock based compensation awards by plan follows:

The Company awarded shares of stock to its non-employee directors, shares of restricted stock to management and options to management in 2012 and 2011. There were no stock or option awards in 2013. A summary of the share and option awards and the stock-based compensation expense for the twelve months ended December 31, 2013, 2012 and 2011 follows:

The Company estimates the fair value of the stock option on the grant date using the Black-Scholes-Merton option pricing model and assumptions for expected price volatility, option term, risk-free interest rate and dividend yield. Expected price volatilities are based on historical volatilities of the Company’s stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected annual forfeiture rate of 3.5 percent is based on the forfeitures for prior awards. The fair value of the stock option is recognized on a straight-line basis over the requisite service period. The assumptions for the 2012 and 2011 stock awards are shown in the following table:

Under the terms of the Plan, the consideration received by the Company upon exercise of the options may be paid in cash or by the surrender and delivery to the Company of previously owned shares of its common stock, or by a combination thereof. The optionee is credited with the fair market value of any stock surrendered and delivered as of the exercise date. Options become exercisable in annual 33.3 percent increments commencing twelve months after the date of grant. Restricted stock becomes exercisable in annual 25.0 percent increments commencing twelve months after the date of grant.

A summary of the status of the Plan as of December 31, 2013, 2012 and 2011, and changes during the years ended on those dates, is presented below:

The following table summarizes information about stock options outstanding at December 31, 2013:

A summary of the non-vested stock options at December 31, 2013, 2012 and 2011 and changes during the years then ended follows:

The intrinsic value of the stock options outstanding at December 31, 2013 based on the difference between the exercise price of the options and the year-end stock price follows (all outstanding options were out-of-the-money):

The unrecognized stock compensation as of December 31, 2013 will be recognized over future periods as follows:

The Company has a tax-qualified retirement savings plan, the Cobra Electronics Corporation Profit Sharing and 401(k) Incentive Savings Plan (the “Plan”), under which participating employees may contribute up to the yearly statutory maximum into their Plan accounts. In addition, under the Plan, the Company matches amounts contributed by the participant up to a certain percent of earnings, not to exceed the statutory maximum. The Plan also allows the Company to make discretionary profit sharing contributions to the Plan accounts for the benefit of participating employees for any calendar year in an amount determined by the Board of Directors. The Company also has defined contribution expenses for certain non-U.S. employees. A summary of the 401(k) matching, profit sharing and defined contribution expenses for the twelve months ending December 31, 2013, 2012 and 2011 follows:

Deferred compensation obligations arise pursuant to outstanding key executive deferred compensation plans, most of which are non-qualified defined benefit arrangements. The current portion of the deferred compensation liability was included in accrued salaries and commissions and the non-current portion was recorded as a long-term liability. The current and non-current liabilities for deferred compensation at December 31, 2013 and 2012 follow:

The deferred compensation liability is based on discounted future cash flows for the defined benefit plan. The discount rate used at December 31, 2013 and 2012 for the defined benefit plan follows:

The cash surrender value of life insurance policies is classified on the balance sheet as a non-current asset. The cash value of officers’ life insurance policies is maintained to recover the costs of deferred compensation obligations and the aggregate death benefit to the Company. Following is a summary of the Company’s death benefit at December 31, 2013 and 2012:

Intangible assets consist of the following at December 31, 2013 and December 31, 2012:

The product software asset and accumulated amortization shown above are presented net of the respective impairment charges. There were no product software impairment charges for 2013, 2012 and 2011. The anticipated amortization expense of intangible assets over the next 5 years is summarized in the following table:

The components of the other current assets at December 31, 2013 and 2012 follow:

On August 3, 2012, Hoyt A. Fleming filed a complaint in the United States District Court for the District of Idaho against the Company alleging infringement of certain patents and seeking unspecified damages and injunctive relief. The allegations related to approximately 30 of the Company’s radar detection products that were sold with GPS or capable of receiving a GPS attachment or that have compass directional ability.

On July 16, 2013, the Company executed an agreement with Mr. Fleming to settle the Fleming patent litigation. The settlement agreement provides the Company with a license to certain patents in exchange for certain payments. Although the settlement occurred subsequent to June 30, 2013, the expense for an upfront payment was recorded in the second quarter financial results in accordance with GAAP. On July 30, 2013, the court entered an order dismissing with prejudice all of Mr. Fleming’s claims.

Outstanding inventory purchase orders with suppliers at December 31, 2013 and 2012 follows:

The Company warrants to the consumer who purchases its products that it will repair or replace, without charge, defective products within one year of purchase. The Company also has a return policy for its customers that allow them to return, to the Company, products returned to them by their customers for full or partial credit based on when the Company’s customer last purchased these products. Accordingly, the Company maintains a warranty reserve and a liquidation reserve.

The warranty reserve reflects historical return rates by product category multiplied by the most recent six months of unit sales and the unit standard cost of each model. The Company uses the most recent six months of unit sales in its estimate, as historical experience indicates that most returns will occur within six months of the Company’s original sale date. Therefore, judgments must be made based on historical return rates and how the returned product will be disposed of by, either liquidation or return to vendors for credit on new purchases. The amount of the reserve reflects the estimated quantity of future returns and the expected return costs. The expected return cost is based on the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve may vary based upon the level of sales and changes in historical return rates from quarter to quarter as well as estimated costs of disposal, either liquidation prices or the credit given by vendors. A roll-forward of the warranty reserve follows:

The liquidation reserve represents the write-down of returned product from our customers to its net realizable value. Returned inventory is either sold to various liquidators or returned to vendors for partial credit against similar, new models; this decision depends upon the estimated future demand for the models. Judgments are made as to whether various models are to be liquidated or returned to the vendor, taking into consideration the liquidation prices expected to be received and the amount of vendor credit. The amount of the reserve reflects the quantity of returned products on-hand and the expected return costs. The expected return cost is the difference between the purchase cost and the return credit from the vendor or the difference between the purchase cost and the liquidation sale. This reserve can fluctuate significantly from quarter to quarter depending upon quantities of returned inventory on hand and the estimated liquidation price or vendor credit per unit. A roll-forward of the liquidation reserve follows:

The Company maintains a net realizable value (“NRV”) reserve to write-down, as necessary, certain inventory not previously sold to customers, except for that covered by the liquidation reserve discussed above, below cost. The reserve includes models where it is determined that the NRV is less than cost. Thus, judgments must be made about which slow-moving, excess or non-current models are to be included in the reserve and the estimated net realizable value of such models. The estimated realizable value of each model is the per unit price that it is estimated to be received if the model was sold in the marketplace. This reserve will vary depending upon the specific models selected, the estimated NRV for each model and quantities of each model that are determined will be sold below cost from quarter to quarter. A roll-forward of the NRV reserve follows:

The Company maintains a Stockholder Rights Plan (the “Plan”) designed to deter coercive or unfair takeover tactics, to prevent a person or group from gaining control of the Company without fair value to all shareholders and to deter other abusive takeover tactics that are not in the best interest of shareholders. The Company has designated 120,000 of the 1,000,000 authorized shares of the preferred stock as Series A Junior Participating preferred stock. The Company entered into an Amended and Restated Rights Agreement with American Stock Transfer and Trust on November 3, 2011.

Under the terms of the Amended and Restated Plan, each share of common stock is accompanied by one right; each right entitles the shareholder to purchase from the Company one one-hundredth of a newly issued share of Series A Junior Preferred Stock, par value $1 per share, of the Company at an exercise price of $18. The rights become exercisable 10 days after a public announcement that an Acquiring Person (as defined in the Plan) has become the beneficial owner of 15 percent or more of the outstanding shares of the Company (the “Stock Acquisition Date”) or 10 business days after the commencement of a tender or exchange offer that would result in a person beneficially owning 15 percent or more of such shares. The Company can redeem the rights for $0.01 per right at any time until the earlier of 10 days following the Stock Acquisition Date or the final expiration of the rights. The rights will expire on November 3, 2021, unless redeemed earlier by the Company.

In the event that any person becomes an Acquiring Person, each right will entitle the holder (except for the Acquiring Person) thereof, upon payment of the current exercise price, to receive shares of common stock of the Company, which at the time of such person becoming an Acquiring Person, have a market value equal to two times the then current exercise price. If, after the public announcement has been made that any person has become an Acquiring Person, (i) the Company merges into or consolidates with another person (with limited exceptions), (ii) another person (with limited exceptions) merges into or consolidates with the Company and shares of common stock of the Company are converted into securities of another person, cash or property or (iii) the Company transfers 50 percent or more of its consolidated assets, cash flow or earning power to another person (with limited exceptions), each right will entitle the holder thereof to receive, upon payment of the current exercise price, the number of shares of common stock of the Acquiring Person (or of another person affiliated therewith) which, at the time of consummation of the transaction, have a market value equal to two times the then current exercise price.

The following table shows the activity in the allowance for doubtful accounts for 2013, 2012 and 2011.

The following table shows the components of interest expense for the years ending December 31, 2013, 2012 and 2011:

The following table shows the components of other income (expense) for the years ending December 31, 2013, 2012 and 2011:

Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the years ended December 31, 2013, 2012 and 2011, accumulated other comprehensive loss includes the foreign currency translation adjustment and the interest rate swap. A summary of the accumulated other comprehensive loss for the three-year period ending December 31, 2013 follows:

The following table summarizes the unaudited quarterly financial information for years ending December 31, 2013 and 2012:

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no changes in or disagreements with the Company’s auditors regarding accounting or financial disclosure matters.

The Company has established disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. The Company’s disclosure controls and procedures have also been designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

During 2013, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures. Based on this evaluation, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures are effective as of December 31, 2013.

The management of the Company, including the Company’s Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Management of the Company, including the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013. Management based this assessment on criteria for effective internal control over financial reporting described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that, as of December 31, 2013, the Company maintained effective internal control over financial reporting.

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Internal control over financial reporting was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only management’s report in this Annual Report on Form 10-K.

There has been no change in the Company’s internal control over financial reporting that occurred during the fourth quarter of 2013 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

On March 13, 2014, the Compensation Committee adopted the 2014 Executive Incentive Payment Plan (the “Plan”) for the Company’s executive officers (other than James R. Bazet) and certain other key employees. Under the Plan, participants are entitled to earn cash bonus compensation based upon the achievement by the Company of a pre-established performance goal for 2014 outlined in the Plan. The performance goal consists of a targeted operating profit level of the Company. 100% of the “target” award for each participant in the Plan will be based on the Company meeting the target operating profit level. If the target operating profit level is exceeded by an identified amount, each participant will be entitled to receive 105%, 110%, 120%, 130%, 140% or 150% of her “target” award, in the case of Sally Washlow, 105%, 110%, 125%, 135% or 140% of his “target” award, in the case of Robert Ben, and 105%, 110%, 115%, 120%, 122% or 125% of his or her “target” award, in the case of the other participants in the Plan, in each case depending on the actual operating profit of the Company. If the target operating profit level is not met but one of five lesser identified operating profit levels is achieved, each participant will be entitled to receive 50%, 60%, 70%, 80% or 90% of his or her respective “target” award depending on the level of operating profit achieved. Under the Plan, the “target” award for Ms. Washlow is 40% of her base salary, the “target” award for Mr. Ben is 35% of his base salary and the “target” award for other participants in the Plan is 25% of their respective base salaries. For purposes of the Plan, “operating profit” means the Company’s consolidated operating profits calculated in accordance with generally accepted accounting principles without regard to extraordinary or other nonrecurring items or unusual items unless the Compensation Committee determines that any such extraordinary, nonrecurring or unusual item shall not be disregarded. The annual bonus to be received by Mr. Bazet is determined in accordance with the terms of his employment agreement.

Information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A within 120 days after the end of the Company’s 2013 fiscal year, and such information is hereby incorporated by reference.

The Company has adopted a Code of Business Conduct and Ethics (the “Code”), which applies solely to the Company’s officers, senior accounting and financial personnel and directors. The Company has posted the Code on its website at www.cobra.com and any waivers of, or amendments to, the Code will be approved by the Board of Directors or the Governance and Nominating Committee of the Company’s Board of Directors. Any change to or waiver of the Code will be disclosed by publishing a statement on the Company’s website.

Additional information concerning Cobra’s executive officers is included under Executive Officers of the Registrant in Part I.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

With the approval of the 2010 Equity Incentive Plan by the shareholders in 2010, prior plans were consolidated into the 2010 Plan. The following table provides information about stock options outstanding and shares available for future awards under the Company’s equity compensation plan as of December 31, 2013.

Other information in response to this item will be set forth in a definitive proxy statement to be filed by the Company pursuant to Regulation 14A within 120 days after the end of the Company’s 2013 fiscal year, and such information is hereby incorporated by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

COBRA ELECTRONICS CORPORATION

/S/ ROBERT J. BEN

Robert J. Ben

Senior Vice President, Chief Financial Officer

and Secretary

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.


DELAWARE		36-2479991
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
6500 WEST CORTLAND STREET CHICAGO, ILLINOIS		60707
(Address of principal executive offices)		(Zip Code)


		Page(s)
	PART I
Item 1:	BUSINESS		1
	GENERAL		1
	RECENT DEVELOPMENTS		1
	SALES AND DISTRIBUTION		3
	SUPPLIERS		3
	RESEARCH AND DEVELOPMENT		3
	PATENTS AND OTHER INTELLECTUAL PROPERTY		3
	COMPETITION		4
	EMPLOYEES		4
	INFORMATION BY SEGMENT AND GEOGRAPHIC AREA		4
	COBRA SEGMENT		4
	PPL SEGMENT		9
	AVAILABLE INFORMATION		11
	EXECUTIVE OFFICERS OF THE REGISTRANT		11
Item 1A:	RISK FACTORS		12
Item 1B:	UNRESOLVED STAFF COMMENTS		20
Item 2:	PROPERTIES		20
Item 3:	LEGAL PROCEEDINGS		20
Item 4:	MINE SAFETY DISCLOSURES		20

	PART II
Item 5:	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		21
Item 6:	SELECTED FINANCIAL DATA		23
Item 7:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		23
Item 7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		34
Item 8:	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		35
Item 9:	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		64
Item 9A:	CONTROLS AND PROCEDURES		64
Item 9B:	OTHER INFORMATION		65

	PART III
Item 10:	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE		66
Item 11:	EXECUTIVE COMPENSATION		66
Item 12:	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS		66
Item 13:	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE		66
Item 14:	PRINCIPAL ACCOUNTANT FEES AND SERVICES		66

	PART IV
Item 15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		67
Signatures			68


Name, Age and Present Position	Has Held Present Position Since		Prior Business Experience In Past Five Years
James R. Bazet, 66 Chairman of the Board and Chief Executive Officer*		September 2008	Chairman of the Board, President and Chief Executive Officer, 2008 to 2012.

Sally A. Washlow, 42 President		January 2013	Senior Vice President Marketing and Sales 2010 to 2012; Vice President Product Development and Marketing, 2007 to 2010.

Robert J. Ben, 49 Senior Vice President, Chief Financial Officer and Secretary		December 2013	Senior Vice President and Chief Financial Officer May 2011 to November 2013; Vice President, Corporate Controller and Interim Chief Financial Officer, January to April 2011; Vice President, Corporate Controller, 2007 to 2010.

* Also a director


Segment	Location	Owned or Leased	Utilization
Cobra	Chicago, Illinois	Owned	Office and warehouse space
Cobra	Kowloon, Hong Kong	Leased	Office space
Cobra	Dublin, Ireland	Leased	Office space
Cobra	Moen, Belgium	Leased	Warehouse space
PPL	Runcorn, United Kingdom	Leased	Office and warehouse space


	STOCK PRICE RANGE AND DIVIDENDS
	2013						2012
Quarter	High		Low		Dividends Declared		High		Low		Dividends Declared
First	$	4.37	$	3.26	$	-	$	5.89	$	3.91	$	-
Second		3.63		2.89		-		5.15		3.56		-
Third		3.16		2.46		-		5.10		4.05		-
Fourth		3.06		2.57		-		5.40		3.28		-


Year Ended December 31	2013			2012		2011		2010		2009
	(in thousands, except per share amounts)
Operating Data:
Net sales	$	111,237		$	118,906	$	123,259	$	110,520	$	105,229
Net (loss) earnings		(1,140	)		3,170		3,087		1,332		(10,867	)

Net (loss) earnings per share:
Basic	$	(0.17	)	$	0.48	$	0.47	$	0.21	$	(1.68	)
Diluted		(0.17	)		0.48		0.47		0.21		(1.68	)

Dividends per share	$	—		$	—	$	—	$	—	$	—

As of December 31:
Total assets	$	82,806		$	83,490	$	80,595	$	74,354	$	75,703
Bank debt		20,673			20,284		18,655		18,042		17,869


	Years Ended December 31
	2013			2012
	(in thousands)
Net (loss) earnings	$	(1,140	)	$	3,170
Depreciation and amortization		3,135			3,532
Interest expense, excluding loan fee amortization		664			796
Income tax (benefit) provision		(57	)		108

EBITDA		2,602			7,606
Stock option expense		261			327
CSV gain		(1,397	)		(535	)
Other non-cash items		(565	)		(245	)

EBITDA As Defined	$	901		$	7,153


										2013 vs. 2012
	2013					2012				Increase (Decrease)
	(in thousands)
Business Segment	Net Sales		Pre-tax Loss			Net Sales		Pre-tax Income		Net Sales			Pre-tax Income
Cobra	$	97,305	$	(1,009	)	$	104,955	$	2,970	$	(7,650	)	$	(3,979	)
PPL		13,932		(188	)		13,951		308		(19	)		(496	)

Total Company	$	111,237	$	(1,197	)	$	118,906	$	3,278	$	(7,669	)	$	(4,475	)


									2012 vs. 2011
	2012				2011				Increase (Decrease)
	(in thousands)
Business Segment	Net Sales		Pre-tax Income		Net Sales		Pre-tax Income		Net Sales			Pre-tax Income
Cobra	$	104,955	$	2,970	$	107,808	$	3,142	$	(2,853	)	$	(172	)
PPL		13,951		308		15,451		114		(1,500	)		194

Total Company	$	118,906	$	3,278	$	123,259	$	3,256	$	(4,353	)	$	22


	Total		Less Than 1 year		1 to 3 years		3 to 5 years		After 5 years
	(in thousands)
Capital lease	$	47	$	43	$	4	$	-	$	-
Operating leases		1,509		615		650		130		114
Purchase obligations (a)		14,663		14,594		69		-		-
Obligations under FIN 48		96		96		-		-		-
Deferred compensation		8,472		562		1,303		1,418		5,189
Revolving loan (b)		23,777		876		1,753		21,148		-

Total	$	48,564	$	16,786	$	3,779	$	22,696	$	5,303


	2013			2012
ASSETS
Current assets:
Cash	$	3,059		$	1,785
Receivables, net of allowance for doubtful accounts of $126 in 2013 and $679 in 2012		19,338			20,943
Inventories, primarily finished goods, net		35,810			38,068
Other current assets		3,686			3,071

Total current assets		61,893			63,867
Property, plant and equipment, at cost:
Buildings and improvements		7,010			6,865
Tooling and equipment		14,937			13,796

		21,947			20,661
Accumulated depreciation		(16,724	)		(15,568	)
Land		230			230

Property, plant and equipment, net		5,453			5,323
Other assets:
Cash surrender value of life insurance policies		7,586			5,907
Deferred income taxes, non-current		322			544
Intangible assets		7,372			7,634
Other assets		180			215

Total other assets		15,460			14,300

Total assets	$	82,806		$	83,490


	2013			2012
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Revolving bank loan facility	$	20,673		$	20,284
Accounts payable		5,726			5,598
Accrued salaries and commissions		1,612			2,053
Accrued advertising and sales promotion costs		1,207			1,012
Accrued product warranty costs		1,113			1,040
Accrued income taxes		13			425
Deferred income taxes, current		174			33
Other accrued liabilities		3,102			3,368

Total current liabilities		33,620			33,813

Non-current liabilities:
Deferred compensation		7,910			7,780
Deferred income taxes		653			886
Other long-term liabilities		714			751

Total non-current liabilities		9,277			9,417

Total liabilities		42,897			43,230
Commitments and contingencies		-			-
Shareholders’ equity:
Preferred stock, $1 par value Authorized: 1,000,000 shares Issued: None		-			-
Common stock, $.33 1/3 par value Authorized: 12,000,000 shares Issued: 7,170,800 shares for 2013 and 7,178,400 shares for 2012 Outstanding: 6,602,980 shares for 2013 and 6,610,580 shares for 2012		2,390			2,392
Additional paid-in capital		21,532			21,269
Retained earnings		21,319			22,459
Accumulated other comprehensive loss		(1,495	)		(2,023	)

		43,746			44,097
Treasury stock, at cost (567,820 shares)		(3,837	)		(3,837	)

Total shareholders’ equity		39,909			40,260

Total liabilities and shareholders’ equity	$	82,806		$	83,490


	Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Comprehensive Income (Loss)			Treasury Stock			Non- Controlling Interest			Total
Balance — January 1, 2011	$	2,345		$	20,785	$	16,202		$	(2,317	)	$	(3,837	)	$	28		$	33,206
Net earnings		-			-		3,087			-			-			-			3,087
Dissolution of PPN		-			-		-			-			-			(28	)		(28	)
Accumulated other comprehensive income:
Foreign currency translation adjustment		-			-		-			(79	)		-			-			(79	)
Interest rate swap, no tax benefit		-			-		-			134			-			-			134
Stock compensation expense		23			180		-			-			-			-			203

Balance — December 31, 2011		2,368			20,965		19,289			(2,262	)		(3,837	)		-			36,523
Net earnings		-			-		3,170			-			-			-			3,170
Accumulated other comprehensive income:
Foreign currency translation adjustment		-			-		-			151			-			-			151
Interest rate swap, no tax benefit		-			-		-			88			-			-			88
Tax benefits from stock-based awards		-			1		-			-			-			-			1
Stock compensation expense		24			303		-			-			-			-			327

Balance — December 31, 2012		2,392			21,269		22,459			(2,023	)		(3,837	)		-			40,260
Net loss		-			-		(1,140	)		-			-			-			(1,140	)
Accumulated other comprehensive income:
Foreign currency translation adjustment		-			-		-			470			-			-			470
Interest rate swap, no tax benefit		-			-		-			58			-			-			58
Stock compensation expense		-			261		-			-			-			-			261
Retirement of shares		(2	)		2		-			-			-			-			-

Balance — December 31, 2013	$	2,390		$	21,532	$	21,319		$	(1,495	)	$	(3,837	)	$	-		$	39,909


Classification		Life

Buildings		30 years

Building improvements		20 years

Equipment		5 - 10 years

Tools, dies and molds		1.5 - 4.5 years


Classification	Life
Internal use software		3 years
ERP internal use software		7 years
Trademarks and trade names		3 - 30 years
Patents		17 years
Product software (based primarily on product life cycle)		1 - 3 years
Aura data base		5 years
Noncompetition agreements		3 years
Customer relationships		10 years


	Year Ended December 31, 2013									Year Ended December 31, 2012									Year Ended December 31, 2011
	COBRA			PPL			TOTAL			COBRA			PPL			TOTAL			COBRA			PPL			TOTAL
	(in thousands)
Net sales	$	97,305		$	13,932		$	111,237		$	104,955		$	13,951		$	118,906		$	107,808		$	15,451		$	123,259
Cost of sales		71,666			9,282			80,948			75,591			8,787			84,378			76,900			10,262			87,162

Gross profit		25,639			4,650			30,289			29,364			5,164			34,528			30,908			5,189			36,097
Selling, general and administrative expense		27,222			4,766			31,988			26,352			4,884			31,236			26,399			4,952			31,351

(Loss) earnings from operations		(1,583	)		(116	)		(1,699	)		3,012			280			3,292			4,509			237			4,746
Interest expense		(778	)		-			(778	)		(1,036	)		-			(1,036	)		(1,103	)		-			(1,103	)
Other income (expense)		1,352			(72	)		1,280			994			28			1,022			(264	)		(123	)		(387	)

(Loss) earnings before income taxes		(1,009	)		(188	)		(1,197	)		2,970			308			3,278			3,142			114			3,256
Tax expense (benefit)		189			(246	)		(57	)		424			(316	)		108			561			(392	)		169

Net (loss) earnings	$	(1,198	)	$	58		$	(1,140	)	$	2,546		$	624		$	3,170		$	2,581		$	506		$	3,087


	December 31, 2013									December 31, 2012									December 31, 2011
	COBRA			PPL			TOTAL			COBRA			PPL			TOTAL			COBRA			PPL			TOTAL
	(in thousands)
Property, plant and equipment	$	1,156		$	271		$	1,427		$	1,010		$	116		$	1,126		$	860		$	294		$	1,154
Depreciation and amortization		2,237			898			3,135			2,559			973			3,532			2,616			1,189			3,805
Long-lived assets		15,876			5,037			20,913			14,216			5,407			19,623			13,440			5,903			19,343
Total assets		69,738			13,068			82,806			68,906			14,584			83,490			66,049			14,546			80,595


Uncertain Tax Positions
Balance at January 1, 2011	$	157
Additions for current year tax positions		24

Balance at December 31, 2011		181
Reductions for prior years’ tax positions		(135	)

Balance at December 31, 2012		46
Additions for current year tax positions		22
Additions for prior year tax positions		28

Balance at December 31, 2013	$	96


Commitment fee		0.25	%
Fixed charge coverage ratio		1.10 to 1.00
Annual capital expenditures limit (in thousands)	$	4,000
Annual dividend to shareholders limit (in thousands)	$	1,250


	December 31
	2013		2012
	(in thousands)
Interest bearing debt	$	20,673	$	20,284
Credit availability	$	8,369	$	11,924


Percentage of eligible accounts receivable	85.0	%
The lesser of:
Percentage of lower of cost or market of eligible inventory	65.0	%
Percentage of the appraised net orderly liquidation	85.0	%
value of eligible inventory
Percentage of commercial letters of credit	65.0	%


	Year Ended
	2013			2012
Weighted average interest rate		3.7	%		4.6	%


Year	Revolver
	(in thousands)
2014	$	–
2015		–
2016		20,673
2017		–

	$	20,673


Income Statement Location	2013		2012
	(in thousands)
Interest expense	$	58	$	88


	Operating Lease		Capital Lease		Total
	(in thousands)
2014	$	615	$	43	$	658
2015		453		4		457
2016		197		–		197
2017		65		–		65
2018		65		–		65
Thereafter		114		–		114

Total	$	1,509	$	47	$	1,556


	2010 Plan		Closed Plans
	(in thousands)
Authorized, unissued shares originally available for grant		800		1,260
Stock options granted		218		1,213
Shares granted to non-employee directors		45		–
Restricted shares awarded to management		94		–
Shares available for grant at December 31, 2013		466		–
Options exercisable at December 31, 2013		101		125


	2012			2011
Risk-free interest rate		2.0	%		3.4	%
Expected life		10 years			10 years
Expected volatility		42.0	%		43.0	%


	Options Outstanding						Options Exercisable
Range of Exercise Price	Number Outstanding (000)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Number Exercisable (000)		Weighted Average Exercise Price

$3.00 to $4.00		97	$	3.84		7.2		65	$	3.84
$4.01 to $5.00		105		4.50		8.2		36		4.50
$7.01 to $11.00		125		10.78		3.2		125		10.78

Total		327	$	6.70				226	$	7.78


	Shares (000)			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		40		$	10.78
Options awarded but not vested in 2011		103			3.84
Forfeitures		(5	)		10.78
Vested		(35	)		10.78

Nonvested at December 31, 2011		103			3.84
Options awarded but not vested in 2012		115			4.50
Vested		(35	)		3.84

Nonvested at December 31, 2012		183			4.25
Forfeitures		(10	)		4.37
Vested		(72	)		4.19

Nonvested at December 31, 2013		101		$	4.30


	2013
	(in thousands)
Intrinsic value of options outstanding	$	-


Year Recognized	Stock Compensation
	(in thousands)
2014	$	176
2015		67
2016		8

Total	$	251


Year	Cost
	(in thousands)
2014	$	1,400
2015		1,000
2016		800
2017		400
2018		400

Total	$	4,000


	Quarter Ended
	March 31					June 30					September 30				December 31
	2013			2012		2013			2012		2013		2012		2013		2012
	(in thousands, except per share amounts)
Net sales	$	21,577		$	26,418	$	25,630		$	29,084	$	29,038	$	27,672	$	34,992	$	35,732
Gross profit		6,235			7,588		6,679			8,858		7,459		7,779		9,916		10,303
Net (loss) earnings		(1,532	)		339		(1,943	)		902		394		564		1,941		1,365
Net (loss) earnings per share (a)
Basic	$	(0.23	)	$	0.05	$	(0.29	)	$	0.14	$	0.06	$	0.09	$	0.29	$	0.21
Diluted		(0.23	)		0.05		(0.29	)		0.14		0.06		0.09		0.29		0.21


Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights		(b) Weighted-average exercise price of outstanding options, warrants and rights		(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		327,250	$	6.70		466,050
Equity compensation plans not approved by security holders		-		-		-

Total		327,250	$	6.70		466,050


Description		Page or Schedule Number
1.	Report of Independent Registered Public Accounting Firm	35
	Consolidated Statements of Operations for the three years ended December 31, 2013	36
	Consolidated Statements of Comprehensive Income (Loss) for the three years ended December 31, 2013	37
	Consolidated Balance Sheets as of December 31, 2013 and 2012	38
	Consolidated Statements of Cash Flows for the three years ended December 31, 2013	40
	Consolidated Statements of Shareholders’ Equity for the three years ended December 31, 2013	41
	Notes to Consolidated Financial Statements	42

2.	Exhibits:

	See Index to Exhibits on pages 69 through 72.


/S/ JAMES R. BAZET James R. Bazet		Director, Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

/S/ ROBERT J. BEN Robert J. Ben		Senior Vice President, Chief Financial Officer and Secretary (Principal Accounting and Financial Officer)

/S/ WILLIAM P. CARMICHAEL William P. Carmichael		Director

/S/ JOHN S. LUPO John S. Lupo		Director

/S/ IAN R. MILLER Ian R. Miller		Director

/S/ S. SAM PARK S. Sam Park		Director