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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

| ̈ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2009

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from _______ to _______

Commission File Number 0-511

COBRA ELECTRONICS CORPORATION

(Exact name of Registrant as specified in its Charter)



|                         |  |                                     
|------------------------ |  | ------------------------------------
|DELAWARE                 |  | 36-2479991                          
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



|                                            |  |           
|------------------------------------------- |  | ----------
|6500 WEST CORTLAND STREET CHICAGO, ILLINOIS |  | 60707     
|(Address of principal executive offices)    |  | (Zip Code)

Registrants telephone number, including area code: (773) 889-8870

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO   ̈

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   ̈    NO   ̈

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 definition
of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                                              |  |                             
|--------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈                    |  | Accelerated filer   ̈        
|Non-accelerated filer   ̈                      |  | Smaller reporting company  x
|(Do not check if a smaller reporting company) |  |                             

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

Number of shares of Common Stock of Registrant outstanding as of May 5, 2009: 6,471,280









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TABLE OF CONTENTS



|          |  |                                                                                       |  |         
|--------- |  | ------------------------------------------------------------------------------------- |  | --------
|          |  |                                                                                       |  | Page No.
|PART I    |  | FINANCIAL INFORMATION                                                                 |  |         
|          |  |                                                                                      
|Item 1    |  | Financial Statements                                                                  |  | 3       
|          |  |                                                                                      
|Item 2    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 18      
|          |  |                                                                                      
|Item 3    |  | Qualitative and Quantitative Disclosures About Market Risk                            |  | 26      
|          |  |                                                                                      
|Item 4    |  | Controls and Procedures                                                               |  | 26      
|          |  |                                                                                      
|PART II   |  | OTHER INFORMATION                                                                     |  |         
|          |  |                                                                                      
|Item 1A   |  | Risk Factors                                                                          |  | 27      
|          |  |                                                                                      
|Item 6    |  | Exhibits                                                                              |  | 27      
|          |  |                                                                                      
|SIGNATURE |  |                                                                                       |  | 28      



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PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

Cobra Electronics Corporation and Subsidiaries

Consolidated Statements of OperationsUnaudited

(In Thousands, Except Per Share Amounts)



|                                                                         |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------ |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                         |  | Three Months EndedMarch 31, |       
|                                                                         |  | 2009                        |        |   | 2008 |  
|Net sales                                                                |  | $                           | 19,085 |   |      | $ | 28,858 |  
|Cost of sales                                                            |  |                             | 14,023 |   |      |   | 19,942 |  
|                                                                         |  |                             |        |   |      |   |        |  
|Gross profit                                                             |  |                             | 5,062  |   |      |   | 8,916  |  
|Selling, general and administrative expense                              |  |                             | 7,056  |   |      |   | 8,307  |  
|                                                                         |  |                             |        |   |      |   |        |  
|(Loss) earnings from operations                                          |  |                             | (1,994 | ) |      |   | 609    |  
|Interest expense                                                         |  |                             | (150   | ) |      |   | (303   | )
|Other expense                                                            |  |                             | (257   | ) |      |   | (192   | )
|                                                                         |  |                             |        |   |      |   |        |  
|(Loss) earnings before income taxes                                      |  |                             | (2,401 | ) |      |   | 114    |  
|Tax (benefit) provision                                                  |  |                             | (786   | ) |      |   | 26     |  
|                                                                         |  |                             |        |   |      |   |        |  
|Net (loss) earnings                                                      |  |                             | (1,615 | ) |      |   | 88     |  
|Less: net earnings attributable to non-controlling interest              |  |                             | 1      |   |      |   | 7      |  
|                                                                         |  |                             |        |   |      |   |        |  
|Net (loss) earnings attributable to Cobra                                |  | $                           | (1,616 | ) |      | $ | 81     |  
|                                                                         |  |                             |        |   |      |   |        |  
|Net (loss) earnings per common share attributable to Cobra shareholders: |  |                             |        |   |      |   |        |  
|Basic                                                                    |  | $                           | (0.25  | ) |      | $ | 0.01   |  
|Diluted                                                                  |  | $                           | (0.25  | ) |      | $ | 0.01   |  
|Weighted average shares outstanding:                                     |  |                             |        |   |      |   |        |  
|Basic                                                                    |  |                             | 6,471  |   |      |   | 6,471  |  
|Diluted                                                                  |  |                             | 6,471  |   |      |   | 6,474  |  
|Dividends declared per common share                                      |  | $                           |       |   |      | $ | 0.16   |  

The accompanying notes are an integral part of these financial statements.



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Cobra Electronics Corporation and Subsidiaries

Consolidated Balance SheetsUnaudited

(In Thousands)



|                                                                                               |  |               |         |   |                  |   |         |  
|---------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                               |  | March 31,2009 |         |   | December 31,2008 |  
|ASSETS                                                                                         |  |               |         |   |                  |   |         |  
|Current assets:                                                                                |  |               |         |   |                  |   |         |  
|Cash                                                                                           |  | $             | 1,340   |   |                  | $ | 1,985   |  
|Receivables, net of allowance for claims and doubtful accounts of $83 in 2009 and $107 in 2008 |  |               | 14,226  |   |                  |   | 18,017  |  
|Inventories, primarily finished goods, net                                                     |  |               | 28,084  |   |                  |   | 27,464  |  
|Deferred income taxes, current                                                                 |  |               | 6,168   |   |                  |   | 6,130   |  
|Prepaid assets                                                                                 |  |               | 1,745   |   |                  |   | 1,705   |  
|Other current assets                                                                           |  |               | 1,943   |   |                  |   | 1,497   |  
|                                                                                               |  |               |         |   |                  |   |         |  
|Total current assets                                                                           |  |               | 53,506  |   |                  |   | 56,798  |  
|                                                                                               |  |              
|Property, plant and equipment, at cost:                                                        |  |               |         |   |                  |   |         |  
|Buildings and improvements                                                                     |  |               | 6,038   |   |                  |   | 5,996   |  
|Tooling and equipment                                                                          |  |               | 21,252  |   |                  |   | 21,512  |  
|                                                                                               |  |               |         |   |                  |   |         |  
|                                                                                               |  |               | 27,290  |   |                  |   | 27,508  |  
|                                                                                               |  |              
|Accumulated depreciation                                                                       |  |               | (21,924 | ) |                  |   | (21,962 | )
|Land                                                                                           |  |               | 230     |   |                  |   | 230     |  
|                                                                                               |  |               |         |   |                  |   |         |  
|Property, plant and equipment, net                                                             |  |               | 5,596   |   |                  |   | 5,776   |  
|                                                                                               |  |              
|Other assets:                                                                                  |  |               |         |   |                  |   |         |  
|Cash surrender value of officers life insurance policies                                      |  |               | 2,755   |   |                  |   | 3,034   |  
|Deferred income taxes, non-current                                                             |  |               | 2,905   |   |                  |   | 2,004   |  
|Intangible assets                                                                              |  |               | 10,944  |   |                  |   | 11,218  |  
|Other assets                                                                                   |  |               | 147     |   |                  |   | 168     |  
|                                                                                               |  |               |         |   |                  |   |         |  
|Total other assets                                                                             |  |               | 16,751  |   |                  |   | 16,424  |  
|                                                                                               |  |               |         |   |                  |   |         |  
|Total assets                                                                                   |  | $             | 75,853  |   |                  | $ | 78,998  |  
|                                                                                               |  |               |         |   |                  |   |         |  

The accompanying notes are an integral part of these financial statements.



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Cobra Electronics Corporation and Subsidiaries

Consolidated Balance SheetsUnaudited

(In Thousands, Except Share Data)



|                                                                                 |  |               |        |   |                  |   |        |  
|-------------------------------------------------------------------------------- |  | ------------- | ------ | - | ---------------- | - | ------ | -
|                                                                                 |  | March 31,2009 |        |   | December 31,2008 |  
|LIABILITIES AND EQUITY                                                           |  |               |        |   |                  |   |        |  
|Current liabilities:                                                             |  |               |        |   |                  |   |        |  
|Current maturities of long-term debt                                             |  | $             | 1,370  |   |                  | $ | 1,370  |  
|Accounts payable                                                                 |  |               | 3,965  |   |                  |   | 2,923  |  
|Accrued salaries and commissions                                                 |  |               | 910    |   |                  |   | 1,124  |  
|Accrued advertising and sales promotion costs                                    |  |               | 489    |   |                  |   | 1,174  |  
|Accrued product warranty costs                                                   |  |               | 698    |   |                  |   | 897    |  
|Accrued income taxes                                                             |  |               | 485    |   |                  |   | 495    |  
|Other accrued liabilities                                                        |  |               | 2,354  |   |                  |   | 2,584  |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Total current liabilities                                                        |  |               | 10,271 |   |                  |   | 10,567 |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Non-current liabilities:                                                         |  |               |        |   |                  |   |        |  
|Long-term bank debt, net of current maturities                                   |  |               | 15,427 |   |                  |   | 16,301 |  
|Deferred compensation                                                            |  |               | 6,684  |   |                  |   | 6,516  |  
|Deferred income taxes                                                            |  |               | 1,882  |   |                  |   | 1,983  |  
|Other long-term liabilities                                                      |  |               | 1,176  |   |                  |   | 1,077  |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Total non-current liabilities                                                    |  |               | 25,169 |   |                  |   | 25,877 |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Total liabilities                                                                |  |               | 35,440 |   |                  |   | 36,444 |  
|                                                                                 |  |              
|Commitments and contingencies                                                    |  |               |       |   |                  |   |       |  
|                                                                                 |  |              
|Shareholders equity:                                                            |  |               |        |   |                  |   |        |  
|Preferred stock, $1 par value, 1,000,000 shares authorized, none issued          |  |               |       |   |                  |   |       |  
|Common stock, $.33 1/3 par value, 12,000,000 shares authorized, 7,039,100 issued |  |               | 2,345  |   |                  |   | 2,345  |  
|Paid-in capital                                                                  |  |               | 20,412 |   |                  |   | 20,354 |  
|Retained earnings                                                                |  |               | 24,689 |   |                  |   | 26,305 |  
|Accumulated other comprehensive loss                                             |  |               | (3,221 | ) |                  |   | (2,637 | )
|                                                                                 |  |               |        |   |                  |   |        |  
|                                                                                 |  |               | 44,225 |   |                  |   | 46,367 |  
|Treasury stock, at cost (567,820 shares)                                         |  |               | (3,837 | ) |                  |   | (3,837 | )
|                                                                                 |  |               |        |   |                  |   |        |  
|Total shareholders equity - Cobra                                               |  |               | 40,388 |   |                  |   | 42,530 |  
|Non-controlling interest                                                         |  |               | 25     |   |                  |   | 24     |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Total equity                                                                     |  |               | 40,413 |   |                  |   | 42,554 |  
|                                                                                 |  |               |        |   |                  |   |        |  
|Total liabilities and equity                                                     |  | $             | 75,853 |   |                  | $ | 78,998 |  
|                                                                                 |  |               |        |   |                  |   |        |  

The accompanying notes are an integral part of these financial statements.



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Cobra Electronics Corporation and Subsidiaries

Consolidated Statement of Cash FlowsUnaudited

(In Thousands)



|                                                                                          |  |                             |        |   |      |   |        |  
|----------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                          |  | Three Months EndedMarch 31, |       
|                                                                                          |  | 2009                        |        |   | 2008 |  
|Cash flows from operating activities:                                                     |  |                             |        |   |      |   |        |  
|Net (loss) earnings attributable to Cobra                                                 |  | $                           | (1,616 | ) |      | $ | 81     |  
|Adjustments to reconcile net (loss) earnings to net cash flows from operating activities: |  |                             |        |   |      |   |        |  
|Depreciation and amortization                                                             |  |                             | 978    |   |      |   | 1,694  |  
|Deferred income taxes                                                                     |  |                             | (1,040 | ) |      |   | (306   | )
|Loss on cash surrender value (CSV) life insurance                                         |  |                             | 279    |   |      |   | 349    |  
|Stock-based compensation                                                                  |  |                             | 59     |   |      |   | 65     |  
|Non-controlling interest                                                                  |  |                             | 1      |   |      |   | 7      |  
|Changes in assets and liabilities:                                                        |  |                             |        |   |      |   |        |  
|Receivables                                                                               |  |                             | 3,791  |   |      |   | 5,015  |  
|Inventories                                                                               |  |                             | (620   | ) |      |   | 134    |  
|Other current assets                                                                      |  |                             | (617   | ) |      |   | (5     | )
|Accounts payable                                                                          |  |                             | 1,042  |   |      |   | 70     |  
|Accrued income taxes                                                                      |  |                             | (10    | ) |      |   | 634    |  
|Accrued liabilities                                                                       |  |                             | (1,328 | ) |      |   | (2,033 | )
|Deferred compensation                                                                     |  |                             | 168    |   |      |   | 168    |  
|Deferred income                                                                           |  |                             | (12    | ) |      |   | (112   | )
|Other long-term liabilities                                                               |  |                             | 98     |   |      |   | (197   | )
|                                                                                          |  |                             |        |   |      |   |        |  
|Net cash provided by operating activities                                                 |  |                             | 1,173  |   |      |   | 5,564  |  
|                                                                                          |  |                             |        |   |      |   |        |  
|Cash flows from investing activities:                                                     |  |                             |        |   |      |   |        |  
|Capital expenditures                                                                      |  |                             | (231   | ) |      |   | (110   | )
|Intangible assets                                                                         |  |                             | (140   | ) |      |   | (143   | )
|                                                                                          |  |                             |        |   |      |   |        |  
|Net cash used in investing activities                                                     |  |                             | (371   | ) |      |   | (253   | )
|                                                                                          |  |                             |        |   |      |   |        |  
|Cash flows from financing activities:                                                     |  |                             |        |   |      |   |        |  
|Bank borrowings                                                                           |  |                             | (874   | ) |      |   | (300   | )
|Dividends paid                                                                            |  |                             |       |   |      |   | (1,035 | )
|                                                                                          |  |                             |        |   |      |   |        |  
|Net cash used in financing activities                                                     |  |                             | (874   | ) |      |   | (1,335 | )
|                                                                                          |  |                             |        |   |      |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                              |  |                             | (573   | ) |      |   | 409    |  
|                                                                                          |  |                             |        |   |      |   |        |  
|Net (decrease) increase in cash                                                           |  |                             | (645   | ) |      |   | 4,385  |  
|Cash at beginning of period                                                               |  |                             | 1,985  |   |      |   | 1,860  |  
|                                                                                          |  |                             |        |   |      |   |        |  
|Cash at end of period                                                                     |  | $                           | 1,340  |   |      | $ | 6,245  |  
|                                                                                          |  |                             |        |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                         |  |                             |        |   |      |   |        |  
|Cash paid during the period for:                                                          |  |                             |        |   |      |   |        |  
|Interest                                                                                  |  | $                           | 139    |   |      | $ | 316    |  
|Income taxes, net of refunds                                                              |  | $                           | 87     |   |      | $ | (135   | )

The accompanying notes are an integral part of these financial statements.



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Cobra Electronics Corporation and Subsidiaries

Notes to Consolidated Financial Statements

For the three months ended March 31, 2009 and 2008

(Unaudited)

The consolidated financial statements included herein have been prepared by Cobra Electronics Corporation (the Company), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (the SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated Balance Sheet as of
December 31, 2008 has been derived from the audited consolidated balance sheet as of that date. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in
the Companys latest Annual Report on Form 10-K for the year ended December 31, 2008. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim
period a fair statement of such operations. Due to the seasonality of the Companys business, the results of operations of any interim period are not necessarily indicative of the results that may be expected for a fiscal year.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
 Cobra Consumer Electronics (Cobra) designs and markets consumer electronics products, which it sells primarily under the Cobra brand name principally in the United States, Canada and Europe. Performance Products Limited
(PPL), a subsidiary of the Company, sells its products under the Snooper tradename, principally in the United Kingdom, as well as elsewhere in Europe. A majority of the Companys products are purchased from overseas suppliers,
primarily in China, Hong Kong 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 financial statements also include a variable interest entity (VIE) of which PPL is the primary beneficiary. The consolidated entities are collectively referred to as the Company.
All significant intercompany balances and transactions have been eliminated in consolidation.



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(2) NEW ACCOUNTING PRONOUNCEMENTS

In December 2007, the FASB issued Financial Accounting Standard No. 160 Non-Controlling Interests in Consolidated Financial Statements(SFAS 160) an amendment of ARB No. 51. SFAS 160
changes the accounting for, and the financial statement presentation of, non-controlling equity interests in a consolidated subsidiary. SFAS 160 replaces the existing minority-interest provisions of Accounting Research Bulletin (ARB) 51,
Consolidated Financial Statements, by defining a new term non-controlling interests to replace what were previously called minority interests. The new standard establishes non-controlling interests as a component of the
equity of a consolidated entity. The underlying principle of the new standard is that both the controlling interest and the non-controlling interests are part of the equity of a single economic entity: the consolidated reporting entity. Classifying
non-controlling interests as a component of consolidated equity is a change from the current practice of treating minority interests as a mezzanine item between liabilities and equity or as a liability. The change affects both the accounting and
financial reporting for non-controlling interests in a consolidated subsidiary. SFAS 160 includes reporting requirements intended to clearly identify and differentiate the interests of the parent and the interests of the non-controlling owners. The
Company adopted SFAS 160 on January 1, 2009 and the reporting and disclosure requirements of this standard were applied retrospectively to the prior periods. Adoption of SFAS 160 did not have a material effect on the financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  An Amendment of FASB Statement
No. 133, (SFAS 161). SFAS 161 requires enhanced disclosures about an entitys derivative and hedging activities, including (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and
related hedged items are accounted for under SFAS 133, and (iii) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. The Company adopted SFAS 161 on
January 1, 2009. Since SFAS 161 only requires enhanced disclosures, this standard did not affect the Companys financial information or operating performance.

In April 2009, the FASB issued FASB Staff Position (FSP) FAS 107-b and APB 28-a. FSP FAS 107-a amends SFAS 107, Disclosures About Fair Value of Financial Instruments,and FSP APB 28-a amends
APBO 28, Interim Financial Reporting, to require fair value disclosures for interim financial statements. This FSP will be effective for interim periods ending after June 15, 2009. However, the Company early adopted FSP FAS 107-a and APB
28-a on January 1, 2009. Since this FSP only requires enhanced disclosures, this standard did not affect the Companys financial information or operating performance.



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(3) FAIR VALUE OF FINANCIAL INSTRUMENTS AND DERIVATIVES

The Companys financial instruments include cash, cash surrender value of officers life insurance policies, accounts receivable, accounts payable, current
portion of long-term debt, long-term debt and letters of credit. The carrying values of cash, accounts receivable and accounts payable approximate their fair value because of the short maturity of these instruments. The carrying amounts of the
Companys bank borrowings under its credit facility approximate fair value because the interest rates are reset periodically to reflect current market rates. The letters of credit reflect fair value as a condition of their underlying purpose
and are subject to fees competitively determined in the marketplace. The contract value/fair value of the letters of credit at March 31, 2009 was $1.9 million and at December 31, 2008 was $2.0 million. These letters of credit are only
executed with major financial institutions, and full performance is anticipated.

On January 1, 2008, the Company adopted Statement of Financial
Accounting Standard No. 157, Fair Value Measurements (SFAS 157) as it relates to financial assets and liabilities.

On
January 1, 2009, the Company adopted SFAS 157 as it relates to non-financial assets and liabilities that are not recognized or disclosed at fair value in the financial statements at least annually. This adoption of SFAS 157, as it relates to
non-financial assets and liabilities, had no impact on the financial statements.

SFAS 157 defines fair value as the price that would be received to sell
an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in Generally Accepted Accounting Principles (GAAP) for the definition of fair
value, except for the fair value of leased property as defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent
sources (observable inputs) and (2) an entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three
broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under
SFAS 157 are described below:



| |  |  | Level 1  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2  Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including
quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g.,
interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3  Inputs that are both significant to the fair value measurement and unobservable.
| | - |  | ------------------------------------------------------------------------------------------

As of March 31, 2009, the Company had a derivative contract for an interest rate swap that was valued using quoted market prices. This financial instrument is
exchange-traded and is classified within Level 2 of the fair value hierarchy because the exchange is not deemed to be an active market. The derivative was classified as a long-term liability on the balance sheet.

The following table provides the fair value information as of March 31, 2009 and December 31, 2008.



|                   |  |                |     |                   |   |                                            |  |                |     |                 |   |                                            |  |   |     |  |   |    
|------------------ |  | -------------- | --- | ----------------- | - | ------------------------------------------ |  | -------------- | --- | --------------- | - | ------------------------------------------ |  | - | --- |  | - | ---
|                   |  | March 31, 2009 |     | December 31, 2008
|                   |  |                |     | Fair Value        |   |                                            |  | Fair Value    
|                   |  | CarryingAmount |     | TotalFair Value   |   | SignificantOther ObservableInputs(Level
2) |  | CarryingAmount |     | TotalFair Value |   | SignificantOther ObservableInputs(Level
2)
|                   |  | (In thousands)
|Interest rate swap |  | $              | 627 |                   | $ | 627                                        |  | $              | 627 |                 | $ | 291                                        |  | $ | 291 |  | $ | 291

At March 31, 2009 the existing contract applicable to the term loan with a value of $250,000 was terminated and
replaced with a contract applicable to the term loan and a portion of the revolving loan valued at $377,000. The $250,000 value of the terminated liability will be amortized thru September 30, 2011.



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(4) DERIVATIVES

The
Company operates 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s current hedging activity is limited to foreign currency purchases and an interest rate swap. The purpose of the foreign currency
hedging activities is to protect the Company from the risk that eventual settlement of foreign currency transactions will be adversely affected by changes in exchange rates. The purpose of the interest rate swap is to fix the interest rate for the
term of the revolving loan, thereby protecting the Company from future interest rate increases. The interest rate swap represents a cash flow hedge.

The
Company hedges foreign exchange exposures by entering into various short-term foreign exchange forward contracts. Under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, the instruments are carried at fair value
in the 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 of SFAS No. 133 are recorded as a component of other
comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Changes in the fair value of foreign exchange forward contracts that do not meet the applicable hedging criteria of SFAS
No. 133 are recorded currently in income as cost of sales. Hedging activities did not have a material impact on results of operations or financial condition during the three-month periods ending March 31, 2009 and 2008.

At March 31, 2009, the Company did not have any open foreign exchange contracts. The carrying value of the interest rate swap, net of tax, totaled $376,000 and
$233,000, respectively at March 31, 2009 and 2008.



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The fair value of outstanding derivative contracts recorded as liabilities in the accompanying balance sheet were as
follows:



|                     |  |                        |  |                |     |                  |   |    
|-------------------- |  | ---------------------- |  | -------------- | --- | ---------------- | - | ---
|Liability Derivative |  | Balance Sheet Location |  | March 31,2009  |     | December 31,2008
|                     |  |                        |  | (In thousands)
|Interest rate swap   |  | Non-current liability  |  | $              | 627 |                  | $ | 291
|                     |  |                        |  |                |     |                  |   |    
|Total                |  |                        |  | $              | 627 |                  | $ | 291
|                     |  |                        |  |                |     |                  |   |    

The effective portion of the gain (loss) on outstanding derivatives recognized in Other Comprehensive Income (OCI)
for the three-month period ending March 31, 2009 and 2008 follows:



|                   |  |                             |      |   |      |   |    
|------------------ |  | --------------------------- | ---- | - | ---- | - | ---
|                   |  | Three Months EndedMarch 31,
|                   |  | 2009                        |      |   | 2008
|                   |  | (In thousands)             
|Interest rate swap |  | $                           | (201 | ) |      | $ | 144
|                   |  |                             |      |   |      |   |    
|Total              |  | $                           | (201 | ) |      | $ | 144
|                   |  |                             |      |   |      |   |    

The effective portion of the gain (loss) reclassified from Accumulated Comprehensive Other Income into Income
during the three-month period ending March 31, 2009 follows:



|                          |  |                    |   
|------------------------- |  | ------------------ | --
|Income Statement Location |  | AmountReclassified
|                          |  | (In Thousands)    
|Interest expense          |  | $                  | 43
|                          |  |                    |   
|Total                     |  | $                  | 43
|                          |  |                    |   



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(5) SEGMENT INFORMATION

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). The Company has separate sales departments and distribution channels for each segment, which provide all segment exclusive product lines to all customers for
that segment. Currently, there are no intersegment sales.

The tabular presentation below summarizes the financial information by business segment for the
three months ended March 31, 2009 and 2008.



|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|----------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | ----- | ----- |  | - | ------ | - |  | --- | ------ | ----- |  | - | ----- |  | - | ------ | -
|                                                            |  | Three Months EndedMarch 31, 2009 |        |   | Three Months EndedMarch 31, 2008 |  
|                                                            |  | COBRA                            |        |   | PPL                              |   |       | TOTAL |  |   | COBRA  |   |  | PPL |        | TOTAL | 
|                                                            |  | (in thousands)                   |       
|Net sales                                                   |  | $                                | 17,248 |   |                                  | $ | 1,837 |       |  | $ | 19,085 |   |  | $   | 24,576 |       |  | $ | 4,282 |  | $ | 28,858 |  
|Cost of sales                                               |  |                                  | 12,987 |   |                                  |   | 1,036 |       |  |   | 14,023 |   |  |     | 17,592 |       |  |   | 2,350 |  |   | 19,942 |  
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|Gross profit                                                |  |                                  | 4,261  |   |                                  |   | 801   |       |  |   | 5,062  |   |  |     | 6,984  |       |  |   | 1,932 |  |   | 8,916  |  
|Selling, general and administrative expense                 |  |                                  | 6,077  |   |                                  |   | 979   |       |  |   | 7,056  |   |  |     | 6,971  |       |  |   | 1,336 |  |   | 8,307  |  
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|(Loss) earnings from operations                             |  |                                  | (1,816 | ) |                                  |   | (178  | )     |  |   | (1,994 | ) |  |     | 13     |       |  |   | 596   |  |   | 609    |  
|Interest expense                                            |  |                                  | (150   | ) |                                  |   |      |       |  |   | (150   | ) |  |     | (303   | )     |  |   |      |  |   | (303   | )
|Other (expense) income                                      |  |                                  | (234   | ) |                                  |   | (23   | )     |  |   | (257   | ) |  |     | (376   | )     |  |   | 184   |  |   | (192   | )
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|(Loss) earnings before income taxes                         |  |                                  | (2,200 | ) |                                  |   | (201  | )     |  |   | (2,401 | ) |  |     | (666   | )     |  |   | 780   |  |   | 114    |  
|Tax (benefit) expense                                       |  |                                  | (713   | ) |                                  |   | (73   | )     |  |   | (786   | ) |  |     | (92    | )     |  |   | 118   |  |   | 26     |  
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|Net (loss) earnings                                         |  |                                  | (1,487 | ) |                                  |   | (128  | )     |  |   | (1,615 | ) |  |     | (574   | )     |  |   | 662   |  |   | 88     |  
|Less: net earnings attributable to non-controlling interest |  |                                  |       |   |                                  |   | 1     |       |  |   | 1      |   |  |     |       |       |  |   | 7     |  |   | 7      |  
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  
|Net (loss) earnings attributable to Cobra                   |  | $                                | (1,487 | ) |                                  | $ | (129  | )     |  | $ | (1,616 | ) |  | $   | (574   | )     |  | $ | 655   |  | $ | 81     |  
|                                                            |  |                                  |        |   |                                  |   |       |       |  |   |        |   |  |     |        |       |  |   |       |  |   |        |  

There have been no differences in the basis of segmentation or the basis of measurement.

(6) MOBILE NAVIGATION STRATEGY CHANGE

The Companys decision to
change its North American mobile navigation strategy resulted in a $7.7 million charge in the fourth quarter of 2007. This strategy change limits the future development of mass market mobile navigation products in North America to unique mobile
navigation products sold into niche markets with specialized and focused distribution and employs lower cost sourcing arrangements utilizing the platform of Performance Products Limited or that of other qualified vendors. The mobile navigation
strategy change reserve totaled $109,000 at March 31, 2009 and the Company does not expect future costs to exceed the current reserve balance.



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##### Table of Contents

(7) FINANCING ARRANGEMENTS

On February 15, 2008, the Company entered into a Loan and Security Agreement (the LSA) with The Private Bank and Trust Company, as lender and agent, and RBS Citizens, N.A. for a $5.7 million term loan facility and a $40
million revolving credit facility, both of which mature on October 19, 2011. Borrowings under the term loan were used to pay off the balance and close the term loan from the Companys previous credit agreement. Borrowings under the new
revolving credit facility were used to pay off and close the previous revolving credit facility and for general corporate purposes. The LSA replaced the Companys previous credit agreement.

At March 31, 2009, the Company had interest bearing debt outstanding of $16.8 million, consisting of the $4.1 million term loan and $12.7 million borrowed under the
revolving credit facility. As of March 31, 2009, availability was approximately $7.8 million under the revolving credit facility based on the borrowing base formula.

The term loan requires a $310,000 payment at the end of each calendar quarter through September 30, 2009 and a $440,000 payment for the remaining seven quarters. Interest under the LSA is calculated based on, at the
Companys option, the base rate (Prime or the Federal Funds Rate plus 0.5% per annum) or LIBOR, plus an applicable margin. The margin at March 31, 2009 was -0.5% for base loan rate (prime) or LIBOR plus 1%. The margin as of April 14, 2009,
based on the December 31, 2008 Debt to EBITDA ratio, increased to LIBOR plus 1.5% or prime. The revolving credit facility under the LSA is also subject to an unused line fee of 0.25%. Borrowings under the LSA are secured by substantially all of the
assets of the Company except for equity interests in non-US subsidiaries.

The LSA allows the Company to pay dividends and repurchase its stock.
Availability under the revolver is calculated based on a borrowing base formula including 75% of eligible accounts receivable, 60% of eligible inventory and 60% of open trade letters of credit, but it can be subject to reserves at the lenders
discretion. Excess availability must be at least $3 million at all times. The LSA contains certain financial and other covenants including a fixed charge coverage ratio and a debt to EBITDA ratio. The term loan is subject to quarterly installment
payments and mandatory prepayments based on certain asset sales and issuance of equity or debt. The Company was in compliance with all debt covenants at March 31, 2009.

The weighted average interest rate for the three-month periods ending March 31, 2009 and 2008 was 3.5% and 6.3%, respectively. The Company entered into an interest rate swap on March 31, 2009 which fixed the
interest rate on the term loan and a portion of the revolving loan at 3.47%.



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##### Table of Contents

(8) EARNINGS/LOSS PER SHARE



|                                                                   |  |                                   |           |   |      |   |           |  
|------------------------------------------------------------------ |  | --------------------------------- | --------- | - | ---- | - | --------- | -
|                                                                   |  | Three Months EndedMarch 31,       |          
|                                                                   |  | 2009                              |           |   | 2008 |  
|                                                                   |  | (In Thousands, Except Share Data) |          
|Basic (loss) earnings per share:                                   |  |                                   |           |   |      |   |           |  
|Net (loss) earnings available to Cobra shareholders                |  | $                                 | (1,616    | ) |      | $ | 81        |  
|Weighted-average shares outstanding                                |  |                                   | 6,471,280 |   |      |   | 6,471,280 |  
|                                                                   |  |                                   |           |   |      |   |           |  
|Basic (loss) earnings per share                                    |  | $                                 | (0.25     | ) |      | $ | 0.01      |  
|                                                                   |  |                                   |           |   |      |   |           |  
|Diluted (loss) earnings per share:                                 |  |                                   |           |   |      |   |           |  
|Weighted-average shares outstanding                                |  |                                   | 6,471,280 |   |      |   | 6,471,280 |  
|Dilutive shares issuable in connection with stock option plans (a) |  |                                   |          |   |      |   | 51,516    |  
|Less: shares purchasable with option proceeds                      |  |                                   |          |   |      |   | (48,851   | )
|                                                                   |  |                                   |           |   |      |   |           |  
|Total                                                              |  |                                   | 6,471,280 |   |      |   | 6,473,945 |  
|                                                                   |  |                                   |           |   |      |   |           |  
|Diluted (loss) earnings per share                                  |  | $                                 | (0.25     | ) |      | $ | 0.01      |  
|                                                                   |  |                                   |           |   |      |   |           |  



|(a) | Stock options to purchase 509,296 shares were not included in the calculation for dilutive loss per share for the three months ended March 31, 2009 since the exercise price was
above the market price.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(9) COMPREHENSIVE EARNINGS/LOSS



|                                                        |  |                             |        |   |      |   |    
|------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ---
|                                                        |  | Three Months EndedMarch 31,
|                                                        |  | 2009                        |        |   | 2008
|                                                        |  | (In Thousands)             
|Net (loss) earnings attributable to Cobra               |  | $                           | (1,616 | ) |      | $ | 81 
|Foreign currency translation adjustment (no tax effect) |  |                             | (383   | ) |      |   | 270
|Interest rate swap and foreign exchange (net of tax)    |  |                             | (201   | ) |      |   | 144
|                                                        |  |                             |        |   |      |   |    
|Total comprehensive (loss) earnings                     |  | $                           | (2,200 | ) |      | $ | 495
|                                                        |  |                             |        |   |      |   |    



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##### Table of Contents

(10) COMMITMENTS AND CONTINGENCIES

The Company is subject to various unresolved legal actions, which arise in the normal course of its business. None of these matters are expected to have a material adverse effect on the Companys financial
position or results of operations. However, the ultimate resolution of these matters could result in a change in the Companys estimate of its liability for these matters.

The Company warrants to the consumer who purchases its products that it will repair or replace, without charge, defective products within a specified time period, generally one year. The Company also has a return
policy for its customers that allows customers 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. Consequently, it maintains a
warranty reserve, which reflects historical warranty return rates by product category multiplied by the most recent six months of unit sales of that model and the unit standard cost of the model. A roll-forward of the warranty reserve follows:



|                                                    |  |                                  |      |   |                             |   |        |  
|--------------------------------------------------- |  | -------------------------------- | ---- | - | --------------------------- | - | ------ | -
|                                                    |  | Three Months EndedMarch 31, 2009 |      |   | Year EndedDecember 31, 2008 |  
|                                                    |  | (In Thousands)                   |     
|Accrued product warranty costs, beginning of period |  | $                                | 897  |   |                             | $ | 3,440  |  
|Warranty provision                                  |  |                                  | 422  |   |                             |   | 2,908  |  
|Warranty expenditures                               |  |                                  | (621 | ) |                             |   | (5,451 | )
|                                                    |  |                                  |      |   |                             |   |        |  
|Accrued product warranty costs, end of period       |  | $                                | 698  |   |                             | $ | 897    |  
|                                                    |  |                                  |      |   |                             |   |        |  

At March 31, 2009 and December 31, 2008, the Company had outstanding inventory purchase orders with
suppliers totaling approximately $21.7 million and $16.6 million, respectively.



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##### Table of Contents

(11) INVENTORY VALUATION RESERVES

The Company maintains a liquidation reserve representing the write-down of returned product from its 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. The decision to sell or return products to vendors 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 the vendor credit. The amount of the reserve is determined by comparing the cost of each unit returned to the estimated amount to be realized upon
each units disposition, either from returning the unit to the vendor for partial credit towards the cost of new, similar product or liquidating the unit. 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:



|                                         |  |                                  |      |   |                             |   |        |  
|---------------------------------------- |  | -------------------------------- | ---- | - | --------------------------- | - | ------ | -
|                                         |  | Three Months EndedMarch 31, 2009 |      |   | Year EndedDecember 31, 2008 |  
|                                         |  | (In Thousands)                   |     
|Liquidation reserve, beginning of period |  | $                                | 623  |   |                             | $ | 2,695  |  
|Liquidation provision                    |  |                                  | 881  |   |                             |   | 4,490  |  
|Liquidation of models                    |  |                                  | (625 | ) |                             |   | (6,562 | )
|                                         |  |                                  |      |   |                             |   |        |  
|Liquidation reserve, end of period       |  | $                                | 879  |   |                             | $ | 623    |  
|                                         |  |                                  |      |   |                             |   |        |  

The Company maintains a net realizable value (NRV) reserve to write-down, as necessary, certain
finished goods, except for those goods covered by the previously discussed liquidation reserve, below cost. The reserve includes models where it is determined that the estimated 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 NRV of such models. The estimated NRV of each model is the per unit price that is estimated to be received if the model were 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:



|                                            |  |                                  |     |   |                             |   |        |  
|------------------------------------------- |  | -------------------------------- | --- | - | --------------------------- | - | ------ | -
|                                            |  | Three Months EndedMarch 31, 2009 |     |   | Year EndedDecember 31, 2008 |  
|                                            |  | (In Thousands)                   |    
|Net realizable reserve, beginning of period |  | $                                | 109 |   |                             | $ | 1,614  |  
|NRV provision                               |  |                                  | 67  |   |                             |   | 870    |  
|NRV write-offs                              |  |                                  | (12 | ) |                             |   | (2,375 | )
|                                            |  |                                  |     |   |                             |   |        |  
|Net realizable reserve, end of period       |  | $                                | 164 |   |                             | $ | 109    |  
|                                            |  |                                  |     |   |                             |   |        |  



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##### Table of Contents

(12) OTHER INCOME (EXPENSE)

The following table shows the components of other income (expense):



|                     |  |                             |      |   |      |   |      |  
|-------------------- |  | --------------------------- | ---- | - | ---- | - | ---- | -
|                     |  | Three Months EndedMarch 31, |     
|                     |  | 2009                        |      |   | 2008 |  
|                     |  | (In Thousands)              |     
|Interest income      |  | $                           | 4    |   |      | $ | 16   |  
|CSV loss             |  |                             | (279 | ) |      |   | (349 | )
|Exchange (loss) gain |  |                             | (26  | ) |      |   | 173  |  
|Other - net          |  |                             | 44   |   |      |   | (32  | )
|                     |  |                             |      |   |      |   |      |  
|                     |  | $                           | (257 | ) |      | $ | (192 | )
|                     |  |                             |      |   |      |   |      |  



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##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

ANALYSIS OF RESULTS OF OPERATIONS

Executive Summary

Net loss for the first quarter of 2009 totaled $1.6 million, or $.25 loss per share, compared to net earnings of $81,000, or $.01 per share, for the first quarter of
2008. Key factors contributing to the lower net earnings were:



| |  |  | Net sales declined $9.8 million, or 33.9%, principally because of the adverse economic climate in the United States and Europe.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | Gross margins decreased by 4.4 points to 26.5 points due to lower volume, unfavorable sales mix and the impact of fixed overhead charges against a lower sales base.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Selling, general and administrative expenses decreased $1.3 million, or 15.1%, due to managements effort to reduce spending and lower variable selling costs.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other expenses decreased by $88,000 mainly due to lower interest expense.
| | - |  | -------------------------------------------------------------------------

The combined impact of the foregoing factors was a $2.5 million decrease in income before taxes.

The effective tax rate
for the first quarter of 2009 was 32.7% compared to 22.8% for the first quarter of 2008. The higher effective tax rate for the first quarter of 2009 was because of managements decision to repatriate the future earnings of its Irish subsidiary
as of January 1, 2009.

Outlook

The
prospects for the global economy, particularly in Europe, remain uncertain. Although the first quarter results were below expectations, the Company continues to forecast profitability in 2009 as new products are introduced and as the Company takes
advantage of new and enhanced marketing channels. As noted previously, the Company has taken steps to weather the downturn and continue to identify opportunities to reduce expenses in light of reduced consumer spending. In light of the uncertain
economic climate, the Board of Directors has elected not to pay a dividend in 2009.



18



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##### Table of Contents

EBITDA

The
following table shows the reconciliation of net earnings (loss) to the Adjusted EBITDA:



|                               |  |                             |        |   |      |   |       |  
|------------------------------ |  | --------------------------- | ------ | - | ---- | - | ----- | -
|                               |  | Three MonthsEnded March 31, |       
|                               |  | (in thousands)              |       
|                               |  | 2009                        |        |   | 2008 |  
|Net (loss) earnings            |  | $                           | (1,616 | ) |      | $ | 81    |  
|Depreciation/amortization      |  |                             | 978    |   |      |   | 1,694 |  
|Interest expense               |  |                             | 150    |   |      |   | 303   |  
|Income tax (benefit) provision |  |                             | (786   | ) |      |   | 26    |  
|Minority interest              |  |                             | 1      |   |      |   | 7     |  
|                               |  |                             |        |   |      |   |       |  
|EBITDA                         |  |                             | (1,273 | ) |      |   | 2,111 |  
|Stock option expense           |  |                             | 59     |   |      |   | 65    |  
|CSV loss                       |  |                             | 279    |   |      |   | 349   |  
|Other non-cash items           |  |                             | 53     |   |      |   | (160  | )
|                               |  |                             |        |   |      |   |       |  
|Adjusted EBITDA                |  | $                           | (882   | ) |      | $ | 2,365 |  
|                               |  |                             |        |   |      |   |       |  

EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA, represents
EBITDA plus the applicable adjustments required to agree 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 Adjusted EBITDA to assess operating performance and ensure compliance with financial covenants.

EBITDA and Adjusted EBITDA are Non-GAAP performance indicators that should be used in conjunction with GAAP performance measurements such as net sales, operating
profit and net income to evaluate the Companys operating performance. EBITDA and Adjusted EBITDA are not alternatives to net income or cash flow from operations determined in accordance with GAAP. Furthermore, EBITDA and Adjusted EBITDA may
not be comparable to the calculation of similarly titled measures reported by other companies.



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##### Table of Contents

First Quarter 2009 Compared to First Quarter 2008

The following table contains sales and pre-tax (loss) profit after eliminating intercompany accounts by business segment for the first quarter ending March 31, 2009
and 2008:



|                 |  |                |        |             |      |        |           |                                  |                     |        |  |           |      |   |             |   |         |   |  |   |        |  
|---------------- |  | -------------- | ------ | ----------- | ---- | ------ | --------- | -------------------------------- | ------------------- | ------ |  | --------- | ---- | - | ----------- | - | ------- | - |  | - | ------ | -
|                 |  | First Quarter  |       
|                 |  | 2009           |        |             | 2008 |        |           | 2009 vs. 2008Increase (Decrease) |                    
|                 |  | (in thousands) |       
|Business Segment |  | Net Sales      |        | Pre-taxLoss |      |        | Net Sales |                                  | Pre-tax(Loss)Profit |        |  | Net Sales |      |   | Pre-taxLoss |  
|Cobra            |  | $              | 17,248 |             | $    | (2,200 | )         |                                  | $                   | 24,576 |  | $         | (666 | ) |             | $ | (7,328) |   |  | $ | (1,534 | )
|PPL              |  |                | 1,837  |             |      | (201   | )         |                                  |                     | 4,282  |  |           | 780  |   |             |   | (2,445  | ) |  |   | (981   | )
|                 |  |                |        |             |      |        |           |                                  |                     |        |  |           |      |   |             |   |         |   |  |   |        |  
|Total Company    |  | $              | 19,085 |             | $    | (2,401 | )         |                                  | $                   | 28,858 |  | $         | 114  |   |             | $ | (9,773  | ) |  | $ | (2,515 | )
|                 |  |                |        |             |      |        |           |                                  |                     |        |  |           |      |   |             |   |         |   |  |   |        |  

Cobra Business Segment

Cobra net sales decreased $7.3 million, or 29.8%, in the first quarter of 2009 to $17.2 million, as compared to prior year. Excluding the mobile navigation sales, sales for the first quarter of 2009 were down $6.2
million, or 26.5%. Most of this sales decline was due to lower sales of two-way radios and Citizens Band radios in the United States and a broad decline across several product lines in Europe, as the severe global economic downturn resulted in
significant declines in retail store traffic and consumer spending for discretionary items. In particular, sales of Citizens Band radios were down by more than 40%, as declining freight movements resulted in reductions in traffic at travel centers
and truck stops. Additionally in 2009, Cobra experienced a vendor delay that caused more than $800,000 of Citizens Band radio sales to shift to the second quarter. Lastly, net sales for 2008 included $1.1 million for mobile navigation products that
have been discontinued in 2009 due to the Companys change in its North American mobile navigation strategy as reflected in the following table:



|         |  |                                         |        |   |                        |   |        |                |  |   |        |  
|-------- |  | --------------------------------------- | ------ | - | ---------------------- | - | ------ | -------------- |  | - | ------ | -
|         |  | Mobile Navigation/GPS ProductsNet Sales |        |   | OtherProductsNet Sales |   |        | TotalNet Sales | 
|2009     |  | $                                       |       |   |                        | $ | 17,248 |                |  | $ | 17,248 |  
|2008     |  |                                         | 1,123  |   |                        |   | 23,453 |                |  |   | 24,576 |  
|         |  |                                         |        |   |                        |   |        |                |  |   |        |  
|Decrease |  | $                                       | (1,123 | ) |                        | $ | (6,205 | )              |  | $ | (7,328 | )
|         |  |                                         |        |   |                        |   |        |                |  |   |        |  



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Gross profit decreased $2.7 million in the first quarter of 2009 from the first quarter of 2008 to $4.3 million and the
gross margin decreased to 24.7% in the first quarter of 2009 from 28.4% in the first quarter of 2008. Excluding the mobile navigation sales, the 2009 gross margin of 24.7% declined from the 2008 gross margin of 27.2% mainly due to sales mix, as well
as the effect of overhead expense on a reduced sales base, which resulted in a reduction in the gross margin by 0.9%. In 2008, as reflected below, Mobile Navigation/GPS sales added 1.2% to Cobras gross margin in the first quarter of 2008.



|                  |  |                                                   |       |   |                           |   |        |                  |  |   |        |  
|----------------- |  | ------------------------------------------------- | ----- | - | ------------------------- | - | ------ | ---------------- |  | - | ------ | -
|                  |  | Mobile Navigation/GPS Products Gross(Loss) Profit |       |   | OtherProductsGross Profit |   |        | TotalGrossProfit | 
|                  |  |                                                   |       |   | (in thousands)            |   |        |                  | 
|2009 gross profit |  | $                                                 |      |   |                           | $ | 4,261  |                  |  | $ | 4,261  |  
|2008 gross profit |  |                                                   | 607   |   |                           |   | 6,377  |                  |  |   | 6,984  |  
|                  |  |                                                   |       |   |                           |   |        |                  |  |   |        |  
|Decrease          |  | $                                                 | (607  | ) |                           | $ | (2,116 | )                |  | $ | (2,723 | )
|                  |  |                                                   |       |   |                           |   |        |                  |  |   |        |  
|2009 gross margin |  |                                                   | NA    |   |                           |   | 24.7%  |                  |  |   | 24.7%  |  
|2008 gross margin |  |                                                   | 54.1% |   |                           |   | 27.2%  |                  |  |   | 28.4%  |  

Selling, general and administrative expenses declined $894,000, or 12.8%, to $6.1 million in the first quarter of
2009 from $7.0 million in the first quarter of 2008. Decreased variable selling costs because of lower sales, accounted for $371,000 of the decline. Fixed marketing and administrative expenses were down $523,000 due to cost savings measures
implemented by management, including an approximate 10% reduction in the Cobra segment headcount. As a result of the headcount reduction, the first quarter of 2009 included $147,000 of severance expenses.

Interest expense decreased $153,000 in the first quarter of 2009 compared to the prior years quarter due to the lower level of debt and a more favorable interest
rate. Other expense decreased $142,000 due to $70,000 of lower CSV expense and $52,000 of royalty income on cell phone headsets sold under the Cobra name by a third party.

As a result of the above, there was a pre-tax loss of $2.2 million in the first quarter of 2009 compared to a pre-tax loss of $666,000 in the first quarter of 2008.



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Performance Products Limited (PPL) Business Segment

PPLs net sales decreased by $2.5 million, or 57.1%, to $1.8 million in the first quarter of 2009 from $4.3 million in the first quarter of 2008. This decrease was
due to the severe recession, particularly in the United Kingdom as well as elsewhere in Europe, delays in new products because of development timing issues and a stronger dollar versus the pound sterling.

Gross profit decreased $1.1 million to $801,000 in the first quarter of 2009 from $1.9 million in the first quarter of 2008. Gross margin decreased to 43.6% in 2009 from
45.1% in 2008 primarily due to the impact of amortizing intangible assets (purchase price allocation) over lower sales volume.

Selling, general and
administrative expenses were $357,000 or 26.7% lower than the first quarter of 2008 and mainly reflected the impact of a stronger dollar. As a percentage of net sales, selling, general and administrative expenses increased to 53.3% in 2009 from
31.2% in 2008 due to the lower level of sales in 2009 as compared to 2008.

As a result of the above, loss before income taxes totaled $201,000 for the
first quarter of 2009 compared to $780,000 pre-tax income for the first quarter of 2008.



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LIQUIDITY AND CAPITAL RESOURCES

On February 15, 2008, the Company entered into a Loan and Security Agreement (the LSA) with The Private Bank and Trust Company, as lender and agent, and RBS Citizens, N.A. for a $5.7 million term loan
facility and a $40 million revolving credit facility. Both facilities mature on October 19, 2011 and replaced the previous credit agreement.

At
March 31, 2009, the Company had interest bearing debt outstanding of $16.8 million, consisting of the $4.1 million term loan and $12.7 million in the revolver. As of March 31, 2009, availability was approximately $7.8 million under the
revolving credit line based on the borrowing base formula.

For the three months ended March 31, 2009, net cash flows from operating activities were
$1.2 million. Significant net cash inflows from operations included the add-back of non-cash depreciation and amortization of $978,000 million, a reduction in accounts receivable of $3.8 million and an increase in accounts payable of $1.0 million.
The decrease in accounts receivable resulted from collections on sales from the fourth quarter of 2008. The increase in accounts payable was due to higher inventory levels and additions to prepaid and other current assets. Partially offsetting these
inflows was the net loss of $1.6 million, an increase in inventory of $620,000, an increase in net deferred income tax asset of $1.0 million and a decrease in accrued liabilities of $1.3 million. The deferred tax asset increase was due to the
current year tax benefit while the decrease in accrued liabilities was because of lower accruals for variable program selling expenses (reflecting both lower first quarter sales and timing of payments) and payment of year-end payroll bonuses.

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 2009 to fund its working capital needs.

Net cash used in investing activities amounted to $371,000 in the first three months of 2009. $140,000 was due to an increase in intangible assets and $231,000 was used for capital expenditures, primarily computer
equipment, tooling and building improvements.

Net cash used in the first three months of 2009 for financing activities totaled $874,000 due to reduction
of long-term debt. For 2009, the cash used for financing activities will most likely be limited to debt reduction. The Company decided not to pay a dividend in 2009.

The Company believes that for the foreseeable future, it will be able to continue to fund its operations and seasonal working capital requirements with cash generated from operations and borrowings under the
Companys current or similar future credit agreement. The Companys credit agreement contains certain financial covenants with which the Company was in compliance as of March 31, 2009. A failure to comply with these covenants in
future periods 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.



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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting policies and estimates generally consist of those that reflect significant judgments and uncertainties and could potentially result in materially
different results under different assumptions. For a description of the Companys critical accounting polices and estimates refer to the Companys Annual Report on Form 10-K for the year ended December 31, 2008. 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.

FORWARD-LOOKING STATEMENTS

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.



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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:



| |  |  | global economic and market conditions, including continuation of or changes in the current economic environment;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | ability of the Company to introduce new products to meet consumer needs, including timely introductions as new consumer technologies are introduced, and customer
and consumer acceptance of these new product introductions;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pressure for the Company to reduce prices for older products as newer technologies are introduced;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | significant competition in the consumer electronics business, including introduction of new products and changes in pricing;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | factors related to foreign manufacturing, sourcing and sales (including foreign government regulation, trade and importation, and health and safety concerns, and
effects of fluctuation in exchange rates);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | ability of the Company to maintain adequate financing, to bear the interest cost of such financing and to remain in compliance with financing covenants;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | impairment of intangible assets due to market conditions and/or the Companys operating results;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | changes in law;
| | - |  | ---------------



| |  |  | ability to successfully integrate acquisitions;
| | - |  | -----------------------------------------------



| |  |  | and other risk factors, which may be detailed from time to time in the Companys SEC filings.
| | - |  | ---------------------------------------------------------------------------------------------

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.



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##### Table of Contents

|Item 3. | Qualitative and Quantitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

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 mitigates the financial impact with hedging and interest rate swaps.

Other than executing an interest rate swap agreement to cover the term loan and $4.0 million of the revolving loan, there have been no material changes in the Companys market risk since December 31, 2008.



|Item 4. | Controls and Procedures
|------- | -----------------------

The Company has established disclosure
controls and procedures 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.

As of March 31, 2009, 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 (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective as of March 31, 2009.

There has been no change in the
Companys internal control over financial reporting that occurred during the first three months of 2009 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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PART II

OTHER INFORMATION



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material changes to the risk
factors as previously disclosed under Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2008.



|Item 6. | Exhibits
|------- | --------



|a) | Exhibit 10.1 2009 Executive Incentive Payment Plan.
|-- | ---------------------------------------------------



|b) | Exhibit 31.1 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
|-- | -----------------------------------------------------------------------------------



|c) | Exhibit 31.2 Rule 13a-14(a)/15d14(a) Certification of the Chief Financial Officer.
|-- | -----------------------------------------------------------------------------------



|d) | Exhibit 32.1 Section 1350 Certification of the Chief Executive Officer.
|-- | -----------------------------------------------------------------------



|e) | Exhibit 32.2 Section 1350 Certification of the Chief Financial Officer.
|-- | -----------------------------------------------------------------------



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



COBRA ELECTRONICS CORPORATIONBy

/s/ MICHAEL SMITHMichael SmithSenior Vice President andChief Financial Officer(Duly Authorized Officer and PrincipalFinancial Officer)


Dated: May 11, 2009



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INDEX TO EXHIBITS



|              |  |                                                                       
|------------- |  | ----------------------------------------------------------------------
|ExhibitNumber |  | Description of Document                                               
|10.1          |  | 2009 Executive Incentive Payment Plan.                                
|              | 
|31.1          |  | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
|              | 
|31.2          |  | Rule 13a-14(a)/15d14(a) Certification of the Chief Financial Officer.
|              | 
|32.1          |  | Section 1350 Certification of the Chief Executive Officer.            
|              | 
|32.2          |  | Section 1350 Certification of the Chief Financial Officer.