In financials released today (November 14, 2011) Spy Optic has announced that net sales in the quarter ended September 30, 2011 were up 33 percent to $9.2 million, however, the company still lost $3 million on the quarter compared to $900,000 in the same three months in 2010.
“We are very pleased with the growth that we generated this quarter, particularly in our core SPY® products which had nice growth in both goggles and sunglasses, in North America and internationally. This is especially encouraging following the significant decline the Company had in the first quarter of the year,” said Orange 21 President Michael Marckx. “Our new team’s focus on the marketing, product development and sales programs to leverage the core SPY® brand appears to be gaining traction on many fronts.”
Increased sales would suggest that things are definitely moving in the right direction, however profitability would likely be even better. Follow the jump for the official details.ORANGE 21 INC. REPORTS FINANCIAL RESULTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011; ANNOUNCES INVESTOR CONFERENCE CALL
For Immediate Release: November 14, 2011
CARLSBAD, Calif.—Orange 21 Inc. (OTCBB: ORNG) today announced financial results for the quarter ended September 30, 2011.
Net sales increased by $2.3 million, or 33%, to $9.2 million for the three months ended September 30, 2011, compared to $6.9 million on a “pro forma” basis for the three months ended September 30, 2010. “Pro forma” numbers exclude the net sales from our LEM, S.r.l. subsidiary that we sold effective December 31, 2010. Sales of core SPY® products increased by $1.6 million and closeout sales, the vast majority of which were from our licensed brands, increased by $0.7 million. Net sales for the three months ended September 30, 2010, including the net sales from LEM, were reported as $8.2 million.
Net sales increased by $2.2 million, or 10%, to $24.9 million for the nine months ended September 30, 2011, compared to $22.7 million on a “pro forma” basis for the nine months ended September 30, 2010. Sales of core SPY® products increased by $1.6 million, closeout sales of our SPY® products decreased by $0.5 million, and sales of our licensed brands, the vast majority of which were closeout sales, increased by $1.1 million. Net sales for the nine months ended September 30, 2010, including the net sales from LEM, were reported as $26.0 million.
The Company incurred a net loss of $3.0 million for the three months ended September 30, 2011 compared to a net loss of $0.9 million for the three months ended September 30, 2010. The net loss for the three months ended September 30, 2011 included the impact of lower gross margin as a percent of sales due to increased inventory reserves of approximately $0.7 million related to our licensed brands and significant closeout sales of licensed brands at no or low margin, as well as increased sales and marketing spending related to the core SPY® products.
“We are very pleased with the growth that we generated this quarter, particularly in our core SPY® products which had nice growth in both goggles and sunglasses, in North America and internationally. This is especially encouraging following the significant decline the Company had in the first quarter of the year,” said Orange 21 President Michael Marckx. “Our new team’s focus on the marketing, product development and sales programs to leverage the core SPY® brand appears to be gaining traction on many fronts.”
Carol Montgomery, Orange 21’s Chief Executive Officer, added: “Improvements to internal systems and processes, increased clarity of goals and development of the organization these past few months have strengthened our ability to succeed and grow.”
The 2010 “pro forma” net sales amounts described above exclude $1.3 million and $3.3 million during the three and nine month periods ended September 30, 2010, respectively, of sales products manufactured for third party customers rather than for the Company by its former Italian manufacturing subsidiary, LEM. LEM was sold on December 31, 2010. As such, LEM’s operations were not included in the Company’s consolidated results for the three or nine month periods ended September 30, 2011. However, LEM sales remain included in our consolidated results for the three and nine month periods ended September 30, 2010. Set forth below are “pro forma” financial tables which present our operating results for the three and nine months ended September 30, 2010, as if we did not own LEM during those periods.
