Spy finished off another quarter of increased sales and lower losses as they logged $19 million in sales for the first half of 2013, according to financials released today, August 7, 2013.
“We are really happy to have achieved our 9th consecutive quarter of year over year growth of SPY® brand products, with strong SPY® brand sales growth of 10% in the first half of 2013 over the first half of 2012, and the first half of 2013 was 29% higher than the first half of 2011,” said Michael Marckx, President and CEO. “Moving forward, our Happy Lens Collection is expanding to include a growing list of new styles and will be featured in our Rx, Performance and Goggle Collections, which will further leverage this innovation in many ways. On top of our successful Happy Lens launch, we are even more pleased with the combination of things we accomplished this half: solid sales growth, improved gross margins, lower operating expenses, positive cash flow from operations and income from operations. We believe this solid first half of the year helps to position us well for the balance of 2013.”
Unfortunately, the company is still not out of the red yet. Spy lost $1.3 million in the first half of 2013, down from $4.2 million in the same period of 2012. For the official word from Spy, follow the jump.SPY INC. REPORTS FINANCIAL RESULTS FOR THE 1ST HALF AND SECOND QUARTER 2013
9th Consecutive Quarter of Year over Year Growth of SPY® Brand Products
SPY® Brand Products Achieved Semi-Annual Growth of 10% in the 1st Half of 2013 over the 1st Half of 2012
Total Company First Half Net Sales reported as $19.0 million
For Immediate Release: August 7, 2013
CARLSBAD, Calif.—SPY Inc. (OTCBB: XSPY) today announced financial results for the three and six months ended June 30, 2013.
First half sales of SPY® brand products were $19.0 million in 2013, an increase of 10% or $1.8 million greater than in the first half of 2012. Total Company net sales increased by 8% or $1.4 million, to $19.0 million in the first half of 2013, compared to $17.6 million in the first half of 2012. The difference between our SPY® brand sales and total Company sales in 2012 was due to our discontinued licensed brand products, which will have no sales in the future. Discontinued licensed brand sales were less than $50,000 in the first half of 2013, compared with sales of $0.4 million in the first half of 2012.
Second quarter sales of SPY® brand products were $10.0 million in 2013, an increase of 7% or $0.7 million greater than in the second quarter of 2012. Total Company net sales increased by 6% or $0.5 million, to $10.0 million compared to $9.5 million in the second quarter of 2012. There were no licensed brand sales in the second quarter of 2013, compared with $0.1 million in the second quarter of 2012.
“We are really happy to have achieved our 9th consecutive quarter of year over year growth of SPY® brand products, with strong SPY® brand sales growth of 10% in the first half of 2013 over the first half of 2012, and the first half of 2013 was 29% higher than the first half of 2011,” said Michael Marckx, President and CEO. “Moving forward, our Happy Lens Collection is expanding to include a growing list of new styles and will be featured in our Rx, Performance and Goggle Collections, which will further leverage this innovation in many ways. On top of our successful Happy Lens launch, we are even more pleased with the combination of things we accomplished this half: solid sales growth, improved gross margins, lower operating expenses, positive cash flow from operations and income from operations. We believe this solid first half of the year helps to position us well for the balance of 2013.”
Income from operations improved by $3.6 million to $0.4 in the first half of 2013, compared to a loss from operations of $3.2 million in the first half of 2012. The $3.6 million improvement was partially due to the increase in sales combined with a 340 basis point improvement in gross profit as a percent of sales, which generated $1.3 million in additional gross profit contribution. Additionally, total operating expenses in the first half of 2013 were lower by $2.3 million, compared to the first half of 2012, primarily a result of the restructure actions taken in the third quarter of 2012. Cash flow generated by operating activities was $1.1 million in the first half of 2013, compared to negative $3.9 million in the first half of 2012, or an improvement of more than $4.9 million.
Income from operations improved by $1.4 million to $0.3 in the second quarter of 2013, compared to a loss from operations of approximately $1.1 million in the second quarter of 2012. The $1.4 million improvement was partially due to the increase in sales combined with a 250 basis point improvement in gross profit as a percent of sales, which generated $0.5 million in additional gross profit contribution. Additionally, total operating expenses in the second quarter of 2013 were lower by $0.9 million, compared to the second quarter of 2012, primarily a result of the restructure actions taken in the third quarter of 2012. Cash flow used by operating activities was $0.5 million in the second quarter of 2013, compared to negative $3.5 million in the second quarter of 2012, or an improvement of more than $3.0 million.
The net loss improved by $2.9 million to $1.3 million in the first half of 2013, compared to a net loss of $4.2 million in the first half of 2012. The net loss improved by $1.1 million to $0.6 million in the second quarter of 2013, compared to a net loss of $1.6 million in the second quarter of 2012. The improved net loss in each period was due to the reduction in our loss from operations, partially offset by higher interest expense. Interest expense included in the net losses is primarily “paid in kind” by being added to the outstanding principal balance rather than being paid in cash.
The results of our operations for the six months ended and quarter ended June 30, 2013 and 2012 are more fully discussed in our Form 10-Q, filed with the Securities and Exchange Commission on August 7, 2013.
