Spy Optic parent company Orange 21 announced yesterday financial results for the year ending December 31, 2008 and though net sales were up 2% over 2007 to $47.3 million, their losses increased from $8 million in 2007 to $15.2 million in 2008.
“The current recession continues to have a significant impact on our sales,” commented Stone Douglass, the Company’s Chief Executive Officer. “The impact is being felt not just in the US, but overseas as well. During these last few months we have reacted swiftly to reduce operating expenditures in all our companies and increase our sales and marketing efficiencies. In addition, we have been seeking new opportunities on a global basis.”
Douglass says that he is excited about some new opportunities in the future, but damn, that losing $23 million in two years seems like a pretty large wall to climb even with the office being closed on Fridays and cutting employee pay by 10 percent.
Orange 21 Inc. Reports Financial Results for 2008 and Announces Investor Conference Call
CARLSBAD, Calif.–Orange 21 Inc. (NASDAQ:ORNG), a leading developer of brands that produce premium products for the action sports and youth lifestyle markets, today announced financial results for the year ended December 31, 2008.
Consolidated net sales for 2008 were $47.3 million up approximately 2% over net sales of $46.5 million for 2007. We incurred a net loss of $15.2 million for the year ended December 31, 2008, compared to a net loss of $8.0 million for the year ended December 31, 2007. The 2008 net loss included non-cash charges of $8.4 million for goodwill impairment related to the acquisition of LEM S.r.l. (our primary sunglass manufacturer acquired in 2006), $3.5 million increase in our income tax valuation allowance, and $0.6 million in share-based compensation costs in accordance with FASB No. 123(R).
“The current recession continues to have a significant impact on our sales,” commented Stone Douglass, the Company’s Chief Executive Officer. “The impact is being felt not just in the US, but overseas as well. During these last few months we have reacted swiftly to reduce operating expenditures in all our companies and increase our sales and marketing efficiencies. In addition, we have been seeking new opportunities on a global basis.
“In comparison to the prior year, we have reduced total operating expenses by approximately $4.1 million, excluding the $8.4 million non-cash goodwill impairment charge. In 2009, we have continued to reduce expenses further to offset the significant impact of the economy.
“We are fortunate that the recent fundraising efforts have given us working capital to help ensure that our expense cuts will not be at the expense of our sales, margins, development efforts and the value of our brand. In this tough financial market, we view our success in raising equity capital as a sign that our participating shareholders believe, as does our management team, in Orange 21’s significant potential. Our reputation for quality, innovation and delivery is very strong in the industry. And combined with our recent restructuring efforts, we should be able to capitalize on opportunities that are presenting themselves.”
Jerry Collazo, the Company’s Chief Financial Officer, added, “During this difficult time we have been focused on laying a more solid foundation with many of our vendors and customers. We are all in this together and we fully appreciate the difficulty everyone is undergoing. As such, we have made every effort to work with vendors and customers. And we believe that these efforts will enhance business relationships and as the economy returns to growth we will reap financial rewards.”
Concluding, Stone Douglass added, “We expect that the current economy will remain soft and as such we are operating very cautiously, but we are very confident and excited about new opportunities that are starting to unfold for Orange 21 and its shareholders.”
Investor Conference Call
We invite you to join us for an investor conference call on Monday, April 20, 2009 at 1:30, p.m. Pacific Daylight time. The dial-in number for the call in North America is 1-800-561-2601 and 1-617-614-3518 for international callers. The participant pass code is 97408241. The call also will be webcast live on the Internet and can be accessed by logging onto www.orangetwentyone.com.
The webcast will be archived on the Company’s website for at least 60 days following the call. An audio replay of the conference call will be available for seven days beginning approximately two hours after the completion of the call on April 20, 2009. The audio replay dial-in number for North America is 1-888-286-8010 and 1-617-801-6888 for international callers. The replay pass code is 56426126.
About Orange 21 Inc.
Orange 21 designs, develops, markets and produces premium products for the action sport, motorsports, snowsports and youth lifestyle markets. Orange 21’s primary brand, Spy Optic(TM), manufactures sunglasses and goggles targeted toward the action sports, motorsports, snowsports and youth lifestyle markets.
