CARLSBAD, CA--( May 6, 2014) - SPY Inc. (OTCBB: XSPY) today announced financial results for the three months ended March 31, 2014.
Consolidated Spy sales increased by 2% or $0.2 million, to $9.2 million for the three months ended March 31, 2014, compared to $9.0 million during the same period in 2013. Sales included slightly lower closeout sales of $0.4 million in 2014, compared to $0.6 million in 2013. The increase in our net sales was primarily driven by our prescription frame product line.
"We are once again happy to report top line growth along with achieving our 12th quarter in a row of year over year growth of our SPY® brand products," said Michael Marckx, President and CEO. "We also increased our margin to 52% in 2014 from 51% in 2013, which continues to be a focal point for us. This directly reflects the strong demand for our product offering as well as the operational and manufacturing synergies that we created over the past year. The solid sales growth and margin expansion are direct results of our strong sales and marketing teams as well as a concerted effort across the organization to reduce operating costs. Achieving operating profit along with our expanding portfolio of products, including our successful Happy Lens™ Collection, positions us well for the balance of 2014 as we continue to focus on disruptive strategies, driving sales, improving our product margins and managing our operating costs."
During 2014, the Company had income from operations of $84 thousand during the three months ended March 31, 2014 compared to $29 thousand during the same period in 2013.
The Company incurred a net loss of $0.7 million during the three months ended March 31, 2014 and 2013.
SPY Inc. invites you to join the investor conference call on Tuesday, May 6, 2014, at 1:30 p.m. PDT. The dial-in number for the call in North America is 1-866-318-8618 and 1-617-399-5137 for international callers. The participant pass code is 74411610. The call will also be webcast live on the internet and can be accessed by logging on at investor.spyoptic.com.
The results of our operations for the quarters ended March 31, 2014 and 2013 are more fully discussed in our Form 10-Q for the quarter ended March 31, 2014, filed with the Securities and Exchange Commission on May 6, 2014.
SPY Inc.:
We have a happy disrespect for the usual way of looking (at life) and the need to SEE HAPPY. It is this mindset that drives us to design, market, and distribute premium products for people who "live" to be outdoors, pushing the boundaries in action sports, motorsports, snow sports, cycling and multi-sports. We actively support the lifestyle subcultures that surround these pursuits, and as a result our products serve the broader fashion, music and entertainment markets of the youth culture. Our reason for being is to create the unusual and this is what helps us deliver distinctive products to people who are active, fun and a bit irreverent, like us. Our principal products -- sunglasses, goggles and prescription frames -- are marketed with fun and creativity under the SPY® brand. More information about SPY may be obtained from: www.spyoptic.com, www.facebook.com/spyoptic, Twitter @spyoptic and Instagram @spyoptic.
Safe Harbor Statement:
This press release contains forward-looking statements. These statements relate to future events or future financial performance and are subject to risks and uncertainties. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "feel," "estimate," "predict," "hope," the negative of such terms, expressions of optimism or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Factors that could cause actual results to differ from those contained in our forward-looking statements include, but are not limited to lack of continuity and effectiveness of our management team, our ability to generate sufficient incremental sales of our core SPY® brand and new products to recoup our significant investments in sales and marketing, our ability to lower our expenses or otherwise reduce our breakeven point on an operating basis, our ability to maintain or increase the availability of our existing credit facilities and otherwise finance our strategic objectives, and the other risks identified from time to time in our filings made with the U.S. Securities and Exchange Commission. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results. Moreover, except as required by law, we assume no responsibility for the accuracy or completeness of such forward-looking statements and undertake no obligation to update any of these forward-looking statements.
| SPY INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Thousands, except number of shares and per share amounts) | ||||||||||
| March 31, 2014 | December 31, 2013 | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | $ | 688 | $ | 686 | ||||||
| Accounts receivable, net | 5,622 | 6,543 | ||||||||
| Inventories, net | 4,344 | 5,872 | ||||||||
| Prepaid expenses and other current assets | 691 | 680 | ||||||||
| Income taxes receivable | -- | 3 | ||||||||
| Total current assets | 11,345 | 13,784 | ||||||||
| Property and equipment, net | 394 | 438 | ||||||||
| Intangible assets, net of accumulated amortization of $792 and $782 at March 31, 2014 and December 31, 2013, respectively | 63 | 72 | ||||||||
| Other long-term assets | 44 | 63 | ||||||||
| Total assets | $ | 11,846 | $ | 14,357 | ||||||
| Liabilities and Stockholders' Deficit | ||||||||||
| Current liabilities | ||||||||||
| Lines of credit | $ | 1,686 | $ | 4,024 | ||||||
| Current portion of capital leases | 71 | 77 | ||||||||
| Current portion of notes payable | 16 | 16 | ||||||||
| Accounts payable | 1,047 | 1,302 | ||||||||
| Accrued expenses and other liabilities | 3,655 | 3,069 | ||||||||
| Total current liabilities | 6,475 | 8,488 | ||||||||
| Capital leases, less current portion | 75 | 92 | ||||||||
| Notes payable, less current portion | 12 | 16 | ||||||||
| Notes payable to stockholders | 21,452 | 21,452 | ||||||||
| Total liabilities | 28,014 | 30,048 | ||||||||
| Stockholders' deficit | ||||||||||
| Preferred stock: par value $0.0001; 5,000,000 authorized; none issued | -- | -- | ||||||||
| Common stock: par value $0.0001; 100,000,000 shares authorized; 13,324,037 and 13,184,876 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 1 | 1 | ||||||||
| Additional paid-in capital | 45,597 | 45,331 | ||||||||
| Accumulated other comprehensive income | 519 | 520 | ||||||||
| Accumulated deficit | (62,285 | ) | (61,543 | ) | ||||||
| Total stockholders' deficit | (16,168 | ) | (15,691 | ) | ||||||
| Total liabilities and stockholders' deficit | $ | 11,846 | $ | 14,357 | ||||||
| SPY INC. AND SUBSIDIARIES | ||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||
| (Thousands, except per share amounts) | ||||||||||
| Three Months Ended March 31, | ||||||||||
| 2014 | 2013 | |||||||||
| (Unaudited) | ||||||||||
| Net sales | $ | 9,192 | $ | 9,008 | ||||||
| Cost of sales | 4,412 | 4,407 | ||||||||
| Gross profit | 4,780 | 4,601 | ||||||||
| Operating expenses: | ||||||||||
| Sales and marketing | 2,920 | 2,854 | ||||||||
| General and administrative | 1,483 | 1,447 | ||||||||
| Shipping and warehousing | 140 | 169 | ||||||||
| Research and development | 153 | 102 | ||||||||
| Total operating expenses | 4,696 | 4,572 | ||||||||
| Income from operations | 84 | 29 | ||||||||
| Other income (expense): | ||||||||||
| Interest expense | (757 | ) | (732 | ) | ||||||
| Foreign currency transaction loss | (67 | ) | (18 | ) | ||||||
| Other income | 1 | -- | ||||||||
| Total other expense | (823 | ) | (750 | ) | ||||||
| Loss before provision for income taxes | (739 | ) | (721 | ) | ||||||
| Income tax provision | 3 | -- | ||||||||
| Net loss | $ | (742 | ) | $ | (721 | ) | ||||
| Net loss per share of Common Stock | ||||||||||
| Basic | $ | (0.06 | ) | $ | (0.05 | ) | ||||
| Diluted | $ | (0.06 | ) | $ | (0.05 | ) | ||||
| Shares used in computing net loss per share of Common Stock | ||||||||||
| Basic | 13,222 | 13,115 | ||||||||
| Diluted | 13,222 | 13,115 | ||||||||
| Other comprehensive income (loss) | ||||||||||
| Foreign currency translation adjustment (loss) gain | (94 | ) | 177 | |||||||
| Unrealized gain (loss) on foreign currency exposure of net investment in foreign operations | 93 | (194 | ) | |||||||
| Total other comprehensive loss | (1 | ) | (17 | ) | ||||||
| Comprehensive loss | $ | (743 | ) | $ | (738 | ) | ||||
CONTACTS:
Maddy Isbell/PR Manager/760-804-8420/Fax: 760-804-8442/http://investor.spyoptic.com
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