Welcome!

News Feed Item

SPY Inc. Reports Financial Results for the Quarter Ended September 30, 2012

CARLSBAD, CA -- (Marketwire) -- 11/13/12 -- SPY Inc. (OTCBB: XSPY) today announced financial results for the quarter ended September 30, 2012.

Total net sales increased by $0.7 million, or 8%, to $9.9 million for the quarter ended September 30, 2012, compared with total net sales of $9.2 million for the quarter ended September 30, 2011. Total net sales increased by $2.6 million, or 10%, to $27.5 million for the nine months ended September 30, 2012, compared with total net sales of $24.9 million for the nine months ended September 30, 2011.

Sales of our core SPY® brand products increased by $1.4 million, or 17%, to $9.8 million for the quarter ended September 30, 2012, compared with core SPY® brand sales of $8.4 million during the quarter ended September 30, 2011. Other sales of approximately $0.1 million during the quarter ended September 30, 2012, consisted of licensed brand products which are no longer a focus of the Company, compared with licensed product sales of $0.8 million during the quarter ended September 30, 2011.

Sales of our core SPY® brand products increased by $3.9 million, or 17%, to $27.1 million for the nine months ended September 30, 2012, compared with core SPY® brand sales of $23.2 million during the nine months ended September 30, 2011. Other sales were $0.4 million during the nine months ended September 30, 2012, consisting of licensed brand products which are no longer a focus of the Company, compared with licensed product sales of $1.7 million during the nine months ended September 30, 2011.

"With strong SPY® brand sales growth of 17% for 3rd quarter of 2012 over 2011, building on the huge SPY® brand growth rate of 25% for the 3rd quarter of 2011 over 2010, we are happy to have achieved our 6th consecutive quarter of year over year growth of SPY® brand products. We feel this once again demonstrates the strength of our renewed brand positioning and exciting new product collection," said Michael Marckx, President and CEO. "We are especially pleased that we were able to grow our North American snow goggle and sunglass businesses because of such a poor snow season last year that we believe caused many of our retailers to have relatively high inventory levels going into this 2012 fall snow goggle buying season."

We incurred a net loss of $1.8 million during the quarter ended September 30, 2012, which was significantly lower than the net loss of $3.0 million during the quarter ended September 30, 2011. The reduced loss during the quarter ended September 30, 2012 was primarily due to increased gross margin. Total operating expenses were slightly lower during the quarter ended September 30, 2012 compared to 2011; with lower general and administrative expenses due to the level of legal and consulting expenses in 2011 associated with the restructure of management in 2011, offset by increased sales and marketing expenses in 2012 related to our SPY® brand products. Additionally, operating expenses in the quarter ended September 30, 2012 included $0.7 million related to certain restructuring actions which included estimated expenses associated with reducing the number of employees and changing the direct portion of our European business to a distribution model. The restructuring activities together with reducing the level of anticipated spending for marketing programs are intended to lower our future breakeven point on an operating basis.

In August 2012, we increased our borrowing capacity by increasing the maximum principal amount available to us under one of our credit facilities with Costa Brava Partnership III, L.P. ("Costa Brava") by $3.0 million (from $7.0 million to $10.0 million), thereby increasing the aggregate maximum principal amount under all credit facilities from Costa Brava from $14.0 million to $17.0 million (excluding accrued interest which is added to outstanding principal). We also extended the due dates of both of our credit facilities with Costa Brava to be April 1, 2014. In September 2012, we borrowed $1.0 million under a convertible debt arrangement with Harlingwood (Alpha), LLC ("Harlingwood"). Costa Brava and Harlingwood are significant shareholders of the company's common stock.

The results of our operations, liquidity and capital resources during and as of the quarter ended September 30, 2012 and 2011, respectively, are more fully discussed in our Form 10-Q for the quarter ended September 30, 2012.

SPY Inc.:
We design, market and distribute premium products for hardcore participants in action sports, motorsports, snow sports, cycling and multi-sports markets, which embrace their attendant lifestyle subcultures, crossing over into more mainstream fashion, music and entertainment markets. We believe a principal strength is our ability to create distinctive products for active people within the youthful demographics of these subcultures. Our principal products -- sunglasses, goggles and prescription frames -- are marketed under the SPY® brand. During 2011 and 2010, we also designed, manufactured and sold eyewear under the O'Neill®, Melodies by MJB® and Margaritaville® brands and in 2011, we decided to cease any new purchase orders of additional inventory for these licensed eyewear brands and do not expect any significant sales from these brands in the future.

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 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)


                                             September 30,    December 31,
                                            --------------   --------------
                                                 2012             2011
                                            --------------   --------------
                                              (Unaudited)
                  Assets
Current assets
  Cash                                      $          953   $          727
  Accounts receivable, net                           6,125            4,859
  Inventories, net                                   7,636            6,190
  Prepaid expenses and other current
   assets                                              526              420
                                            --------------   --------------
    Total current assets                            15,240           12,196
Property and equipment, net                            510              730
Intangible assets, net of accumulated
 amortization of $718 and $688 at
 September 30, 2012 and December 31, 2011,
 respectively                                          105               65
Other long-term assets                                  76               50
                                            --------------   --------------
    Total assets                            $       15,931   $       13,041
                                            ==============   ==============

   Liabilities and Stockholders' Deficit
Current liabilities
  Lines of credit                           $        4,577   $        2,484
  Current portion of capital leases                     56               65
  Current portion of notes payable                      15              500
  Accounts payable                                   2,616            1,583
  Accrued expenses and other liabilities             3,807            2,679
  Income taxes payable                                   -                8
                                            --------------   --------------
    Total current liabilities                       11,071            7,319
Capital leases, noncurrent                             111              150
Secured notes payable, noncurrent                       36               47
Subordinated stockholder long-term debt,
 noncurrent                                         17,530           13,000
                                            --------------   --------------
  Total liabilities                                 28,748           20,516
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;
   13,072,774 and 12,955,438 shares issued
   and outstanding at September 30, 2012
   and December 31, 2011, respectively                   1                1
  Additional paid-in capital                        44,183           43,492
  Accumulated other comprehensive income               460              471
  Accumulated deficit                              (57,461)         (51,439)
                                            --------------   --------------
    Total stockholders' deficit                    (12,817)          (7,475)
                                            --------------   --------------
    Total liabilities and stockholders'
     deficit                                $       15,931   $       13,041
                                            ==============   ==============



SPY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Thousands, except per share amounts)


                            Three Months Ended         Nine Months Ended
                               September 30,             September 30,
                         ------------------------  ------------------------
                            2012         2011         2012         2011
                         -----------  -----------  -----------  -----------
                                (Unaudited)               (Unaudited)
Net sales                $     9,886        9,186  $    27,497  $    24,875
Cost of sales                  5,583        5,941       14,644       13,334
                         -----------  -----------  -----------  -----------
  Gross profit                 4,303        3,245       12,853       11,541
Operating expenses:
  Sales and marketing          3,838        3,421       11,262        8,863
  General and
   administrative              1,351        1,972        5,075        6,247
  Shipping and
   warehousing                   224          164          607          454
  Research and
   development                   112          130          364          445
  Other operating
   expense                         -            -            -        1,952
                         -----------  -----------  -----------  -----------
    Total operating
     expenses                  5,525        5,687       17,308       17,961
                         -----------  -----------  -----------  -----------
  Loss from operations        (1,222)      (2,442)      (4,455)      (6,420)
Other income (expense):
  Interest expense              (637)        (413)      (1,676)        (964)
  Foreign currency
   transaction gain
   (loss)                         42          (81)          80          (68)
  Other (expense) income          33          (27)          29          (26)
                         -----------  -----------  -----------  -----------
    Total other expense         (562)        (521)      (1,567)      (1,058)
                         -----------  -----------  -----------  -----------
  Loss before provision
   for income taxes           (1,784)      (2,963)      (6,022)      (7,478)
Income tax provision               -           21            -           27
                         -----------  -----------  -----------  -----------
Net loss                 $    (1,784) $    (2,984) $    (6,022) $    (7,505)
                         ===========  ===========  ===========  ===========
Net loss per share of
 Common Stock
  Basic                  $     (0.14) $     (0.23) $     (0.46) $     (0.59)
                         ===========  ===========  ===========  ===========
  Diluted                $     (0.14) $     (0.23) $     (0.46) $     (0.59)
                         ===========  ===========  ===========  ===========
Shares used in computing
 net loss per share of
 Common Stock
  Basic                       13,066       12,888       13,037       12,675
                         ===========  ===========  ===========  ===========
  Diluted                     13,066       12,888       13,037       12,675
                         ===========  ===========  ===========  ===========
Other comprehensive
 income (loss)
  Foreign currency
   translation
   adjustment                   (125)         313           34         (113)
  Unrealized gain on
   foreign currency
   exposure of net
   investment in foreign
   operations                    141         (396)         (45)         100
                         -----------  -----------  -----------  -----------
    Total other
     comprehensive
     income (loss)                16          (83)         (11)         (13)
                         -----------  -----------  -----------  -----------
Comprehensive loss       $    (1,768) $    (3,067) $    (6,033) $    (7,518)
                         ===========  ===========  ===========  ===========

CONTACTS:
Maddy Isbell
PR Manager
760-804-8420
Fax: 760-804-8442
http://investor.spyoptic.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Sometimes I write a blog just to formulate and organize a point of view, and I think it’s time that I pull together the bounty of excellent information about Machine Learning. This is a topic with which business leaders must become comfortable, especially tomorrow’s business leaders (tip for my next semester University of San Francisco business students!). Machine learning is a key capability that will help organizations drive optimization and monetization opportunities, and there have been some...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.