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
Get deep visibility into the performance of your databases and expert advice for performance optimization and tuning. You can't get application performance without database performance. Give everyone on the team a comprehensive view of how every aspect of the system affects performance across SQL database operations, host server and OS, virtualization resources and storage I/O. Quickly find bottlenecks and troubleshoot complex problems.
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2017 New York The 7th Internet of @ThingsExpo will take place on June 6-8, 2017, at the Javits Center in New York City, New York. Chris Matthieu is the co-founder and CTO of Octoblu, a revolutionary real-time IoT platform recently acquired by Citrix. Octoblu connects things, systems, people and clouds to a global mesh network allowing users to automate and control design flo...
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
With 15% of enterprises adopting a hybrid IT strategy, you need to set a plan to integrate hybrid cloud throughout your infrastructure. In his session at 18th Cloud Expo, Steven Dreher, Director of Solutions Architecture at Green House Data, discussed how to plan for shifting resource requirements, overcome challenges, and implement hybrid IT alongside your existing data center assets. Highlights included anticipating workload, cost and resource calculations, integrating services on both sides...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Unless your company can spend a lot of money on new technology, re-engineering your environment and hiring a comprehensive cybersecurity team, you will most likely move to the cloud or seek external service partnerships. In his session at 18th Cloud Expo, Darren Guccione, CEO of Keeper Security, revealed what you need to know when it comes to encryption in the cloud.
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
"We are the public cloud providers. We are currently providing 50% of the resources they need for doing e-commerce business in China and we are hosting about 60% of mobile gaming in China," explained Yi Zheng, CPO and VP of Engineering at CDS Global Cloud, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
The WebRTC Summit New York, to be held June 6-8, 2017, at the Javits Center in New York City, NY, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 20th International Cloud Expo and @ThingsExpo. WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web co...
Between 2005 and 2020, data volumes will grow by a factor of 300 – enough data to stack CDs from the earth to the moon 162 times. This has come to be known as the ‘big data’ phenomenon. Unfortunately, traditional approaches to handling, storing and analyzing data aren’t adequate at this scale: they’re too costly, slow and physically cumbersome to keep up. Fortunately, in response a new breed of technology has emerged that is cheaper, faster and more scalable. Yet, in meeting these new needs they...
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busin...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.