Welcome!

News Feed Item

SPY Inc. Reports Financial Results for the First Half and Second Quarter 2014

SPY(R) Inc. Total Company First Half Net Sales Reported as $17.4 Million

CARLSBAD, CA -- (Marketwired) -- 08/06/14 -- SPY Inc. (OTCBB: XSPY) today announced financial results for the three and six months ended June 30, 2014.

First half sales were $17.4 million in 2014, a decrease of 9% or $1.6 million less than in the first half of 2013. Sales included lower closeout sales of $0.8 million in 2014, compared to $1.4 million in 2013. The decrease in our net sales was primarily driven by an overall decline in the consumer market coupled with several key retailers currently holding lower levels of inventory and fewer closeout sales of our sunglass products. Gross profit as a percentage of net sales was 54% for the six months ended June 30, 2014, compared to 52% for the six months ended June 30, 2013.

Second quarter sales were $8.2 million in 2014, a decrease of 18% or $1.8 million less than in the second quarter of 2013. The decrease in our net sales was primarily driven by an overall decline in the consumer market coupled with several key retailers currently holding lower levels of inventory and fewer closeout sales of our sunglass products. Gross profit as a percentage of net sales was 56% for the three months ended June 30, 2014, compared to 53% for the three months ended June 30, 2013.

"Although we encountered a challenging consumer environment in the first couple of months of the second quarter we were pleased with the top line improvements in June and especially with the increase in our gross margin rate to the highest level in the last four years," said Michael Marckx, president and CEO. "The margin expansion is a direct result of our strong product development team as well as a concerted effort across the organization to reduce operating costs. Achieving an 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 focus on fulfilling strong pre-orders for snow goggles, driving overall sales, improving our product margins and managing our operating costs."

Income from operations decreased by $0.2 million to $0.2 million in the first half of 2014, compared to income from operations of $0.4 million in the first half of 2013. The $0.2 million decrease was partially due to the decrease in sales offset with a 167 basis point improvement in gross profit as a percent of sales. Additionally, total operating expenses in the first half of 2014 were lower by $0.4 million, compared to the first half of 2013. Cash flow generated by operating activities was $1.5 million in the first half of 2014.

Income from operations decreased by $0.2 million to $0.1 million in the second quarter of 2014, compared to income from operations of approximately $0.3 million in the second quarter of 2013. The $0.2 million decrease was partially due to the decrease in sales offset with a 271 basis point improvement in gross profit as a percent of sales. Additionally, total operating expenses in the second quarter of 2014 were lower by $0.5 million, compared to the second quarter of 2013.

The Company incurred a net loss of $1.5 million and $1.3 million during the first half of 2014 and 2013, respectively.

The Company incurred a net loss of $0.7 million and $0.6 million during the second quarter of 2014 and 2013, respectively.

SPY Inc. invites you to join the investor conference call on Wednesday, August 6, 2014, at 1:30 p.m. PDT. The dial-in number for the call in North America is 1-866-700-6067 and 1-617-213-8834 for international callers. The participant pass code is 95387010. 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 June 30, 2014 and 2013 are more fully discussed in our Form 10-Q for the quarter ended June 30, 2014, filed with the Securities and Exchange Commission on August 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)

                                                   June 30,    December 31,
                                                     2014          2013
                                                 ------------  ------------
                                                  (Unaudited)
                     Assets
Current assets
  Cash                                           $        808  $        686
  Accounts receivable, net                              5,316         6,543
  Inventories, net                                      6,557         5,872
  Prepaid expenses and other current assets               883           680
  Income taxes receivable                                   -             3
                                                 ------------  ------------

    Total current assets                               13,564        13,784
Property and equipment, net                               391           438
Intangible assets, net of accumulated
 amortization of $800 and $782 at June 30, 2014
 and December 31, 2013, respectively                       54            72
Other long-term assets                                     44            63
                                                 ------------  ------------

    Total assets                                 $     14,053  $     14,357
                                                 ============  ============

      Liabilities and Stockholders' Deficit
Current liabilities
  Lines of credit                                $      2,703  $      4,024
  Current portion of capital leases                        71            77
  Current portion of notes payable                         16            16
  Accounts payable                                      3,467         1,302
  Accrued expenses and other liabilities                2,866         3,069
                                                 ------------  ------------

    Total current liabilities                           9,123         8,488
Capital leases, less current portion                       57            92
Notes payable, less current portion                         8            16
Notes payable to stockholders                          21,597        21,452
                                                 ------------  ------------

    Total liabilities                                  30,785        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; 13,350,876 and 13,184,876
   shares issued and outstanding at June 30,
   2014 and December 31, 2013, respectively                 1             1
  Additional paid-in capital                           45,780        45,331
  Accumulated other comprehensive income                  514           520
  Accumulated deficit                                 (63,027)      (61,543)
                                                 ------------  ------------

    Total stockholders' deficit                       (16,732)      (15,691)
                                                 ------------  ------------

    Total liabilities and stockholders' deficit  $     14,053  $     14,357
                                                 ============  ============



SPY INC. AND SUBSIDIARIES

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

                                  Three Months Ended     Six Months Ended
                                        June 30,             June 30,
                                 --------------------  --------------------
                                    2014       2013       2014       2013
                                 ---------  ---------  ---------  ---------
                                      (Unaudited)           (Unaudited)
Net sales                        $   8,183  $   9,995  $  17,376  $  19,002
Cost of sales                        3,641      4,718      8,053      9,125
                                 ---------  ---------  ---------  ---------

  Gross profit                       4,542      5,277      9,323      9,877
Operating expenses:
  Sales and marketing                2,726      2,950      5,646      5,804
  General and administrative         1,387      1,789      2,871      3,236
  Shipping and warehousing             132         89        272        258
  Research and development             196        122        349        223
                                 ---------  ---------  ---------  ---------

    Total operating expenses         4,441      4,950      9,138      9,521
                                 ---------  ---------  ---------  ---------

  Income (Loss) from operations        101        327        185        356
Other income (expense):
  Interest expense                    (751)      (752)    (1,509)    (1,484)
  Foreign currency transaction
   gain (loss)                          69       (144)         2       (162)
  Other (expense)                     (161)        (5)      (159)        (5)
                                 ---------  ---------  ---------  ---------

    Total other expense               (843)      (901)    (1,666)    (1,651)
                                 ---------  ---------  ---------  ---------

  Loss before provision for
   income taxes                       (742)      (574)    (1,481)    (1,295)
Income tax provision                    --         --          3         --
                                 ---------  ---------  ---------  ---------

Net loss                         $    (742) $    (574) $  (1,484) $  (1,295)
                                 =========  =========  =========  =========

Net loss per share of Common
 Stock
    Basic                        $    (.06) $    (.04) $    (.11) $    (.10)
                                 =========  =========  =========  =========

    Diluted                      $    (.06) $    (.04) $    (.11) $    (.10)
                                 =========  =========  =========  =========

Shares used in computing net
 loss per share of Common Stock
    Basic                           13,343     13,135     13,285     13,125
                                 =========  =========  =========  =========

    Diluted                         13,343     13,135     13,285     13,125
                                 =========  =========  =========  =========

Other comprehensive income
 (loss)
  Foreign currency translation
   adjustment                    $     (93) $     (84) $    (187) $      93
  Unrealized gain (loss) on
   foreign currency exposure of
   net investment in foreign
   operations                           88         96        180        (98)
                                 ---------  ---------  ---------  ---------

    Total other comprehensive
     income (loss)                      (5)        12         (7)        (5)
                                 ---------  ---------  ---------  ---------

Comprehensive loss               $    (747) $    (562) $  (1,491) $  (1,300)
                                 =========  =========  =========  =========

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
SYS-CON Events announced today that EARP will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "We are a software house, so we perfectly understand challenges that other software houses face in their projects. We can augment a team, that will work with the same standards and processes as our partners' internal teams. Our teams will deliver the same quality within the required time and budget just as our partn...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
SYS-CON Events announced today that Tappest will exhibit MooseFS at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. MooseFS is a breakthrough concept in the storage industry. It allows you to secure stored data with either duplication or erasure coding using any server. The newest – 4.0 version of the software enables users to maintain the redundancy level with even 50% less hard drive space required. The software func...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software in the hope of capturing value in IoT. Although IoT is relatively new in the market, it has already gone through many promotional terms such as IoE, IoX, SDX, Edge/Fog, Mist Compute, etc. Ultimately, irrespective of the name, it is about deriving value from independent software assets participating in an ecosystem as one comprehensive solution.
Regardless of what business you’re in, it’s increasingly a software-driven business. Consumers’ rising expectations for connected digital and physical experiences are driving what some are calling the "Customer Experience Challenge.” In his session at @DevOpsSummit at 20th Cloud Expo, Marco Morales, Director of Global Solutions at CollabNet, will discuss how organizations are increasingly adopting a discipline of Value Stream Mapping to ensure that the software they are producing is poised to o...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
IBM helps FinTechs and financial services companies build and monetize cognitive-enabled financial services apps quickly and at scale. Hosted on IBM Bluemix, IBM’s platform builds in customer insights, regulatory compliance analytics and security to help reduce development time and testing. In his session at 20th Cloud Expo, Tom Eck, Industry Platforms CTO at IBM Cloud, will discuss how these tools simplify the time-consuming tasks of selection, mapping and data integration, allowing developers ...
SYS-CON Events announced today that Outscale, a global pure play Infrastructure as a Service provider and strategic partner of Dassault Systèmes, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2010, Outscale simplifies infrastructure complexities and boosts the business agility of its customers. Outscale delivers a secure, reliable and industrial strength solution for its customers, which in...
SYS-CON Events announced today that Outscale will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outscale's technology makes an automated and adaptable Cloud available to businesses, supporting them in the most complex IT projects while controlling their operational aspects. You boost your IT infrastructure's reactivity, with request responses that only take a few seconds.
SYS-CON Events announced today that Systena America will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Systena Group has been in business for various software development and verification in Japan, US, ASEAN, and China by utilizing the knowledge we gained from all types of device development for various industries including smartphones (Android/iOS), wireless communication, security technology and IoT serv...
DevOps at Cloud Expo – being held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real r...
Cloud applications are seeing a deluge of requests to support the exploding advanced analytics market. “Open analytics” is the emerging strategy to deliver that data through an open data access layer, in the cloud, to be directly consumed by external analytics tools and popular programming languages. An increasing number of data engineers and data scientists use a variety of platforms and advanced analytics languages such as SAS, R, Python and Java, as well as frameworks such as Hadoop and Spark...
Cloud promises the agility required by today’s digital businesses. As organizations adopt cloud based infrastructures and services, their IT resources become increasingly dynamic and hybrid in nature. Managing these require modern IT operations and tools. In his session at 20th Cloud Expo, Raj Sundaram, Senior Principal Product Manager at CA Technologies, will discuss how to modernize your IT operations in order to proactively manage your hybrid cloud and IT environments. He will be sharing bes...
Interested in leveling up on your Cloud Foundry skills? Join IBM for Cloud Foundry Days on June 7 at Cloud Expo New York at the Javits Center in New York City. Cloud Foundry Days is a free half day educational conference and networking event. Come find out why Cloud Foundry is the industry's fastest-growing and most adopted cloud application platform.
Five years ago development was seen as a dead-end career, now it’s anything but – with an explosion in mobile and IoT initiatives increasing the demand for skilled engineers. But apart from having a ready supply of great coders, what constitutes true ‘DevOps Royalty’? It’ll be the ability to craft resilient architectures, supportability, security everywhere across the software lifecycle. In his keynote at @DevOpsSummit at 20th Cloud Expo, Jeffrey Scheaffer, GM and SVP, Continuous Delivery Busine...