21/03/2013

Business news : Spy Inc. Slashes Close-Outs and Loss in Fourth Quarter

Spy Inc. continued on its turn around by reporting sharply lower operating losses in both the fourth quarter and year ended Dec. 31 thanks in large part to a much reduced level of close-outs sales of its sunglasses.

Annual sales of its Spy brand products were $35.1 million in 2012, an increase of 13 percent or $4.0 million, compared to $31.1 million in 2011. Spy brand annual sales included lower closeout sales of $2.6 million in 2012, compared to $3.0 million in 2011. Sales from discontinued licensed brand products, which are no longer a focus of the company, were $0.5 million in 2012, compared with licensed brand product sales of $2.2 million in 2011. Total company net sales increased by 7 percent or $2.2 million, to $35.6 million for the year ended Dec. 31, 2012, compared to $33.4 million for the year ended December 31, 2011.

Fourth quarter sales of Spy brand products were $8.1 million in 2012, an increase of 1 percent or $0.1 million over the fourth quarter of 2011. The fourth quarter Spy brand sales included substantially lower closeout sales of $0.6 million in the fourth quarter of 2012 compared to $1.8 million in the fourth quarter of 2011, or a $1.2 million decrease due to  inventory reduction efforts in the fourth quarter of 2011.  Discontinued licensed brand products, which are no longer a focus of the company, were less than $0.1 million in the fourth quarter of 2012 compared with licensed product sales of $0.5 million in fourth quarter of 2011.
Total company net sales decreased by 4 percent or $0.4 million, to $8.1 million in the fourth quarter of 2012, compared to $8.5 million in the fourth quarter of 2011, as a result of lower sales of the discontinued licensed brands in 2012 compared to 2011, and higher sales of Spy brand close outs in late 2011 in connection with inventory reduction efforts.

"With continued strong Spy brand sales, and an annual growth of 13 percent for 2012 over 2011, we are happy to have achieved our seventh consecutive quarter of year-over-year growth of Spy brand products,” said Michael Marckx, President and CEO. “This is very encouraging for our efforts in 2013, as we have major initiatives lined up, the most important of which is  Spy Happy Lens -- the most innovative product Spy has ever launched. These results also again suggest the strength of our renewed brand positioning and strategies, as also evidenced by increased market share driven by unique new product collections. We are also pleased that our efforts have really paid off with improved gross margins compared to the fourth quarter and annual results of last year.  Top line results were achieved despite significantly lower operating expenses, which in the fourth quarter of 2012 were 29 percent lower than the fourth quarter of 2011 and sequentially 25 percent better than the third quarter of 2012. These factors together with our strong annual growth, nicely improved margins, and substantially lower spending, are the hallmarks of a strengthening brand."

Spy’s annual loss from operations was $5.0 million in 2012 compared to $9.4 million in 2011, or a 47 percent improvement. The loss from operations was $0.6 million in the fourth quarter of 2012 compared to $3.0 million in the fourth quarter of 2011, or an improvement of $2.4 million.

The improvement in annual loss from operations in 2012 compared to 2011 was due to increased gross margins as a percent of sales on higher sales volumes and significantly reduced operating expenses. The significant improvement in the loss from operations in the fourth quarter of 2012 compared to the fourth quarter 2011 was due to increased gross margins as a percent of sales related to a reduction in lower margin closeout sales and reduced licensed brand sales due to being discontinued and selling a more favorable product mix in 2012, and substantially reduced operating expenses.

Spy incurred an annual net loss of $7.2 million in 2012 compared to a net loss of $10.9 million in 2011. We incurred a net loss of $1.2 million in the fourth quarter of 2012 compared to a net loss of $3.4 million in the fourth quarter of 2011. The primary difference between the net loss and loss from operations was due to interest expense on long-term debt due to Costa Brava Partnership III, LP, Spy’s largest shareholder, which beginning in 2012 is "paid in kind" by being added to the outstanding principal balance rather than being paid in cash.

In December 2012, Spy borrowed an additional $0.5 million of convertible debt from Harlingwood (Alpha), LLC. Harlingwood is a significant shareholder of the company's common stock.
The results of operations for the years ended Dec. 31, 2012 and 2011 are more fully discussed in Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on March 20, 2013.

( Source Spy through SportsOneSource )

More news about Spy Optic, use the search tool at the right top of the page .

Aucun commentaire:

Enregistrer un commentaire