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Spy products show growth of 8% in 2013

Industry Updates

Spy Inc. reports results for third quarter 2013

Surfersvillage Global Surf News, 5 November, 2013 - Carlsbad, California - Spy  today announced financial results for the three and nine months ended September 30, 2013. Spy brand products were $29.1 million during the nine months ended September 30, 2013, an increase of 8% or $2.0 million greater than in of the same period in 2012.

Total Company net sales increased by 6% or $1.7 million, to $29.2 million during the nine months ended September 30, 2013, compared to $27.5 million in the same period in 2012. The difference between our SPY® brand sales and total Company sales in 2012 was due to our discontinued licensed brand products, which will have no sales in the future.

Discontinued licensed brand sales were less than $50,000 during the nine months ended September 30, 2013, compared with sales of $0.4 million in the same period of 2012.

Third quarter sales of SPY® brand products were $10.2 million in 2013, an increase of 3% or $0.3 million greater than in the third quarter of 2012. Total Company net sales increased by 3% or $0.3 million, to $10.2 million compared to $9.9 million in the third quarter of 2012. There were no licensed brand sales in the third quarter of 2013, compared with $0.1 million in the third quarter of 2012.
 
 “We are very happy to have achieved our 10th consecutive quarter of year over year growth of SPY® brand products, with strong SPY® brand year to date sales growth of 8% in 2013 over of the same period in 2012, and year to date sales in 2013 were 19% higher than the same period in 2011,” said Michael Marckx, President and CEO.

“In addition to the expanding Happy Lens™ Collection, we are pleased with the year to date growth of our Rx and goggle product lines that grew by 110% and 13%, respectively, in 2013 compared to 2012.

The growth of these product lines helps diversify our revenue portfolio while expanding our SPY® brand. We achieved our third consecutive quarter of operating profit and had positive cash flow from operations. We believe our solid year to date results position us well for the fourth quarter of 2013 and into 2014.”

Income from operations improved by $5.3 million to $0.8 in the nine months ended September 30, 2013, compared to a loss from operations of $4.5 million during the same period in 2012. The $5.3 million improvement was partially due to the increase in sales combined with a 400 basis point improvement in gross profit as a percent of sales, which generated $1.9 million in additional gross profit contribution.

Additionally, total operating expenses in the nine months ended September 30, 2013 were lower by $3.3 million, compared to the same period in 2012, primarily a result of the restructure actions taken in the third quarter of 2012. Cash flow generated by operating activities was $2.5 million in the nine months ended September 30, 2013, compared to negative $4.1 million in the same period in 2012, or an improvement of more than $6.6 million.

Income from operations improved by $1.7 million to $0.5 in the third quarter of 2013, compared to a loss from operations of approximately $1.2 million in the third quarter of 2012. The $1.7 million improvement was partially due to the increase in sales combined with a 500 basis point improvement in gross profit as a percent of sales, which generated $0.6 million in additional gross profit contribution.

Additionally, total operating expenses in the third quarter of 2013 were lower by $1.1 million, compared to the third quarter of 2012, primarily a result of the restructure actions taken in the third quarter of 2012. Cash flow provided by operating activities was $1.4 million in the third quarter of 2013, compared to negative $0.3 million in the third quarter of 2012, or an improvement of more than $1.7 million.
 
The net loss improved by $4.4 million to $1.6 million in the nine months ended September 30, 2013, compared to a net loss of $6.0 million during the same period in 2012. The net loss improved by $1.5 million to $0.3 million in the third quarter of 2013, compared to a net loss of $1.8 million in the third quarter of 2012.

The improved net loss in each period was due to the reduction in our loss from operations, partially offset by higher interest expense. Interest expense included in the net losses is primarily “paid in kind” by being added to the outstanding principal balance rather than being paid in cash.

The results of our operations for the nine months ended and quarter ended September 30, 2013 and 2012 are more fully discussed in our Form 10-Q, filed with the Securities and Exchange Commission on November 5, 2013.

Author: 
Maddy Isbell
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