Orange 21’s 2009 Sales Drop 27.7%

Orange 21 Inc., the parent of Spy Optics, reported consolidated net sales for the year ended December 31, 2009 were $34.2 million compared to net sales of $47.3 million for the year ended December 31, 2008. The company incurred a net loss of $3.4 million for the year ended December 31, 2009, compared to net loss of $15.2 million for the year ended December 31, 2008.

The net loss for the years ended Dec. 31, 2009 and 2008 each included a $600,000 in non-cash share-based compensation costs in accordance with FASB authoritative guidance. The 2008 net loss also included a non-cash charge of $8.4 million for goodwill impairment related to the acquisition of LEM S.r.l., a wholly-owned subsidiary and sunglass manufacturer acquired in 2006, and a $3.5 million increase in income tax valuation allowance. Cash generated from operating activities during the years ended Dec. 31, 2009 and 2008 was $1.2 million and $2.2 million, respectively.

“The current recession continues to have a significant impact on the retail environment and our global sales. As such we will continue to control costs and improve operational efficiencies where possible to minimize future possible losses,” said Stone Douglass, the company’s Chief Executive Officer. “During the year ended December 31, 2009, we reduced total operating expenses by approximately $7.6 million from 2008, excluding the $8.4 million goodwill impairment charge recorded in 2008, and expect to continue to benefit from these cost savings efforts during 2010.”

Concluding, Douglass added, “We are very excited about possible new opportunities that are unfolding for Orange 21 and its shareholders in 2010, including our existing new Spy styles and the introduction of our new ONeill and Margaritaville brands.”