Orange 21 said consolidated net sales increased 23% to $11.6 million for the three months ended March 31, 2008 from $9.4 million for the three months ended March 31, 2007.
Orange 21 sells its primary brand, Spy Optic, through a variety of action sports/youth fashion retailers, including Cycle Gear, Inc., No Fear, Inc., Pacific Sunwear of California, Inc., Tilly's Clothing, Shoes & Accessories and Zumiez, Inc.
Sales and marketing expense decreased 25% to $3.0 million from $3.9 million for the three months ended March 31, 2007. The decrease was primarily due to a $600,000 decrease in depreciation expense for point-of-purchase displays in the U.S. partly offset by a $200,000 increase in expense related to purchases of new point-of-purchase displays.
General and administrative expense remained consistent at $2.5 million.
Shipping and warehousing expense increased 29% to $500,000 from $400,000 for the three months ended March 31, 2007. The increase is primarily due to increased employee-related expense at LEM.
“We made progress in executing against our business plan this quarter, moving into a phase of growth while also continuing to work on improving operating efficiencies,” said Mark Simo, Orange 21s Chairman and CEO.
ORANGE 21 INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands, except per share amounts)
Three Months Ended March 31, | ||||||||
2008 | 2007 (As restated) | |||||||
(Unaudited) | ||||||||
Net sales | $ | 11,554 | $ | 9,389 | ||||
Cost of sales | 6,110 | 4,466 | ||||||
Gross profit | 5,444 | 4,923 | ||||||
Operating expenses: | ||||||||
Sales and marketing | 2,952 | 3,911 | ||||||
General and administrative | 2,462 | 2,523 | ||||||
Shipping and warehousing | 507 | 392 | ||||||
Research and development | 290 | 193 | ||||||
Total operating expenses | 6,211 | 7,019 | ||||||
Loss from operations | (767 | ) | (2,096 | ) | ||||
Other expense: | ||||||||
Interest expense | (178 | ) | (67 | ) | ||||
Foreign currency transaction loss | (205 | ) | (51 | ) | ||||
Other income (expense) | 30 | (48 | ) | |||||
Total other expense | (353 | ) | (166 | ) | ||||
Loss before benefit for income taxes | (1,120 | ) | (2,262 | ) | ||||
Income tax benefit | (269 | ) | (589 | ) | ||||
Net loss | $ | (851 | ) | $ | (1,673 | ) | ||
Net loss per share of Common Stock | ||||||||
Basic | $ | (0.10 | ) | $ | (0.21 | ) | ||
Diluted | $ | (0.10 | ) | $ | (0.21 | ) | ||
Shares used in computing net loss per share of Common Stock | ||||||||
Basic | 8,164 | 8,101 | ||||||
Diluted | 8,164 | 8,101 |