Orange 21 Inc. saw net sales for the first quarter of 2006 increase 11% to $9.4 million from $8.5 million last year. The company reported a net loss for the quarter of approximately $1.7 million, or 21 cents loss per diluted share compared to a net loss of approximately $495,000, or 6 cents loss per diluted share in the same period a year ago.

Cash, cash equivalents, and short term investments at March 31, 2006, totaled approximately $5.9 million.

“We are pleased that our first quarter results were in line with our expectations. Demand for our product was strong in the first quarter, however our results continue to be adversely impacted by delays in product delivery. We are making progress in our efforts to correct these issues,” said Barry Buchholtz, Chief Executive Officer. “On the positive side, our brand continues to gain market awareness on a global basis. We continue to develop exceptional products and demand is growing. In fact, during the first four months of the year, domestic sunglass bookings were up 31%. Additionally, our preliminary snow goggle bookings are strong versus a year ago. Finally, we are just a few weeks away from launching our Spring 2007 eyewear collection and we are very excited about the new styles.”


2006 Outlook

The company continues to forecast 2006 annual net sales in the range of $46 – $48 million and a net loss of 15 cents – 20 cents per fully diluted share for the year.

                   Orange 21 Inc. and Subsidiaries
                 Consolidated Statement of Operations

                                          Three months ended March 31,
                                          ----------------------------
                                               2005           2006
                                          -------------  -------------

Net sales                                   $8,472,553     $9,382,480
Cost of sales                                4,397,694      4,867,246
                                          -------------  -------------

Gross Profit                                 4,074,859      4,515,234
                                          -------------  -------------

Operating expenses:
  Sales and marketing                        2,868,516      3,506,593
  General and administrative                 1,299,926      2,139,332
  Shipping and warehousing                     292,189        476,291
  Research and development                     136,075        265,857
                                          -------------  -------------

    Total operating expenses                 4,596,706      6,388,073
                                          -------------  -------------

  Loss from operations                        (521,847)    (1,872,839)

    Other expense                              (72,214)       (68,450)
                                          -------------  -------------
    Loss before income taxes                  (594,061)    (1,941,289)
Income tax benefit                             (99,000)      (207,414)
                                          -------------  -------------
  Net loss                                   $(495,061)   $(1,733,875)
                                          =============  =============
Net loss per common share
  Basic                                         $(0.06)        $(0.21)
                                          =============  =============
  Diluted                                       $(0.06)        $(0.21)
                                          =============  =============
Weighted average common shares outstanding
  Basic                                      8,012,483      8,084,314
                                          =============  =============
  Diluted                                    8,012,483      8,084,314