Orange 21 Inc. announced net sales for the first quarter ended March 31, 2005 were $8.5 million compared to $6.4 million in the first quarter of 2004, an increase of 32%. The net loss for the first quarter of 2005 was approximately $495,000 versus a net loss of approximately $348,000 in the first quarter of 2004. The company reported a loss per share for the first quarter of 2005 of 6 cents on approximately 8 million average shares outstanding compared to a loss per share of 8 cents on approximately 4.4 million average shares outstanding in the same period a year ago.
Cash, cash equivalents, and short term investments at March 31, 2005, totaled $14.2 million.
“We are very pleased with our results for first quarter 2005, our first full quarter as a public company,” said Barry Buchholtz, chief executive officer. “Our results are a reflection of our commitment to the execution of our growth strategy that is centered around bringing innovative, premium optical products to the market place.”
Mr. Buchholtz continued, “We are excited about the growth opportunities for 2005 and beyond. In the first quarter we launched the Dale Earnhardt, Jr. signature sunglass series, which is being marketed under the “E Eyewear” brand, as well as the new Handcrafted Eyewear Collection which is being produced in limited quantities. We continue to expand global distribution, improve service levels, and develop innovative sales and marketing programs that reach our target audience. We are confident we have the right product portfolio to successfully reach our target audience and drive the growth of our business.”
Updated 2005 Guidance
Although first quarter results exceeded the first call consensus EPS estimate for the quarter, the company continues to remain comfortable with the previously given annual guidance of revenue growth of 25% – 30%, and the current annual consensus estimate of 17 cents EPS, on approximately 8 million average shares outstanding.
As previously stated, this excludes the impact of legal costs associated with the Oakley and the class action law suits, which based on legal counsel estimates, could affect net income by as much as $150,000 in 2005.
Statements of Operations for Q1 2005
Three months ended
March 31,
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2004 2005
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Net sales $6,403,416 $8,472,553
Cost of sales 3,244,365 4,397,694
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Gross Profit 3,159,051 4,074,859
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Operating expenses:
Sales and marketing 2,265,365 2,868,516
General and administrative 984,526 1,299,926
Shipping and warehousing 162,360 292,189
Research and development 89,051 136,075
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Total operating expenses 3,501,302 4,596,706
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Loss from operations (342,251) (521,847)
Other expense (53,585) (72,214)
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Loss before income taxes (395,836) (594,061)
Income tax benefit (48,000) (99,000)
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Net loss (a) $(347,836) $(495,061)
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Net loss per common share
Basic $0.08 $0.06
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Diluted (a) $0.08 $0.06
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Weighted average common shares outstanding
Basic 4,434,067 8,012,483
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Diluted 4,434,067 8,012,483
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(a) The results for the first quarter of 2004 were not previously
reviewed by the Company's accountants. The accountants' review was for
the six months ended June 30, 2004. The results above reflect
intra-period adjustments of $154,000 net of income taxes between Q1
and Q2 of 2004 based on their review.
