As a follow up to its initial release of 2008 results the prior week (BOSS_0916) Orange 21 last Monday conducted a conference call to outline their plans to prepare for what will likely be a tough 2009.
The action sports company, which manages the SPY and SPY Optics brands, reported that net sales rose 2% to $47.3 million in full year 2008 from $46.5 million in 2007.
Consolidated net sales for the first six months of the year increased 20% to $25.5 million from $21.3 million for the comparable period, while net sales fell 9% and 19% in the third and fourth quarters, respectively. The increase in sales during the first half of the year resulted from improved product mix and availability coupled with increased prices, remarked Douglass, while the decrease in sales in the second half of the year was attributed to a poor economy and cuts in the consumers discretionary spending.
Gross profit decreased 7% to $21.3 million for 2008 from $22.8 million for 2007. The decline in gross profit was due to an increase in the value of the euro against the U.S. dollar during the first half of the year and increased discounting and a general decrease in sales in the latter part of 2008, remarked CFO Jerry Collazo.
In outlining some of the initiatives put in place to offset the downturn, Orange 21 reported that it issued stockholders rights to buy additional shares of ORNG stock at 80 cents per share in January, which raised about $2.4 million in funds. CEO Stone Douglass said the company has also recently closed on “approximately $500,000 of additional investment by allocating unsubscribed rights to additional investors,” and temporarily reduced its compensation to U.S. employees by 10%, which is a savings of approximately $75,000 a quarter. The company also enacted a compensated leave program in Italy for a 13-week period, said the CEO, which has saved ORNG around $500,000.
