Spy Inc., which designs, markets, and distributes sunglasses, goggles and prescription eyewear for action sports,
motorsports, snow sports, cycling and multi-sports enthusiasts, reported sales dipped 0.7 percent to $9.1 million in the first quarter compared with the year earlier quarter.
The decrease was primarily driven by lower sales of sunglasses, partially offset by higher sales in goggles and prescription frame product lines. Gross profit as a percentage of net sales was 54.8 percent for the quarter ended March 31, compared to 52.0 percent for the same period in 2014.
“I am quite happy with our results this first quarter, with only a slight dip in our sales trend despite the continued contraction of the action sports retail sector and the detrimental shift in global exchange rates,” said Michael Marckx, Spy president and CEO. “In fact, excluding those areas impacted by the very negative exchange rate changes, our business would have once again enjoyed substantial growth in the first quarter. Despite these challenges we achieved an improved operating profit margin driven by stronger gross margins, which were made possible by the success of our newer premium products across all categories. We are very excited about the increases in our optical channel and the tremendous growth in the pre-orders for our snow business, which will have a very positive bearing on our second half results this year.”
Marckx continued, “For the remainder of 2015, we will continue to focus on our growing e-commerce business, expanding key accounts in the sporting goods and outdoor channels, as well as the new opportunities through our Powdr and Boyne resort partnerships. And, as I mentioned, growing our optical business is very important for our business as well as effectively sharing our Happy Lens story. Finally, we will continue to create ways to support our existing core action sports retail partners. These key initiatives, plus a further expansion of our Happy Lens offering, improving our product margins and controlling our expenses will enable us to deliver a happy 2015.”
Income from operations increased by $0.1 million to $0.2 million for the first quarter of 2015, compared to income from operations of approximately $0.1 million in the first quarter of 2014. The $0.1 million increase was primarily due to a 280 basis point increase in gross profit as a percent of sales. Additionally, total operating expenses in the first quarter of 2015 were higher by $0.1 million, compared to the first quarter of 2014.
The company incurred a net loss of $0.4 million and $0.7 million during the first quarter of 2015 and 2014, respectively.
The company ended the quarter with cash of $522,000 and inventories of $6.69 million, up 48.7 percent and down 13.7 percent from Dec. 31, 2014.