Spy Inc. swung to a loss in the third quarter ended Sept. 30 as sales of its sunglasses and goggles fell $1.6 million, or 14.6 percent, to $9.4 million.
Gross profit as a percentage of net sales was 43.7% for the quarter ended September 30, 2015, compared to 49.2% for the same period in 2014.
“We are clearly disappointed by the quarter,” said Seth Hamot, Interim CEO and Chairman. “. “SPY continued to experience a challenging consumer environment. Key accounts and e-commerce business were able to generate modest top-line growth, while our smaller, independent retail account activities were challenged.”
Hamot said a higher mix of lower margin goggle business relative to higher margin sun and Rx as well the higher level of closeout sales combined to contract margins.
“Going forward, our focus is on expanding our base of customers, growing our e-commerce business, reducing inventory levels and a laser focus on controlling costs,” he said. “Our Happy Lens Collection positions us well for the future, and we are leveraging this opportunity wherever possible.”
Income from operations decreased by approximately $0.8 million to $28,000 in the nine months of 2015, compared to $0.8 million in the nine months of 2014. Total operating expenses in the nine months of 2015 were lower by $0.8 million, compared to the same period in 2014. Cash flow generated by operating activities was $0.5 million in the first nine months of 2015.
The company had a loss from operations of $0.1 million, compared with operating income of approximately $0.6 million in the same period in 2014. Additionally, total operating expenses in the third quarter of 2015 were lower by $0.6 million, compared to the same period in 2014.
Spy incurred a net loss of $1.7 million and $1.5 million during the nine months of 2015 and 2014, respectively. The company incurred a net loss of $0.8 million and less than $0.1 million during the third quarter of 2015 and 2014, respectively.
| SPY INC. AND SUBSIDIARIES | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||||||||||||||||
| (Thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||
| Net sales | $ | 9,370 | $ | 10,977 | $ | 26,622 | $ | 28,353 | ||||||||||
| Cost of sales | 5,273 | 5,579 | 13,500 | 13,632 | ||||||||||||||
| Gross profit | 4,097 | 5,398 | 13,122 | 14,721 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing | 2,515 | 3,071 | 8,343 | 8,717 | ||||||||||||||
| General and administrative | 1,424 | 1,417 | 3,903 | 4,287 | ||||||||||||||
| Shipping and warehousing | 141 | 145 | 384 | 418 | ||||||||||||||
