Spy Inc. reported sales reached $8.2 million in the second quarter ended June 30, down 18 percent, or $1.8 million, compared with the second quarter of 2013. The company said the decline reflected an overall decline in the consumer market coupled with several key retailers currently holding lower levels of inventory, as well as fewer closeout sales of sunglass products.
Gross profit as a percentage of net sales was 56 percent for the three months ended June 30, 2014, compared to 53 percent for the three months ended June 30, 2013.
“Although we encountered a challenging consumer environment in the first couple of months of the second quarter we were pleased with the top line improvements in June and especially with the increase in gross margin rate to the highest level in the last four years,” said Michael Marckx, president and CEO. “The margin expansion is a direct result of our strong product development team as well as a concerted effort across the organization to reduce operating costs. Achieving an operating profit along with our expanding portfolio of products, including our successful Happy Lens Collection, positions us well for the balance of 2014 as we focus on fulfilling strong pre-orders for snow goggles, driving overall sales, improving our product margins and managing our operating costs.”
Income from operations decreased by $0.2 million to $0.1 million in the second quarter of 2014, compared to income from operations of approximately $0.3 million in the second quarter of 2013. The $0.2 million decrease was partially due to the decrease in sales offset with a 271 basis point improvement in gross profit as a percent of sales. Additionally, total operating expenses in the second quarter of 2014 were lower by $0.5 million, compared to the second quarter of 2013.
The company incurred a net loss of $1.5 million and $1.3 million during the first half of 2014 and 2013, respectively.
The company incurred a net loss of $0.7 million and $0.6 million during the second quarter of 2014 and 2013, respectively.
SPY INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
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(Thousands, except per share amounts) | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||
| Net sales | $ | 8,183 | $ | 9,995 | $ | 17,376 | $ | 19,002 | ||||||||||
| Cost of sales | 3,641 | 4,718 | 8,053 | 9,125 | ||||||||||||||
| Gross profit | 4,542 | 5,277 | 9,323 | 9,877 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Sales and marketing | 2,726 | 2,950 | 5,646 | 5,804 | ||||||||||||||
| General and administrative | 1,387 | 1,789 | 2,871 | 3,236 | ||||||||||||||
| Shipping and warehousing | 132 | 89 | 272 | 258 | ||||||||||||||
| Research and development | 196 | 122 | 349 | 223 | ||||||||||||||
| Total operating expenses | 4,441 | 4,950 | 9,138 | 9,521 | ||||||||||||||
| Income (Loss) from operations | 101 | 327 | 185 | 356 | ||||||||||||||
| Other income (expense): | ||||||||||||||||||
| Interest expense | (751 | ) | (752 | ) | (1,509 | ) | (1,484 | ) | ||||||||||
| Foreign currency transaction gain (loss) | 69 | (144 | ) | 2 | (162 | ) | ||||||||||||
| Other (expense) | ||||||||||||||||||
