Spy Inc. reported strong goggle sales and continued growth in prescription frames helped drive up its fourth quarter sales by 13.2 percent to $9.8 million in the fourth quarter ended Dec. 31, 2014, compared with the year earlier quarter.
Gross profit as a percentage of net sales was 46.8 percent for the quarter ended Dec. 31, 2014, compared to 47.0 percent for the same period in 2013.
Annual sales were $38.1 million in 2014, an increase of 0.9 percent or $0.3 million more than in the year ended Dec. 31, 2013. Sales included lower closeout sales of $2.0 million in 2014, compared to $2.8 million in 2013. The overall increase in net sales during the 2014 period was principally attributable to higher sales of prescription frames and goggle lines. Gross profit as a percentage of net sales was 50.6 percent for the year ended Dec. 31, 2014, compared to 49.9 percent for the year ended Dec. 31, 2013.
“In the fourth quarter, we were once again happy with our continued positive sales trend and with such significant growth in our top three major categories: prescription frames, snow goggles and sunglasses,” said Michael Marckx, president and CEO. “We achieved a solid operating profit margin driven by the success of our snow goggle line, which for the first time included our proprietary Happy Lens. We are also excited by the increases achieved in our sun and prescription frame categories and believe these trends will continue as we move through the first quarter of this year.”
Spy will focus on building its business in the prescription frame channel, as well as the sporting and outdoor channels in 2015.
“As a portion of our goal to grow our snow goggle business and the outdoor channel we have positioned ourselves to achieve continued growth from the investments that we made in the sponsorships with Powdr Resorts and those that we are making in 2015 with Boyne Resorts,” said Marckx. “In addition, we are very committed to driving growth in Spy's e-commerce business with our online partners. This growth, along with a further expansion of our Happy Lens offering, improving our product margins and controlling our expenses will carry Spy to a successful and happy 2015.”
Income from operations increased by $0.5 million to $0.1 million for the fourth quarter of 2014, compared to a loss from operations of approximately $0.4 million in the fourth quarter of 2013. The $0.5 million increase was primarily due to the increase in sales and partially offset by a 20 basis point decrease in gross profit as a percent of sales. Additionally, total operating expenses in the fourth quarter of 2014 were higher by $0.3 million, compared to the fourth quarter of 2013.
Income from operations increased by $0.5 million to $0.9 million for the year ended Dec. 31, 2014, compared to $0.4 million for the year ended Dec. 31, 2013. The $0.5 million increase was primarily due to the increase in sales and a 70 basis point improvement in gross profit as a percent of sales. Additionally, total operating expenses for the year ended Dec. 31, 2014 were lower by $0.1 million, compared to the same period in 2013.
The company incurred a net loss of $0.4 million and $1.3 million during the fourth quarter of 2014 and 2013, respectively.
The company incurred a net loss of $1.9 million and $2.9 million during the years ended Dec. 31, 2014 and 2013, respectively.
| SPY INC. AND SUBSIDIARIES | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||||||
| (Thousands, except per share amounts) | |||||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
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| 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| (Unaudited) | |||||||||||||||||
| Net sales | $ | 9,768 | $ | 8,627 | $ | 38,120 | $ | 37,782 | |||||||||
| Cost of sales | 5,199 | 4,571 | 18,831 | 18,921 | |||||||||||||
| Gross profit | 4,569 | 4,056 | 19,289 | 18,861 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Sales and marketing | 2,790 | 2,547 | 11,506 | 11,314 | |||||||||||||
| General and administrative | 1,405 | 1,607 | 5,692 | 6,112 | |||||||||||||
| Shipping and warehousing | 122 | 155 | 540 | 534 | |||||||||||||
| Research and development | 140 | 158 | 661 | 502 | |||||||||||||
| Total operating expenses | 4,457 | 4,144 | 18,399 | 18,462 | |||||||||||||
| Income (loss) from operations | 112 | (577 | ) | 890 | 399 | ||||||||||||
| Other expense: | |||||||||||||||||
| Interest expense | 497 | 737 | 2,500 | 2,966 | |||||||||||||
| Foreign currency transaction loss | 32 | 116 | 138 | 290 | |||||||||||||
| Other expense | 6 | 2 | 175 | ||||||||||||||
