Orange 21 Inc. Reports Financial Results for Third Quarter 2008 and Announces Investor Conference Call
Spy Optics Parent Company
CARLSBAD, Calif.--(BUSINESS WIRE)-- Orange 21 Inc. (NASDAQ:ORNG), a leading developer of brands that produce premium products for the action sports and youth lifestyle markets, today announced financial results for the three and nine months ended September 30, 2008.
We achieved net income of $6,000 for the three-month period ended September 30, 2008, compared to a net loss of $58,000 for the comparable period in 2007. We sustained a net loss of $1.1 million for the nine-month period ended September 30, 2008, compared to a net loss of $3.3 million for the comparable period in 2007. Consolidated net sales for the three- and nine-month periods ended September 30, 2008 were $12 million and $37.6 million, respectively, compared to $13.2 million and $34.5 million for the comparable periods in 2007.
"We are clearly feeling the effects of the general slowdown in the economy," commented Stone Douglass, the Company's newly appointed Chief Executive Officer. "In response, we are doing everything we can to maintain our sales while dramatically reducing expenses.
"Examples of recent expense reductions include:
$402,000 or 16% reduction in G&A expense in the third quarter as compared to the third quarter of 2007; $59,000 or 2% reduction in sales and marketing expense in the third quarter as compared to the third quarter of 2007; and
* $129,000 or 30% reduction in R&D expense in the third quarter as compared to the third quarter of 2007.
"Further, we have implemented several additional cost reduction measures and we expect to begin to see tangible results from those initiatives in the fourth quarter of this year and expect more robust savings in 2009.
"We are also focused on improving our efficiencies. Since joining the board in August, I have already made multiple trips to Italy to focus on streamlining our manufacturing operations. We expect to announce modifications to our organizational structure in the coming weeks that we believe will result in substantial savings in 2009. In addition, we are beginning to make changes to our production processes that we believe will more fully utilize our manufacturing capacity, thus further reducing our cost of goods sold and G&A expense.
"Although we are focused on reducing expenses, we are conducting a top-down analysis of the business to ensure that our cuts will not be at the expense of top line sales, leading product designs or our reputation for quality and innovativeness in the market."
Jerry Collazo, the Company's Chief Financial Officer, further commented, "We have met with several of our business partners, including vendors and customers, in an effort to renew and strengthen these relationships. For example, we are working with our vendors to improve our purchasing terms and are working with our existing manufacturing customers to better understand how we can service their needs and perhaps provide additional manufacturing services. Finally, we have commenced a new sales initiative. We are sending our sales managers into the field to visit all of our customers and independent sales representatives regularly in order to better connect with customers and help them to better market and sell our products. We believe that we will begin to see dividends from these efforts in the fourth quarter, notwithstanding the downturn in the economy."
Concluding, Stone Douglass added, "Notwithstanding these efforts, we absolutely expect to face challenges in the market. As you know, retail sales in general are down substantially compared to last year. We expect to continue to feel pressure on our sales and collections as a result. However, given the strength of our brand, quality of our products and recent initiatives to improve sales and control costs, we remain optimistic about our future prospects."
Investor Conference Call
We invite you to join us for an investor conference call on Monday, November 17, 2008 at 2:00 p.m. Pacific time. The dial-in number for the call in North America is 1-866-543-6407 and 1-617-213-8898 for international callers. The participant pass code is 40910306. The call also will be webcast live on the Internet and can be accessed by logging onto www.orangetwentyone.com.
The webcast will be archived on the Company's website for at least 60 days following the call. An audio replay of the conference call will be available for seven days beginning approximately two hours after the completion of the call on November 17, 2008. The audio replay dial-in number for North America is 1-888-286-8010 and 1-617-801-6888 for international callers. The replay pass code is 20042680.
About Orange 21 Inc.
Orange 21 designs, develops, markets and produces premium products for the action sport and youth lifestyle markets. Orange 21's primary brand, Spy Optic(TM), manufactures sunglasses and goggles targeted toward the action sports and youth lifestyle markets.
Shop Surfeyes.com for the biggest and best collection of Spy Eyewear in the world. Selling Online since 1989.
DEAN SURVIVES THE SINKING OF THE TINNIE IN OZ An Unexpected Mishap Dean Lives to Share the Story
Spy’s Dean Morrison decided to take some time off the World Championship Tour to take care of some ailing injuries he had acquired. In September, Dr. Warren Krammer, the renowned surgeon who works with surfing’s top professionals, operated on Dean's hip and knee.
It’s been three months of rehabilitation after his surgeries and for those who know Dean he’s not the type who can sit for long. He gets bored quick and the next thing you know, he’s off and running somewhere. On a typical day, he’s surfing for six hours. He is like the ultimate surf grom. He never wants to leave the water. Since surfing has been out of the question temporarily, Dean decided to come up with other mischievous fun…
With that being said Dean is off to the nearest boat dealership to buy a small fishing boat, what the Australians call a "tinnie." Next on his agenda is to grab a few friends and head up the coast from Coolangatta to the Great Barrier Reef to go fishing and ocean exploring.
Dean, Paul Fisher, the Harrington twins Dean and Shaun and Darren Scott were on their way headed up the coast to break in the new tinnie. The car was loaded with five bored and anxious surfers, fishing gear and the proper Australian beverages. The crew was in for some good times, but little did they know what could happen.
Once they arrived at Hamilton Island (October 12th), camp was set up and the fun began. After about three days of unsuccessful fishing, the beer tasted better than ever and the stories were non-stop entertainment. Dingo (Dean Morrrison) then decides to appoint Hazza (Dean Harrington) to be in charge of the outboard motor.
All on board, Hazza full throttles the motor, causing Fisher to scream at Hazza to slow down. A novice at boating, Hazza immediately slowed down the boat causing the wake to violently crash at the boat. The large wake had spilled into the boat putting the crew in an unexpected predicament.
Now in the middle of the ocean, by the Great Barrier Reef, known to have an over abundance of shark life, the tinnie was beginning to sink. Cell phones and everything on board were sinking to the bottom of the ocean. The boat had flipped and now Dean and the guys were drifting at sea. At the beginning it was funny, but then the night was approaching and there were no response to the flares that were set off earlier. Panic and concern had begun to set into their minds.
They were about 2.5 miles from land and they knew it was time to swim if they were going to have any chance to make it to land before night fall. With the strong open ocean currents the swim was much more difficult than they had anticipated. It was now completely dark and they couldn’t see any land. They swam for about two hours and it was just their luck they had finally reached land. They had no idea where they were. Dingo and Fisher were excited that they had made it. Screams and shouts filled the night air. Then it just came to them that they were missing the others.
Now in search of the others and looking for help there was no one to be found on the deserted island. In the distance, Dingo and Fisher heard some noises, which ended up being the others. The current had taken them to another place on the deserted island. Cold and bothered by the biting sand flies they continued to search for help. They realized that they needed to call it night and sleep near an outhouse that was built on concrete flooring. Cold and exhausted they decided to sleep huddled together to help keep warm.
Unable to sleep they woke up early the next morning and it was in the morning that Dingo came across a six foot black snake. After the snake encounter, they all realized that the island had nothing to relieve their situation. So they decided to swim to a nearby island that was visible on the horizon.
Once in the water after about 30 minutes of swimming they came across super strong currents and massive whirlpools. They all struggled just staying afloat, and luckily saw a pontoon boat. They began screaming and yelling to catch the attention of the fisherman. The wide-eyed fisherman was in such shock seeing the guys adrift in the middle of the ocean.
On their ride back to Hamilton Island, they told their tinnie story to the fisherman. The fisherman then tells them it was Tiger Shark breeding season and that the beaches have been closed due to recent croc sightings.
Lucky for them they had survived the adventure of sinking the tinnie in the middle of the South Pacific.
SPY’S INTERVIEW WITH DEAN AFTER HIS EPISODE
S: Dean, we’re glad you’re around to tell the story. It sounds like you will have a great story to tell your kids and grand kids later on.
D: Yeah, thanks mate. (sigh) That was gnarly. We wanted to get away and do something different. We all wanted to go somewhere, so we thought this would be a good idea. It was suppose to be flat, so my mates and I figured that this would be fun. Drink piss (beer), fish and camp.
S: Funny how things turn out…when you saw your new tinnie get flooded what was going through your mind?
D: I thought it was funny. I didn't realize that we couldn't flip it back over. We were in an area where people go, so I wasn't too worried about not getting help. But when the sun started to go down, I realized that we needed to get back to land and we were going to have to swim.
S: You just had surgery how worried were you about not being able to make it back?
D: That thought never came to mind. I was thinking that we just needed to get there before dark or we would get lost at sea. I have been going through rehabilitation so I feel pretty good right now. I am not a 100% but I do feel a lot better.
S: So you slept by a toilet and cuddled with men? Haha
D: Yeah. It was horrible. (laughs) The smell was so bad and we were all freezing and wet. The whole time I was wishing I was with my girl Alana. Safe, dry and warm! I really didn't sleep much. My mind would not shut down. I didn't think I was going to die, but being in a situation like that you really begin to think about your life, family and friends.
S: Weren't you worried about sharks during all the swimming?
D: Yeah I was. But if I saw one I would have used my friends as protection. (laughs) We really didn't have a choice. There were no options for us when the tinnie sank. When we decided to go to the other island we were so concerned about getting off that island it never crossed my mind. We just knew that if we stayed at that island it could be a long time until we got help. We all just wanted the trip to end.
S: So will you ever get another tinnie and invite the Hazza's?
D: (laugh) Yeah for sure mate. They are all time. Maybe next time I will make them pay for the boat. (laughs) It's good fun to have adventure in your life.
S: Well we’re glad you’re back, safe and in good spirits. It will be good to see you in the water again. I guess it's not too much longer, your surfing Pipe right?
D: Yeah, hopefully not too much longer. I plan to surf Pipe if I am healthy enough too. I love going to Hawaii. It's a great place to be. Good waves and all my mates are there so it will be good fun.
S: Thanks Dean for your time and good luck in Hawaii. Stay away from tinnies for a while!
D: Cheers
Shop Surfeyes.com for the biggest and best collection of Spy Eyewear in the world. Selling Online since 1989.
After a big fall or injury; What motivates you to get up and do it again: The fact I fell. I never like going down.
Favorite Trick: bs 180
Describe how you feel when you can't ride due to and injury or travel, etc: It’s like you’re hungry at a restaurant and none of the waiters will help you.
Favorite country, spot, hill, park, etc: Home and Lake Powell
Describe a perfect day: Sleep in until about 12, going to ride for a few hours, go get some sushi and then play some cards or go to the bar.
Favorite Spy sunglass and/or Goggle and why: The new Haymaker and the white MC.
Contests or Freeride? Describe likes and dislikes: Contests are fun, but freeriding is the best. You get to be out on a lake all by yourself.
Most inspired by: Friends. Danny, Parks, Ruck
Favorite Tunes: Red Wine by UB40
Where you coming from and what's next: I just came out of physical therapy and am going to the Daytona Supercross tonight.
What Videos will you be featured in 2007: Truth by Liquid Force and the new Pointless video
Favorite Photographer and/ or Artist: Josh Letchworth and Joey Meddock photos and Kaws for art.
