CARLSBAD, Calif.--(BUSINESS WIRE)--May 16, 2005--Orange 21 Inc.
(NASDAQ:ORNG):
-- First quarter revenues of $ 8.5 million, a 32% year over year
increase
-- EPS for the first quarter of 2005 was a loss per share of
$0.06 compared to a loss per share of $0.08 in the first
quarter of 2004
Orange 21 Inc. (NASDAQ:ORNG), a leading developer of brands that
produce premium optical products, today announced financial results
for the three months ended March 31, 2005.
The Company's net sales for the first quarter of 2005 were $8.5
million compared to $6.4 million in the first quarter of 2004, an
increase of 32%. The net loss for the first quarter of 2005 was
approximately $495,000 versus a net loss of approximately $348,000 in
the first quarter of 2004. The Company reported a loss per share for
the first quarter of 2005 of $0.06 on approximately 8 million average
shares outstanding compared to a loss per share of $0.08 on
approximately 4.4 million average shares outstanding in the same
period a year ago.
Cash, cash equivalents, and short term investments at March 31,
2005, totaled $14.2 million.
"We are very pleased with our results for first quarter 2005, our
first full quarter as a public company," said Barry Buchholtz, Chief
Executive Officer. "Our results are a reflection of our commitment to
the execution of our growth strategy that is centered around bringing
innovative, premium optical products to the market place."
Mr. Buchholtz continued, "We are excited about the growth
opportunities for 2005 and beyond. In the first quarter we launched
the Dale Earnhardt, Jr. signature sunglass series, which is being
marketed under the "E Eyewear" brand, as well as the new Handcrafted
Eyewear Collection which is being produced in limited quantities. We
continue to expand global distribution, improve service levels, and
develop innovative sales and marketing programs that reach our target
audience. We are confident we have the right product portfolio to
successfully reach our target audience and drive the growth of our
business."
Updated 2005 Guidance
Although our first quarter results exceeded the first call
consensus EPS estimate for the quarter, we continue to remain
comfortable with our previously given annual guidance of revenue
growth of 25% - 30%, and the current annual consensus estimate of
$0.17 EPS, on approximately 8 million average shares outstanding.
As previously stated, this excludes the impact of legal costs
associated with the Oakley and the class action law suits, which based
on our legal counsel's estimates, could affect net income by as much
as $150,000 in 2005.
While we are not providing specific quarterly guidance, our
business is seasonal with approximately 40% of sales occurring in the
first half of the year, and approximately 60% of sales occurring in
the second half of the year.
Investor Conference Call
Orange 21's quarterly earnings conference call is scheduled to
begin today, Monday, May 16, 2005 at 1:45 p.m., Pacific Standard Time.
The conference call will be broadcast live over the Internet.
Investors may listen to the live webcast at www.orangetwentyone.com.
For those who are not available for the live broadcast, the call will
be archived on Orange 21's investor website.
About Orange 21 Inc.
Orange 21 develops brands that produce premium optical products.
Orange 21's brands include Spy Optic, which manufactures sunglasses
and goggles targeted towards the action sports and youth lifestyle
market, and E Eyewear, which manufactures the signature Dale
Earnhardt, Jr. sunglass line.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This press release contains forward-looking
statements and forecasts about Orange 21 and its business, such as
management's net sales and earnings estimates for 2005. Because
forecasts are inherently estimates that cannot be made with precision,
the company's performance may at times differ from its estimates and
targets.
Statements in this press release regarding financial guidance,
Mr. Buchholtz's statements and any other statements in this press
release that refer to Orange 21's estimated and anticipated future
results, are forward-looking statements. All forward-looking
statements in this press release reflect Orange 21's current analysis
of existing trends and information and represent Orange 21's judgment
only as of the date of this press release. Actual results may differ
from current expectations based on a number of factors affecting
Orange 21's businesses including but not limited to adjustments made
pursuant to the final audit by our outside auditors; uncertainties
associated with Orange 21's ability to maintain a sufficient supply of
products and to successfully manufacture its products; the performance
of new products and continued acceptance of current products; the
execution of strategic initiatives and alliances; Orange 21's product
liability claims or quality issues; litigation; and the uncertainties
associated with intellectual property protection for the company's
products. In addition, matters generally affecting the domestic and
global economy, such as changes in interest and currency exchange
rates, can affect Orange 21's results. Therefore, the reader is
cautioned not to rely on these forward-looking statements. Orange 21
disclaims any intent or obligation to update these forward-looking
statements.
Further information on potential risk factors that could affect
Orange 21's business and its financial results are detailed in its
filings with the Securities and Exchange Commission, including its
Registration Statement on Form S-1 declared effective on December 13,
2004 and its most recent annual report on Form 10-K, and current
reports on Form 8-K. Undue reliance should not be placed on
forward-looking statements.
Balance Sheets for Q1 2005
December 31, March 31,
Assets 2004 2005
------------ ------------
Current assets
Cash and cash equivalents $11,476,828 $3,336,720
Short-term investments - $10,907,191
Accounts receivable - net 8,244,910 6,458,807
Inventories 11,814,846 13,111,937
Prepaid expenses and other current assets 1,073,181 1,841,272
Income taxes receivable - 97,859
Deferred income taxes 1,074,000 857,000
------------ ------------
Total current assets 33,683,765 36,610,786
Property and equipment - net 3,687,907 3,863,641
Intangible assets, net of accumulated
amortization of $318,332 and $332,521
at 2004 and 2005, respectively 152,543 192,517
Deferred income taxes - 173,000
------------ ------------
Total assets $37,524,215 $40,839,944
============ ============
Liabilities and Stockholders' Equity
Current liabilities
Current portion of notes payable $125,000 $125,000
Current portion of capitalized leases 37,370 37,041
Accounts payable 2,243,955 2,584,549
Accrued expenses and other liabilities 2,433,371 2,356,948
Income taxes payable 443,619 -
------------ ------------
Total current liabilities 5,283,315 5,103,538
Notes payable, less current portion 166,667 135,417
Capitalized leases, less current portion 31,369 22,225
Deferred income taxes 143,000 -
------------ ------------
Total liabilities 5,624,351 5,261,180
Commitments and contingencies
Stockholders' equity
Preferred stock; par value $0.0001; 5,000,000
authorized - -
Common stock; par value $0.0001; 100,000,000
shares authorized; 7,491,218 and 8,012,483
shares issued and outstanding at 2004 and
2005, respectively 747 799
Additional paid-in capital 31,655,426 35,840,787
Accumulated other comprehensive income 437,673 426,221
Accumulated deficit (193,982) (689,043)
------------ ------------
Total stockholders' equity 31,899,864 35,578,764
------------ ------------
$37,524,215 $40,839,944
============ ============
Statements of Operations for Q1 2005
Three months ended
March 31,
-----------------------
2004 2005
----------- -----------
Net sales $6,403,416 $8,472,553
Cost of sales 3,244,365 4,397,694
----------- -----------
Gross Profit 3,159,051 4,074,859
----------- -----------
Operating expenses:
Sales and marketing 2,265,365 2,868,516
General and administrative 984,526 1,299,926
Shipping and warehousing 162,360 292,189
Research and development 89,051 136,075
----------- -----------
Total operating expenses 3,501,302 4,596,706
----------- -----------
Loss from operations (342,251) (521,847)
Other expense (53,585) (72,214)
----------- -----------
Loss before income taxes (395,836) (594,061)
Income tax benefit (48,000) (99,000)
----------- -----------
Net loss (a) $(347,836) $(495,061)
=========== ===========
Net loss per common share
Basic $0.08 $0.06
=========== ===========
Diluted (a) $0.08 $0.06
=========== ===========
Weighted average common shares outstanding
Basic 4,434,067 8,012,483
=========== ===========
Diluted 4,434,067 8,012,483
=========== ===========
(a) The results for the first quarter of 2004 were not previously
reviewed by the Company's accountants. The accountants' review was for
the six months ended June 30, 2004. The results above reflect
intra-period adjustments of $154,000 net of income taxes between Q1
and Q2 of 2004 based on their review.
CONTACT: Orange 21 Inc.
Michael Brower, 760.804.8420
or
Integrated Corporate Relations
Andrew Greenebaum / agreenebaum@icrinc.com
Allyson Pooley / apooley@icrinc.com
310.395.2215
SOURCE: Orange 21 Inc.
