Exhibit 99.1
Orange 21 Reports Fourth Quarter and Fiscal Year 2004 Results
CARLSBAD, CA. March 30, 2005, Orange 21 Inc. (NASDAQ: ORNG)
• 2004 Revenues of $33.56 million, a 22.5% increase over 2003
• 2004 Net Income of $807,304, a 61% increase over 2003
• 2004 Fully diluted EPS of $0.16 for 2004 versus $0.11 in 2003
Orange 21 Inc., a leading developer of brands that produce premium optical products, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004.
Fiscal year 2004 net sales increased 22.5% to $33.56 million from $27.4 million for fiscal year 2003. 2004 net income was $807,304, compared to $500,097 in 2003, representing a 61% increase. For fiscal year 2004, earnings per diluted share were $0.16 on 5.0 million average shares outstanding versus $0.11 on 4.6 million average shares outstanding in 2003.
The Company’s net sales for the fourth quarter of 2004 were $9.5 million compared to $7.7 million in the fourth quarter of 2003, an increase of 24.6%. Net income for the fourth quarter of 2004 was approximately $722,000 versus a net loss of approximately $110,000 in the fourth quarter of 2003. Earnings per diluted share for the fourth quarter of 2004 were $0.13 on 5.8 million average shares outstanding compared to a loss per share of $0.02 on 4.4 million average shares outstanding in the same period a year ago.
Cash and cash equivalents at December 31, 2004, totaled $11.5 million.
“We are very pleased with our results for the fourth quarter and 2004,” said Barry Buchholtz, Chief Executive Officer. “Our success is attributable to the continued execution of our focused strategy to leverage our brand recognition within our target market and increase market share in the premium eyewear category.”
Mr. Buchholtz continued, “We are excited about the growth opportunities for 2005 and beyond. We have already launched the Dale Earnhardt, Jr. signature sunglass series, which is being marketed under the E Eyewear brand, and we have embarked on an accelerated expansion plan in the US, as well as Europe.”
Investor Conference Call
Orange 21’s quarterly earnings conference call is scheduled to begin today 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 21s; 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. Undue reliance should not be placed on forward-looking statements.
Contact:
Orange 21 Inc.
Michael Brower, CFO
760.804.8420
OR
Integrated Corporate Relations
310.395.2215
Andrew Greenebaum / agreenebaum@icrinc.com
Allyson Pooley / apooley@icrinc.com
ORANGE 21 INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| | December 31, | |
| | 2003 | | 2004 | |
Assets | | | | | |
Current assets | | | | | |
Cash and cash equivalents | | $ | 581,207 | | $ | 11,476,828 | |
Accounts receivable—net | | 6,635,277 | | 8,244,910 | |
Inventories | | 6,669,307 | | 11,814,846 | |
Prepaid expenses and other current assets | | 1,199,500 | | 1,073,181 | |
Income taxes receivable | | 65,025 | | — | |
Deferred income taxes | | 985,000 | | 1,074,000 | |
| | | | | |
Total current assets | | 16,135,316 | | 33,683,765 | |
Property and equipment - net | | 3,893,438 | | 3,687,907 | |
Due from related party | | 845,057 | | — | |
| | | | | |
Intangible assets, net of accumulated amortization of $264,633 and $318,332 at December 31, 2003 and 2004, respectively | | 167,214 | | 152,543 | |
| | | | | |
Total assets | | $ | 21,041,025 | | $ | 37,524,215 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Current liabilities | | | | | |
Line of credit | | $ | 7,075,000 | | $ | — | |
Current portion of notes payable | | 190,000 | | 125,000 | |
Notes payable to stockholders | | 380,000 | | — | |
Current portion of capitalized leases | | 39,505 | | 37,370 | |
Accounts payable | | 2,031,958 | | 2,243,955 | |
Accrued expenses and other liabilities | | 1,369,820 | | 2,433,371 | |
Income taxes payable | | — | | 443,619 | |
| | | | | |
Total current liabilities | | 11,086,283 | | 5,283,315 | |
Notes payable, less current portion | | 281,250 | | 166,667 | |
Capitalized leases, less current portion | | 59,527 | | 31,369 | |
Deferred income taxes | | 107,000 | | 143,000 | |
| | | | | |
Total liabilities | | 11,534,060 | | 5,624,351 | |
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; 4,434,067 and 7,491,218 | | 10,117,798 | | 747 | |
shares issued and outstanding at December 31, 2003 and 2004, respectively | | | | | |
Additional paid-in capital | | 92,353 | | 31,655,426 | |
Accumulated other comprehensive income | | 298,100 | | 437,673 | |
Accumulated deficit | | (1,001,286 | ) | (193,982 | ) |
| | | | | |
Total stockholders’ equity | | 9,506,965 | | 31,899,864 | |
| | | | | |
| | $ | 21,041,025 | | $ | 37,524,215 | |
ORANGE 21 INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
| | Quarter ended December 31, | | Year ended December 31, | |
In $000s | | 2003 | | 2004 | | 2003 | | 2004 | |
| | | | | | | | | |
Net sales | | $ | 7,652 | | $ | 9,535 | | $ | 27,404 | | $ | 33,563 | |
Cost of sales | | 4,048 | | 4,600 | | 13,186 | | 15,530 | |
| | | | | | | | | |
Gross Profit | | 3,604 | | 4,935 | | 14,218 | | 18,033 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Sales and marketing | | 1,731 | | 2,516 | | 8,075 | | 10,392 | |
General and administrative | | 1,235 | | 1,322 | | 3,775 | | 4,563 | |
Shipping and warehousing | | 152 | | 320 | | 771 | | 990 | |
Research and development | | 11 | | 228 | | 264 | | 512 | |
| | | | | | | | | |
Total operating expenses | | 3,129 | | 4,386 | | 12,885 | | 16,457 | |
| | | | | | | | | |
Income from operations | | 475 | | 549 | | 1,333 | | 1,576 | |
| | | | | | | | | |
Other income (expense) | | (127 | ) | 345 | | (144 | ) | 165 | |
| | | | | | | | | |
Income before income taxes | | 348 | | 894 | | 1,189 | | 1,741 | |
Income tax provision (benefit) | | 458 | | 172 | | 689 | | 934 | |
Net income | | $ | (110 | ) | $ | 722 | | $ | 500 | | $ | 807 | |
Net income per share | | | | | | | | | |
Basic | | $ | (0.02 | ) | $ | 0.13 | | $ | 0.11 | | $ | 0.17 | |
Diluted | | $ | (0.02 | ) | $ | 0.13 | | $ | 0.11 | | $ | 0.16 | |
Shares used in computing net income per share | | | | | | | | | |
Basic | | 4,434,067 | | 5,424,587 | | 4,426,056 | | 4,643,320 | |
Diluted | | 4,434,067 | | 5,754,519 | | 4,617,609 | | 4,973,252 | |
