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Orange 21 Inc. reports financial results for first quarter

Orange 21's Brands. Courtesy
Orange 21's Brands. Courtesy of Orange 21.
By Press Releases
May 17, 2011 12:57 AM

Press Release:

 

CARLSBAD, CA, May 16, 2011 (MARKETWIRE via COMTEX) --

 

Orange 21 Inc. (OTCBB: ORNG) today announced financial results for the quarter ended March 31, 2011.

 

Consolidated net sales decreased by $1.6 million to $6.7 million for the three months ended March 31, 2011 from $8.3 million for the three months ended March 31, 2010.

 

The majority of the $1.6 million decrease in net sales was attributable to the sale and deconsolidation of our former Italian manufacturing subsidiary, LEM, S.r.l. ("LEM"), on December 31, 2010. LEM's net sales of products manufactured for third parties of approximately $900,000 were included in the Company's consolidated results for the three months ended March 31, 2010.

 

No such sales were included in the Company's consolidated results for the three months ended March 31, 2011. In addition, the Company had approximately $400,000 less in sales from closeouts during the three months ended March 31, 2011, compared to the three months ended March 31, 2010, as a result of changes in inventory mix.

 

Domestic net sales represented 93% and 79% of total net sales for the three months ended March 31, 2011 and 2010, respectively, with this increase in percentage being primarily due to the sale and deconsolidation of LEM as of December 31, 2010. International net sales represented 7% and 21% of total net sales for the three months ended March 31, 2011 and 2010, respectively.

 

Gross margin increased by 600 basis points to 51% for the three months ended March 31, 2011 compared to 45% for the three months ended March 31, 2010, primarily attributable to the sale and deconsolidation of LEM as of December 31, 2010, and, to a lesser extent, less in sales from closeouts during the three months ended March 31, 2011, when compared to the three months ended March 31, 2010.

 

We incurred a net loss of $1.6 million for the three months ended March 31, 2011, compared to a net loss of $937,000 for the three months ended March 31, 2010. The net losses for the three months ended March 31, 2011 and 2010, included $139,000 and $134,000, respectively, in non-cash share-based compensation costs calculated in accordance with FASB authoritative guidance.

 

"We are encouraged by the positive impact on our gross margin performance due to the sale of LEM combined with the reduction in close-out sales; however, we are disappointed with the approximately 9% quarter-over-quarter decline in sales, excluding the impact of LEM," said Orange 21 Chairman of the Board of Directors Seth Hamot.

 

"With the new management team in place as of mid-April, we hope to see improvements to the business in the future."

 

See page 2 for more details

 

 

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