Oakley: record first quarter net sales

Oakley has announced financial results for its first quarter ended March 31, 2006. All references to prior period results reflect restated amounts as reported in the company's public filings with the U.S. Securities and Exchange Commission.

Beginning with the first quarter of 2006, the company has modified its previous practice of disclosing gross sales in multiple product categories to reporting net sales in three product categories. The 'optics' category includes the company's sunglasses, prescription eyewear, goggles, electronics and eyewear-related accessories. The 'apparel, footwear and accessories' category includes the company's apparel, footwear, watches and accessories. The 'other' segment contains sales of eyewear brands not owned or licensed by the company and sold through the company's specialty retail stores.

First quarter net sales increased 7.0 percent, to a first quarter record $151.7 million compared with $141.8 million in the same period of 2005. Net income for the first quarter totalled $1.9 million, or $0.03 per diluted share, compared with net income of $10.0 million, or $0.15 per diluted share, earned in the first quarter of 2005. Net income for the first quarter of 2006 included unrealized fair value losses of approximately $0.01 per diluted share while the first quarter of 2005 included unrealized fair value gains of approximately $0.04 per diluted share related to the company's hedging activities recorded in accordance with SFAS 133.

'Our first quarter results reflect the initial benefits of Oakley's renewed emphasis on optics,' said Scott Olivet, chief executive officer, Oakley. 'We executed well against an earlier sunglass release schedule and successfully launched our first women's eyewear collection. The women's launch was one of the most coordinated and powerful ever, combining excellent design and manufacturing execution with an early, integrated sales and marketing effort around the world'.

'During the quarter, we also took an important step forward in our multi-branding strategy with the acquisition of Oliver Peoples. Oakley's portfolio of strong brands will enable us to reach new consumers, satisfy performance, sport and active needs while penetrating new distribution channels', continued Olivet.

'Moving forward, we intend to implement the growth strategies articulated in February which include realigning our apparel platform, restructuring the footwear business, building our retail and international platforms and increasing the investment in overall brand development. We believe that focusing on these strategies will position the company for renewed annual earnings growth in 2007', Olivet concluded.