SPY Inc. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2013. SPY(R) brand products were $29.1 million during the nine months ended September 30, 2013, an increase of 8% or $2.0 million greater than in of the same period in 2012. Total company net sales increased by 6% or $1.7 million, to $29.2 million during the nine months ended September 30, 2013, compared to $27.5 million in the same period in 2012. The difference between SPY(R) brand sales and total Company sales in 2012 was due to its discontinued licensed brand products, which will have no sales in the future. Income from operations improved by $5.3 million to $0.8 in the nine months ended September 30, 2013, compared to a loss from operations of $4.5 million during the same period in 2012. The $5.3 million improvement was partially due to the increase in sales combined with a 400 basis point improvement in gross profit as a percent of sales, which generated $1.9 million in additional gross profit contribution. Cash flow generated by operating activities was $2.5 million in the nine months ended September 30, 2013, compared to negative $4.1 million in the same period in 2012, or an improvement of more than $6.6 million. The net loss improved by $4.4 million to $1.6 million in the nine months ended September 30, 2013, compared to a net loss of $6.0 million during the same period in 2012. Diluted loss per share was $0.12 compared to $0.46 a year ago period. Loss before provision for income taxes was $1.597 million against $6.022 million a year ago period.

Third quarter sales of SPY(R) brand products were $10.2 million in 2013, an increase of 3% or $0.3 million greater than in the third quarter of 2012. Total company net sales increased by 3% or $0.3 million, to $10.2 million compared to $9.9 million in the third quarter of 2012. Income from operations improved by $1.7 million to $0.5 in the third quarter of 2013, compared to a loss from operations of approximately $1.2 million in the third quarter of 2012. The $1.7 million improvement was partially due to the increase in sales combined with a 500 basis point improvement in gross profit as a percent of sales, which generated $0.6 million in additional gross profit contribution. Cash flow provided by operating activities was $1.4 million in the third quarter of 2013, compared to negative $0.3 million in the third quarter of 2012, or an improvement of more than $1.7 million. The net loss improved by $1.5 million to $0.3 million in the third quarter of 2013, compared to a net loss of $1.8 million in the third quarter of 2012. The improved net loss in each period was due to the reduction in the loss from operations, partially offset by higher interest expense. Diluted loss per share was $0.02 compared to $0.14 a year ago period. Loss before provision for income taxes was $0.302 million against $1.784 million a year ago period.