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Auri Announces Third Quarter 2011 Results
LAGUNA BEACH, Calif. , Nov. 15, 2011 /PRNewswire/ -- Auri, Inc., (OTCQB: AURI.OB - News), an innovative fashion and technology footwear design lab, today announced financial results for the three and nine months ended September 30, 2011 .
Third Quarter 2011 Highlights:
YTD 2011 revenues increased 65% to $761,277 ; Women's footwear YTD 2011 revenues up 175% to $359,546
Added 23 new retail distribution points in the third quarter; 63 total retail locations at September 30, 2011
Three Months Ended September 30, 2011
Revenues for the three months ended September 30, 2011 were $287,453 , an increase of 183% from $101,682 for the three months ended September 30, 2010 . The men's segment continued to grow in door count over the previous year. The significant growth in the women's segment is directly attributed to a broader and more comprehensive collection of women's footwear delivered in the third quarter versus the same period a year ago. The application of Auri's innovative technologies, delivering true luxury in the form of groundbreaking comfort in fashion footwear has generated new sales and provided growth and reorder business.
Cost of sales for the three months ended September 30, 2011 increased to $260,778 from $99,572 in the year ago period. Gross margin increased to 9.3% in the three months ended September 30, 2011 from 2.1% in the comparable period a year ago.
Selling, general and administrative expenses were $542,431 in the third quarter of 2011 compared to $151,965 in the same period a year ago. Auri incurred $112,000 of public company expenses, including $36,120 of non-cash stock-based compensation expenses, which was not present in the year-ago period.
Loss from operations was $515,756 in the third quarter of 2011 compared to $149,885 in the same period in 2010.
Net loss for the three months ended September 30, 2011 was $553,252 compared to a $152,568 loss for the three months ended September 30, 2010 . The diluted loss per share was $0.01 based on 90.5 million weighted average shares outstanding in the third quarter of 2011 compared to $0.00 and 53.3 million shares in the same period a year ago, respectively.
Nine Months Ended September 30, 2011
Revenues for the nine months ended September 30, 2011 increased 65% to $761,277 from the year ago period. Sales of women's footwear increased approximately 175% to $359,546 and benefited from delivering two complete seasonal collections versus 1.5 in 2010. Overall growth included 11 new doors at department stores and 52 new boutiques.
Cost of sales for the nine months ended September 30, 2011 was $643,806 versus $351,960 last year. Gross profit was $117,471 in the first nine months of 2011 versus $110,421 in the first nine months of 2010, with associated gross margins of 15.4% and 23.9%, respectively.
Selling, general and administrative expenses increased from $594,116 to $1,423,704 due primarily to additional legal fees, addition of sales personnel and increased marketing/trade show attendance. In addition, the Company spent approximately $393,000 in public company expenses during the first nine months of 2011, which were not present in the comparable period a year ago. Operating loss was $1,306,233 compared to $483,695 in the first nine months of 2010.
Net loss for the first nine months of 2011 was $1,390,972 as compared to a loss of $490,157 during the nine months ended September 30 , 2010. The diluted net loss per share for the first nine months of 2011 was $0.02 based on 83.3 million weighted average shares outstanding.
Liquidity and Capital Resources
As of September 30, 2011 , the Company had $108,795 of cash and cash equivalents and $116,670 of long term debt outstanding. Working capital was $350,301 at September 30, 2011 compared to $240,325 at December 31, 2010 .
The Company received $1.0 million in net proceeds from various private placements in the nine months ended September 30, 2011 . Based on current projected working capital needs for the next twelve months, the Company needs to raise additional capital to meet its operating goals.
Business Strategy Update
The Company continues to leverage its strengths in design innovation and technology integration with strategic partners to drive growth in three complementary businesses: 1) Auri branded footwear products, 2) Licensing and 3) Co-branding.
Auri's branded footwear products offer groundbreaking technologies, materials and design, leveraging its innovative technologies across its men's and women's fashion footwear collections. Auri's approach in utilizing its design process with its patented technologies such as active heel suspension systems is just one of the brands innovative solutions with more in design and development. The brand presents over 200 fashionable men's and women's SKUs in their Fall 2011 and Spring 2012 collections that will be available in over 200 locations nationwide. Auri's women's fall collection sells at a retail price range from $145-$295 . The men's collection features a diverse lineup of casual, dress, and sportswear oriented footwear. Retail prices for the men's line range from $150-$285 .
Auri continues to build its portfolio of intellectual property and to integrate its expertise and technologies into fashionable footwear across a broad spectrum of styles and constructions. In combination with its own branded footwear products, Auri plans to maximize profits, grow its brand equity through strategic collaborations and co-branding opportunities. The Company is already in advanced discussions with a number of industry-leading brands to develop, design and collaborate on a number of lines of technologically superior fashion footwear products.
In a highly competitive market place such as the fashion footwear segment, every brand is looking to differentiate from the competition. With four (4) design and utility patents already issued and more pending, Auri is uniquely positioned to secure licensing, collaborative, and co-branding agreements that will elevate its brand equity and increase profitability.
