CARLSBAD, Calif.—SPY Inc. (OTCBB: XSPY) reported that total net sales increased by $1.4 million, or 22 percent, to reach $8.1 million for the quarter ended March 31, 2012. The sales for the period compared with total net sales of $6.7 million for the quarter ended March 31, 2011.

Sales of our the group’s core SPY brand products increased by $1.3 million, or 22 percent to $7.9 million for the quarter, compared with core SPY brand sales of $6.5 million during the prior year period. Other sales were $0.3 million during the quarter, consisting of closeout sales of substantially all of the remaining inventory value of licensed brand products which are no longer a focus of the company, the announcement said, compared with licensed brand product sales of $0.2 million during the quarter ended March 31, 2011.

"We are very pleased with the significant growth SPY generated in our first quarter of 2012, particularly since our first quarter is usually a seasonally weak quarter," said Michael Marckx, president and CEO. "During the last 12 months, we have taken steps to bolster SPY's position in the market in order to position us for continued growth, including new marketing initiatives, strategic product offerings and investments in sales and marketing related to our core SPY brand.”

The company incurred a net loss of $2.6 million during the first quarter, compared to a net loss of $1.6 million during prior year period. The company pointed out that, despite these net losses, the negative cash flow from operations of $0.4 million and $0.6 million during the quarters ended March 31, 2012 and 2011, was significantly less than the net loss in each period primarily due to significant levels of non-cash expenses of $0.8 million and $0.4 million, respectively, and cash generated from the company’s working capital of $1.5 million and $0.5 million, respectively.

SPY Inc.’s principal products—sunglasses, goggles and prescription frames—are marketed under the SPYbrand. During 2011 and 2010, the company also designed, manufactured and sold eyewear under the O'Neill, Melodies by MJB and Margaritaville brands and in 2011, the company decided to cease any new purchase orders of additional inventory for these licensed eyewear brands and said it does not expect any significant sales from these brands in the future.