ROCHESTER, N.Y.—Vuzix Corporation (NASDAQ: VUZI), a leading supplier of video eyewear and smart glasses products in the consumer, enterprise and entertainment markets, provided an update on its business initiatives and reported its second quarter financial results for the period ended June 30, 2015.

Vuzix reported $427,812 in revenues for the three months ended June 30, 2015, compared to $723,258 for the same period in 2014. According to the company, “The decrease in product sales for the three months ended June 30, 2015 over the same period in 2014, was primarily the result of the phase out of our Wrap 1200 series of products. The Wrap Video Eyewear products are used for Video Viewing, Augmented Reality, and Virtual Reality applications. All of these Wrap 1200 product models were phased out early in the period due to planned product changes to higher resolution versions and as a consequence we had very limited quantities left for sale as compared to the 2014 period.”

As a result, sales of Video Eyewear, AR and VR products decreased by 74 percent over the comparative period in 2014 and represented just 16 percent of revenues for the 2015 period. Sales of M100 Smart Glasses were virtually flat for the quarter as compared to the prior year and they represented 84 percent of total product revenues as compared to 60 percent in the 2014 period, the company said.

Vuzix CEO and President Paul J. Travers said, "We are excited about the many advances we made during the second quarter of 2015 that position us for strong growth over time. The decline in revenue in the second quarter masks real strides that the company has made in driving recurring sales of Vuzix M100 Smart Glasses, which is our top priority."

"The composition of our sales mix represents a significant improvement compared to 2014, when the majority of M100 sales were non-recurring and made to early adopters and developers. By comparison, now we have customers that are placing larger orders and we expect the majority of these will be recurring in nature as these customers expand their pilots to actual live-use programs. Because of the fixed cost nature of our business, once sales start to build, we should see a meaningful positive impact on our gross and operating margins, as well as our cash flow," he said.