UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July~~January 31, ~~2010~~2011

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to ______________________.

Commission file number 0-23001

SIGNATURE EYEWEAR, INC.

(Exact Name of Registrant as Specified in its Charter)

California

(State or Other Jurisdiction of

Incorporation or Organization)

95-3876317

(I.R.S. Employer

Identification No.)

498 North Oak Street

Inglewood, California 90302

(Address of Principal Executive Offices)

(310) 330-2700

(Registrant’s Telephone Number, Including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by checkmark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer ¨
Non-accelerated Filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes ý No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 6,955,639 shares ~~issued and~~ outstanding as of ~~September~~March 101, ~~2010~~2011.

SIGNATURE EYEWEAR, INC.

INDEX TO FORM 10-Q

PART I	FINANCIAL INFORMATION	Page
Item 1	Financial Statements	3
	Balance Sheets	3
	Statements of Income	5
	Statements of Cash Flows	6
	Notes to the Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3	Quantitative and Qualitative Disclosures About Market Risk	11
Item 4	Controls and Procedures	11
PART II	OTHER INFORMATION	12
Item 1	Legal Proceedings	12
Item 1A	Risk Factors	12
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3	Defaults upon Senior Securities	12
Item 4	(Removed and Reserved)	12
Item 5	Other Information	12
Item 6	Exhibits	12

References in this ~~report~~Report to the “weCompany,” “~~our~~Signature,” “uswe” or ~~the~~ “~~Company~~us” refer to Signature Eyewear, Inc.

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PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements

SIGNATURE EYEWEAR, INC.

BALANCE SHEETS

AT ~~JULY~~JANUARY 31, ~~2010~~2011 (UNAUDITED)

~~AND~~AT OCTOBER 31, ~~2009~~2010 (AUDITED)

ASSETS



ASSETS

	January 31,		October 31,
	2011		2010
Current assets

Cash and cash equivalents	$	387,462	$	429,824
Accounts receivable - trade, net of allowance for doubtful accounts of $42,163		2,616,393		2,503,331
Inventory		3,864,303		3,943,377
Promotional products and materials		158,263		171,185
Prepaid expenses and other current assets		410,422		290,230
Deferred income taxes		376,500		376,500

Total current assets		7,813,343		7,714,447

Property and equipment, net		228,652		261,096
Deposits and other assets		291,861		121,304
Deferred income taxes		2,600,700		2,600,700

Total assets	$	10,934,556	$	10,697,547

	July 31,		October 31,
	2010		2009
Current assets
Cash and cash equivalents	$	403,933	$	431,037
Accounts receivable - trade, net of allowance for doubtful accounts of $42,163		2,597,966		2,565,125
Inventory		3,598,534		3,843,793
Promotional products and materials		172,549		209,847
Prepaid expenses and other current assets		284,689		263,594
Deferred income taxes		376,500		376,500
Total current assets		7,434,171		7,689,896
Property and equipment, net		275,812		313,324
Deposits and other assets		80,000		250,500
Deferred income taxes		2,600,700		2,600,700
Total assets	$	10,390,683	$	10,854,420

The accompanying notes are an integral part of these financial statements.

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SIGNATURE EYEWEAR, INC.

BALANCE SHEETS

AT ~~JULY~~JANUARY 31, ~~2010~~2011 (UNAUDITED)

~~AND~~AT OCTOBER 31, ~~2009~~2010 (AUDITED)

LIABILITIES AND SHAREHOLDERS' EQUITY



LIABILITIES AND SHAREHOLDERS’ EQUITY

	January 31,			October 31,
	2011			2010
Current liabilities
Accounts payable - trade	$	4,291,306		$	4,213,364
Accrued expenses and other current liabilities		326,086			447,851
Current portion of long-term debt		290,000			290,000

Total current liabilities		4,907,392			4,951,215

Long-term debt, net of current portion		3,914,000			3,720,360

Total liabilities		8,821,392			8,671,575

Commitments and contingencies

Shareholders’ equity
Preferred stock, $0.001 par value
5,000,000 shares authorized
Series A 2% convertible preferred stock, $0.001 par value; liquidation preference (approximately $938,000 and $933,000 at January 31, 2011 and October 31, 2010, respectively)
1,360,000 shares authorized
1,200,000 issued and outstanding		1,200			1,200
Common stock, $0.001 par value: 30,000,000 shares authorized, 6,955,639 shares issued and outstanding		6,956			6,956
Additional paid-in capital		15,656,812			15,656,812
Accumulated deficit		(13,551,804	)		(13,638,996	)

Total shareholders’ equity		2,113,164			2,025,972

Total liabilities and shareholders’ equity	$	10,934,556		$	10,697,547

	July 31,			October 31,
	2010			2009
Current liabilities
Accounts payable - trade	$	3,908,282		$	3,532,159
Accrued expenses and other current liabilities		1,376,611			1,538,516
Current portion of long-term debt		290,000			415,000
Total current liabilities		5,574,893			5,485,675
Long-term debt, net of current portion		2,837,500			3,805,000
Total liabilities		8,412,393			9,290,675
Commitments and contingencies
Shareholders' equity
Preferred stock, $0.001 par value 5,000,000 shares authorized
Series A 2% convertible preferred stock, $0.001 par value; liquidation preference (approximately $928,000 and $915,000 at July 31, 2010 and October 31, 2009 respectively); 1,360,000 shares authorized;1,200,000 issued and outstanding		1,200			1,200
Common stock, $0.001 par value; 30,000,000 shares authorized; 6,955,639 shares issued and outstanding		6,956			6,956
Additional paid-in capital		15,656,812			15,656,812
Accumulated deficit		(13,686,678	)		(14,101,223	)
Total shareholders' equity		1,978,290			1,563,745
Total liabilities and shareholders' equity	$	10,390,683		$	10,854,420

The accompanying notes are an integral part of these financial statements.

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SIGNATURE EYEWEAR, INC.

~~FOR~~STATEMENTS ~~THE~~OF ~~THREE MONTHS AND NINE MONTHS ENDED JULY 31, 2010 (UNAUDITED)~~INCOME

~~AND~~FOR ~~JULY~~THE THREE MONTHS ENDED JANUARY 31, ~~2009~~2011 (UNAUDITED)

	For The Three Months Ended						For The Nine Months Ended
	2010			2009			2010			2009
Net sales	$	4,909,351		$	5,932,665		$	15,936,826		$	18,003,359
Cost of sales		1,674,907			2,199,444			5,772,591			6,514,423
Gross profit		3,234,444			3,733,221			10,164,235			11,488,936
Operating expenses
Selling		1,911,206			2,181,179			6,062,682			6,540,116
General and administrative		1,102,275			1,287,892			3,397,472			4,091,974
Depreciation and amortization		49,784			39,180			143,472			110,846
Total operating expenses		3,063,265			3,508,251			9,603,626			10,742,936
Income from operations		171,179			224,970			560,609			746,000
Interest expense/other, net		(36,031	)		(50,831	)		(125,651	)		(154,608	)
Income before taxes		135,148			174,139			434,958			591,392
Income taxes		19,978			19,199			20,413			21,347
Net income		115,170			154,940			414,545			570,045
Preferred Stock Dividend	$	(4,599	)	$	(4,509	)	$	(13,730	)	$	(13,459	)
Net income available to common shareholders	$	110,571		$	150,431		$	400,815		$	556,586
Basic earnings per share	$	0.02		$	0.02		$	0.06		$	0.08
Diluted earnings per share	$	0.01		$	0.02		$	0.05		$	0.07
Weighted-average common shares
outstanding - Basic		6,955,639			6,955,639			6,955,639			6,955,639
Weighted-average common shares
outstanding - Diluted		8,341,456			8,314,201			8,341,456			8,314,201

AND JANUARY 31, 2010 (UNAUDITED)




	2011			2010

Net sales	$	4,734,635		$	5,168,880
Cost of sales		1,927,748			1,920,797

Gross profit		2,806,887			3,248,083

Operating expenses
Selling		1,513,177			1,905,636
General and administrative		1,115,194			1,108,591
Depreciation and amortization		55,426			44,929
Total operating expenses		2,683,797			3,059,156

Income from operations		123,090			188,927

Interest expense		(34,093	)		(45,835	)

Income before taxes		88,997			143,092
Income taxes		1,805			435

Net income		87,192			142,657
Preferred stock dividend	$	(4,646	)	$	(4,554	)
Net income available to common shareholders	$	82,546		$	138,103
Basic earnings per share	$	0.01		$	0.02

Diluted earnings per share	$	0.01		$	0.02

Weighted-average common shares
outstanding - Basic		6,955,639			6,955,639

Weighted-average common shares
outstanding - Diluted		8,355,289			8,327,761

The accompanying notes are an integral part of these financial statements.

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SIGNATURE EYEWEAR, INC

STATEMENTS OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~JULY~~JANUARY 31, ~~2010~~2011 (UNAUDITED)

AND ~~JULY~~JANUARY 31, ~~2009~~ 2010 (UNAUDITED)

	2010			2009
	2011			2010
Cash flows from operating activities
Net income	$	~~414~~87,~~545~~192		$	~~570~~142,~~045~~657
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		~~143~~55,~~472~~426			~~110~~44,~~846~~929
(Increase) decrease in:
Accounts receivable - trade		(32113,~~842~~063	)		(~~269~~223,~~903~~765	)
Inventories		~~245~~79,~~258~~072			12,~~253,524~~575
Promotional products and materials		3712,~~298~~922			~~(54~~29,~~301~~705	)
Prepaid expenses and other current assets		(21120,~~095~~192	)		~~136~~(81,~~803~~839	)
Increase (decrease) in:
Accounts payable - trade		~~376~~77,~~123~~942			~~(895~~26,~~025~~539	)
Accrued expenses and other current liabilities		(~~161~~105,~~905~~625	)		(~~323~~87,~~721~~343	)
					.
Net cash provided by operating activities		1,000,854			528,268
Net cash used in operating activities		(26,326	)		(146,542	)
Cash flows from investing activities
Purchase of property and equipment		(~~105~~22,~~958~~197	)		(7859,~~974~~833	)
Deposits and other assets		~~170~~(171,~~500~~339	)		~~(132~~146,~~498~~500	)
Net cash provided by (used in) investing activities		64,542			(211,472	)
Net cash (used in) provided by investing activities		(193,536	)		86,667
Cash flows from financing activities
Net payments on lines of credit		(750,000	)		-
Net increase in line of credit		250,000			100,000
Payments on short-term debt		(125,000	)		-
Payments on long-term debt		(72,500	)		(72,500	)
Payments on long-term debt		(217,500	)		(367,500	)
Net cash provided by financing activities		177,500			27,500
Net cash used by financing activities		(1,092,500	)		(367,500	)
Net decrease in cash and cash equivalents		(42,362	)		(32,375	)
Net decrease in cash and cash equivalents		(27,104	)		(50,704	)
Cash and cash equivalents, beginning of period		429,824			431,037
Cash and cash equivalents, beginning of period		431,037			305,628
Cash and cash equivalents, end of period	$	387,462		$	398,662
Cash and cash equivalents, end of period	$	403,933		$	254,924
Supplemental disclosures of cash
Supplemental disclosures of cash flow information
flow information
Interest paid	$	9417,~~861~~357		$	8823,~~831~~542
Income taxes paid	$	201,~~413~~805		$	~~21,346~~435

The accompanying notes are an integral part of these financial statements.

- 6 -

NOTES TO FINANCIAL STATEMENTS

(Information as of ~~July~~January 31, ~~2010~~2011 and for the three ~~and nine~~ months ended ~~July~~January 31, ~~2010~~2011 and ~~2009~~2010 is unaudited)

Note 1.

Organization and Line of Business

Signature Eyewear, Inc. (the “Company”) designs, markets and distributes eyeglass frames, sunwear and footwear throughout the United States and internationally. The Company conducts its operations primarily from its principal executive ~~office~~offices and a warehouse in Inglewood, California.

Note 2.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all normal, recurring adjustments considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company'’s Annual Report on Form 10-K for the year ended October 31, ~~2009~~2010. The results of operations for the ~~nine~~three months ended ~~July~~January 31, ~~2010~~2011 are not necessarily indicative of the results that may be expected for the year ending October 31, ~~2010~~2011.

Inventory

Inventory consists of finished goods, which are valued at the lower of cost or market. Cost is computed using the weighted-average cost, which approximates actual cost on a first-in, first-out basis.

The Company regularly and periodically evaluates its inventory to ensure that it is valued at the lower of cost or market based on current market trends, product history, and turnover.

Property and Equipment

Property and equipment are recorded at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the assets as follows:

Office furniture and equipment	7 years
Computer equipment	3 years
Software	3 years
Machinery and equipment	5 years
Leasehold improvements	Term of the lease or the estimated life of the related improvements, whichever is shorter

Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized.

Fair Value of Financial Instruments

For certain of the Company'’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable - trade, and line of credit, the carrying amounts approximate fair value due to their short-term maturities. The amounts shown for long-term debt also approximate fair value because current interest rates offered to the Company for debt of similar maturities are substantially the same.

- 7 -

Income per Share

Basic income per share is computed by dividing the income available to common shareholders by the weighted-average number of common shares outstanding. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The following data show the amounts used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock:

Three months ended January 31, 2011	Income (Numerator)		Shares (Denominator)	Per Share Amount
Basic earnings per share	$	82,546	6,955,639	$	0.01
Conversion of preferred stock		4,646	1,399,650		0.00
Diluted earnings per share	$	87,192	8,355,289	$	0.01

Three months ended July 31, 2010	Income (Numerator)		Shares (Denominator)		Per Share Amount
Three months ended January 31, 2010	Income (Numerator)		Shares (Denominator)		Per Share Amount
Basic earnings	$	110,571		6,955,639	$	0.02
Basic earnings per share	$	138,103		6,955,639	$	0.02
Conversion of preferred stock		4,~~599~~554		1,~~385~~372,~~817~~122		0.00
Diluted earnings	$	115,170		8,341,456	$	0.01
Diluted earnings per share	$	142,657		8,327,761	$	0.02

Three months ended July 31, 2009	Income (Numerator)		Shares (Denominator)		Per Share Amount
Basic earnings	$	150,431		6,955,639	$	0.02
Conversion of preferred stock		4,509		1,358,562		0.00
Diluted earnings	$	154,940		8,314,201	$	0.02

The following potential common shares have been excluded from the computations of diluted income per share for the three months ended January 31, 2011 and 2010 because the effect would have been anti-dilutive:

Nine months ended July 31, 2010	Income (Numerator)		Shares (Denominator)		Per Share Amount
	2011		2010
Basic earnings	$	400,815		6,955,639	$	0.06
Warrants		—		300,000
Conversion of preferred stock		13,730		1,385,817		0.01
Diluted earnings	$	414,545		8,341,456	$	0.05

Nine months ended July 31, 2009	Income (Numerator)		Shares (Denominator)		Per Share Amount
Basic earnings	$	556,586		6,955,639	$	0.08
Conversion of preferred stock		13,459		1,358,562		0.01
Diluted earnings	$	570,045		8,314,201	$	0.07

The following potential common shares have been excluded from the computations of diluted income per share for the nine months ended July 31, 2010 and 2009 because the effect would have been anti-dilutive:

	2010		2009
Stock options		—		32,900
Warrants		—		300,000
Total		—		332,900

Foreign Currency Translation

In fiscal 2009, the Company maintained a branch office in Belgium, and closed this office at the end of that year. The functional currency of this office was the euro. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at average rates. In addition, some of the Company’s liabilities are denominated in foreign currencies. Such liabilities are converted into U.S. dollars at the exchange rate prevailing at the balance sheet date. The resulting gains or losses were not material for the three months and nine months ended July 31, 2009 or 2010.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Significant Recent Accounting Pronouncements

In April 2010, the FASB issued ASU 2010-17, Milestone Method of Revenue Recognition, which provides guidance related to Revenue Recognition that applies to arrangements with milestones relating to research or development deliverables. This guidance provides criteria that must be met to recognize consideration that is contingent upon achievement of a substantive milestone in its entirety in the period in which the milestone is achieved. This guidance is effective for the Company starting fiscal year 2011. The Company is currently assessing whether this guidance will have any impact on its financial statements.

The recent accounting pronouncements discussed in the notes to the Company’s audited financial statements for the year October 31, 2009 included in the Company’s Annual Report on Form 10-K that were required to be adopted during the year ended October 31, 2009 did not have and are not expected to have a significant impact on the Company’s 2010 financial statements.

Note 3.

Long-Term Debt

Long-term debt (~~excluding~~including accrued and unpaid interest of $871,500 and $855,360 as of January 31, 2011 and October 31, 2010, respectively) consisted of the following at the dates indicated:

	July 31, 2010			October 31, 2009
	January 31, 2011			October 31, 2010
Revolving line of credit from Comerica Bank	$	12,~~750~~100,000		$	21,~~500~~850,000
Revolving line of credit from Bluebird Finance Limited		1,377,500			1,595,000
Credit facility from Bluebird Finance Limited		2,104,000			2,160,360
Term note payable to Ashford Capital, LLC		—			125,000
		4,204,000			4,010,360
		3,127,500			4,220,000
Less current portion		(290,000	)		(290,000	)
Less current portion		(290,000	)		(415,000	)
Long-term portion	$	3,914,000		$	3,720,360
Long-term portion	$	2,837,500		$	3,805,000

Note 4.

Income Taxes

As of ~~July~~ January 31, ~~2010~~2011, the Company had net operating loss carry-forwards for federal and state income tax purposes of approximately $15,~~156~~267,000 and $4,~~271~~230,000, respectively, which expire at various times from 2021 through ~~2027~~2029.

~~The~~- ~~Company~~8 has recorded a partial benefit for income taxes based on these net operating loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not a portion of deferred tax assets will not be realized.-

~~Realization~~The ofCompany ~~this~~has ~~deferred~~recorded ~~tax~~a ~~asset~~partial isbenefit ~~dependent~~for onincome ~~the~~taxes ~~Company’s~~based ~~ability~~on toits ~~generate~~net ~~future~~operating ~~taxable~~loss ~~income~~carryforwards. ~~Management~~Deferred ~~believes~~tax ~~that~~assets itare isreduced ~~more~~by ~~likely~~a ~~than~~valuation ~~not~~allowance ~~that~~when, in the ~~Company~~opinion ~~will generate taxable income to utilize some~~ of ~~the tax carryforwards before their expiration. However~~management, ~~there~~it ~~can~~is bemore nolikely ~~assurance~~than ~~that~~not ~~the Company will meet its expectation of future income. As~~ a ~~result,~~portion ~~the amount~~ of ~~the~~ deferred tax ~~asset~~assets ~~considered~~will ~~realizable~~not ~~could~~ be ~~reduced in the near term if estimates of future taxable income are reduced~~realized. ~~Such occurrence could materially adversely affect the Company’s results of operations and financial condition.~~

Realization of this deferred tax asset is dependent on the Company’s ability to generate future taxable income. Management believes that it is more likely than not that the Company will generate taxable income to utilize some of the tax carry-forwards before their expiration. However, there can be no assurance that the Company will meet its expectation of future income. As a result, the amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income are reduced. Such occurrence could materially adversely affect the Company’s results of operations and financial condition.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis, which should be read in connection with ~~the~~our ~~Company’s~~ financial statements and accompanying footnotes, contains forward-looking statements that involve risks and uncertainties. Important factors that could cause actual results to differ materially from ~~the~~our ~~Company’s~~ expectations are set forth in Item 1 – Business – Factors That May Affect Our Future Operating Results,” in our Form 10-K for the year ended October 31, ~~2009~~2010 as well as those discussed elsewhere in this Form 10-Q. Those forward-looking statements may relate to, among other things, ~~the~~our ~~Company’s~~ plans and strategies, new product lines, and relationships with licensors, distributors and customers, distribution strategies and the business environment in which ~~the~~we ~~Company operates~~operate.

Overview

We generate revenues through the sale of ~~prescription~~ eyeglass frames, sunwear and ~~sunwear~~footwear under licensed brand names, including bebe, Carmen Marc Valvo, Cutter & Buck, Dakota Smith, Hart Schaffner Marx, Laura Ashley, Michael Stars and Nicole Miller, and under our proprietary Rough Justice and Signature ~~brand~~brands. Our cost of sales consists primarily of purchases from foreign contract manufacturers that produce ~~frames~~eyewear and ~~cases~~footwear to our specifications.

We reported net income of $~~115~~87,000 on net sales of $4.97 million for the three months ended ~~July~~ January 31, ~~2010~~2011 (the “~~2010~~2011 Quarter”) compared to net income of $~~155~~143,000 on net sales of $5.92 million for the three months ended ~~July~~ January 31, ~~2009~~2010 (the “~~2009~~2010 Quarter”). WeThe ~~reported~~decrease ~~net~~in ~~income of $415,000 on~~ net sales ofwas ~~$15.9~~due ~~million~~primarily ~~for~~to the ~~nine~~expiration ~~months~~of ~~ended~~our ~~July 31,~~bebe ~~2010~~license ~~(the~~in “June 2010 ~~Nine~~and ~~Months”)~~the ~~compared~~continuing torecession. The decrease in net ~~income~~sales of ~~$570,000~~bebe oneyewear was offset in part by increased net sales of ~~$18.0~~other ~~million~~eyewear ~~for~~lines ~~the~~and ~~nine~~our ~~months~~initial ~~ended~~revenues ~~July 31,~~from ~~2009~~private ~~(the~~label ~~“2009~~sales of our newly launched footwear business.

9The decrease in net income was due primarily to lower sales and lower gross margin. The gross margin decreased from 62.8% in the 2010 First Quarter to 59.3% in the 2011 First Quarter because of competitive conditions in the optical sector and the impact of private label footwear sales, which have lower gross margins than our eyewear lines.

Nine Months”). The decrease in net sales in the 2010 Quarter was due to the deepening recession and production delays at our Chinese manufacturers due primarily to labor shortages. These labor shortages have resulted in higher wages at our frame manufacturers and may result in higher frame cost in the future. We anticipate that these production delays are likely to continue through the next quarter. The decrease in net income in the 2010 periods was due primarily to lower revenues partially offset by higher gross margin and lower operating expenses and interest expense.

Our licenses for bebe and Hummer eyewear expired June 30, 2010. Under the license agreements, we may sell existing inventory of those lines in the United States through December 31, 2010. In addition, we may continue to sell our existing inventory of bebe eyewear internationally through December 31, 2011. The loss of these licenses will have a material adverse effect on our revenues. In the fiscal year ended October 31, 2009, and the nine months ended July 31, 2010, these lines represented approximately 45% of our net sales.

We are actively taking a number of actions to replace the bebe and Hummer revenues. These include: (i) increasing our marketing and sales efforts of our other eyewear lines; (ii) increasing our efforts to obtain other third party licenses; (iii) increasing our efforts to develop our proprietary Signature lines; and (iv) considering the viability of marketing other fashion accessories. We are also taking actions to reduce operating expenses to offset as much of the loss of revenue as possible. No assurance can be given that we will be successful in these efforts to replace the lost revenues. If we cannot replace a material portion of these revenues over the next twelve months, we will have to implement drastic cost cutting measures in an effort to maintain profitability and positive cash flow.

Results of Operations

The following table sets forth for the periods indicated selected statements of ~~income~~operations data shown as a percentage of net sales.

	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2010			2009			2010			2009
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of sales		34.1			37.1			36.2			36.2
Gross profit		65.9			62.9			63.8			63.8
Operating expenses:
Selling		38.9			36.7			38.1			36.3
General and administrative		22.5			21.7			21.3			22.7
Depreciation and amortization		1.0			0.7			0.9			0.6
Total operating expenses		62.4			59.1			60.3			59.6
Income from operations		3.5			3.8			3.5			4.2
Interest expense/other, net		(0.7	)		(0.9	)		(0.8	)		(0.9	)
Income before income taxes		2.8			2.9			2.7			3.3
Income taxes		0.4			0.3			0.1			0.1
Net income		2.4	%		2.6	%		2.6	%		3.2	%

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Net Sales. Net sales decreased by 17.2% or $1,023,000 from the 2009 Quarter to the 2010 Quarter and by 11.5% or $2,067,000 from the 2009 Nine Months to the 2010 Nine Months. Unit sales decreased in the 2010 Nine Months and 2010 quarter. The recession resulted in a decrease in the average sales price of our frames in the 2010 periods as compared to the 2009 periods, as consumers continued to purchase lower cost frames and we offered higher customer discounts. In addition, net sales were materially impacted in the 2010 Nine Months by production delays at our Chinese manufacturers, which resulted in increased back orders.

	Three Months Ended
	January 31,
	2011			2010
Net sales		100.0	%		100.0	%
Cost of sales		40.7			37.2
Gross profit		59.3			62.8
Operating expenses:
Selling		32.0			36.8
General and administrative		23.5			21.4
Depreciation and amortization		1.2			0.9
Total operating expenses		56.7			59.1
Income from operations		2.6			3.7
Interest expense		0.7			0.9
Income before taxes		1.9			2.8
Income taxes		0.0			0.0
Net income		1.9	%		2.8	%

~~Direct~~Net Sales. Net sales todecreased ~~independent~~by ~~optical~~8.4% ~~retailers~~or ~~and distributors decreased~~ $~~578~~434,000 infrom the 2010 Quarter ~~and~~to ~~$1,499,000~~the 2011 Quarter. The decrease in ~~the~~net ~~2010~~sales ~~Nine~~was ~~Months. Sales~~due primarily to ~~optical~~the ~~and~~expiration ~~retail~~of ~~chains~~our ~~decreased~~bebe ~~$468,000~~eyewear license in ~~the~~June 2010, ~~Quarter~~which ~~and~~resulted ~~decreased~~in a $~~582,000~~1.7 million decrease in ~~the~~net ~~2010~~sales ~~Nine~~of ~~Months~~bebe eyewear. ~~International~~Net sales ~~increased~~were ~~$41,000~~also adversely affected by the continuing recession. Net sales were positively affected in the ~~2010~~2011 First Quarter ~~and $68,000~~by increases in net sales of the ~~2010~~Company’s ~~Nine~~other ~~Months~~eyewear lines and through private label sales of footwear through the Signature Fashion Group division launched in November 2010.

Net sales ~~reflect~~of ~~gross~~eyewear ~~sales~~to ~~less~~independent aoptical ~~reserve~~retailers ~~for~~and ~~product~~distributors ~~returns~~decreased ~~established~~$596,000 byin usthe ~~based~~2011 ~~on products that we are aware will be returned~~Quarter. ~~Our~~Net ~~reserves~~sales ~~were~~of ~~$464,000~~eyewear ~~and~~to ~~$464,000~~optical ~~at July 31, 2010~~ and ~~October 31,~~retail ~~2009,~~chains ~~respectively. We~~decreased ~~had~~ $~~862~~354,000 ~~and $875,000~~ in ~~product returns for~~ the ~~2010 Quarter~~2011 ~~and 2009~~ Quarter~~, respectively, resulting in a product returns percentage of 17~~.~~6% and 14.7%, respectively.~~ WeInternational ~~had~~sales ~~$2.5~~increased ~~million and~~ $~~2.6~~187,000 ~~million~~ in ~~product returns for~~ the ~~2010 Nine~~2011 ~~Months and 2009 Nine Months, respectively, resulting in a product returns percentage of 15~~Quarter.~~5% and 14.7%, respectively.~~

10Net sales reflect gross sales less a reserve for product returns established by us based on products that we are aware will be returned as of that date. We had $890,000 and $760,000 in product returns for the 2011 Quarter and 2010 Quarter, respectively, resulting in a product returns percentage of 16.2% and 13.2%, respectively.

Gross Profit and Gross Margin. Gross profit decreased $~~499~~441,000 from the ~~2009~~ 2010 Quarter to the ~~2010~~ 2011 Quarter ~~and~~due ~~$1.3 million from the 2009 Nine Months~~ to ~~the~~decreased ~~2010~~sales ~~Nine~~and ~~Months~~increased ~~due~~cost toof ~~decreased~~ sales. Gross margin ~~was~~decreased 65to 59.93% in the ~~2010~~2011 Quarter ~~and~~from 6362.8% in the 2010 ~~Nine~~Quarter ~~Months,~~due ~~as compared~~ to ~~62.9%~~competitive inconditions ~~the 2009 Quarter~~ and ~~63.8% in~~ the ~~2009~~impact ~~Nine~~of ~~Months. The~~private ~~increase~~label infootwear ~~gross~~sales, ~~margin~~which ~~for~~have ~~the~~lower ~~2010~~gross ~~Quarter~~margins ~~was~~than ~~primarily due to credits from the frame manufacturers, which lowered~~ our ~~average~~eyewear ~~cost per frame~~lines.

Selling Expenses. Selling expenses decreased $~~270~~392,000 from the ~~2009~~2010 Quarter ~~primarily due~~ to ~~a decrease of $81,000 in advertising and promotion expenses, a decrease of $93,000 in royalty expense and a decrease of $56,000 in compensation expense. Selling expenses decreased $477,000 from~~ the ~~2009~~2011 ~~Nine~~Quarter ~~Months~~ primarily due to adecreases ~~decrease of $202,000~~ in ~~compensation~~net ~~expense~~sales, aresulting ~~decrease of $141,000~~ in ~~advertising~~decreases ~~and promotion expenses, a decrease~~ of $~~134~~216,000 in royalty expense and ~~offset by an increase of~~ $40126,000 in ~~freight~~compensation expense.

General and Administrative Expenses. General and administrative expenses for the ~~2010~~2011 Quarter ~~and~~remained ~~2010~~level ~~Nine~~with ~~Months~~general ~~decreased $186,000~~ and ~~$695,000,~~administrative ~~respectively,~~expenses ~~from the comparable 2009 periods primarily due to the closing of our Belgium office at the end of fiscal 2009. There were also decreases~~ in ~~almost all expense categories in~~ the 2010 Quarter. ~~In the 2010 Nine Months there were also decreases of $114,000 in professional fees, $110,000 in telephone expense, $73,000 in rent and $69,000 in compensation expense.~~

Interest Expense~~/Other, Net~~. Interest expense, ~~net,~~ consists of interest expense offset by other income. Interest expense decreased $1512,000 in the ~~2010~~2011 Quarter ~~and~~primarily ~~$29,000~~due to reduction in the ~~2010~~weighted ~~Nine~~average ~~Months~~rate ~~primarily~~on ~~due~~our ~~to reductions in outstanding~~ borrowings.

Income Taxes. As a result of our net loss carryforward, we had no income tax expense other than ~~minimum~~ franchise taxes in various states in the ~~2010~~2011 Quarter or the ~~2009~~2010 Quarter.

Financial Condition, Liquidity and Capital Resources

Our accounts receivable (net of allowance for doubtful accounts) were $2.6 million at ~~July~~ January 31, ~~2010~~2011 ~~and~~compared to $2.5 million at October 31, ~~2009~~2010.

~~Our~~- ~~inventories~~10 (at lower of cost or market) were $3.6 million at July 31, 2010 compared to $3.8 million at October 31, 2009. The decrease was due to our continuing efforts to reduce our inventory levels taking into account current economic conditions, and slower deliveries from our frame manufacturers.-

Our ~~long-term~~inventories ~~debt~~ (~~including~~at ~~current~~lower ~~portion)~~of ~~decreased~~cost toor market) were $3.1 9 million at ~~July~~both January 31, ~~2010~~2011 ~~from~~and ~~$4.2 million at~~ October 31, ~~2009. See Note 3 of Notes to Financial Statements for further information regarding our long-term debt. At July 31,~~ 2010~~, the interest rate on our Comerica Bank revolving line of credit was approximately 4~~.~~00% per annum and we had $1.6 million of additional borrowing capacity under that line.~~

OfCurrent ~~our~~liabilities ~~accounts~~were ~~payable~~$4.9 million at ~~July~~ January 31, ~~2010,~~2011 ~~approximately~~as ~~$155,000~~compared ~~were~~to ~~payable in foreign currency~~$5. To0 ~~monitor~~million ~~risks~~at ~~associated~~October ~~with currency fluctuations~~31, ~~we periodically assess the volatility of certain foreign currencies and review the amounts and expected payment dates of our purchase orders and accounts payable in those currencies~~2010.

WeOur ~~believe~~long-term ~~that,~~debt ~~for~~(including ~~the~~current ~~next~~portion) ~~two~~was ~~quarters,~~$4.0 ~~assuming no~~million ~~unanticipated~~and ~~material~~$4.2 ~~adverse~~million ~~developments,~~at noOctober ~~greater production disruptions with our frame manufacturers~~31, ~~continued~~2010 ~~compliance with our credit facilities~~ and ~~that~~January we31, ~~can~~2011, ~~reduce~~respectively. See ~~our~~Note ~~operating~~3 ~~expenses~~of ~~sufficiently~~Notes to ~~offset~~Financial ~~the~~Statements ~~anticipated~~for ~~reduction~~further ininformation ~~revenues~~regarding ~~relating~~our tolong-term ~~the~~debt. At ~~expiration~~January ~~the~~31, ~~bebe~~2011, ~~and~~the ~~Hummer~~interest ~~eyewear~~rate ~~licenses,~~on our ~~cash~~Comerica ~~flows~~Bank ~~from~~revolving ~~operations~~line ~~and~~of ~~through~~ credit ~~facilities~~was ~~will~~3.5% beper ~~sufficient~~annum toand ~~enable~~we ushad to$1.2 ~~pay~~million ~~our~~of ~~debts~~additional ~~and~~borrowing ~~obligations~~capacity asavailable ~~they~~under ~~mature~~that line.

Of the Company’s accounts payable at January 31, 2011, approximately $177,000 were payable in foreign currency. To monitor risks associated with currency fluctuations, the Company periodically assesses the volatility of certain foreign currencies and reviews the amounts and expected payment dates of its purchase orders and accounts payable in those currencies.

We believe that, at least through fiscal 2011, assuming that there are no unanticipated material adverse developments, we continue to be in compliance with our credit facilities and we maintain current sales levels, our cash flows from operations and through credit facilities will be sufficient to enable us to pay our debts and obligations as they mature.

Inflation

We do not believe our business and operations have been materially affected by inflation.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4.

Controls and Procedures

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide reasonable assurance only of achieving the desired control objectives, and management necessarily is required to apply its judgment in weighing the costs and benefits of possible new or different controls and procedures. Limitations are inherent in all control systems, so no evaluation of controls can provide absolute assurance that all control issues and any fraud within the company have been detected.

As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer (the same person has both titles), evaluated the effectiveness of our disclosure controls and procedures. Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of that date.

There was no change in our internal control over financial reporting during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

Nothing to report.

Item 1A.

Risk Factors

Not applicable.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Nothing to report.

Item 3.

Defaults upon Senior Securities

Nothing to report.

Item 4.

(Removed and Reserved)

Item 5.

Other Information

Nothing to report.

Item 6.

Exhibits

See Exhibit Index ~~attached.~~Attached

- 12 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIGNATURE EYEWEAR, INC.
Date: September 14, 2010	By:	/s/ Michael Prince
		Michael Prince
		Chief Executive Officer
		Chief Financial Officer

Date: March 11, 2011

SIGNATURE EYEWEAR, INC.

By: /s/ Michael Prince

Michael Prince

Chief Executive Officer

Chief Financial Officer

- 13 -

EXHIBIT INDEX

Exhibit Number		Exhibit Description
10.1		Amendment No. 2 dated December 13, 2009 to Loan and Security Agreement between Signature Eyewear, Inc. and Comerica Bank.
31.1		Certification Pursuant to SEC Rule 13a-14(a)/15d-14(a)
32.1		Certification Pursuant to 18 U.S.C. § 1350

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