Amisco sales down 15.2%, but earnings up
By Michael J. Knell -- Furniture Today, July 8, 2007
L'Islet, Quebec — L'Islet, Quebec— Metal furniture specialist Amisco Inds. continues to suffer top line declines but reported that its profit picture improved significantly in its fiscal second quarter, ended June 2.
Sales of C$7.8 million were down 15.2% from the comparable quarter in 2006. But the company posted earnings of C$523,000, compared with a net loss of C$159,000 a year earlier.
In a statement, Amisco said the turnaround in earnings was largely due to the company's improved management of financial instruments it uses to deal with exchange rate swings between the Canadian and American dollars.
Sales in Canada fell 12.5% to C$2.9 million in the second quarter, while U.S. sales decreased 16.7% to C$4.9 million.
The company said its gross margin jumped from 20.6% in the second quarter of 2006 to 27% this year, thanks to improvement in productivity, a more stable exchange rate and significant cost savings in administrative expenses.
For the first half of the fiscal year, Amisco's net sales were down 15.5% to C$15.3 million. Net earnings were C$430,000, compared with a loss of C$56,000 a year earlier.
Sales to Canadian retailers were C$5.5 million, down from C$6.1 million last year. U.S. sales were C$9.8 million, down from C$12 million.
The average conversion rate for the first half was 1.248 Canadian dollars to one U.S. dollar, compared with 1.269 for the same period last year. The company said the relative strength of the Canadian dollar, compared with historical levels, had a negative impact of C$141,000 on earnings in the first half of this year. U.S. sales account for 65% of Amisco's volume.
| Amisco (a) | |||
|---|---|---|---|
| Figures in parentheses are losses or declines. | |||
| Quarter ended 6/2 | 2007 | 2006 | Change |
| (a) In Canadian dollars. (b) Includes a gain of C$733,000 in the quarter and C$416,000 in the six months on an increase in the fair value of financial instruments. |
|||
| Sales | $7,820,000 | $9,217,000 | (15.2%) |
| Operating income | 257,000 | (133,000) | — |
| Net income (b) | 523,000 | (159,000) | — |
| Earnings per share | NA | NA | NA |
| 6 months ended 6/2 | 2007 | 2006 | Change |
| Sales | $15,297,000 | $18,093,000 | (15.5%) |
| Operating income | 285,000 | 10,000 | 2750.0% |
| Net income (b) | 430,000 | (56,000) | — |
| Earnings per share | NA | NA | NA |
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