Invesprint Announces Q2 Results, Sales of $15 Million
Press release from the issuing company
December 20, 2002 -- Invesprint Corporation of Toronto today reported financial results for the second quarter ended October 31, 2002.
Sales for the quarter ended October 31, 2002 were $15.0 million compared to $17.2 million in the firstquarter of fiscal 2002. Jay Packaging's sales for the quarter were 9.4% lower than in the same period last year reflecting the continued softness in its markets. Second quarter sales for the Company's label divisions, Jonergin and Jonergin Pacific, were 18.7% lower than in the second quarter last year. The decrease was due primarily to a reduction in orders from a major customer. For the first six months of fiscal 2003, label sales were 9% lower than last year. Kree Technologies' sales for the quarter and year-to-date were 7.6% and 6.4% higher respectively than in the same period last year.
Operating earnings for the second quarter were $580,000 compared to $1,908,000 in the second quarter last year. Year-to-date, operating earnings are $1,604,000 compared to $3,123,000 last year. Lower sales, a change in sales mix and reduced capacity utilization adversely impacted margins and operating earnings.
Consolidated selling, general and administrative expenses for the second quarter were 6.7% lower than in the second quarter last year and 2.5% lower year-to-date. Lower interest expense for the quarter and year-to-date reflects lower interest rates and reduced borrowings.
The Company has adopted CICA Handbook Section 3062 for goodwill and intangible assets, effective May 1, 2002. Under this standard, goodwill and intangible assets with indefinite benefit periods are no longer amortized but are subject to periodic impairment tests. An initial impairment test as of May 1, 2002, was completed during the second quarter of fiscal 2003 resulting in a goodwillimpairment of $8,574,000 which has been charged to retained earnings. No amortization of goodwill has been recorded in fiscal 2003. Last year, goodwill amortization expense was $231,000 in the second quarter and $417,000 for the first six months.
Net earnings for the second quarter were $218,000 ($0.04 per share) compared to $943,000 ($0.18 per share) for the second quarter last year. For the six months ended October 31, 2002, net earnings were $688,000 ($0.13 per share) compared to $1,479,000 ($0.28 per share) in the same period last year.
"The second quarter was a difficult one for Invesprint" stated Tony Wong, President and Chief Executive Officer. "As disclosed in our November 20, 2002 press release, our largest customer in the label business has informed us that we have lost our position as a preferred supplier. We have increased our sales initiatives, both at Jonergin and Jonergin
Pacific, in an effort to replace the lost volume over the next 6-12 months. The new Sanjo press at Jonergin Pacific, which will be fully operational in January, allows us to be more competitive on longer production runs and the recently installed digital press opens new markets for us."
Invesprint is in the business of visual product identification. Through three divisions with five manufacturing facilities in North America, the Company manufactures prime labels and specialty packaging for many major corporations
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