Invesprint Announces Q2 Results: Loss of Largest Customer Hurts Sales
Press release from the issuing company
TORONTO, ONTARIO--Invesprint Corporation today reported financial results for its second quarter and six months ended October 31, 2003.
Sales for the second quarter of fiscal 2004 were $5.7 million compared to $7.4 million in the second quarter of fiscal 2003. For the six months ended October 31, 2003, sales were $12.5 million compared to $16.1 million in the same period last year. As reported in our last few earning releases, the Company is still experiencing the adverse impact of the loss of its largest customer. While significant progress has been made to replace this business, the loss of this customer has adversely impacted sales and earnings in fiscal 2004.
Consolidated gross margin was 3.0% of sales compared to 21.3% in the second quarter last year. Lower sales combined with increased capacity at Jonergin Pacific, which came on-stream late in fiscal 2003 and has not been fully utilized, resulted in substantially lower margins. Selling, general and administrative expenses were 5.4% lower than in the second quarter last year and 4.2% lower year-to-date. Administrative expenses for the first half of fiscal 2004 include severance and reorganization expenses of $138,000. The increase in interest expense in the second quarter and first half of fiscal 2004 reflects the higher level of capital lease obligations outstanding this year.
The loss from continuing operations for the second quarter was $872,000 ($0.16 per share) compared to a loss of $26,000 ($0.00 per share) for the second quarter of fiscal 2003. The net loss for the quarter was $872,000 ($0.16 per share) compared to net earnings of $218,000 ($0.04 per share) in the same period last year. For the first six months of fiscal 2004 the loss from continuing operations was $1,725,000 ($0.32 per share) compared to earnings of $253,000 ($0.05 per share) in the same period last year. The net loss for the first half of fiscal 2004 was $2,033,000 ($0.38 per share) compared to net earnings of $688,000 ($0.13 per share) last year.
On December 19, 2003, the Company secured a $1,332,500 debt facility at an interest rate of 6.85%. The Company believes that this new financing, combined with cash on hand and cash flow from operations will provide adequate funds for ongoing operations.
Vince Hockett, Invesprint's CEO stated, "While our second quarter performance remains unacceptable it is a planned step on our road to achieving annual profitability in fiscal 2005. We made major progress in realigning our cost structure and in rebuilding customer confidence. Since July, we have taken steps to remove approximately $2 million in cost, on an annualized basis, from our system. These initiatives will have significant impact later this year and in fiscal 2005."
Hockett further stated, "The new financing will strengthen our cash position as we continue to rebuild our business. This financing will be confidence building news for our employees and our customers. At the same time, we have resolved the dispute with a major equipment lessor and can confirm that we are in compliance with all of the lease covenants."
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