TurboChef Technologies, Inc. reported financial results for the 3 month and 6 months ended June 30, 2006. For the 3 months ended June 30, 2006, total revenue was U.S. $10.5 million compared with $10.8 million in the year ago quarter. As a percentage of total revenue, cost of product sales for the quarter was 69.3 percent as compared with 69.6 percent for the first quarter of 2006 and as compared with 88.7 percent for the year ago quarter, which included a $2.8 million increase in the company's warranty reserve.
The positive improvement sequentially in cost of product sales statistics reflects the benefits of recently implemented price increases; including those to contract customers in full effect in June of the current quarter. The aggregate effects of these price adjustments have led to a significant improvement in overall margins on ovens. For the 3 months ended June 30, 2006, overall margins on sales of ovens, parts and consumable items were approximately 38 percent as compared with 30 percent for the preceding quarter and 34 percent for the year ago quarter (exclusive of the $2.8 million increase in the company's warranty reserve.) This positive improvement in overall oven margins is, at present, mitigated by negative margins on the company's 2005 extended warranty program. Also as compared with the year ago quarter, cost of product sales continues to be impacted by price pressures on certain materials and component parts as well as increased freight and handling charges. The company expects that the recently implemented price increases combined with the new 2006 Warranty Program will lead to improved margins.
The company reported a net loss of $5.0 million or $0.17 per share for the second quarter of 2006 as compared with a net loss of $5.9 million or $0.21 per share for the year ago quarter.
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