Concord Camera Corp. (Hollywood, FL, U.S.) has reported financial results for the second quarter and 6 months of fiscal year 2004 ended Dec. 27, 2003.
For the second quarter ended Dec. 27, 2003, net sales were U.S. $65.1 million, a 5.2-percent increase from the same quarter the previous year. The net loss was $2.9 million, or $0.10 per share. This compared to sales of $61.8 million, and net income of $2.1 million, or $0.07 per diluted share for the second quarter of the prior fiscal year.
This year's second quarter includes the pre-tax recognition of a $0.9 million loss related to the decline in fair value of certain short-term investments. Thenloss was realized upon the sale of the investments subsequent to the end of the quarter, and a pre-tax $3.1 million charge with respect to certain inventory and tooling primarily attributable to digital camera products.
"Concord's sales of $65.1 million for the second quarter of fiscal 2004 set a company record for the highest revenue in any prior quarter,” Ira B. Lampert, Concord's chairman, CEO, and president, said in a written statement commenting on the financial results. “The net loss was $2.9 million, or $0.10 per share, versus the revised guidance, issued on Jan. 16, 2004, of a loss of $2.0 to $2.5 million, or $0.07 to $0.09 per share.”
The “disappointing results” were primarily attributable to lower than anticipated digital camera sales coupled with lower than projected average selling prices, Mr. Lampert explained. “Furthermore, another contributing factor to the loss was the significantly higher manufacturing costs that were incurred as a result of production inefficiencies related to delays in completing the development of certain new digital camera products."
Sales from Concord’s Retail Sales and Distribution (RSD) business for the second quarter of fiscal 2004 were $55.4 million, an increase of $7.1 million, or 14.7 percent compared to the same quarter last year. This accounted for 85 percent of total sales.
“This growth was in large part due to sales of Polaroid branded and other single use and traditional cameras, new accounts, and organic growth from existing accounts,” Mr. Lampert said.
Sales from the company’s Design and Manufacturing Services (DMS) business were $9.7 million, a decrease of $3.8 million, or 28.5 percent, compared to the same quarter last year, which accounted for 15 percent of total sales. The company attributes the decline primarily to a decrease in sales to certain customers which it says was offset, to some extent, by single-use and digital camera sales to other customers.
"Our performance in the second quarter was very disappointing, in particular, sales of one of our digital cameras were significantly lower than we had expected,” Mr. Lampert continued. ”Although our average selling prices for digital cameras increased by more than 30 percent over the prior fiscal year, they were lower than anticipated on certain products due to significant price pressure during the holiday selling season.”
Concord’s gross profit for the second quarter of fiscal 2004 was $6.5 million, or 9.9 percent of sales, versus $9.5 million, or 15.3 percent of sales in the same quarter the previous year.
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