Concord Camera Corp., a manufacturer of digital, instant, Advanced Photo System (APS), and 35-mm cameras, reported financial results for the first quarter of fiscal year 2004 that ended Sept. 27, 2003.
For the first quarter ended Sept 27, 2003, net sales were U.S. $57.4 million, a 90-percent increase over the same quarter last year. The net loss was $0.6 million, or $0.02 per share. This is compared to sales of $30.2 million, and net income of $1.4 million, or $0.05 per diluted share, for the first quarter of the prior fiscal year.
Excluding this year's first quarter non-cash variable stock option expense of $3.1 million ($2.7 million after taxes), net income was $2.1 million, or $0.07 per diluted share. In addition, starting in fiscal 2004, the company changed its method of applying manufacturing labor and overhead costs to inventory. The company said it believes the new method will improve the matching of costs to the flow of product through the production processes. As a result of this change, the cost of products sold increased by $3.4 million for the first quarter and therefore gross profit and net income decreased by $3.4 million and $3.0 million, respectively, or $0.10 per diluted share.
Commenting on the financial results, Ira B. Lampert, Concord's chairman, CEO, and president, said: "Concord's sales for the first quarter of fiscal 2004 of $57.4 million was right in the middle of the range ($55 to $60 million) of the guidance we announced in August. Excluding non-cash variable stock option expense, net income was $2.1 million, or $0.07 per diluted share versus guidance of $2.1 to $2.7 million, or $0.07 to $0.09 per diluted share.
"Sales from our Retail Sales and Distribution ("RSD") business for the first quarter of fiscal 2004 were $42.4 million, an increase of $16.5 million, or 64 percent, compared to the same quarter last year and accounted for 74 percent of total sales,” he added. “This growth was in large part due to sales of Polaroid branded single use and traditional cameras, new digital product sales, new accounts and organic growth from existing accounts due to sell through and new product introductions. Sales from our Design and Manufacturing Services ("DMS") business were $15.0 million, an increase of $10.7 million, or 247 percent, compared to the same quarter last year and accounted for 26 percent of total sales. This increase was primarily due to single use cameras being manufactured for Eastman Kodak Company under a supply agreement entered into in September 2002."
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