Applica Incorporated announced that second-quarter sales for 2004 were U.S. $159 million, up 16.2 percent from the same period in 2003. According to the company, the increase is a result of several new product launches and increased sales of Black & Decker(R) brand products.
For the first 6 months of 2004, sales were $291.5 million, up 12.9 percent compared to the same period in 2003. Applica says the increase was largely the result of growth in sales of Black & Decker(R) products benefiting from better point-of-sale of such products, as well as retailers beginning the year at lower inventory levels.
Applica reported a net loss for the 2004 second quarter of $123.8 million, or $5.16 per share, compared with a loss of $2.8 million, or $0.12 per share, for the 2003 second quarter. The second-quarter 2003 earnings included $1.5 million of equity in the net earnings of a joint venture in which Applica owned a 50 percent interest.
For the first half of 2004, Applica reported a net loss of $128.3 million, or $5.38 per share, as compared to net income of $16.8 million, or $0.71 per diluted share, for the same period last year. The 2003 first-half earnings included $39.0 million of equity in the net earnings of a joint venture.
Applica's gross profit margin increased to 30.5 percent in the 3-month period ended June 30, 2004 as compared to 27.8 percent for the same period in 2003. The increase was primarily attributed to lower product costs resulting from moving core products from Mexico to China, the launch of new products carrying higher margins, and better overhead absorption at our manufacturing facilities during 2004.
The increases were offset by increases in raw materials costs, higher inbound freight expenses and start-up expenses related to the launch of the Home Cafe(TM) single-cup brewing system. For the first half of the year, the gross profit margin increased to 29.5 percent, compared to 29.1 percent for the same period in 2003.
"We are focusing on more innovative products with higher margins, we have been rationalizing our manufacturing and sourcing strategy, and we are attempting to improve our pricing to our customers," said Harry D. Schulman, president and CEO. "The sale of our Chinese manufacturing facilities will allow us to reduce our fixed overhead and risk profile, and will allow us to become more flexible in our ability to react to a rapidly changing global marketplace."
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