Depressed by a one-time relocation charge, Polk Audio Inc.'s fiscal fourth-quarter earnings dropped 51.3 percent as sales increased 17 percent.
The Baltimore-based maker of high-quality loudspeakers yesterday reported it earned $156,054, or 9 cents a share, on sales of $10.8 million during the three months that ended March 26. In the previous fourth quarter, the company earned $320,186, or 19 cents a share, on sales of $9.2 million.
Net income was down because of a $200,000, or 12 cents per share, after-tax charge for moving most of Polk's remaining manufacturing production from Baltimore to its operations in Tijuana, Mexico, and San Diego to cut labor costs.
Without that charge, earnings would have been $356,054, or 21 cents per share, or 11.2 percent higher than the previous fourth quarter.
The charge, which was announced on March 30, apparently drove Polk's stock price down from $12.75 on March 29 to $10.25, where it closed yesterday unchanged.
"We don't entirely understand this because this was a kind of a charge we had to take to do this relocation," said Gary B. Davis, Polk's chief financial officer.
"We think in the long term, it certainly will have quite a positive impact," Mr. Davis said.
The shift in manufacturing will eliminate 34 jobs by the middle of this month, leaving only 10 manufacturing workers here. However, the company's headquarters will remain in Baltimore along with 125 workers involved in administration, distribution, engineering, sales and marketing.
For the fiscal year, the company's net income climbed by 46.9 percent to $1.5 million, or 86 cents per share, compared to $1 million, or 60 cents a share, for the previous year. Sales increased 22.7 percent to $41.7 million from $34.0 million.
Mr. Davis attributed the sales increases to new products introduced from September to December. "We're trying to be pretty aggressive in constantly introducing new products," he said.
He particularly pointed to the company's improved three-way satellite speaker system, which consists of two small speakers and a sub-woofer, which can be placed anywhere in a room. "It's cosmetically appealing to a lot more folks these days," Mr. Davis said.
Polk Audio Inc.
Baltimore
.. .. .. .. .. .. .. .. .Ticker .. .. .. .. .. .. ..Yesterday's
.. .. .. .. .. .. .. .. .Symbol .. .. .. ..Cls... .. .. ...Chg.
.. .. .. .. .. .. .. .. ..POLK .. .. .. ...10 1/4 .. .. .. .. .unch
Period ended
3/26 .. .. .. .. .. .. ..4th qtr. .. .. ..Year ago .. .. .Chg.
Revenue .. .. .. .. .. ..$10,801 .. .. .. .$9,225 .. ...+17.1%
Net Income .. .. .. .. .. .$156* .. .. .. ...$320 .. ...-51.3%
Primary EPS .. .. .. .. ..$0.09* .. .. .. ..$0.19 .. ...+52.6%
.. .. .. .. .. .. .. .. ..12 mos. .. .. ..Year ago .. .. .Chg.
Revenue .. .. .. .. .. ..$41,673 .. .. ...$33,957 .. ...+22.7%
Net Income .. .. .. .. ..$1,452* .. .. .. ...$988 .. ...+46.9%
Primary EPS .. .. .. .. ..$0.86* .. .. .. ..$0.60 .. ...+43.3%
* Includes a charge of $200,000, or 12 cents a share, for relocating manufacturing operations from Baltimore to Tijuana, Mexico, and San Diego.
Figures in thousands (except per share data)
