The improvement in profitability was due to the increased contribution of higher margin products and the continuous improved operating efficiencies in all of the company's divisions. These efficiency measures included amongst others: increased production and quality performance and further transfer of sewing capacity to Jordan with lower labor costs.
On a pro-forma basis, net income reached $4.1 million which represented 8.8 percent of fourth quarter revenues, compared with a net loss of $4.5 million in the fourth quarter of 2004.
On a GAAP basis, 2005 fourth quarter gross margin increased to 23.3 percent from 7.6 percent in the fourth quarter of last year. Operating income grew to $1.9 million (3.4 percent of revenues) compared with an operating loss of $2.1 million in the fourth quarter of 2004.
The net loss for the quarter was $2.2 million compared with a net loss of $4.1 million in the fourth quarter in 2004.
Revenues in 2005 reached $205.6 million, representing a 12.5 percent increase over revenues of $182.8 million in 2004. On a pro forma basis, revenues were $171.3 million representing a 15.3 percent increase over pro- forma revenues of $148.6 million in 2004.
The growth in sales over the year was due mainly to the significant growth in sales of active-wear, and in particular sales to Nike for their Nike Pro category.
Gross margin on a pro-forma basis was 17.3 percent in 2005 compared with 8.2 percent in 2004. Pro-forma operating profit for 2005 was $15.7 million (9.1 percent of revenues) compared with $4.7 million in 2004.
marketing@alchempro.com
