"We are encouraged by the company's performance in the first half of 2006, driven by the enthusiastic consumer response to our strong global brand portfolio and innovative product offerings. Excluding investment spending for new growth initiatives, all four of our major branded footwear groups, as well as our Leather and Retail operations, reported double-digit profit improvements in the first half."
Stephen Gulis Jr., the company's CFO, reported, "Our 10.5 percent revenue increase in the second quarter of 2006 resulted from strong consumer acceptance of our spring product offerings and a business model change with one of our international partners. Sales to this growing international distributor were changed from a distribution fee basis to a wholesale basis, which increased both revenue and cost of products sold by $8.3 million in the second quarter. The change accounted for 3.8 percentage points of the quarter's revenue increase and also reduced gross margin in the quarter by 140 basis points, which is reflected in the quarter's 37.9 percent gross margin.
"Our balance sheet remains strong, as the company ended the quarter with a cash balance of $81 million. Inventories were down slightly and our accounts receivable growth was below the rate of revenue growth."
O'Donovan concluded, "We ended the second quarter of 2006 with our order backlog up over 8 percent. This backlog was impacted by the planned decrease in our Bates military footwear business for the back half of 2006. The backlog increase in our business, excluding Bates, approximated 12 percent at quarter end.
marketing@alchempro.com
