The Company's gross margin was 38.6 percent of net sales for the third quarter of 2006, up from 36.7 percent in the same period of 2005, an increase of 190 basis points.
The year-over-year gross margin improvement was the result of recently introduced products with higher margins, coupled with reduced sales discounts and allowances.
LaCrosse's total operating expenses were $8.7 million in the third quarter of 2006, up 19 percent from $7.4 million in the same period of 2005.
The increase primarily reflects expansion of the Company's product development, sourcing and sales teams, increased incentive compensation expense and stock-based compensation expense.
As a result of improved alignment of inventory purchases with actual sales demand, the Company reduced its inventory levels at the end of the third quarter of 2006 by approximately $4.5 million or 14 percent from the end of the third quarter of 2005.
At the end of the third quarter of 2006, LaCrosse had cash and cash equivalents of $2.5 million and zero bank debt, compared to zero cash and cash equivalents and bank debt of $12.6 million at the end of the third quarter of 2005.
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