Gross profit in the third quarter of 2006 was $32.1 million, or 41.1% of sales, compared to $34.1 million or 36.2% of sales, for the same period last year. The 490 basis point increase in gross margin was primarily due to the decrease in shipments to the U.S. military in the third quarter of 2006 compared to the third quarter of 2005. Military boots are sold at lower gross margins than branded products.
Selling, general and administrative (SG&A) expenses were $22.6 million, or 28.9% of sales for the third quarter of 2006 compared to $21.8 million, or 23.2% of sales, a year ago. The increase of $0.8 million is the result of a shift in the timing of certain advertising and professional expenses.
Income from operations was $9.5 million or 12.2% of net sales, compared to income from operations of $12.3 million or 13.0% of net sales in the prior year.
Funded Debt and Interest Expense:
Funded debt at September 30, 2006 was $127.3 million versus $127.5 million at September 30, 2005. Interest expense increased to $2.9 million for the third quarter of 2006, versus $2.5 million for same period last year, primarily due to higher interest rates than a year ago.
Inventory:
Inventory increased to $87.7 million at September 30, 2006 compared with $77.3 million on the same date a year ago.
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