Next Inc announced results for its fiscal year ending December 1, 2006.
Core sales (Collegiate, Auto, Wildlife, and American Biker) for the year increased 14.8% to $28.6 million from $24.9 million in the same period last year. In 2006, the Company discontinued private label and corporate sales products. Total sales increased by 7.8% to $28.8 million in 2006 from $26.7 million in 2005. Gross operating margins were 28.2%, compared to prior year of 22.5%, which is an increase of 5.7% in margin improvement. In 2005, the Company had an inventory write off of $704,000, which lowered margins by 2.6%.
In 2006, the Company lowered its production cost and has developed more competitive sources of raw materials in order to achieve increased margins related to the Company's pricing model. Selling cost increased in 2006 by $690,000 over 2005, of which $550,000 was related royalties due to the increased volume of licensed products compared to the prior year.
General and administrative cost from operations decreased slightly from $2,762,502 in 2005, to $2,754,244 in 2006 due to reduction of personnel and closure of two satellite offices. Corporate costs increased by 4.5% from $973,880 in 2005 to $1,017,632 in 2006 due to banking fees, franchise taxes, and wages.
Operating income was $899,688 for 2006, compared to an operating loss of $501,451 in 2005, which is a net change of $1,401,139. Interest expense increased from $645,891 in 2005 to $815,960 in 2006 primarily related to higher rates associated with the National City line of credit and the new convertible notes completed on April 6, 2006. Net income was $46,537 for 2006, compared to a net loss of $680,720 in 2005.
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