In fiscal 2007, higher product costs, resulting from increased oil prices and strengthening of the Chinese Yuan against the U.S. Dollar, negatively impacted the gross profit percentage.
A successful program of aggressive in-season markdowns used to stimulate retail sales of the Company's products during and after the lackluster 2006 holiday season also contributed to the fiscal year-on-year decline.
Selling, general and administrative (SG&A) expenses decreased by 8.6 percent to $30.4 million, from $33.2 million in fiscal 2005. Increased marketing, advertising and public relations spending and higher costs related to changes in accounting for share-based compensation expenses in fiscal 2007 were more than offset by savings in shipping, logistics and a variety of other operational areas.
Income from continuing operations before taxes, and excluding an $878,000 gain on the sale of land, increased 42.9 percent to $11.2 million versus $7.8 million for fiscal year 2005. In the fourth quarter of 2007, the Company's Board of Directors approved a plan to sell the Company's French subsidiary, Fargeot.
Consequently, results from Fargeot are reported as discontinued operations, and the Company recorded a net loss of $590,000, which included both the results from Fargeot operations and a loss on the disposal of the business.
marketing@alchempro.com
