Fourth quarter 2006 results were adversely impacted by a 1.5% increase in cost of goods sold as a percentage of net sales over fourth quarter 2005 levels. This increase is due to an unfavorable change in sales mix and resulting lower average selling prices. Higher outbound freight expenses also contributed to the cost of goods increase.
Advertising expenses for the fourth quarter of 2006 declined by $873,000 or 2.5% from the comparable quarter in 2005. However, advertising costs as a percent of net sales rose from 26.7% to 28.5% as a result of changes in the Company's circulation program and lower than expected sales.
Interest expense for the fourth quarter was $819,000 lower than the fourth quarter of 2005. In 2005, the Company incurred higher interest expense which was associated with the financing of its $185 million tender offer.
marketing@alchempro.com
