Our Apparel margin, as a percentage of sales, decreased from 27.1% for the same quarter last year to 23.7% for the current quarter. During the quarter our Apparel margins were impacted slightly by increased yarn and cut/sew costs and reduced selling margins, due to changes in product mix.
However, the main impact on our Apparel margin during the quarter related to our initiative to increase our cut/sew capacity in our Mexican facilities to meet our forecasted demand. We feel that the training costs associated with this program, which negatively impacted our Apparel margin during the period, was in excess of $1.0 million, or approximately $.03 per diluted share.
Our earnings for the quarter were $10.8 million, or 7.1% of sales, compared to $11.3 million, or 7.8% of sales for the same quarter last year. Our diluted earnings per share for the quarter were $.42 per share, compared to $.44 per share for the same quarter last year. Without the estimated impact of our cut/sew training costs, our diluted earnings per share would have been $.45 per share for the current quarter.
The Company generated approximately $22.5 million in EBITDA (earnings before interest, taxes, depreciation and amortization) during the quarter, compared to $24.3 million for the comparable quarter last year.
Keith Walters, Chairman, President and CEO, commented by saying, “We are extremely pleased with our Print results for the quarter. We started an initiative over the previous quarters to improve our overall Print margins and are pleased to see the results of these initiatives this quarter. Our Apparel margins while lower than last year, due to the impact of our cut/sew production initiative, were in-line with our internal forecasts."
"We strongly feel that the increase in our cut/sew capacity is a critical step and one that must be undertaken to meet our forecasted sales projections and inventory demand levels. We are however, looking for ways to minimize the cost of this initiative going forward. Overall, given the market conditions and the cost of our Apparel initiative, we were pleased with our results for the quarter, which were in-line with our internal forecasts. In addition, we plan to continue to look for acquisitions in both Print and Apparel, which will be complimentary to our existing business model or strategic in nature."
marketing@alchempro.com
