General and administrative ("G&A") expenses for the three months ended December 31, 2009 were 5.8% of sales, compared to 6.2% during the same periods in 2008. G&A expenses have been reduced in nearly all cost categories as a result of the Fund's comprehensive review of business processes to manage the business through the current economic volatility.
Net income was $6.2 million for the three months ended December 31, 2009 compared to $6.5 million during the same period in 2008.
Financial Results for the year ended December 31, 2009
Sales for full year 2009 were $131.2 million, an increase of 0.3% over the $130.8 million for 2008. Same store sales declined by 5.7% compared to 2008.
Cost of sales as a percentage of sales for the year ended December 31, 2009 was 52.7% compared to 49.2% in 2008. The following factors contributed to this increase:
• Consumer confidence and the overall retail market (fashion and apparel in particular) were weak. The Fund continued its promotional activity to generate sales, reduce inventory and respond to competitive forces.
• Greater promotional activity in 2009 contributed to weaker gross margins.
• Cost of sales was negatively impacted by the weakness of the Canadian dollar versus the US dollar compared to 2008;
Store and selling expenses for the year ended December 31, 2009 were 35.7% of sales, compared to 35.8% for 2008. The Fund's review of business processes included changes in all areas of our cost structure, particularly store payroll costs.
G&A expenses for the year ended December 31, 2009 were 5.8% of sales, compared to 6.1% during 2008. As mentioned above G&A expenses have been reduced in nearly all cost categories as a result of the Fund's comprehensive review of business processes.
Net loss was $27.6 million for the year ended December 31, 2009 compared to net income of $6.7 million in 2008. This loss was primarily attributed to a $33.2 million non-recurring, non-cash impairment charge to the carrying value of the Fund's goodwill & intangible assets, partially offset by a $4.6 million non-recurring, non-cash recovery of future income taxes.. Excluding these items, the Fund earned net income of $1.0 million in 2009.
Sterling Shoes Income Fund
marketing@alchempro.com
