Parlux reports lower Q2 as profits and sales slide
falling 20 per cent against a slight slip in sales, as lower
margins and royalty payments bite hard.
The company said that sales for the quarter ending September 30 were approximately $39.1m, compared to sales of $39.3m for the same period last year, a fall of around 1 per cent.
Net income came in at $3.5m, down from $4.4m, which, as well as being attributed to lower royalties for non-fragrance products, was also blamed on duplicated warehouse and temporary storage expenses, as well as additional interest expenses.
The company also added that some of the costs were offset by a $1.8m gain from the sale of its investment in E com Ventures, a company that is owned by Parlux stakeholder Glen Nussdorf.
Nussdorf has stated his opposition to recent executive board decisions at Parlux and had tried to launch a take-over bid for the company in October last year.
Net sales for the six month period to September 30 came in at $79.8m, compared to $73.1m for the same period a year earlier - an increase of 9 per cent.
For the same period the company reported a net loss of $10.6m, compared to a net profit of $8.3m a year earlier. It said that this figure was largely attributable to a $16.2m compensation charge relating to outstanding warrants issued as a result of a stock split.
The company also said that a review of its financial results for the period ending September 30 , 2006, will be delayed. Although it did not specify a date for its publication, the company blamed a class action suit filed against it on November 8 by shareholders regarding its accountancy practices as the reason for the delay.
Meanwhile, the board of directors says it has authorized a stock buy-back program, that will involve the sale of up to ten million company shares, in step with successive buy-back schemes that have been initiated during the course of the past ten years.
Further to this, a date of February 1, 2007, has been given for NASDAQ to respond to the company's request for a hearing before a panel regarding the filing of the company's previous quarterly results, up to June 30, 2006.
