Q1 net income was $408,000 ($0.10 per share), a 100% increase over net income of $202,000 ($0.05 per share) in Q1 of last year. The improvement in earnings is a consequence of increasing gross profit margin percentage driven both by operating efficiencies and improvements in the price of some key raw materials. Gross profit margin for the quarter was 50.3%, up from 39.0% in the same quarter last year.
Gross revenue for Q1 was $5,556,000, versus $5,899,000 last year, a decrease of 5.8%. The decline in revenues is directly attributable to the company’s decision to no longer distribute its low margin food and some beverage products and instead focus on higher margin, fiscally sustainable, branded beverage sales. The company ceased its food distribution business in mid-Q1 of fiscal 2009.
Discounts, rebates and slotting fees were $419,000, down from $490,000 in Q1 of the prior year. Non-cash stock based compensation expense for the quarter was $70,000. SG&A expenses were $1,758,000, up 15.4% from $1,524,000 the previous year, primarily due to increased sales, promotion and marketing activities behind the company’s branded beverage products and higher foreign exchange cost. The company also recorded non-cash income tax expense of $205,000 during the quarter.
As at quarter end, the company had only 3,923,275 shares outstanding and cash and available credit totaling $3,800,000. EBITDAS for this quarter was $853,000, versus $600,000 in Q1 last year, an increase of $253,000 or 42%.
Source: Leading Brands Inc
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